April 23, 2012

NATIONAL SCIENCE FOUNDATION

Office of Budget, Finance and A ward Management
4201 Wilson Boulevard
Arlington, VA 22230
Dr. Miguel A. Munoz, President
University of Puerto Rico
Central Administration
Jardin Botanico Sur
1187 Calle Flamboyan
San Juan, Puerto Rico 00925
Dear Dr. Munoz:
The National Science Foundation (NSF) conducted a site visit to University of Puerto Rico (UPR) in
February 2010. Significant findings were identified in the site visit, and NSF worked with UPR as it
developed a Corrective Action Plan (CAP) to address these findings, which was accepted by NSF on
February 3, 2011. Continued delinquency in addressing the elements of the CAP resulted in UPR being
placed on special payments on August 8, 2011. Further delinquencies in addressing the time and effort
reporting systems identified in the August 8, 2011 letter resulted in NSF providing the University of Puerto
Rico formal notice on February 3, 2012 that deficiencies must be corrected by April1 , 2012. After
reviewing the documentation provided by UPR, and after significant interaction between NSF and UPR,
NSF has determined that UPR failed to complete activities identified in the CAP regarding inadequacies
in the time and effort reporting systems for Central Administration and the Mayaguez Campus.
NSF has decided because of the inadequate time and effort reporting systems, to suspend all awards to
Central Administration and the Mayaguez Campus, with the exception of award number ENG-1218031 as
explained below. The suspension is reasonable to protect the interests of the government. (Ref. NSF
Award Administration Guide, Chapter VII . A. 2. b. and NSF Research Terms and Conditions, Article 25).
Suspension is an action that temporarily withholds Federal support of a project pending corrective action
by the grantee or a decision by NSF to terminate the grant. No costs incurred during a suspension period
will be allowable, except those costs which, in the opinion of NSF, the grantee could not reasonably avoid
or eliminate, or which were otherwise authorized by the suspension or termination notice, provided such
costs would otherwise be allowable under the terms of the grant and the governing cost principles. (Ref.
NSF Award Administration Guide, Chapter VII. A. 1 and 2). Award number ENG-1218031 is not being
suspended because the individual is working at NSF pursuant to the Intergovernmental Personnel Act,
and NSF can observe the effort of the individual covered under this award.
The suspension will remain in effect for a period of 60 calendar days from the date of this notice and is in
accordance with NSF Research Terms and Conditions (RTC), Article 25 Termination and Enforcement
and with NSF Award Administration Guide, Chapter VII . A. Suspension and Termination Procedures.
UPR has 60 days from the date of this letter to provide documentation that it has completed activities
identified in the CAP to correct inadequacies in the time and effort reporting systems for Central
Administration and the Mayaguez Campus.
If, after this period, implementation is not complete, NSF will begin the process of terminating all active
awards at Central Administration and the Mayaguez campus (with the exception of ENG-1218031), and
no new awards will be made. Pending proposals will be withdrawn or declined. Continued lack of
compliance may have implications beyond Central Administration and the Mayaguez campus, impacting
the status of UPR's entire NSF-sponsored award portfolio. In order to cure these deficiencies, UPR must
implement a system compliant with OMB Circular A-21 which would include the following:
Charges for work performed on sponsored agreements by faculty members during the academic
year will be based on the individual faculty member's regular compensation for the continuous
period which, under the policy of the institution concerned, constitutes the basis of his/her salary.
Charges for work performed on sponsored agreements during all or any portion of such period
are allowable at the base salary rate. In no event will charges to sponsored agreements,
irrespective of the basis of computation, exceed the proportionate share of the base salary for
that period.
The method must recognize the principle of after-the-fact confirmation or determination so that
costs distributed represent actual costs, unless a mutually satisfactory alternative agreement is
reached.
Activity reports will reflect the distribution of activity expended by employees covered by the
system.
These reports will reflect an after-the-fact reporting of the percentage distribution of activity of
employees.
Reports will reasonably reflect the activities for which employees are compensated by the
institution. To confirm that the distribution of activity represents a reasonable estimate of the work
performed by the employee during the period, the reports will be signed by the employee,
principal investigator, or responsible official(s) using suitable means of verification that the work
was performed.
For professorial and professional staff, the reports will be prepared each academic term, but no
less frequently than every six months.
Please provide a written response to this letter and send it to my office within 60 days. Your response
should include any actions that UPR took in order to fully resolve these matters. If you have any
questions, please contact me.
Sincerely,
. '
French
and Agreements Officer
Copy:
NSF Director
NSF Deputy Director
NSF OIG
NSF CFO
NSF Assistant Directors
NSF Office of General Counsel
NSF Office of Legislative and Public Affairs
Director, DGA
Director, DIAS
Applicable Program Officers