IU Audit Process & Tips

IU Audit Process&

Tips

Who Audits IU?

Federal Agencies

Other Agencies (FSSA, Commercial, Foundations, Other Universities, etc.)

State Board of Accounts

IU Internal Audit

Desk Audit for FinancialAUDIT STARTS

When does an Audit Start?

Proposal Stage

Award Stage

Closeout

AUDIT NOTICE

AUDIT TEAM

INTERNAL MEETING

ENTRANCE MEETING

FIELDWORK

DRAFT REPORT

FINAL REPORT

AUDIT PROCESS

Receive Audit Notice

All notices go to the University Liaison (UL) Departments -Do not

respond to the noticeUL 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• Official University Contact• Leads the auditUniversity Liaison

• Responsible for Project/Award• Appropriateness of expenditure

Principal Investigator

• Financially Responsible • Departmental contact

Department Business Manager

• Determines Allowability• University Grant Management

University Grant Consultant

• Completes Desk Audit• Provides University retained documents

University Financial Analyst

• Day to day grant management• Provides department retained documents

Department Administrator

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

Desk Audit for FinancialAuditor Relationships

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

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 REPORTReport 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’tsDocument RegisterUnallowable

expenditure samplePrevention is the best

cureRecord 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 givenBrief description of

sampleAuditors 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 RetentionDocumentation

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 RetentionKeep 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 (812) 855-0165Fax (812) 855-9943E-mail njengel@iu.edu