2024-001 Activities Allowed or Unallowed and Allowable Costs / Cost Principles
Research and Development Cluster:
National Institutes of Health:
Institutional Career Development Costs (ALN 93.350, grant number 5 UL1 TR001866)
Statistically valid sample: No, and it was not intended to be.
Repeat finding: Not a repeat finding.
Finding Type: Noncompliance
Criteria:
Non-federal entities should ensure that costs are reasonable and necessary for the performance of the Research and Development effort identified in the applicable award.
In accordance with the documentation standards of 2 CFR section s200.430(i), costs of compensation for personal services are allowable to the extent total compensation for individual employees:
a. Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities;
b. Follows an appointment made in accordance with a non-federal entity’s rules or written policies and meets the requirements of federal statute, where applicable; and
c. Is determined and supported as provided in 2 CFR section 200.430(i), including the charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed.
Condition and context:
In April 2024, University management became aware that a full-time employee of the University was concurrently employed by Duke-NUS Medical School in Singapore since early 2021. The employee had not previously disclosed to the University his affiliation with, and income from, Duke-NUS Medical School, including on his financial conflict of interest in research disclosure forms that the University requires all researchers to complete and in various documents and certifications in connection with several National Institutes of Health (NIH) grants, which supported a portion of his salary.
The University retained external legal counsel to conduct an investigation. After this investigation by external counsel, several actions were taken. First, the University stopped drawing NIH grant funds to support this employee’s salary. The employee’s employment ended. The University conducted a financial conflict of interest in research review as to the employee’s previously undisclosed significant financial interests for the period 2021 to 2024, and other payments from Duke-NUS Medical School, dating back to 2019 and found no evidence that the design, conduct, or reporting of the employee’s NIH-funded work at the University had been adversely affected. Lastly, the University informed NIH of the matter and offered to repay half of the employee’s salary, fringe benefits, and indirect cost recovery charges that had been charged to NIH grants during the time period from January 2021 through May 2024. The proposed repayment amounts to $299,805.
The amount charged to NIH grants during fiscal year 2024 was $178,084.
Cause:
The employee failed to disclose to the University that he was concurrently employed by Duke-NUS Medical School including on his financial conflict of interest in research forms that he was required to complete and in documents and certifications in connection with various NIH grants that supported his salary.
Effect:
Because the University assumed when calculating the employee’s salary that he was a full-time employee of the University and drew from NIH grants on that basis, but in reality, he was also working at Duke-NUS Medical School, some of the employee’s salary, related fringe benefits and indirect cost charges likely were unallowable under federal grant principles.
Questioned Costs:
The likely questioned costs are $178,084. Known questioned costs are indeterminable.
Recommendation:
The University should continue to communicate to University investigators the importance of accurately completing the financial conflicts of interest in research disclosure forms pursuant to applicable, long-standing University policies.
Views of Responsible Officials:
The University recognizes the seriousness of this matter, involving a former employee who accepted employment and worked at Duke-NUS Medical School in Singapore, without disclosing to the University this concurrent position. Under the University’s Code of Conduct, all members of the University community should conduct themselves ethically, honestly, and with integrity in all dealings and should act with due recognition of their position of trust with respect to the University’s research sponsors. Upon discovering that the employee had a concurrent employment at Duke-NUS, the University acted responsibly in investigating the matter and taking appropriate action, including notifying NIH, offering repayment, and fully cooperating with NIH. No internal controls or protocols were compromised as a result of this matter.
2024-002 Subrecipient Monitoring
Research and Development Cluster:
National Institutes of Health:
Allergy and Infectious Diseases Research (ALN 93.855)
Statistically valid sample: No, and it was not intended to be.
Repeat finding: Not a repeat finding.
Finding Type: Noncompliance and Significant Deficiency
Criteria:
A pass-through entity is required to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors as the subrecipient’s prior experience with similar subawards, whether the subrecipient has new personnel or new or substantially changed systems and the extent and results of federal awarding agency monitoring. Additionally, in accordance with federal requirements, a non-federal entity shall maintain internal controls over federal programs designed to provide reasonable assurance that transactions are executed in compliance with federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a federal program.
Condition and context:
Prior to executing a subaward, the University performs a risk assessment over the potential subrecipient to evaluate the risk of noncompliance with federal statues, regulations, and the terms and conditions of the subaward by the subrecipient. This risk assessment includes the review of a commitment form. The commitment form is prepared by the subrecipient and reviewed by the Principal Investigator and includes an evaluation of the results of previous audits, whether the subrecipient has new personnel or new or substantially changed systems and the extent and results of federal awarding agency monitoring.
We selected seven subrecipients out of a population of 50 subrecipients for test work who had subaward agreements with the University during the fiscal year 2024 and noted for two subrecipients, the commitment form was not received and reviewed prior to the University entering into the subawardee agreement.
Cause:
The Principal Investigators did not obtain the commitment forms from two subrecipients and therefore, could not provide evidence that a risk assessment was performed prior to the University entering into the subaward.
Effect:
The University could provide a subaward to a subrecipient that is considered to have a higher risk of noncompliance and require additional monitoring, and not perform that additional monitoring.
Questioned Costs:
None.
Recommendation:
The University should strengthen its policies and procedures over its subrecipient monitoring process over the Research and Development Cluster programs and provide training to the staff responsible for this federal requirement to ensure all necessary documentation is received and reviewed in accordance with the University's policies and procedures.
Views of Responsible Officials:
As of March 2021, Rockefeller University’s Office of Sponsored Programs Administration (OSPA) requires collection of the subrecipient commitment form for all applications including outgoing subawards, regardless of FDP Clearinghouse or membership status. All OSPA staff have been trained on this requirement, and we continue to emphasize this requirement in our team meetings. In addition, the requirements were sent to the university community in March 2021 and posted on the OSPA website. If a university applicant resists this requirement, all OSPA staff are required to forward that information to the Director, who communicates the requirement to the applicant. OSPA will be re-educating the laboratories on this requirement in the coming weeks via email and will repeat on a semi-annual basis.
2024-001 Activities Allowed or Unallowed and Allowable Costs / Cost Principles
Research and Development Cluster:
National Institutes of Health:
Institutional Career Development Costs (ALN 93.350, grant number 5 UL1 TR001866)
Statistically valid sample: No, and it was not intended to be.
Repeat finding: Not a repeat finding.
Finding Type: Noncompliance
Criteria:
Non-federal entities should ensure that costs are reasonable and necessary for the performance of the Research and Development effort identified in the applicable award.
In accordance with the documentation standards of 2 CFR section s200.430(i), costs of compensation for personal services are allowable to the extent total compensation for individual employees:
a. Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities;
b. Follows an appointment made in accordance with a non-federal entity’s rules or written policies and meets the requirements of federal statute, where applicable; and
c. Is determined and supported as provided in 2 CFR section 200.430(i), including the charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed.
Condition and context:
In April 2024, University management became aware that a full-time employee of the University was concurrently employed by Duke-NUS Medical School in Singapore since early 2021. The employee had not previously disclosed to the University his affiliation with, and income from, Duke-NUS Medical School, including on his financial conflict of interest in research disclosure forms that the University requires all researchers to complete and in various documents and certifications in connection with several National Institutes of Health (NIH) grants, which supported a portion of his salary.
The University retained external legal counsel to conduct an investigation. After this investigation by external counsel, several actions were taken. First, the University stopped drawing NIH grant funds to support this employee’s salary. The employee’s employment ended. The University conducted a financial conflict of interest in research review as to the employee’s previously undisclosed significant financial interests for the period 2021 to 2024, and other payments from Duke-NUS Medical School, dating back to 2019 and found no evidence that the design, conduct, or reporting of the employee’s NIH-funded work at the University had been adversely affected. Lastly, the University informed NIH of the matter and offered to repay half of the employee’s salary, fringe benefits, and indirect cost recovery charges that had been charged to NIH grants during the time period from January 2021 through May 2024. The proposed repayment amounts to $299,805.
The amount charged to NIH grants during fiscal year 2024 was $178,084.
Cause:
The employee failed to disclose to the University that he was concurrently employed by Duke-NUS Medical School including on his financial conflict of interest in research forms that he was required to complete and in documents and certifications in connection with various NIH grants that supported his salary.
Effect:
Because the University assumed when calculating the employee’s salary that he was a full-time employee of the University and drew from NIH grants on that basis, but in reality, he was also working at Duke-NUS Medical School, some of the employee’s salary, related fringe benefits and indirect cost charges likely were unallowable under federal grant principles.
Questioned Costs:
The likely questioned costs are $178,084. Known questioned costs are indeterminable.
Recommendation:
The University should continue to communicate to University investigators the importance of accurately completing the financial conflicts of interest in research disclosure forms pursuant to applicable, long-standing University policies.
Views of Responsible Officials:
The University recognizes the seriousness of this matter, involving a former employee who accepted employment and worked at Duke-NUS Medical School in Singapore, without disclosing to the University this concurrent position. Under the University’s Code of Conduct, all members of the University community should conduct themselves ethically, honestly, and with integrity in all dealings and should act with due recognition of their position of trust with respect to the University’s research sponsors. Upon discovering that the employee had a concurrent employment at Duke-NUS, the University acted responsibly in investigating the matter and taking appropriate action, including notifying NIH, offering repayment, and fully cooperating with NIH. No internal controls or protocols were compromised as a result of this matter.
2024-002 Subrecipient Monitoring
Research and Development Cluster:
National Institutes of Health:
Allergy and Infectious Diseases Research (ALN 93.855)
Statistically valid sample: No, and it was not intended to be.
Repeat finding: Not a repeat finding.
Finding Type: Noncompliance and Significant Deficiency
Criteria:
A pass-through entity is required to evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors as the subrecipient’s prior experience with similar subawards, whether the subrecipient has new personnel or new or substantially changed systems and the extent and results of federal awarding agency monitoring. Additionally, in accordance with federal requirements, a non-federal entity shall maintain internal controls over federal programs designed to provide reasonable assurance that transactions are executed in compliance with federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a federal program.
Condition and context:
Prior to executing a subaward, the University performs a risk assessment over the potential subrecipient to evaluate the risk of noncompliance with federal statues, regulations, and the terms and conditions of the subaward by the subrecipient. This risk assessment includes the review of a commitment form. The commitment form is prepared by the subrecipient and reviewed by the Principal Investigator and includes an evaluation of the results of previous audits, whether the subrecipient has new personnel or new or substantially changed systems and the extent and results of federal awarding agency monitoring.
We selected seven subrecipients out of a population of 50 subrecipients for test work who had subaward agreements with the University during the fiscal year 2024 and noted for two subrecipients, the commitment form was not received and reviewed prior to the University entering into the subawardee agreement.
Cause:
The Principal Investigators did not obtain the commitment forms from two subrecipients and therefore, could not provide evidence that a risk assessment was performed prior to the University entering into the subaward.
Effect:
The University could provide a subaward to a subrecipient that is considered to have a higher risk of noncompliance and require additional monitoring, and not perform that additional monitoring.
Questioned Costs:
None.
Recommendation:
The University should strengthen its policies and procedures over its subrecipient monitoring process over the Research and Development Cluster programs and provide training to the staff responsible for this federal requirement to ensure all necessary documentation is received and reviewed in accordance with the University's policies and procedures.
Views of Responsible Officials:
As of March 2021, Rockefeller University’s Office of Sponsored Programs Administration (OSPA) requires collection of the subrecipient commitment form for all applications including outgoing subawards, regardless of FDP Clearinghouse or membership status. All OSPA staff have been trained on this requirement, and we continue to emphasize this requirement in our team meetings. In addition, the requirements were sent to the university community in March 2021 and posted on the OSPA website. If a university applicant resists this requirement, all OSPA staff are required to forward that information to the Director, who communicates the requirement to the applicant. OSPA will be re-educating the laboratories on this requirement in the coming weeks via email and will repeat on a semi-annual basis.