The Georgia Board of Regents has agreed to pay the United States Government $500,000.
The settlement comes as a result of allegations that senior officials at Fort Valley State University in Fort Valley failed to properly report expenses for part of a $2.5 million grant from the National Science Foundation.
The money was to help undergraduate students with science, math, engineering and technology.
The U.S. Attorney's office for the Middle District of Georgia conducted the investigation.
As part of the settlement the university will have to undergo yearly audits to oversee how grant money is used and reported.