The federal government wants Brigham Young University to repay $250,000 in grant money that was supposed to go into BYU pension funds but never did.

That's according to an audit completed last year of how BYU used federal grant money in 1988 and 1989. The Deseret News obtained a copy through a request to the Inspector General of the U.S. Environmental Protection Agency.The audit said the problem arose when the university decided its employee pension plan was overfunded.

"As a result, payments to the plan were discontinued to reduce the overfunding. However, all activities, including federal programs, continued to be charged for pension benefits which were accumulated in a reserve account," auditors wrote.

BYU spokesman Paul Richards said the school has appealed that decision, as allowed by federal rules.

He said the school is negotiating with the Department of Health and Human Services - the lead federal agency overseeing such funds - to see if the payment may be reduced, or if some rules definitions may be interpreted differently to the school's benefit.

The auditors also found that BYU had earned a total of $10,179 in interest on federal grants from 10 different agencies without returning it to the government or obtaining specific approval to keep it.

Richards said BYU has since returned that money.