The audit found that the university did not follow federal guidelines in 34 salary transactions and 40 non-salary transactions between October 2009 and September 2011, according to the Office of the Inspector General.

Paul Sanberg, USF senior vice president for research and innovation, said the university expects the final amount of the “unallowable items to be significantly reduced” once HHS concludes the audit.

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“The University of South Florida takes seriously its responsibilities in managing research dollars, and is looking forward to working with the Department of Health and Human Services to resolve any concerns about the individual items charged to audited federal research grants,” Sanberg said, according to an email sent to The Oracle from USF Media and Public Affairs Coordinator Adam Freeman.

Additionally, Sanberg said “USF will continue to work internally on its own processes to ensure that expenses billed to federal research grants are properly documented” and it is “not unusual for large and successful national research universities to be audited and asked to return federal dollars at the end of the audit.”

The report by the HHS Office of the Inspector General also showed concern over the university’s grant oversight system in general, and labeled it as a “high-risk area.” The report recommended university officials enhance their oversight of what is and is not charged to federal grant funds.

“These unallowable transactions occurred because the University did not provide adequate oversight to ensure consistent compliance with federal regulations,” the Inspector General said in the report.

While the Office of the Inspector General is in charge of making recommendations for the amount to be reimbursed, a more complete audit is being conducted by the HHS agencies that funded the grants for USF.

In December, the university faced criticism when a state audit revealed the university had overpaid three top administrators and improperly allocated $1.7 million to former football coach Skip Holtz as part of his severance package.