A state audit of the North Carolina Biotechnology Center found the state-funded agency has not always kept adequate records for the grants it awards and the center is now taking new steps to track these awards.

During the audit period, the Biotech Center reimbursed grant recipients more than $5.2 million for Science and Technology Innovation Grants, according to the audit. Out of a sample of 21 payments out of 110 transactions, the auditor found four grant payments to large institutions that were made without adequate records documenting the incurred expense.

The four reimbursement requests, totaling $277,563, and representing 42 percent of the amount tested, did not include support for reimbursement, such as copies of invoices and payroll registers as required of other subrecipients, the North Carolina Office of the State Auditor said in the 15-page audit released Thursday. The audit noted no issues in the sample. But the auditor added that the lack of formal communication could result in payments that should be stopped or reduced.

“During our audit period the Biotech Center did not request additional documentation from the larger institutions,” the audit said. “If these requests had been made and the documentation reviewed, this finding would not have been necessary.”

In the 2012 fiscal year, the Biotech Center reported $6.8 million in grant expenditures and $1.3 million paid out in loans to biotech companies. Biotech Center spokeswoman Robin Deacle said that the center does an annual third-party audit that has consistently had no findings. The finding from the state auditor is the first the center has found from the office.

As a result of the state audit, the auditor’s office is now requiring the Biotech Center to conduct site visits to make sure funds are being used to move toward meeting grant objectives. Biotech Center financial staff will also be need to make site visits to a grant recipients administration office to inspect documents and verify expenses. And last, technical program experts and financial staff from the Biotech Center will meet formally each quarter to discuss the status of active grants.

“If sufficient monitoring is performed, this action will address our issue,” the audit stated.