Last-minute purchases of high-end Apple computers and a host of other questioned expenses has gotten UCSD into hot water with auditors for the National Science Foundation's office of Inspector General, who have called out the university for improperly spending hundreds of thousands of dollars in federal grant money on an array of costly hardware, software, and five-figure travel tabs.
According to a redacted report dated March 29, federal auditors said they sampled $2.5 million worth of the school's total of $197 million in NSF-funded expenditures claimed during the three-year period from April 1, 2012, through March 31, 2015.
"For transaction testing, we judgmentally selected 286 transactions totaling $2.5 million and utilized a data analytics approach to identify potential risk areas. We also performed additional non-transaction based tests as we deemed necessary," according to the document.
"Of the $2.5 million in the transaction testing, our audit questioned $283,801 of costs claimed on 19 NSF awards because UCSD did not comply with Federal and NSF award requirements.”
Dubious expenditures, the findings say, included "$214,177 in unreasonable equipment, materials, and supplies expenses; $54,472 in unreasonable travel; $8,744 in unreasonable participant support expenditures; $5,178 in unallowable indirect costs; and $1,230 in unallocable visa immigration fees.”
Auditors challenged purchases of Macintosh computers, software and supporting gear at the termination of grant funding periods.
"We questioned $24,882 charged to seven NSF awards for general-purpose computers purchased near the award expiration. These purchases did not appear to benefit the awards nor appear to be prudent considering the limited time remaining on the awards," the audit says.
Inappropriate expenditures included "$8,340 for the purchase of two Mac Pros. The computers were received on September 23, 2013, on a 4 -year award that expired on September 30, 2013. The two computers were available for less than 1 percent of the grant life (7 out of 1,460 days)."
$6,629 for a “MacBook Pro, storage arrays, and accessories” were charged to a grant "by mistake" and the school has since "taken action to remove the charges from the NSF award," the report says.
Regarding $4044 paid to acquire two MacBook Airs, the audit says, "the computers were purchased on June 13, 2013, on a 4-year award that expired on June 30, 2013. The two computers were available for 1 percent of the grant life (17 out of 1,445 days)."
Purchases of an iMac and a MacBook Air for $2,071 each also drew criticism.
The iMac "was available for less than 2 percent of the grant life (23 out of 1,460 days)," and the MacBook "was available for 8 percent of the grant life (148 out of 1,825 days). UCSD stated the computer was not used exclusively on the NSF award as it was the [Principal Investigator's] sole computer and he also used it to carry out other activities to support his teaching, departmental service, and research missions."
A $1076 Dell computer "was available for less than 1 percent of the grant life (8 out of 1,445 days)," and a $651 iPad was found to have "shipped on April 6, 2012, after the NSF award expired on March 31, 2012."
Other last minute misappropriations included "$1,911 for robot parts. The parts were received on August 29, 2014 on a 6-year award that expired on August 31, 2014. The parts were available for less than 1 percent of the grant life (2 out of 2,190 days).”
Auditors also questioned "$48,556 ($31,426 plus $17,130 associated indirect costs) charged to one NSF award for seven foreign travel trips” that were “not reasonable or prudent for the administration of the award.
The money, according to the audit, "was originally budgeted to fund graduate student researchers." Worse yet, reimbursement forms for much of the travel were submitted years late.
"Of the seven trips, four of the travel expense forms were dated August 2013 and three were dated June 2013, which was 1 to 2 years after the travel occurred.”
According to the audit, "Per UCSD, these reimbursements were not submitted timely because they were set aside in favor of conducting more productive (and urgent) work activities in research, teaching, and service. The reimbursements were submitted when it was … realized that the reimbursements would be forfeited once the award expired.”
In another case, "$4,744 for travel costs for UCSD employees" were charged to one award. "No travel costs were included in the NSF approved budget; the entire award budget was for participant support. UCSD has agreed to remove the costs from the award. "
In a March 16 response to the audit regarding purchases of computers late in the grant cycle, UCSD's director of audit and management advisory services David Meier argued that "the award end date does not constitute end of the work performed for the award. Work continues to be performed after the expiration date of the project in order to complete the aims of the project."
Added Meier, "Computers are also needed to write papers and reports, prepare presentations and responses to reviewers." Regarding the MacBook Air, the letter says, "The length of time the laptop was used during the grant's life does not accurately reflect the contribution of the laptop to this award and is not correlated with the 8% of the grant life mentioned by [the audit].
“This is because the laptop was used during a stage in the project's lifecycle that naturally requires a burst of activities involving disproportionately high effort compressed in a short time frame."
Statements from unidentified faculty travelers were also included.
"The delay [in requesting reimbursement] was not caused by any ulterior motive but simply by the [Principal Investigator’s] prioritizing reimbursement lower than his research, teaching and service duties," said one.
“The questioned travel also includes three trips for research collaboration, during a sabbatical quarter or during the summer session. This kind of trip is equally important, for the fundamental reason that in certain stages of research collaborations, in-person interaction in the form of informal technical discussions is essential.”
According to the audit, “After taking UCSD’s comments into consideration, the auditors continue to question the costs and left the findings unchanged.”
Regarding the disputed $214,177 in total equipment and materials charges, the report says, “UCSD indicated that it has performed corrective actions to remove $39,596 in unallowable costs from the awards in question, leaving $174,581 remaining unresolved. NSF, during the audit resolution process, should ensure that the award has been credited as appropriate.”