1 / 23

Don’t Be Afraid of the Big, Bad Audit

Don’t Be Afraid of the Big, Bad Audit. Practical Advice from a Survivor and CNCS. Session Objectives. To better prepare participants for an audit by providing them with information to develop strong financial management systems;

meryle
Download Presentation

Don’t Be Afraid of the Big, Bad Audit

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Don’t Be Afraid of the Big, Bad Audit Practical Advice from a Survivor and CNCS

  2. Session Objectives • To better prepare participants for an audit by providing them with information to develop strong financial management systems; • Identify at least three best practices for fiscal monitoring of their program; and • Identify at least three best practices for preparing sub-grantees for an IG audit.

  3. Audit Readiness OMB Circulars • Administrative Circulars: A-102 & A-110 • Cost Principles A-21 (Educational Institutions) A-87 (State and Local Government) A-122 (Nonprofit Organizations)

  4. Audit Process Phases of The Audit Process • Planning • Fieldwork • Reporting • Resolution of findings

  5. PlanningBegins the day you get a grant • Begins with having systems and procedures to account for federal assistance before grant award. • Grantee should set up their systems to record operating costs separately from grant costs and record costs separately for each grant. • Grantees should be familiar with OMB Circulars and which apply to them.

  6. Planning - Audit Process Definition of Audit • Independent corroboration of management assertions • Attestation of factual representations by grantee • Confirmation of grant expenditures (these are costs claimed via Financial Status Reports and authorized in the budget)

  7. Planning - Audit Process Objectives of an Audit (A-133 Audit or Inspector General Audit) • Agency has internal controls (auditors test controls to determine the extent of tests for compliance and allowability) • Compliance with laws and regulations • FSR is accurate and submitted timely • IG Audit is more detailed than an A-133 Audit, as it looks at program and fiscal files

  8. Planning - Audit Process Initial Contact • When you are selected for an Audit you will first receive a letter from the Office of Inspector General (OIG) • The audit work will most likely be performed by a contractor chosen by the OIG • The audit will include both the grantee as well as a selection of sub-grantees (if applicable)

  9. Planning - Audit Process Start off on the right foot with a successful entrance conference • Invite key participants (don’t forget your audit firm) • Confirm duration of fieldwork • Assign staff support for auditor requests • Request regular status briefings • Review logistical and administrative matters, office work hours, availability, request for documents & communication

  10. Field Work • Scope of audit • Usually three most recently completed years • All grantee and subgrantee records • Areas to be reviewed at Parent Organization • Internal Controls • Program expenses (allowability) including Grantee Match • Sub-grantee selection and monitoring

  11. Field Work • Areas to be reviewed at Subgrantee/Program • Internal Controls • Member or Volunteer Records • Program expenses including Grantee Match • Allowable Activities (Talk to members or volunteers)

  12. Common Audit Findings • Types of findings • Questioned Cost • Compliance • Internal controls • Comments for management (Corporation or grantee) consideration

  13. Common Audit Findings • Internal controls • Lack of written policies and procedures • Lack of segregation of duties (this is common for small organizations, Board of Directors involvement can help) such as the person who writes checks should not be the person who reconciles the bank statements

  14. Common Audit Findings • Time & Activity Reporting • Lack of proper timekeeping systems • No timesheets or activity reports • Timesheets based on budgeted figures and not actual time

  15. Common Audit Findings • Time & Activity Reporting A-87 (State or Local Government) • If an employee works on a single Federal award – support for salary can be periodic certifications by the employee (at least semi-annually) • If an employee work on multiple cost objectives/activities, support must be 1) after the fact, 2) account for total hours worked 3) be prepared at least monthly and 4) signed by employee and supervisor

  16. Common Audit Findings • AmeriCorps member Related Issues • Insufficient member records (eligibility, I-9 not sufficient unless you also use passport/State birth certificate) • Inadequate tracking of member hours-hours on timesheets do not agree with hours entered into WBRS • Failure to get background checks for members working with children or vulnerable populations • Improper or non-existent evaluations (mid-year and final) • Forms not entered on WBRS in a timely manner

  17. Common Audit Findings • Time & Activity Reporting A-122 (Nonprofit Organizations) • Reports reflecting the distribution of activity of each employee must be maintained for all those whose compensation is charged (in whole or in part) to awards. The reports must reflect an after the fact determination of the actual activity of each employee. Budget estimates do not qualify as support. • Activity reports must be signed by the employee and supervisor.

  18. Common Audit Findings • Accounting & Documentation • Lack of supporting documentation for required match • Accounting records do not identify expenditures by grant or costs to run the grantee organization • Financial Status Reports Not Reconciled to the General Ledger • Misclassification of Expenses (between budget categories)

  19. Field Work-Finally Done! • Exit Conference • Invite key participants • Receive summary of deficiencies or draft report • Continue to work to gather information and address deficiencies • Plan initial response (there will be a 30 day response period)

  20. Reporting • Audit Reports • Draft report – expect to receive this at or as close to the exit conference as possible • Response – due within 30 days from date of draft report (answer each item in question) • Final report – will include grantee response and CNCS comments

  21. Audit Resolution • After receiving the final report from the Inspector General’s Office you will be in contact with the Office of Grants Management

  22. Audit Process • Audit Resolution • Grantee & Corporation respond to the draft report • Comments included in the report and the final report is issued (ensure to have your original response to IG available for OGM) • Grantee and Corporation resolve the findings • Corporation makes a management decision • Grantee completes corrective action

  23. Questions/Contact Information Jason Patnosh, Deputy Director-Community HealthCorps jpatnosh@nachc.com Doug Gerry Office of Grants Management dgerry@cns.gov

More Related