Anyone involved in the grant management process knows how daunting a sponsored project audit can be. While each situation can vary, it is helpful to know what to anticipate and how to proceed with preparations. For those who have not previously taken part in an audit it may feel like there isn’t a clear cut path of how to prepare. This sentiment is so common, however, that many groups have taken the time to outline a set of rules that will help research administrators better navigate the ins and outs of a sponsored project audit. One such group is NCURA, who invited Michele Codd from George Washington University to present on the phases of an audit. The integral lessons and suggestions have been synthesized here.
The best way to ace a sponsored project audit is to begin preparations before one is requested. This predominately takes the form of ensuring everyone at your institution has a clear understanding of policies by which to adhere, and who is held responsible for each task. Not only should all of this be documented, but your organization should have a streamlined and easily accessible way of filing all of the related legal documents. This is most efficiently done with a grant management software system that utilizes document management and storage features that digitally file and display all relevant forms.
It also helps to think like an auditor. Stay abreast on the “audit environment” by investigating what assessment areas have been heavily featured in the recent months. For instance, your office may learn that auditors have pinpointed sub award monitoring as a particularly relevant and recurring issue. Take this as a sign your office should review the sub award documents and interactions. Additionally, stay aware of the common auditor “red flags” that include items that can be immediately evaluated. This contains aspects such as clerical salaries, computers, and cost transfers. Researching red flags and what is currently being appraised will help your office better respond when a sponsored project audit is requested.
Sponsored Project Audit Requested
If an audit is required, your organization will receive a letter signifying the upcoming assessment. This letter should include a summary of all of the topics the auditors plan to evaluate. Alert the relevant personnel- department members and managers- of the request and the investigative issues that were detailed in the initial correspondence. It is often advised that the office conduct a risk assessment. Additionally, appoint an individual who will serve as a liaison for all communication with the auditors and lead them through the process.
After your team has conducted an internal review, allow the appointed liaison to correspond with the auditors to gain a better understanding of the scope. Some essential questions to ask include:
- Is this an audit of one project, or is the entire institution being evaluated?
- What is the anticipated time frame, from start to finish?
- What areas in specific will be audited?
The last question is extremely important, as you do not want to allow the auditor to broaden their scope and include more assessment areas later in the process.
Above all else, a calm and confident atmosphere is essential for your office to successfully navigate through a sponsored project audit. Ensure your team remains professional, level headed, and assured as you move into the audit process.
Sponsored Project Audit Process
Once the auditors arrive at your institution they will hold an “entrance conference”. As discussed above, it is extremely important that everyone agrees on the scope of the audit. Although the topics should have been explicitly listed in the initial letter and confirmed by the liaison during early communication, use the entrance conference as an opportunity to re-emphasize what is included and what is not. This is the time to clarify any misunderstandings or unmatched expectations. Ensure everyone agrees on how the auditor will conduct their assessment. This involves:
- Whether the auditors will contact team members of interest via phone calls or by bringing them in for a meeting.
- How long the auditors will be stationed at your institution.
- Whether the audit will conclude with a report, briefing, ending conference, or any combination of the three.
- Under what timeline and methods the institution is expected to respond.
After the entrance conference be sure to impose a set of standards of what the auditors will be permitted to do while at your site. Provide the auditing team a room of their own, but don’t make it too comfy- you don’t want them hanging about any longer than necessary! Auditors should only be able to move about your institution with an escort, do not allow them to investigate independently. Provide them with the resources and answers as requested, but with as many simple “yes” or “no” responses as possible.
Closing the Audit
As your sponsored project audit comes to a close there are certain steps your office will need to take. The auditors should brief your team with their findings. This can take the form of an exit conference or a drafted report. If a response is expected from your staff, determine when and how to reply to the auditors, and verify if institutional approval is needed. The management team should read through the series of reports to formulate a plan and impose the lessons learned. From there continue proper documentation and preparation that will put you in even better condition for you next sponsored project audit.