# Control Number ED-OIG/A05-E0018

Dr. Sylvia Manning, Chancellor

University of Illinois at Chicago

601 South Morgan, MC 102

Chicago, IL 60607-7128

Dear Dr. Manning:

This **Final Audit Report** presents the results of our audit of the
University of Illinois at Chicago's (UIC) Upward Bound Math and Science
(UBMS) project. UIC was awarded \$274,493 in UBMS funds for the period
August 31, 2001, through August 31, 2002 (2001-2002 grant year), to
operate the third year of the grant (P047M990103). The objectives of our
audit were to determine if UIC (1) maintained support demonstrating that
it achieved the project's objectives as reported to the U.S. Department
of Education (Department); (2) provided only eligible services to the
number of eligible students required under its agreement with the
Department; (3) properly accounted for its use of UBMS program funds;
and (4) only claimed expenses that were allowable and adequately
supported for the 2001-2002 grant year.

> Our audit disclosed that UIC misrepresented its UBMS project's
> accomplishments to the Department.[^1] UIC (1) did not maintain
> documentation supporting that it achieved the project's objectives as
> reported to the Department, (2) served ineligible participants and did
> not provide all required services, (3) did not appropriately account
> for grant funds, (4) could not support all its expenditures, and (5)
> charged unallowable costs to the grant. Based on the significance of
> the findings, we recommend that the Chief Financial Officer (CFO),
> Office of the Chief Financial Officer, in conjunction with the
> Assistant Secretary, Office of Postsecondary Education (OPE), require
> UIC to return to the Department \$274,493 in UBMS funds it received
> for the 2001-2002 grant year, and take appropriate action pursuant to
> 34 C.F.R. § 74.62 to protect future UBMS grant funds.

We provided UIC with a draft of this report on July 23, 2004. In its
response dated August 23, 2004,[^2] UIC disagreed with the
recommendation to return to the Department the full amount of the funds
it received for the UBMS program, agreeing to refund only \$21,295 in
UBMS funds for the 2001-2002 grant year. However, UIC acknowledged that:

-   Sixty-seven percent of its UBMS participants did not qualify as both
    low-income individuals and first-generation college students; 80
    percent of its participants did not maintain at least a 3.5 grade
    point average (GPA); and UBMS did not have documentation to support
    pre-to-post test score gains on the California Achievement Test
    (CAT) subtests (See Finding No. 1);

-   Three students were not eligible participants because they were
    neither low-income individuals nor first-generation college
    students, and it did not offer a foreign language component during
    the 2002 summer session (See Finding No. 2);

-   Its University Financial and Administrative System (UFAS) was not
    set to track awards by individual award years (See Finding No. 3);

-   Staff members were not always required to complete time and effort
    certifications (See Finding No. 4); and

-   Stipends were received by three students who were neither low-income
    individuals nor first-generation college students (See Finding No.
    5).

We made minor changes to our draft report based on UIC's response and
the additional documentation provided with the response. However, we did
not delete any findings or change our recommendation to return all
2001-2002 grant funds to the Department because UIC did not demonstrate
it operated the UBMS program as proposed.

## AUDIT RESULTS

Finding No. 1 UIC Misrepresented the Results of Its Project and Did Not
Maintain Documentation Supporting Achievements Reported to the
Department

UIC submitted incorrect data via its performance report covering the
period August 31, 2001, to August 30, 2002, stating all of its
measurable objectives were complete. Of the nine objectives in the grant
proposal,[^3] only one (Objective 2) had sufficient documentation to
support the annual performance report. Three (Objectives 1, 3, and 4)
did not have documentation that validated the objective was achieved as
stated in UIC's annual performance report.[^4] The remaining five
objectives were not measurable.[^5]

By signing its annual performance report, UIC certified that the
information submitted to the Department was accurate, complete, and
readily verifiable to the best of its knowledge. Pursuant to 34 C.F.R. §
74.51,[^6] recipients are responsible for managing and monitoring each
project, program, subaward, function or activity supported by the award.
Performance reports must generally contain a comparison of actual
accomplishments with the goals and objectives established for the period
and, if appropriate, the reasons why established goals were not met.
According to 34 C.F.R. § 74.53(b), all records pertinent to an award
shall be retained for a period of three years.

Our audit disclosed that UIC did not retain documentation showing that
the information in its annual UBMS performance report was accurate,
complete, and readily verifiable.[^7] Sufficient documentation was not
available because UIC officials did not monitor the UBMS project in an
effective manner.

#### Objective #1

Pursuant to 34 C.F.R. § 645.4(a), at least two-thirds of the eligible
participants a grantee serves must, at the time of initial selection,
qualify as both low-income individuals and potential first-generation
college students.[^8] The remaining participants must qualify as either
low-income individuals or potential first-generation college students.

In its grant proposal, UIC stated that it would enroll 60 eligible
participants. Sixty-seven percent (or 40) would qualify as both
low-income individuals and first-generation college students, and 33
percent (or 20) would be either low-income individuals or
first-generation college students. UIC later received oral approval from
the Department to serve only 40 students. Therefore, 27 of the
participants should have qualified as both low-income individuals and
first-generation college students, and 13 should have qualified as
either low-income individuals or first-generation college students.

UIC did not address the percentages associated with this objective in
its annual performance report, but the student roster UIC provided us
showed that only 51 percent (20) of the 39 participants qualified as
both low-income individuals and first-generation college students, 41
percent (16) qualified as either low-income individuals or
first-generation college students, and 8 percent (3) did not qualify as
low-income individuals or first-generation college students.

In an attempt to verify the validity of the student roster UIC provided
us, we reviewed all 39 UBMS participants' files. We determined that only
23 percent (9) of the participants qualified as both low-income
individuals and first-generation college students, 67 percent (26)
qualified as either low-income individuals or first-generation college
students, and 10 percent (4) should not have been enrolled as
participants because they did not qualify as low-income individuals or
first-generation college students (See Appendix A).

#### Objective #3

According to the grant proposal, UIC would maintain documentation to
support that 80 percent of all UBMS participants would maintain at least
a C+ (3.5 on a 5.0 grading scale) GPA on a yearly basis through high
school graduation. In its annual performance report narrative, UIC
asserted that at least 80 percent of the UBMS participants maintained a
3.5 GPA during the reporting period.

Only eight of the 39 participants from the 2001-2002 project year
continued participation in the program until the summer of 2002.
Therefore, only 8 participants had enough GPA data to make the
determination of whether they maintained at least a C+ GPA on a yearly
basis. The student roster UIC provided us showed that, of the 8
participants who were in the program for at least a year, only 3 (38
percent) maintained at least a C+ GPA on a yearly basis. Our file review
verified that only 38 percent (3 of 8) of the students who had data
available maintained a C+ GPA (See Appendix A).

#### Objective #4

In its grant proposal, UIC stated that it would evaluate its UBMS
participants\' academic performances as indicated by a pre-to-post test
gain. Upon completion of the six-week summer program, 75 percent of the
participants were to show a 40 percent gain. By June of the subsequent
year, 75 percent of the participants were to show a 20 percent gain on
the math and science subset of the California Achievement Test. UIC did
not address the academic performances associated with the objective in
its annual performance report and did not retain documentation to
support the completion of this objective. We reviewed all 39
participants' files and found that none of the participants had their
academic performance evaluated according to the grant proposal. Fifteen
percent (6 of 39) of the participants did not have pretest scores, and 0
percent (none) had post test scores in their files (See Appendix A).

#### Program Not Operated as Intended

UIC misrepresented the achievements of its UBMS program because it did
not operate the program as written in its grant proposal. Instead, UIC
only operated the summer component of the program. It did not serve its
UBMS participants during the academic year as it originally proposed.

Because UIC misrepresented the results of its UBMS program, the
Department did not have the information it needed to make future funding
decisions. UIC was awarded \$274,493 in UBMS funds for the 2001-2002
grant year. Had the Department known that UIC might not be contributing
to the success of its participants' pre-college performance and,
ultimately, their higher education pursuits, it might not have continued
funding UIC's UBMS program.

### Recommendations

We recommend that the CFO, in conjunction with the Assistant Secretary,
OPE,

1.  Require UIC to return to the Department \$274,493 in UBMS funds it
    received for the period August 31, 2001, through August 31, 2002;
    and

2.  Take appropriate action pursuant to 34 C.F.R. § 74.62 to protect
    future UBMS grant funds.

###### Auditee Comments

# UIC did not entirely agree with the finding and disagreed with the recommendations.

## OIG Response

After reviewing the additional documentation UIC provided, and after
taking into account the supporting documentation from the student files
we reviewed during our audit, we revised the finding slightly. We
dropped the issue concerning achievement of Objective #2 (assessing the
needs of newly admitted participants within 30 days following their
admittance into the UBMS program). However, we did not revise our
recommendations.

# 

# Auditee Comments (Objective #1) 

UIC asserted that only three students were neither low-income nor
first-generation college students. Of the 40 participants, UIC claimed
that 20 (50 percent) were low-income individuals and first-generation
college students, 4 (10 percent) were low-income individuals only, and
13 (33 percent) were first-generation college students only. UIC added
that while its enrollment did not contain the exact percentages as
outlined in the grant proposal (67 percent both low-income and
first-generation college students and 33 percent either low-income or
first-generation college students), 37, or 92.5 percent of the
participants, were eligible for the program based on one or more of the
criteria. UIC provided us a table that it claimed contains the names and
eligibility status of all 37 participants enrolled for the 2001-2002
grant year. UIC also said it provided the documentation used to
establish each participant's eligibility.

## OIG Response (Objective #1)

UIC's claim that 92.5 percent of its participants satisfied at least one
of the eligibility criterion is without merit. The regulation at 34
C.F.R. § 645.4(a) clearly states that at least two-thirds of the
eligible participants a grantee serves must, at the time of initial
selection, qualify as both low-income individuals and potential
first-generation college students. UIC did not serve at least 27
participants who were both low-income individuals and first-generation
college students.

**Auditee Comments (Objective #3)**

UIC asserted that, for the 2001-2002 grant year, only 8 participants had
been enrolled in the program for one year. Therefore, only 8
participants had a yearly GPA calculated for the reporting period. UIC
acknowledged that 80 percent of the participants did not maintain a 3.5
GPA and provided supporting documentation (a table that included the
GPAs of the 8 students and a *Demographic Profile of Grades* from
Section II of its annual performance report). The grades in Section II
reflect the actual grades of the participants. UIC acknowledged that the
narrative within the annual performance report and the demographic
information that included the GPAs were inconsistent due to carelessness
and stated that it has taken steps to assure that reporting errors such
as these do not recur.

#### OIG Response (Objective #3)

We did not revise the finding. UIC's documentation (the table of GPAs as
well as the *Demographic Profile of Grades*) did not include the source
of the documentation (participants' grade reports). According to the
documentation UIC provided, only 25 percent (2 of 8) of the students who
had data available maintained a C+ GPA on a yearly basis. The results of
our file review disclosed that 38 percent (3 of 8) of the students who
had data available maintained a C+ GPA. Neither percentage supports the
annual performance report.

**Auditee Comments (Objective #4)**

UIC acknowledged that UBMS did not have pre-to-post test scores for the
CAT subtests and stated it has taken steps to assure that it assesses
the progress of its students through the use of the CAT. However, UIC
disagreed that none of the participants had their academic performance
evaluated while participating in the program. UIC said that all students
were evaluated by the instructors of the courses on a regular basis and
received grade reports at the end of the course. UIC provided
documentation that included the home school grades (baseline grades) in
the math and science courses and the UBMS program grades (post grades)
for the same subjects. UIC said that a calculation of average home
school grade and average program grade in math and science shows the
gains made by the program participants.

**OIG Response (Objective #4)**

We did not revise the finding. In its grant proposal, UIC stated that it
would evaluate its UBMS participants\' academic performances as
indicated by a pre-to-post test gain. UIC did not address the academic
performances associated with the objective in its performance report and
did not retain documentation to support the completion of this
objective. Per 34 C.F.R. § 75.700, a grantee shall comply with
applicable statutes, regulations, and approved applications, and shall
use Federal funds in accordance with those statutes, regulations, and
applications.

**Finding No. 2 UIC Served Ineligible Participants and Its Summer
Component Did Not Provide All Required Services**

Five of the 39 UBMS participants did not meet all of the requirements to
be considered eligible to participate in the UBMS program. Four
participants were not low-income individuals or potential
first-generation college students, and one participant\'s file did not
have documentation of a demonstrated need for academic support.

According to 34 C.F.R. § 645.3, an individual is eligible to participate
in a Regular, Veterans, or Math and Science Upward Bound project if the
individual is a potential first-generation college student or a
low-income individual and has a need for academic support, as determined
by the grantee, in order to pursue successfully a program of education
beyond high school.

In addition, UIC\'s UBMS 2002 summer core curriculum did not include a
foreign language class. Pursuant to 34 C.F.R. § 645.11(a), all UB
projects that have received funds for at least two years shall include
as part of its core curriculum, instruction in mathematics through
pre-calculus, laboratory science, foreign language, composition, and
literature.

By enrolling ineligible students and not providing students the foreign
language component in the UBMS program, UIC could prevent eligible
students from receiving the services needed to succeed in pre-college
performance and, ultimately, their higher education pursuits may be
hindered.

### 

### Recommendations

We recommend that the CFO, in conjunction with the Assistant Secretary,
OPE, require UIC to

2.1 Return \$35,191[^9] to the Department; and

2.2 Include a foreign language class in its summer core curriculum.

### Auditee Comments

UIC partially agreed with the finding and the recommendation to return
\$35,191 to the Department. However, UIC agreed to refund \$21,115
(\$274,493 divided by 39 and multiplied by 3) because three students
were neither low-income individuals nor first-generation college
students. UIC acknowledged that it did not offer a foreign language
component during the summer of the program year that was the subject of
the audit. Instead, it offered a computer language course.

### OIG Response

We did not revise the finding or the corresponding recommendation. The
fourth student we identified as not being a low-income individual or a
first-generation student was classified as a first-generation student.
However, the student's income statement shows that the mother obtained a
baccalaureate degree. UIC did not acknowledge the one participant whose
file did not have documentation of a demonstrated need for academic
support in its response. Therefore, we still conclude that 5 of the 39
participants did not meet all the requirements to be considered eligible
to participate in the UBMS program.

**Finding No. 3 UIC Did Not Appropriately Account for Grant Funds**

UIC did not completely and accurately account for its UBMS funds by
award year. UIC\'s UBMS accounting records did not identify the budget
period from which funds were expended, and UBMS staff did not perform
regular reconciliations to ensure that expenditures were tied to
specific awards. UIC's UFAS tracked all awards on a cumulative basis
(for the entire life of the grant). UFAS does not segregate expenses by
individual award years.

According to 34 C.F.R. § 74.21(b), recipients\' financial management
systems shall provide for accurate, current, and complete disclosure of
the financial results of the project. Records must adequately identify
the source and application of funds. These records shall contain
information pertaining to awards, authorizations, obligations,
unobligated balances, assets, outlays, income, and interest. Recipients
should compare outlays with budget amounts for each award. According to
34 C.F.R. § 75.730, a grantee shall keep records that fully show (a) the
amount of funds under the grant, (b) how the grantee uses the funds, (c)
the total cost of the project, (d) the share of the cost provided from
other sources, and (e) other records to facilitate an effective audit.

By not accounting for funds by award year, UIC may request and use
Federal funds in excess of its award for any given year. Our review
disclosed that UIC might have used \$22,987 in 2001-2002 grant year
funds to pay for 2000-2001 expenses. Therefore, subsequent award years
might not have enough funding to provide adequate (as defined in the
grant application) services to participants. In addition, UIC loses its
ability to accurately forecast its needs for subsequent budget periods.

### Recommendation

We recommend that the CFO, in conjunction with the Assistant Secretary,
OPE, require UIC to

1.  Ensure its accounting system tracks grant funds by award year or
    develop and implement policies and procedures to perform regular
    reconciliations, tying expenditures to specific award years.

**Auditee Comments**

UIC acknowledged that UFAS was not set to track awards by single grant
years. However, UIC has instituted a new financial and administrative
system, BANNER, that will allow UIC to segregate expenses by individual
award years. Additionally, UIC agreed to perform bi-monthly
reconciliations, tying expenditures to specific award years.

### Finding No. 4 UIC Could Not Support All Its Expenditures

Because UIC did not monitor its UBMS project in an effective manner, UIC
could not provide documentation sufficient to support

-   \$43,419 of salary expenses. We selected all expenses for the 3
    months with the highest salary expenses recorded for the 2001-2002
    grant year. The salary expenses for these 3 months totaled \$56,146
    of the total 2001-2002 grant year personnel expenses of \$138,668.
    Our review disclosed that salaried employees were not required to
    complete after-the-fact certifications to verify work was performed
    on the UBMS project. Also, timesheets for wage employees were not
    always provided by UIC.

-   \$1,328 in non-personnel expenses. We reviewed a judgmental sample
    of non-personnel expense categories. We selected 18 UBMS expense
    categories (45 actual expenses) totaling \$97,415 that were large or
    appeared unusual in relation to similar expenses for other months
    from the total non-personnel expenses of \$128,665 recorded during
    the period August 31, 2001, through August 31, 2002. We reviewed
    supporting documentation such as purchase orders, invoices, and
    canceled checks. UIC personnel did not always approve vouchers, and
    the vouchers did not have all supporting receipts attached. In
    addition, purchase orders did not always correspond with accounting
    records, and the purchase orders did not have all supporting
    invoices attached.

According to the Office of Management and Budget (OMB) Circular A-21,
Attachment, (J)(8)(c)(2)(a) and (e), Principles for Determining Costs
Applicable to Grants, Contracts, and Other Agreements with Educational
Institutions (1998), activity reports should reflect the distribution of
activity expended by employees covered by the system. For professorial
and professional staff, the reports will be prepared each academic term,
but no less frequently than every six months. For other employees,
unless alternate arrangements are agreed to, the reports will be
prepared no less frequently than monthly and will coincide with one or
more pay periods. According to 34 C.F.R. § 75.730, a grantee shall keep
records that fully show how the grantee uses the funds. Pursuant to 34
C.F.R. § 74.53(b), financial records, supporting documentation,
statistical records, and all other records pertinent to an award shall
be retained for a period of three years.

By not retaining adequate documentation, UIC cannot prove that it used
\$44,747 (\$1,328 plus \$43,419) on allowable expenses.

### 

### Recommendation

We recommend that the CFO, in conjunction with the Assistant Secretary,
OPE, require UIC to

1.  Return \$44,747 to the Department.[^10]

**Auditee Comments**

UIC acknowledged that it did not always require the staff to complete
time and effort certifications. Because most of the staff referred to in
the finding continue to work for the UBMS project, UIC submitted the
faculty activity reports and time sheets from which the time and effort
documentation was derived. Staff completed the time and effort forms,
and they and their supervisors signed the forms indicating the time
spent by each staff member on the UBMS project. UIC also provided
additional documentation to support the questioned non-personnel
expenses. According to UIC, the documentation contained receipts, signed
vouchers, and purchase orders that have been reconciled with supporting
invoices.

### OIG Response

After reviewing the additional supporting documentation provided by UIC
to support the \$43,419 in salary expenses, we concluded that we could
not revise the finding or the recommendation to return \$43,419 in
salary expenses. The time and effort documentation was signed and dated
in 2004, after the completion of our audit.

UIC provided additional documentation sufficient to support \$13,674 of
the total \$15,002 in non-personnel expenses we originally questioned.
Therefore, we revised the draft report finding and are now reporting
that UIC could not provide documentation sufficient to support \$1,328
in non-personnel expenses. We also revised our recommendation.

**Finding No. 5 UIC Charged Unallowable Costs to the Grant**

UIC charged unallowable costs to the UBMS program totaling \$4,102. UIC
charged the following to the UBMS program:

-   \$4,111 in telecom expenses. UIC charged telecom costs as a direct
    cost to the UBMS grant, failing to treat the expenses consistently
    throughout the University. For other programs and departments within
    UIC, telecom expenses are included in the indirect cost pool. Per
    OMB Circular A-21, Attachment, (D)(1), costs incurred for the same
    purpose in like circumstances must be treated consistently as either
    direct or facilities and administrative costs.

-   \$180 in stipends. Three students did not qualify as
    first-generation college students or low-income individuals.
    Pursuant to 34 C.F.R. § 645.42(a), an Upward Bound project may
    provide stipends only to those participants who participate on a
    full-time basis. An individual is eligible to participate in a
    Regular, Veterans, or Math and Science Upward Bound project if the
    individual is a potential first-generation college student or a
    low-income individual (34 C.F.R. § 645.3).

In addition, UIC incorrectly computed and charged indirect costs to the
UBMS program. Based on our calculations for the 2001-2002 grant year,
UIC undercharged indirect costs to the UBMS program by \$189.[^11] OMB
Circular A-21, Attachment, (G)(2) states, in part, that the institution
may apply the indirect cost rate to the modified total direct costs for
individual agreements to determine the amount of indirect costs.

Unallowable costs charged to the grant constitute a debt to the Federal
Government and harms the Federal interest. When a grantee uses Federal
funds for unallowable costs, those funds are not available to pay for
items and services that will advance the project.

### Recommendation

We recommend that the CFO, in conjunction with the Assistant Secretary,
OPE, require UIC to

1.  Return \$4,102[^12] to the Department.

**Auditee Comments**

UIC agreed to return \$180 in stipends that were received by the 3
students who were neither low-income nor first-generation college
students. However, UIC asserted that because the telecom expenses were a
line item in the Department-approved budget, and because it was able to
isolate the charges directly to the UBMS budget, UIC believes that it
was within the guidelines of the proposal and the budget line items. UIC
disagreed with the recommendation to return \$3,922 to the Department
(telecom charges less the undercharged \$189) because it acted in good
faith based on its understanding of the line item in the
Department-approved budget.

###### OIG Response

We did not revise the finding or the corresponding recommendation. UIC
did not include additional supporting documentation as part of its
response. Therefore, we could not determine whether the telecom charges
were excluded from UIC's indirect cost pool and only included as direct
charges to the UBMS project.

# BACKGROUND

The Upward Bound program provides support to participants by preparing
them for college entrance. The program provides opportunities for
participants to succeed in pre-college performance and ultimately in
higher education pursuits. Upward Bound projects should serve high
school students from low-income families, high school students from
families in which neither parent holds a bachelors degree, and
low-income, first-generation military veterans who are preparing to
enter postsecondary education. The goal of an Upward Bound project is to
increase the rates at which participants enroll in and graduate from
institutions of postsecondary education.

The Upward Bound Math and Science program allows the Department to fund
specialized Upward Bound math and science centers. The program is
designed to strengthen the math and science skills of participating
students. The goal of the program is to help students recognize and
develop their potential to excel in math and science and encourages them
to pursue postsecondary degrees in these fields.

UBMS is authorized by Part A, Subpart 2 of Title IV of the Higher
Education Act of 1965, as amended. It is subject to the provisions in 34
C.F.R. Parts 74, 75, 77, and 645. Institutions of higher education that
operate UBMS projects also are required to adhere to the requirements in
OMB Circulars A-21 (Cost Principles for Educational Institutions) and
A-110 (Uniform Administrative Requirements for Grants and Other
Agreements with Institutions of Higher Education, Hospitals and Other
Non-Profit Organizations).

UIC was awarded \$274,493 in UBMS funds for the period August 31, 2001,
through August 31, 2002, the third year of the grant (P047M990103).

# OBJECTIVES, SCOPE, AND METHODOLOGY

The objectives of our audit were to determine whether UIC's UBMS program

\(1\) maintained support demonstrating that it achieved each program's
objectives as reported to the Department; (2) provided only eligible
services to the number of eligible students required under its
agreements with the Department; (3) properly accounted for its use of
funds; and (4) only claimed expenses that were allowable and adequately
supported for the period August 31, 2001, through August 31, 2002.

To achieve our objectives, we

1.  Gained an understanding of UIC's internal controls over its UBMS
    program and accounting for Federal funds. We did not assess the
    adequacy of the internal controls. Instead, we relied on compliance
    testing of student files, non-personnel expenses, and salaries and
    fringe benefit expenses.

2.  Reviewed the performance report for the 2001-2002 grant year.

3.  Reviewed accounting records.

4.  Reviewed all 39 2001-2002 UBMS participants' files.

5.  Reviewed a judgmental sample of non-personnel expense categories. We
    selected 18 UBMS expense categories (45 expenses) totaling \$97,415
    that were large or appeared unusual in relation to similar expenses
    for other months. Total non-personnel expenses recorded during the
    2001-2002 grant year were \$128,665. For each expense tested, we
    reviewed supporting documentation such as purchase orders, invoices,
    and canceled checks.

6.  Reviewed a judgmental sample of salaries and fringe benefit expenses
    for three months. We selected the three months from the 2001-2002
    grant year with the highest recorded salary expenses. The sample of
    salaries and fringe benefit expenses for three months totaled
    \$56,146 of the 2001-2002 grant year total personnel expenses of
    \$138,668.

7.  Reviewed additional documentation provided by UIC in response to the
    draft of this report.

We also relied, in part, on computer-processed data recorded in UIC's
UFAS. UIC uses the system to record expenses charged to the project. To
assess the reliability of the data, we reviewed accounting records for
the 2001-2002 grant year for expenses applicable to the grant year as
identified by UIC staff. The data did not appear to be entirely complete
or accurate. The accounting records for the 2001-2002 grant year
included charges from the prior grant year and omitted charges
applicable to the 2001-2002 grant year. However, the accounting records,
as a whole, reflect every transaction related to the UBMS program.
Because we had corroborating evidence[^13] on which we could rely, and
because we only intended to use the accounting records to select
transactions for determining the allowability of costs charged to the
UBMS grant, the computer-processed accounting data was sufficiently
reliable for the purposes of our audit.

We performed our audit work at UIC's administrative offices and our
Chicago office from August 2003 through June 2004. We discussed the
results of our audit with UIC officials on July 9, 2004. Our audit was
performed in accordance with generally accepted government auditing
standards appropriate to the scope of the review described above.

##### 

##### ADMINISTRATIVE MATTERS

Statements that managerial practices need improvements, as well as other
conclusions and recommendations in this report, represent the opinions
of the Office of Inspector General. Determinations of corrective action
to be taken will be made by the appropriate Department officials.

If you have any additional comments or information that you believe may
have a bearing on the resolution of this audit, you should send them
directly to the following Department officials who will consider them
before taking final Departmental action on the audit.

> Jack Martin, Chief Financial Officer

Office of the Chief Financial Officer

> U.S. Department of Education

FOB-6, Room 4E313

400 Maryland Avenue, SW

> Washington, DC 20202

Sally Stroup, Assistant Secretary

> Office of Postsecondary Education

U.S. Department of Education

Room 7115

1990 K Street, NW

> Washington, DC 20006

It is the policy of the U.S. Department of Education to expedite the
resolution of audits by initiating timely action on the findings and
recommendations contained therein. Therefore, receipt of your comments
within 30 days would be greatly appreciated.

In accordance with the Freedom of Information Act (5 U.S.C. § 552),
reports issued by the Office of Inspector General are available to
members of the press and general public to the extent information
contained therein is not subject to exemptions in the Act.

Sincerely,

Richard J. Dowd

Regional Inspector General

> for Audit

Appendices

Attachment

> **APPENDIX A**

+---+---------------------------------+----------+----------+-----------+
|   | # Grant Proposal Objective      | **Ach    | **Ach    | **Ac      |
|   |                                 | ievement | ievement | hievement |
|   |                                 | A        | A        | According |
|   |                                 | ccording | ccording | to        |
|   |                                 | to       | to       | Files**   |
|   |                                 | Per      | UIC\'s   |           |
|   |                                 | formance | Data**   |           |
|   |                                 | Report** |          |           |
+---+---------------------------------+----------+----------+-----------+
| 1 | UIC will identify and select    | 39       | 39       | 39        |
|   | 40[^14] eligible participants   | part     | part     | par       |
|   | from an identified pool of      | icipants | icipants | ticipants |
|   | low-income and potentially      |          |          |           |
|   | first-generation college        | Not      | 20 (51%) | 9 (23%)   |
|   | students in UIC\'s UBMS target  | A        | LI & FG  | LI & FG   |
|   | areas by June 1 of each         | ddressed |          |           |
|   | academic year.                  |          | 16 (41%) | 26 (67%)  |
|   |                                 | Not      | LI or FG | LI or FG  |
|   | -   67% or 26 of the            | A        |          |           |
|   |     participants will qualify   | ddressed | 3 (8%)   | 4 (10%)   |
|   |     as both low-income          |          | Neither  | Neither   |
|   |     individuals and             |          | LI/FG    | LI/FG     |
|   |     first-generation college    |          |          |           |
|   |     students.                   |          |          |           |
|   |                                 |          |          |           |
|   | ```{=html}                      |          |          |           |
|   | <!-- -->                        |          |          |           |
|   | ```                             |          |          |           |
|   | -   33% or 13 will be either    |          |          |           |
|   |     low-income individuals or   |          |          |           |
|   |     first-generation college    |          |          |           |
|   |     students.[^15]              |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 2 | 100% of the newly, admitted     | 100%     | No       | 58%       |
|   | participants will have their    |          | Su       |           |
|   | needs assessed and an           |          | pporting |           |
|   | Individual Educational Action   |          | Data     |           |
|   | Plan (IEAP) will be developed   |          |          |           |
|   | within 30 days following their  |          |          |           |
|   | acceptance in UBMS.             |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 3 | 80% of all UBMS participants    | 80%      | 38%      | 38%       |
|   | will maintain at least a C+     |          |          |           |
|   | (3.5 grade point average on a   |          |          |           |
|   | 5.0 grading scale) on a yearly  |          |          |           |
|   | basis through high school       |          |          |           |
|   | graduation.                     |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 4 | All UBMS participants will      | 100%     | No       | 97%       |
|   | enroll in pre-collegiate        |          | Su       |           |
|   | mathematics and laboratory      | Not      | pporting | 0%        |
|   | science in a research-oriented  | A        | Data     |           |
|   | summer program to improve their | ddressed |          | 0%        |
|   | academic performance and        |          | No       |           |
|   | literacy.                       | Not      | Su       |           |
|   |                                 | A        | pporting |           |
|   | -   Upon completion of the      | ddressed | Data     |           |
|   |     6-week summer program, 75%  |          |          |           |
|   |     of the participants will    |          | No       |           |
|   |     show a 40% pre-to-post test |          | Su       |           |
|   |     gain on a criterion         |          | pporting |           |
|   |     reference math and science  |          | Data     |           |
|   |     test.                       |          |          |           |
|   |                                 |          |          |           |
|   | ```{=html}                      |          |          |           |
|   | <!-- -->                        |          |          |           |
|   | ```                             |          |          |           |
|   | -   By June of the subsequent   |          |          |           |
|   |     year, 75% of the students   |          |          |           |
|   |     will show a 20% pre-to-post |          |          |           |
|   |     gain on the math and        |          |          |           |
|   |     science sub test of the     |          |          |           |
|   |     California Achievement      |          |          |           |
|   |     Test.                       |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 5 | 70% of the UBMS participants    | 70%      | 72%      | Not       |
|   | entering the program as high    |          |          | M         |
|   | school sophomores or juniors    |          |          | easurable |
|   | will be retained in UIC\'s UBMS |          |          |           |
|   | program through their senior    |          |          |           |
|   | year.[^16]                      |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 6 | At least 90% of the UBMS        | Not      | Not      | Not       |
|   | participants who have attained  | Me       | Me       | M         |
|   | the grade level of a senior     | asurable | asurable | easurable |
|   | will graduate from high school  |          |          |           |
|   | with the assistance of UIC\'s   |          |          |           |
|   | UBMS.                           |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 7 | Establish a summer              | Not      | Not      | Not       |
|   | math/science-oriented college   | Me       | Me       | M         |
|   | transition (bridge) program. As | asurable | asurable | easurable |
|   | a result 90% of the summer      |          |          |           |
|   | bridge students will complete   |          |          |           |
|   | the summer program with 60%     |          |          |           |
|   | attaining a grade point average |          |          |           |
|   | of 3.5 or above on a 5.0 scale. |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 8 | 100% of all UBMS seniors will   | Not      | Not      | Not       |
|   | apply for admission to a        | Me       | Me       | M         |
|   | post-secondary educational      | asurable | asurable | easurable |
|   | institution. As a result:       |          |          |           |
|   |                                 |          |          |           |
|   | -   90% of those program        |          |          |           |
|   |     participants will gain      |          |          |           |
|   |     admission and enroll in a   |          |          |           |
|   |     post-secondary educational  |          |          |           |
|   |     institution                 |          |          |           |
|   |                                 |          |          |           |
|   | ```{=html}                      |          |          |           |
|   | <!-- -->                        |          |          |           |
|   | ```                             |          |          |           |
|   | -   75% of the program          |          |          |           |
|   |     participants will indicate  |          |          |           |
|   |     their major declaration by  |          |          |           |
|   |     providing a copy of their   |          |          |           |
|   |     course program.             |          |          |           |
+---+---------------------------------+----------+----------+-----------+
| 9 | 70% of all UBMS graduates who   | Not      | Not      | Not       |
|   | enter post-secondary            | Me       | Me       | M         |
|   | educational institutions will   | asurable | asurable | easurable |
|   | graduate in at least 5 years or |          |          |           |
|   | be making progress toward a     |          |          |           |
|   | degree. At least 50% of those   |          |          |           |
|   | graduating will graduate with a |          |          |           |
|   | math/science related degree.    |          |          |           |
+---+---------------------------------+----------+----------+-----------+

**Objectives and Achievements as Listed in the**

**2001-2002 Annual Performance Report**

  --- --------------------------------- ----------------------------------
      **Objective**[^17]                **Extent to Which Project Achieved
                                        Objective**

  1   Identify and select 40 eligible   39 participants were identified
      participants from an identified   and selected during the reporting
      pool of low-income and            period 2001-2002. Documented by
      potentially first-generation      student applications and
      college students in UIC's         eligibility and enrollment
      Regional Math - Science Center    reports.
      (RMSC) target area by June 1 of   
      each academic year.               

  2   100 percent of the newly admitted 98 percent of all project
      participants will have their      participants were assessed using
      needs assessed and an Individual  the CAT's pre-test. An IEAP was
      Educational Action Plan (IEAP)    developed for all participants.
      will be developed within 30 days  Documented by assessment results
      following their acceptance into   and participant IEAPs.
      RMSC.                             

  3   80 percent of all RMSC            As a result of intensive
      participants will maintain at     curriculum, tutoring, and advising
      least a C+ (3.5 grade point       system, at least 80 percent of
      average on a 5.0 grading scale)   participants have maintained a 3.5
      on a yearly basis through high    GPA during the reporting period.
      school graduation.                Documented by program curriculum,
                                        tutor reports and logs, high
                                        school transcripts, classroom
                                        reports.

  4   All RMSC participants will enroll The Project provided an intensive
      in pre-collegiate mathematics and pre-collegiate, math-science
      laboratory science in a           focused research based curriculum
      research-oriented summer program  to its thirty-nine participants.
      to improve their academic         Documented by curriculum,
      performance and literacy.         participant IEAPs, classroom
                                        schedules and reports and high
                                        school transcripts.

  5   70 percent of RMSC participants   70 percent of current sophomores
      entering the program as high      and juniors are being retained in
      school sophomores or juniors will the RMSC project. Documented by
      be retained in UIC's RMSC program eligibility and enrollment
      through their senior year.        records.

  6   At least 90 percent of the RMSC   No participants had attained
      participants who have attained a  senior level during this reporting
      grade level of senior will        period.
      graduate from high school with    
      the assistance of the UIC's RMSC. 

  7   Establish a summer                RMSC participants during this
      mathematics/science-oriented      reporting period were sophomores
      college transition (Bridge)       and juniors. There were no senior
      program. As a result, 90 percent  participants.
      of summer bridge students will    
      complete the summer program with  
      60 percent attaining a grade      
      point average of 3.5 or above on  
      a 5.0 scale.                      

  8   100 percent of all RMSC seniors   RMSC participants during this
      will apply for admission to a     reporting period were sophomores
      postsecondary educational         and juniors. No participants had
      institution.                      attained senior level during this
                                        reporting period.

  9   70 percent of RMSC graduates who  Not available for this reporting
      enter postsecondary educational   period.
      institutions will graduate in at  
      least five years or be making     
      progress toward a degree.         
  --- --------------------------------- ----------------------------------

![](media/image1.png){width="5.999305555555556in"
height="7.761805555555555in"}

![](media/image2.png){width="5.999305555555556in"
height="7.761805555555555in"}

![](media/image3.png){width="5.999305555555556in"
height="7.761805555555555in"}

![](media/image4.png){width="5.999305555555556in"
height="7.761805555555555in"}

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height="7.761805555555555in"}

![](media/image6.png){width="5.999305555555556in"
height="7.761805555555555in"}

![](media/image7.png){width="5.999305555555556in"
height="7.761805555555555in"}

![](media/image8.png){width="5.999305555555556in"
height="7.761805555555555in"}

![](media/image9.png){width="5.999305555555556in"
height="7.761805555555555in"}

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height="7.761805555555555in"}

![](media/image11.png){width="5.999305555555556in"
height="7.761805555555555in"}

[^1]: See Appendix A and Finding No. 1 for the project objectives
    proposed by UIC. See Appendix B for the results of the project
    reported to the Department.

[^2]: See Attachment.

[^3]: See Appendix A for a list of the objectives in the grant proposal.

[^4]: See Appendix B for the achievements reported in the annual
    performance report.

[^5]: Four of the 5 objectives could have been measured if the UBMS
    program retained students from year to year. Thirty-one of the 39
    participants for the 2001-2002 grant year entered the program in the
    summer 2002 session. As of August 31, 2003, only 2 (5%) of the 39
    participants remained in the program (See Appendix A summarizing all
    9 proposed objectives).

[^6]: All regulatory citations are as of July 1, 2001, unless otherwise
    noted.

[^7]: UIC did not submit a written performance agreement for UBMS that
    showed it received approval to revise the scope of the project as
    outlined in its grant proposal. Because we did not have evidence
    that UIC received approval to revise the scope of its UBMS project,
    we audited to the objectives outlined in the grant proposal.

[^8]: According to Section 402A of the Higher Education Act of 1965, as
    amended, the term "first-generation college student" means an
    individual whose parent(s) did not complete a baccalaureate degree.
    The term "low-income individual" means an individual from a family
    whose taxable income from the preceding year did not exceed 150
    percent of an amount equal to the poverty level determined by using
    criteria of poverty established by the Bureau of the Census.

[^9]: Total UBMS funds received of \$274,493 divided by 39 and
    multiplied by 5. The funds to be returned to the Department are an
    estimate and are not derived from a statistically valid projection.
    The recommended recovery is included in the recovery in
    recommendation 1.1.

[^10]: The recommended recovery is included in the recovery in
    recommendation 1.1.

[^11]: We reduced the total amount of allowable costs (\$4,111 + \$180)
    by the undercharged amount of \$189.

[^12]: The recommended recovery is included in the recovery in
    recommendation 1.1.

[^13]: Corroborating evidence is evidence such as purchase orders,
    invoices, and canceled checks that supports information in UFAS.

[^14]: ^1^ Total number of participants was revised from 60 in the grant
    proposal to 40 in the performance report because UIC's UBMS program
    received oral permission to serve 40 students.

[^15]: ^2^ Revisions made to number of participants who qualify as low
    income and/or first generation because number of total participants
    (#1a) revised from 60 to 40. Only 39 participants were served.

[^16]: ^3^ The achievements as stated in the performance report and
    according to UIC's data only measure the percentage of students
    maintained in the program as of August 31, 2002, which is
    immediately after the summer session concluded. Because all the
    participants were either sophomores or juniors during the 2001-2002
    award year, it could not be determined for the performance report
    period whether the students were retained in the program until their
    senior year. We reviewed exit dates for the 39 participants
    occurring during the 2002-2003 grant year to determine whether they
    remained in the program until their senior year. Of the 39
    participants, only 2 (5%) participants remained in the program
    through their senior year.

[^17]: ^1^ UIC did not submit a written performance agreement for UBMS
    that showed it received approval to revise the scope of the project
    as outlined in its grant proposal. Because we did not have evidence
    that UIC received approval to revise the scope of its UBMS project,
    we audited to the objectives outlined in the grant proposal (See
    Appendix A).