Federal Research Grants: Compensation Paid to Graduate Students at the University of California

Pursuant to a congressional request, GAO investigated the use of federal research and development grant funds by the University of California system in its payments to graduate student researchers (GSR), focusing on whether: (1) the compensation paid to GSRs was in accordance with the guidelines set forth in the Office of Management and Budget's (OMB) Circular A-21; (2) foreign students were receiving a larger share of federal research funds than resident students as compensation for performing as GSRs; (3) the university's treatment of GSR compensation for federal income tax purposes was consistent with its actions in charging such moneys to the federal grants under OMB Circular A-21; and (4) the Department of Health and Human Services (HHS) provided adequate oversight in safeguarding against the diversion of funds from federal research grant awards.