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Grants Management Internal Control Preliminary Report to the Board of Trustees November 13, 2008

Grants Management Internal Control Preliminary Report to the Board of Trustees November 13, 2008 Dub Newell Simon Keemer. Overview of Procedures Performed.

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Grants Management Internal Control Preliminary Report to the Board of Trustees November 13, 2008

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  1. Grants Management Internal Control Preliminary Report to the Board of Trustees November 13, 2008 Dub Newell Simon Keemer

  2. Overview of Procedures Performed • Process designed to obtain an understanding of the policies, procedures and day-to-day processes from a range of different perspectives that relate to grants management. • Procedures were primarily designed to identify opportunities to strengthen the internal control structure. • Relevant policies and procedures identified were compared to other research universities.

  3. Interviews Review of University of Louisville Process Documentation Review of Audit Reports prepared by Internal Audit Review of other University’s Process Documentation Process

  4. Overview of Personnel Interviewed Our interviews included the following (approx. 55 people): • EVP for Research • EVP for Health Affairs • Provost • VP for Finance • VP for Business Affairs • Controller/Treasurer • Director of Sponsored Programs • Director of Grants Management • Director of Research Integrity Program • Associate VP for Human Resources • Associate VP for Administration (and representatives from the Purchasing Department) • 10 of the 12 Deans (Librarian and Graduate Studies) • Representative sample of Principal Investigators • Representative sample of Unit Business Managers • Other key personnel (e.g. Deans of Research, Director of Audit Services, Detective Jewell, etc.)

  5. Overall Conclusion • Generally policies and procedures appear to be consistent with best practices and similar research universities. • Application of the policies and procedures could be improved. • Future growth could present issues based upon the University’s current infrastructure.

  6. Opportunities for Improvement During the course of our interviews we identified a number of process improvement recommendations. These recommendations have been grouped as follows: • Principal Investigators • Conflict of Interest Statements • Unit Business Managers • Procurement Card • Reporting • Other

  7. Principal Investigators • Improve oversight of all principal investigators, especially where the PI is also a Dean. • Provide better tools and training to Chairs and Deans to allow them to perform that oversight. • Perform periodic risk analyses of principal investigators and their grants to allow Internal Audit to target higher risk areas. • Expand Internal Audit resource to increase coverage of principal investigators audited – may include utilization of external CPA firm to augment existing Internal Audit resource.

  8. Conflict of Interest Statements • Improve monitoring to ensure that statements are filed timely. • Clearly communicate and enforce sanctions for non-compliance. • Charge the Office of Research Integrity with the overarching responsibility to ensure that statements are received timely, or sanctions are enforced. • Perform periodic audits of statements to ensure accuracy. • Strengthen the formal policies surrounding the Committee for the Review of Individual Financial Interests in Research to ensure independence is maintained. • Consider requiring conflict of interest statements from all faculty.

  9. Unit Business Managers • Strengthen the Human Resources function of the University, as it relates to Unit Business Managers. • Improve training provided to Unit Business Managers. • Ensure some Unit Business Managers are credentialed in grants management. • Improve personnel policies to ensure that only qualified employees are identified as Unit Business Managers. • Consider implementing a new Grants Management position separate from Unit Business Managers, and reporting to a central office.

  10. Procurement Card • Improve departmental controls over grant expenditures processed through the procurement card. • Emphasize preventive controls.

  11. Reporting • Standardize the shadow system being used by the various schools/colleges/departments. • Almost all schools/colleges/departments involved. • Many different systems currently in use. • Necessitated because PeopleSoft can’t recognize encumbrances. • Most transactions are at least duplicated. • Improve user friendliness of reports, especially for non-financial people. • Reduce the reports available to personnel. • Consider a web-based grant reporting program that covers both pre and post award phases. • Improve timeliness of reporting at close out.

  12. Other • Consider restructuring the central grants management functions to ensure that the entire process reports to one EVP. • Perform an analysis of staffing to ensure that current and future needs are being adequately addressed. • Provide a more centralized information database to allow for easier searching by faculty and support. • Review structure within the Office of Industry Contracts to reduce delays in processing.

  13. Conclusion Any Questions? We thank you for the opportunity to be of service to the University of Louisville

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