A Performance Audit
An Audit Report on the Distribution of the National Research University Fund
November 2021
Summary Analysis
The State Auditor’s Office obtained reasonable assurance that information the University of Texas at Arlington (University) reported to the Higher Education Coordinating Board (Coordinating Board) met the eligibility requirements for receiving National Research University Fund appropriations. Auditors tested the University’s compliance with the statutory and Coordinating Board requirements as they existed during fiscal years 2019 and 2020 (see Appendix 4 for details on the requirements).
Additionally, the Coordinating Board had processes for collecting information from higher education institutions to determine whether they met the eligibility requirements to receive funds from the National Research University Fund. However, opportunities exist for the Coordinating Board to strengthen its eligibility determination and reporting process.
Although the University met the eligibility requirements, auditors also identified controls that the University should improve. Specifically:
- The University should strengthen its process for reviewing and approving expenditures of restricted research funds.
- The University should improve its documentation of restricted research awards.
The University reported to the Coordinating Board in fiscal year 2021 that it had met the eligibility requirements necessary. Auditors tested and verified the University’s compliance with the statutory and Coordinating Board requirements that were in effect during fiscal years 2019 and 2020.
The University had restricted research expenditures totaling more than $45 million in each of fiscal years 2019 and 2020, as required by the Texas Education Code and the Coordinating Board for National Research University Fund eligibility. However, certain expenditures were unallowable under Coordinating Board guidance.
The University had policies and procedures in place regarding restricted research expenditures, and expenditures tested were reviewed and approved. However, that review and approval was not always effective in identifying unallowable costs.
Additionally, the University was unable to provide documentation to support that it had reported all restricted research awards to the Coordinating Board as required by the Coordinating Board’s Standards and Accounting Methods for Reporting Restricted Research Expenditures.
The Coordinating Board had processes for collecting and analyzing information from higher education institutions to determine whether they met the eligibility requirements to receive funds from the National Research University Fund. However, opportunities exist for it to improve its processes for determining eligibility.
The Coordinating Board did not always ensure that its National Research University Fund eligibility analysis used the most current data that the University submitted.
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