Audit shows U. padded plan with unusual costs

In fiscal year 1987, the University spent $6098.40 on cocktails and dinner for University Trustees. That same year, the University kicked out $1099 for an employee in the provost's office to take an unexplained trip to Australia. An employee in the senior vice president's office traveled to London during that period to attend a conference at a cost of $1736.16, which the University covered. And, the University spent $13,357 to pay the Marshall and Rice Association for their assistance in the University's search for a new Vice President for Development. These expenditures appear to have no relation whatsoever. But they do. In each case, government auditors say, the University included the expenditure in its indirect cost proposal to the federal government for fiscal years 1989 through 1992. This means that, while the University was not billing the government for these costs, it was using these and numerous other expenditures, which auditors have determined to be "questionable," to boost its indirect cost rate for future years -- funds that the government did pay. Vice President for Finance Selimo Rael said last night the effect of using questionable expenditures totaling more than $1.25 million in determining the rate was negligible and inflated it by only two-tenths of one percent, to 65 percent from 64.98 percent. And except for $782,531 spent on alumni relations, which the University has agreed should not have been included, the University has disputed many of the findings in the government audit. University officials argue that regulations on what qualifies as billable overhead are ambiguous and that costs such as upkeep of the president's house and the chaplain's office are valid under the rules. But the University also agreed that many of the costs identified in the audit as questionable should not have been part of the proposal. These include: · 35 transactions totaling $22,713 that were for entertainment. These included dinner reservations for the Women's Way 10th anniversary dinner, charges to the president's office general account at the Faculty Club, charges for cups and napkins, wine and cheese, deli buffet, and cocktails and dinner. · Eight transactions totaling $11,275 for public relations or memberships in a professional public relations club. · 10 tickets to a Martin Luther King, Jr. birthday observance costing $500. · $732.85 spent on a Trustees' wives luncheon. · $500 for costs of a seminar in Poland and Israel, which an employee in the provost's office attended. · Several bills to the Philadelphia Flower Shop, valued at $39, $38 and $124.25. · A $117.50 charge at the Barclay Hotel for the dean of the Graduate School of Education. · A dinner at the home of the provost, costing $374.85. · $397.10 worth of advertising in The Daily Pennsylvanian. · $525.80 for wine and cheese at development activities. Other expenditures were determined to be questionable by government auditors, but not necessarily by the University. These include: · The printing and framing of "A Map of Philadelphia and Parts Adjacent" as a gift for a "Mr. O" and valued at $625. · A $98 videocasette, entitled "Tuition Cost Interview With the President." · Annual dues at the Cosmopolitan Club, totaling $185.24. · Several one-time expenditures in preparation for the University's 250th celebration.

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