Audit Survival Guide

Recent Audit Findings

• NSF OIG

• Period April 2010 through March 2013

• Questioned costs $2,003,109

University of Washington

• DHHS OIG

• Period October 2008 through September 2010

• Questioned costs $202,000

University of California,

San Diego

• DHHS OIG

• Period July 2009 through June 2011

• Questioned costs $336,000

University of North Carolina,

Chapel Hill

• Are there different types of audits?

• What is involved?

• Who is contacted?

• Who do I contact?

• What is provided?

Tools for the Survival Kit

Audit Requests Received From…

Federal Cognizant

Agency (ONR)

Federal Sponsor:

Specific award

Federal Sponsor: Non-specific award

State

Industry FoundationOther

UniversityAudit Agency (annual audit)

Internal Audit

Audit Type Examples

Financial

Programmatic

Process Specific (i.e. Effort, COI)

Annual OMB A-133 / Uniform Guidance Subpart F

Where is the Audit Conducted?

• Two Main Types

– Onsite

• Auditor requests to visit campus

– Desk Review

• Auditor requests documents via email

• May request documents be uploaded

Is this an Audit?

• Monitoring Visit

• Documents requested to support invoice

• Investigations

• Quarterly reports

• An audit by another name is still…an audit

Annual Single Audit

• Office of Management and Budget (OMB)

– Previously OMB Circular A-133

– Replaced by Uniform Guidance Subpart F

• Applies to audit of fiscal year beginning on or after December 26, 2014

• Raises the Single Audit threshold from $500,000 in Federal awards per year to $750,000

What Does It Do?

• In general, the Single Audit sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards. These provisions also provide the policies and procedures for Federal awarding agencies and pass-through entities when using the results of these audits.

• Normally performed annually

Audits

Identify major programs based on

expenditures in fiscal year (SEFA)

Review previous audit findings

Review new programs or those

with regulatory changes

Expenditures (budget vs actual)

Expenditures (Cost Acctg Stds)

Expenditures (per Agreement)

Financial Reporting Cash ManagementCost share

(committed vs. actual)

Effort Reporting

Review personnel or system changes

SubawardsUD Policies & Procedures

What Makes a Successful Audit?

Knowledge of policies and regulations

Appropriate Approvals

Organized Files and Good Support

Documentation

Audit Trails…“If it’s not documented, it didn’t happen….”

During the Process

• You are guilty until proven innocent

• The burden of proof regarding allowability is on the University NOT the auditor

• Individuals in departments other than RO may be interviewed and/or expected to provide information

Vulnerable Areas

Credit CardsCost

Transfers

Inconsistent Cost

TreatmentOddities

Red Flags

Insufficient documentation

Significant number of late transfers (greater than 90 days)

Transfers from an account in overrun status to an account with large balance

Significant number of transfers from departmental account to sponsored accounts

Roles and Responsibilities

Principal Investigator

• Read the award

• Know the terms

• Present ideas of WHAT is desired outcome

• Justify allowability

• Provide justification

Administrator

• Read the award

• Know the terms

• Translate rules to outcomes

• Question expenses

• Maintain documentation

Research Office

• Read the award

• Know the terms

• Guide and facilitate decisions

• Seek sponsor approvals as needed

• Help determine relevant documentation

How Is UD Contacted?

• Depends on the type of audit

• Annual Single Audit – Office of The Executive Vice President & University Treasurer

• Federal audit, non-specific award – Research Office (RO)

Specific Award Audit

• Audits, specific award – sponsor could contact:– Principal Investigator (PI)

– Department Research Administrator (RA)

– Research Office• Contract and Grant Specialist (CGS)

• Sponsored Research Accountant (SRA)

• Billing Coordinator

– Any combination of the above…

What To Do If Contacted?

• Contact the Research Office

– CGS, and/or SRA

– If informing via email, copy your College Business Officer

– The information will then be provided to the Associate Director, Post Award Administration, Research Office

What Should I Provide?

• The RO will be the main contact with the auditor

• The RO will ask for clarification and additional information from the auditor as needed

• The RO can then assess the nature of the audit and help determine the items to be provided

Audit Support

RO

• Determines support needed

• Gathers available support

• Provides Effort, fringe, and indirect cost support

Department

• Gathers support requested

• Sends support to the RO

• Alerts the RO to any potential issues

RO

• Reviews all support documents

• Discuss/seek clarity on items with department

• Submits documents to the auditor

Inform the RO

• Potential issues– Item charged inappropriately, but since removed

– Item charged inappropriately, not yet removed

– Not sure if item charged correctly

– Hand-written ‘cross-outs’ or ‘write-overs’ on support documents

– Not clear, cannot be easily read or interpreted

Follow up from Auditors

• Notification of outcome varies

• Requests for clarity on items submitted

• Requests for additional documentation– On items already submitted

– New items, such as additional period to be reviewed

• Disallowance of costs can occur

Auditor Actions Can Include…

• Disallowance of costs

• Published findings

• Fines

• Affect on current and potential proposals and awards

Summary

Audits

• Are necessary

• Should not be feared

• Validate good business processes

Documentation

• Validate expenses

• Can be obtained in many ways

• Ensures good monitoring /business processes

Questions?

Contact

Contract & Grant Specialist or

Sponsored Research Accountant

www.udel.edu/research