Federal auditors are asking Yale University to repay $535,000 that the Ivy League institution allegedly earned by investing idle federal cash, a Department of Health and Human Services spokesman said.
Yale received $82 million in grants, including $72 million paid in advance, from the department in the year ending last June 30 and earned the $535,000 in interest on an average daily balance of $2.7 million in its federal account, said Richard J. McGowan, spokesman for the department's inspector general.
The New Haven, Conn., university and other large grant recipients have letters of credit with the department that allow them to get their money at the time they expect to spend it. McGowan said the department auditors found that Yale got 100 percent of its "estimated cash needs" by the 20th of each month, but "about 50 percent of university expenses were not paid until the last day of each month."
"As a result, the federal government incurred additional borrowing costs estimated at $375,000 while the institution earned interest of about $535,000 on the excess federal funds," he said.
A Yale spokesman has said the university intends to repay some of the funds, but that the amount is undecided and is roughly $100,000 less than the auditors recommended.