Skip to main content

An Audit Report Related to the National Research University Fund

June 2012

Report Number 12-038

Overall Conclusion

The State Auditor's Office obtained reasonable assurance that information Texas Tech University and the University of Houston reported to the Higher Education Coordinating Board (Coordinating Board) met the eligibility requirements for receiving funds from the National Research University Fund. Auditors tested both higher education institutions' compliance with the statutory and Coordinating Board requirements as they existed during fiscal years 2010 and 2011 (see Appendix 2 for details on the requirements).

Opportunities exist for the Coordinating Board to clarify its criteria and processes for determining a higher education institution's eligibility for receiving funds from the National Research University Fund. For example, the Coordinating Board should review its criteria for how higher education institutions should account for and report restricted research awards. The Coordinating Board's criteria also do not specify the accounting basis (accrual or cash) and the time frame for reporting endowment balances that higher education institutions should use when reporting restricted research expenditures.

Although both higher education institutions met the eligibility requirements (see Appendix 3 for eligibility determination letters) auditors also identified controls that each higher education institution should improve. Specifically:

- Texas Tech University should develop and implement a documented policy to ensure consistency in its reclassification of contracts, gifts, and grants as restricted research awards.

- The University of Houston should strengthen controls over time and effort reporting for federally funded research.

Contact the SAO about this report.

Download the Acrobat version of this report. (.pdf)