Audit: UI department shortcomings resulted in overspending, risk of misuse

IOWA CITY — The University of Iowa’s Department of Anatomy and Cell Biology is not aligned with policy and best practices in how it administers and monitors grants, accounts for spending, and handles cash, according to an audit that found “unacceptable weaknesses” that could expose the institution to “unacceptable risks or liability if not corrected.”

“Departmental grant administration and monitoring processes are not aligned with university policy and best practices, resulting in overspending of grants and increased risk that grant funds will be misused,” according to the Board of Regents audit of the 157-year-old UI department, which in the most recent budget year was supported by $3.3 million in general education funds and $3 million in grants and contracts.

The department’s research grants contribute to the hundreds of millions UI researchers generate for the campus annually — including last year’s $533.7 million in research support, which accounted for the majority of its total $705.6 million in external funding.

Research funding has been a fraught topic over the last year, since changes under the Trump administration have threatened federal funding. Grant Witness — which tracks terminations from the National Institutes of Health and the National Science Foundation — reports eight disrupted grants in Iowa, totaling $2 million.

Last year, the state auditor released an investigative report on the UI Department of Neuroscience and Pharmacology that identified more than $300,000 in improper or unsupported spending.

The recent audit on the UI Department of Anatomy and Cell Biology aimed to evaluate its controls and processes to determine “whether opportunities for improvement exist.”

Grants and contracts

Among its findings were concerns with how research grants are administered.

Where UI policy requires departments to resolve within 30 days any spending deficits on grants or contracts that have ended and aren’t getting additional funding, auditors found 16 expired grants that weren’t balanced and closed — including six with deficit balances totaling about $96,000.

Four of the expired grants with deficits were 30-plus days beyond the end of the award, according to the audit that also identified eight active grants operating at a total $213,000 deficit “without clear indication from the department how the deficits will be addressed.”

“It is not acceptable for deficits to reside in grant accounts for extended periods of time,” according to a portion of UI policy highlighted by auditors, who also determined “monthly transactions are not critically assessed.”

In one case, according to the audit, a grant in deficit was awarded multiple no-cost extensions without additional funding and researchers continued to charge against it.

“The expenses should not have continued to be charged to this award as it was already operating in deficit without additional funding available,” according to the audit, which urged the department to balance and close expired grants, resolve overspending and improve grant monitoring.

“The department will work with (the UI Grant Accounting Office) to close and rebalance expired grants and resolve the active grants in deficit,” UI management promised in response to the audit.

Cost errors

In line with the grant-related shortcomings, auditors found broader issues with the department’s cost accounting, “increasing the risk that costs are not allocated appropriately.”

UI policy notes that external agencies and grant sponsors — like the NIH — expect costs to be charged appropriately, making adjustments unnecessary. If an error does occur and the department needs to transfer a cost, it must happen within 90 days and include an explanation.

But between July 2024 and May 2025, the UI department performed 2,666 cost transfers — 35 percent of which occurred 90 or more days after the original transaction. About 58 percent — or 1,539 — of the transfers were on restricted externally-sponsored funds, with 654 transfers happening more than 90 days after the transaction.

Of the 654 late transfers, 206 were more than 180 days late and 38 were more than 360 days past the original transaction. And although UI policy requires completion of an “explanation and justification request form” for cost transfers, an audit check of 10 cost transfers found “none of them met (UI Grant Accounting Office) criteria to sufficiently justify the transfers.”

Auditors recommended the department work with UI College of Medicine leadership to review its cost accounting and transfer practices and make changes that are regularly reviewed and included in staff training.

Department officials, in response, committed to reviewing recent cost transfers — prioritizing those that happened more than 90 days after the original transaction date — and to submitting cost transfer explanation and justification forms.

“Any future transfers completed more than 90 days after the occurrence will be reviewed by the interim (departmental executive officer) for approval, and instances of non-compliance will be escalated to the Interim DEO,” according to the management response to the audit findings.

‘Outdated information’

Auditors, in reviewing the department’s finances, found outdated and incomplete data, “increasing the risk that departmental information is not represented accurately, limiting the ability to make informed decisions.”

“Two months of the department’s financial spreadsheets were reviewed,” auditors reported. “For both months reviewed, there were only six accounts represented, and they do not capture all key financial activity of the department.”

Additionally, sheets included in the report contained “outdated information, with the 5-year trend sheet ranging from FY 2016-2022, and the salaries sheet being populated with salaries from FY 2021.”

Also outdated were the department’s cash handling procedures — last approved in 2019. And the department doesn’t effectively maintain a payment tracking log, upping the risk of lost or delayed revenue.

“The department does not complete any reviews of the log records to confirm payments are received and reconciled timely,” according to auditors who reviewed the 62 records in the 2025 log and found insufficient data.

For example, 22 records indicate payment received without sufficient information to reconcile the payment.

“Additionally, payments are expected to be made within 30 days of the invoiced date, otherwise they are considered late,” according to the audit. “There were 30 records where the recorded payment date in the log was more than 30 days after the invoice date. However, the department does not have a formal escalation process in place to follow up on past-due payments.”

Department officials throughout the audit committed to correct the issues, and auditors reported “management has been responsive to the recommendations.”

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com