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Posted by on May 15, 2018

What makes audit findings so Special?

What makes audit findings so Special?

corruption audit

It was Christmas in April at Management Concepts. At least for me. I worked with our colleague Meghan to pull down the Single Audit Clearinghouse as of March 31, 2017.

So every few days I’ve started to play with the data to figure out what path I want to go down from a research perspective – or to find out what would help our students. I admit – I could play with this information all day. Which is why no one has taught me how to program our internal dashboards.

This is what I’ve found so far:

The most common findings in 2014-2017 are Cost Principles and Reporting. Given my last blog on the compliance conundrum, this wasn’t a surprise.

The next one that popped: “Special Tests and Provisions.” What does this even mean? To the Compliance Supplement went:

“The specific requirements for Special Tests and Provisions are unique to each Federal program and are found in the laws, regulations, and the provisions of contract or grant agreements pertaining to the program. For programs listed in this Supplement, the compliance requirements, audit objectives, and suggested audit procedures for Special Tests and Provisions are in Part 4 – Agency Program Requirements or Part 5 – Clusters of Programs.”

Unique. There’s that word that’s an enemy of consistent reporting. And really if you’re managing multiple grants, it’s a reasonable hypothesis that the “unique” provisions are what will show up as a finding in an audit. You may not have a “unique” control in place to go with it.

I’m going to continue to dig in to the data and share what I find in future posts. That said, let’s focus on what you can do now, especially since it’s the height of Federal application season.

  • Start at the beginning. Read your Notice of Funding Opportunities (NOFO) carefully, and consider writing to and budgeting how you’re going to meet the unique requirements of specific grant programs in your applications. You need your whole team involved in this discussion. Because if it’s unique maybe it should be a direct cost. You need to get that right at the time of application and award.
  • Plan for regular and special grant lifecycles. Manage your grants as consistently as possible. Then document any special activities you must undertake to meet those “special provisions.” That way you’ll be prepared for an auditor or site visit at any stage in the process.
  • Triple check what you’re charging to the grant. Have I mentioned I think that Cost Principles is one of our most difficult courses? It’s because there are so many instances when the decision isn’t black or white.

Remember, audit findings are preventable with good planning, management, and documentation.

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