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Surviving an Audit: From Preparation to Completion

Surviving an Audit: From Preparation to Completion. Tuesday November 6, 2012. Welcome and Introductions. Presenters: Michele Codd , Associate Director Sponsored Project Administration, The George Washington University Kimberly Ginn , Principal, Baker Tilly

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Surviving an Audit: From Preparation to Completion

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  1. Surviving an Audit: From Preparation to Completion Tuesday November 6, 2012

  2. Welcome and Introductions • Presenters: • Michele Codd, Associate Director Sponsored Project Administration, The George Washington University • Kimberly Ginn, Principal, Baker Tilly • Michelle Vazin, Director of Contract and Grant Accounting, Vanderbilt University

  3. What are audits?

  4. Types of Audits • Pre-award • Financial Statement • OMB A-133 • Program Specific • Special Review • F&A Cost Proposal and Disclosure Statement • Business System (one or all of accounting, procurement, property, etc.) Review

  5. Sources of Audits • Sponsor • OIG for Federal Agency • Independent Audit Firm • Internal Audit

  6. Potential Players in an Audit • Central Offices (Institutional Liasion for audit usually in a central office) • Departmental Offices • PIs • Senior Administration • General Counsel

  7. Audit Participants at the Institution • Auditee • Central Liasion • Supplier of Information • Expert in area being audited • Institutional Framework/Internal Controls • Legal Counsel

  8. Notification Institutional Management Responses Definition of Scope Clearances Audit Report & Sponsor Review Exit Conference Preparation Aar Conditions Fieldwork EntranceConference

  9. Phases: Notification Before the letter arrives: • Fine-tune Institutional Policies and Procedures • Have clearly defined Roles and Responsibilities • Be aware of audit environment around you (i.e. what is on the governments agenda – area of concerns) • Make sure training programs hit the “red flags” of audits

  10. Phases: Notification After the letter arrives: • Do your homework: identify areas impacted • Appoint an Audit Liaison (Point of Contact) • Brief central and departmental personnel • Develop a plan and identify who needs to be involved

  11. Phases: Definition of Scope • Determine extent of the audit • Make sure the scope of the audit is clearly understood by all those to be involved • Keep Senior Management informed and up to date on audit – magnitude and potential impact

  12. Phases: Preparation • Pull together all files and data impacted by review • Review all aspects of the area to be reviewed • Do a risk assessment – are there any problems or does everything appear to be in order • Document, document, document

  13. Phases: Entrance Conference • Develop a shared understanding of the scope and process • Get clear guidance from the auditors on their game plan to conduct the audit • Find out what the timeline will be • Ask what will be the end product – will it be a report • Inquire as to how and when the institution will have opportunities for input

  14. Phases: Fieldwork Meeting with the auditors: • Arrange the on-site logistics and escorts as appropriate • Only provide information requested • Answer questions calmly and with confidence • Be honest • Manage any expansion of original scope • Be organized and as timely as possible with requests

  15. Phases: Fieldwork Managing Internal Expectations and Concerns: • Assess any problems or red flags with internal team as they come up • Keep central and departmental stakeholders apprised of the status of the audit • Raise concerns of questioned costs or criminal matters to senior management as soon as detected • Remain calm and begin to prepare response to any problems uncovered

  16. Phases: Exit Conference Draft Report Received: • Make auditors clearly communicate their findings to you (in some instances there may not be an official report given to the institution) • Confirm the protocol and timeframe for the institutions response to the audit • Get clear understanding of what are the steps to be taken to bring closure to the audit

  17. Phases: Management Responses • Agree? Disagree? • Be aware of the posture and tone taken • Negotiate • Obtain Institutional approval of response • Officially respond to the auditors

  18. Phases: Audit Complete • Audit Report Issued • Audit Resolution Phase Begins • Follow-up with all parties involved • Identify the Lessons Learned • Get ready for the next audit

  19. Opportunities for Improvement:Refine Practices • Use audit findings to help guide the institution in developing better practices • Capture and document the things to do so you are better prepared for the next audit when it happens • Close the gap on any weaknesses in day to day process that were detected during the audit

  20. Opportunities for Improvement:Develop/Update Training Materials • Use audit findings to guide the development of new or refinement of current training materials • Real examples are worth gold when trying to make believers on your campus – use them! • The audit can hand you a road map for where training may need to be strengthened – Use that leverage to increase understanding about the proper management of sponsored programs on your campus.

  21. Opportunities for Improvement: Validate Policies • Use audit findings to guide the development of new or refinement of current policies as appropriate • Assess your policies to ensure they provide the right guidance to your campus when managing sponsored programs • Make sure your campus is aware of policies • Develop or update Roles and Responsibilities Matrix to ensure clear understanding at all levels

  22. Questions?

  23. Contact Information: Michele Codd The George Washington University mcodd@gwu.edu Tel: (202)994-0896 Kimberly Ginn Baker Tilly kim.ginn@bakertilly.com Tel: (703) 923- 8677 Michelle Vazin Vanderbilt University Michelle.vazin@vanderbilt.edu Tel: (615)343-1558

  24. Links to Federal Audit Plans and Reports • OIG Audit Work Plans • http://www.oig.hhs.gov/reports-and-publications/workplan/index.asp • http://www.nsf.gov/oig/FY12auditworkplan.pdf • http://www.usda.gov/oig/webdocs/2012ABPFinal.pdf • OIG Audit Reports • http://www.oig.hhs.gov/reports-and-publications/oas/index.asp • http://www.nsf.gov/oig/pubs.jsp • http://www.dodig.mil/Audit/reports/index.html • http://energy.gov/ig/calendar-year-reports • http://www.usda.gov/oig/releasandreport.htm • http://oig.nasa.gov/audits/reports/FY12/index.html

  25. Links to Sample Audits • General: http://www.costaccounting.org/CBNAudit5.htm • Administrative Costs (Duke): http://oig.hhs.gov/oas/reports/region4/40501014.pdf • Recharge Centers: http://oig.hhs.gov/oas/reports/region9/99204020.pdf • Sample NSF Labor Audit – Summer Salary, etc.: http://www.nsf.gov/oig/10-1-003_UNR.pdf • Sample NSF Labor Audit – “Suitable Means”: http://www.nsf.gov/oig/09_1_008_cornell.pdf • Monitoring: http://www.nsf.gov/oig/07-1-020_University_of_Maryland_Baltimore_County.pdf • Cost Sharing: http://www.nsf.gov/oig/06-1-020_University_Of_Hawaii.pdf

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