Transcript Audit Process Presentation - Office of Research Administration

IU Audit Process
&
Tips
Who Audits IU?
Federal Agencies
Other Agencies (FSSA, Commercial,
Foundations, Other Universities, etc.)
State Board of Accounts
IU Internal Audit
AUDIT
Desk
Audit STARTS
for Financial
 When does an Audit Start?
 Proposal Stage
 Award Stage
 Closeout
AUDIT
PROCESS
AUDIT
NOTICE
AUDIT TEAM
INTERNAL
MEETING
ENTRANCE
MEETING
FIELDWORK
DRAFT
REPORT
FINAL
REPORT
Receive Audit Notice
All notices go to the
University Liaison (UL)
 Departments -Do not
respond to the notice
UL will respond to the Audit
agency
 Establish a point person
 ORA will facilitate the
audit
Clarify Audit Scope
 Verify
 Time period of audit
 Scope of the audit
 Schedule fieldwork
 Review the Award
 Understand the
purpose of the award
Create an Audit Team
IU Roles of Audit Team
University Liaison
Principal
Investigator
Department
Business Manager
University Grant
Consultant
• Official University Contact
• Leads the audit
• Responsible for Project/Award
• Appropriateness of expenditure
• Financially Responsible
• Departmental contact
• Determines Allowability
• University Grant Management
University Financial
Analyst
• Completes Desk Audit
• Provides University retained documents
Department
Administrator
• Day to day grant management
• Provides department retained documents
Desk Audit
 Award Set up
 Project Period
 Budget
Categories
 Revised Budget
 Indirect Cost
Rate
Desk Audit
 Financial Info
 Report setup
 Invoice charges
 Documentation
 Revised Budget
 Online
submissions
 Subcontracts
 Allowable items
Desk Audit
 Close Out
 Final Report
completed
 Inc=bdgt=exp
 No Encumb
 No Cash
 No Account Rec
 Close Account
Internal Meeting
 Meet with members of
the Audit team
 Review Roles
 Clarify Priorities
 Review Desk audit
results
 Resolve potential
problems
 Answer questions
Auditor
Relationships
Desk
Audit
for Financial
 Establish an open line of Communication
 Non-communication = Audit Findings
 Build Rapport
 Don’t Badger
 Don’t Neglect
 Be Professional - courteous
Communicate, Communicate,
Communicate . . . Correctly
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
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Ask questions to verify the question asked
Transparency
Answer questions completely
Don’t under answer the question
Don’t over answer the question
Entrance Meeting w/auditors
 Introductions & Roles
 Background of Award
 Audit Timeline
 Fieldwork
 Update meetings
 Audit Process
 Issue Notification
Auditor’s Fieldwork
 Provide adequate
workspace
 Preferably close to
University Liaison
 Direct all questions to
University Liaison
 Team members clear
calendars during fieldwork.
 Answer questions in a timely
manner
DRAFT AUDIT REPORT
 NO Unresolved
issues
 NO additional
information that
could have
been provided
 Know what will
be in the draft
report
FINAL REPORT
 Report should be
addressed to UL or
to the agency
 No new items in
final report
 Your responses
should be included
in final report
AUDIT TIPS
 Audit Do’s & Don’ts
 Document Register
 Unallowable
expenditure sample
 Prevention is the best
cure
 Record Retention
Audit To Do’s
 Audit is the highest priority
 Secure the highest level of
University support
 Keep everyone in the know
 Be over-prepared
 Provide the answers within
24 hours
 Investigate any department
issue(s) before the audit
 Understand agency &
department’s relationship
More To Do’s
 Be Collaborative
 Seek clarity of question(s)
 Be specific with responses
 Cite sources eg.
Agency guidelines,
Circulars
 Establish regular update
meetings with Auditors
 Review all samples before
giving to Auditors
More To Do’s
Create a document that
includes all relevant
weblinks:





A133 Audit
IU policies
F & A agreements
Fringe Benefit rates
Etc
Do Not’s for an Audit
 Don’t Procrastinate
 Don’t Be argumentative
 Don’t Be the Lone Ranger
 Don’t Embellish
 Don’t Offer unrelated
examples
 Don’t Over explain your
response
Document Register
Create a listing of all
documents given to
auditors
 Unique identifier
 Date given
 Brief description of
sample
 Auditors must sign for
the documents
Prevention is the Best Cure
 Perform detailed review (Desk Audit)
 If something appears suspect:
 Document the details of unlike circumstance
 Verifiable evidence of why it is allowable
 Verify Effort during the life of the project
 Not during Certification process
Unallowable Expenditure in Sample
 Self-disclose that it is
not allowable
 Explain why it is on the
grant
 Provide explanation
on how this will be
caught in the future
 Ask auditor how they
want to handle the
cost
Potential Unallowable costs
 Office Supplies
 Hospitality expenses
 Cell phone charges
 Transfer of funds
 Memberships
 Postage
 Fellowships
 Administrative wages
 Non-certified effort
 Promotions
Common Compliance Issues
 Fly America Act
 Excluded Party List
System (EPLS)
 Audits of Subs
 > $500,000
 On time Financial
Reporting
 On time Progress
Reports
Record Retention
Documentation
 Maintain Effort Certification records
 Justifications for purchases
 Financial reports
 Copy of or evidence of completion of final
technical or progress report (final payment
may depend on this!)
 Keep project notes with documentation
Record Retention
Keep three to seven years after the final
report is filed, depending on the agency
Be aware of multi-year awards
Keep documentation centrally located
No documentation = disallowance
Only you
can
prevent
Audit
findings. .
Contact Information
Jim Engel
Director of Grants Administration, Finance and
Operations
Office of Research Administration
Telephone
Fax
E-mail
(812) 855-0165
(812) 855-9943
[email protected]