A recent audit report released by the Secretary of State’s Office unveiled that 13 university employees had fabricated their payrolls by generating unearned overtime and vacation hours to make up for losses from state-enforced furloughs and salary freezes from April 2010 to March 2013. In order to avoid salary freezes and payroll cuts, employees in the university Institute of Neuroscience used grant money from the National Institutes of Health and National Science Foundation to pay for unearned overtime and vacation hours. The audit reviewed 1,000 timesheets, 38 of which showed unworked overtime and furlough days declared when employees had actually worked.
Upon discovery, the UO returned $330,000 to the NIH and $400 to the NSF for the misuse of the grant money, according to UO spokeswoman Julie Brown.
In fiscal year 2012 the UO was awarded $110.6 million dollars from external funding sources in grants – an increase from $110.2 million dollars in 2011. In fiscal year 2012 the total federal award to the UO was $96.9 million dollars, about 88 percent of the overall funding received by the university. Additionally, The Department of Health and Human Services funds about $25.4 million dollars (26 percent of federal dollars received) — most of which comes from the NIH, Brown says. The NSF funds $18.7 million dollars (19 percent of federal dollars received).
By Jan. 2013 the UO administration had become aware of possible payroll violations involving grant money, and requested an internal review by the Internal Audit Division for the Oregon University System. When suspicions were confirmed, the OUS requested an investigation by the Secretary of State Audits Division to determine the extent of payroll discrepancies.
After an extensive review of 38 UO classified staff in 18 departments it was found that regular occurring overtime for the time period of April 2010 through March 2013 was claimed. The review was able to identify the consistent amount of overtime recorded each month for 13 ION staff. In a department-wide scandal it was discovered that business managers within the department were instructing staff to declare hours they hadn’t actually worked. If the employees forgot, the hours were added to individual time sheets by the department’s finance department — sometimes in blatantly different handwriting.
To prevent misuse of federal dollars in the future, new management staff has been assigned to oversee ION payroll matters and grant related activity. The new management staff now reports to the Office of Vice President for Research — not to supervisors within ION — in order to sustain central oversight. They are also implementing changes to the grant administration process by requiring advance submission of grant related material to allow for additional payroll related reviews by Sponsored Project Services. The UO has also added a new segment to faculty orientation that identifies appropriate university resources relating to federal grant administration.
The UO is in the process of developing new mandatory training classes for principal investigators and grant administrators that includes sections on payroll processing, personnel overseeing, and fiscal movement. It is not known yet when training will begin.
Although the addition of overtime in payroll was discovered primarily among ION employees, further investigation identifies approximately 15 additional employees from several academic and research units, and one administrative unit who may have increased FTE appointments, overtime, or undocumented leave.
In the closing paragraphs of the audit, the SOS audit team recommends that the university conduct it’s own investigations into such discrepancies. According to a formal response from Jamie Moffit, UO Vice President for Finance and Administration, the university is “in the process of investigating these new matters and will take appropriate action.”
Though investigations are still being conducted, University administration remains hopeful that the payroll discrepancies were a one-time occurrence.
“The University of Oregon believes payroll errors were limited to a few units and occurred in the past. They do not reflect in any way on the continued research conducted by our faculty,” Brown said.