Federal research grant activities at the University of Rochester for the year ending June 30, 1977, during which the university received $38.6 million in grants and contracts, are reviewed. The report includes: (1) a review of the university's system for administering and accounting for these funds; (2) an analysis of selected major grants awarded by the National Institutes of Health and the National Science Foundation (NSF) to determine whether costs claimed were adequately documented and related to the grants' purposes; (3) an evaluation of the adequacy of audit activities by the Defense Contract Audit Agency; and (4) a review of Health, Education, and Welfare and NSF practices for monitoring research grants and coordinating with other federal agencies. A four-page cover letter to the U.S. House of Representatives Subcommittee on Intergovernmental Relations and Human Resources is included. (Author/MSE)