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NAS Committee Takes Aim at OIGs

2/1/2016 10:14:00 AM

Read the Full Issue(PDF)

In September, the National Academy of Sciences Committee on Federal Research Regulations and Reporting Requirements issued Optimizing the Nation’s Investment in Academic Research: New Regulatory Framework for the 21st Century.

The recommendations in the report commissioned by Congress may soon see action if included in a new bill being drafted by the Senate Health, Education, Labor and Pensions Committee (see story, p. 1).

While the report proposes a new oversight “framework,” it also is a near total repudiation of the process of auditee selection and findings by OIGs. The report cites the National Science Foundation (NSF) Office of Inspector General (OIG) in particular.

The NSF OIG has issued nine audit reports containing findings questioning salary costs, but NSF dismissed such findings. Addressing these dismissals, OIG told RRC its auditors made the correct findings at the time, and when appropriate will now consider the salaries allowable if they comply with NSF’s “revised” policies and if they occurred in 2015 (RRC 12/15, p. 4).

Also highlighted as a problem is NSF OIG’s use of a process called “data analytics” to assign a risk score to awardees that it does not share with institutions. To some degree, analytics are also used by the HHS OIG (RRC 10/12, p. 5).

Additionally, the report takes OIGs to the woodshed for always bringing bad news to Congress in their semiannual reports and for not developing or sharing what in effect would be best practices for financial management of research dollars, despite this task being part of their duties as spelled out in the law establishing OIGs.

Committee members want Congress to require OIGs to:

  • “Resolve issues regarding their interpretation of agency policies and priorities with the agency before conducting formal audits of research institutions; this should not apply in those situations in which the audit itself is directed toward inconsistent agency policy interpretations.”

  • “Include in their semiannual reports, publish on their websites, and highlight in their presentations to Congress examples of effective, innovative, and cost-saving initiatives undertaken by research institutions and federal research agencies that both advance and protect the research enterprise.”

  • “Provide to Congress and make publicly available information generated each year on the total costs (agency and institutional) of Inspectors General audits of research institutions, the total amounts of initial findings, the total amounts paid by institutions after audit resolution, and any significant management, technology, personnel, and accountability steps taken by research institutions as the result of a completed audit.”

  • “Reexamine the risk-based methodology in identifying institutions as candidates for agency audits to take into account the existing compliance environment and oversight on campuses, recognizing that many research institutions have clean single audits, are well managed, and have had long-standing relationships with the federal government.”

  • “Encourage all federal agencies to report only final audit resolution findings on their websites and in their semiannual reports to Congress.”

Addressing this last recommendation, David Robinson, executive vice provost of Oregon Health & Science University and a member of the NAS committee, said that “what usually happens is…[OIGs] announce their initial audit findings, which can possibly be in the millions of dollars, and then the institution works with the agency through the audit resolution process and sometimes the amount of audit findings are reduced by an order of magnitude or more.”

News headlines “usually focus on the bigger number and not the smaller number,” Robinson said. He discussed the report at a recent meeting of the Federal Demonstration Partnership.