Sneak Preview: Site Visit Preparation Can Improve Audit Process

May 4, 2018 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) Nonfederal entities awaiting a site visit from an auditor should make numerous preparations prior to the visit to encourage better outcomes for all parties involved, an attorney told attendees at the recent National Grants Management Association’s (NGMA) annual training conference.

Auditee responsibilities under the Office of Management and Budget uniform guidance (§200.508) include: (1) arranging for a single audit if the auditee meets the single audit threshold (§200.501)(a)) and submitting the report; (2) preparing financial statements; (3) promptly following up on audit findings and taking corrective actions; and (4) providing the auditor with access to personnel, accounts, books, records, supporting documentation and other information as needed.

During a session on the audit resolution process, Tiffany Kesslar, Esq., partner with Brustein and Manasevit PLLC, said the main goal of the audit resolution process is to ensure that the auditee is compliant with federal award requirements. Even if an auditee has consistently had a clean single audit for certain programs, Kesslar noted that it could still be possible for auditors conducting site visits to find instances of fraud and abuse within the auditee’s other programs.

So how should auditees prepare for site visits? Kesslar said that auditors typically will inform recipients about a month ahead that they are coming to conduct an audit. “Make sure that you are holding your auditors accountable; if they ask to see work papers, you have every right to know what documents are being reviewed,” Kesslar told attendees. “Make sure you have your financial statements prepared timely and accurately. Also, make sure you provide access to records to the auditors because you can’t tell them that they don’t have access to documentation related to grants.”

Kesslar pointed out that provisions in §200.328(a) of the uniform guidance state that recipients “are responsible for oversight of the operations of the federal award’s supported activities, and must monitor activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved.” This “puts the burden on [recipients] to self-monitor and determine where problem areas are,” she explained. She encouraged auditees to assess available information, including reviewing prior audit findings and documents on other significant violations. She also told the audience to “look at the last two invoices you made and make sure the work actually happened. The strongest internal monitoring systems recognize where [an organization’s] weaknesses are.”

Kesslar further noted that once recipients become aware of problems within their organization, such as the lack of a time and effort policy, they should take corrective action proactively to address those issues prior to the auditor’s visit. “It’s clearly important to have a corrective action plan in place before the visit,” she explained. “Even if you get a finding because you didn’t actually have the system in place at the time of the audit, it makes the audit a lot easier to deal with. It really is critical to have this self-reporting piece done.”

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

As a reminder, we have all of our Federal Funding Training Forums scheduled for 2018. Please let me know if you have questions or can make any of these. We hope to see you there!

  • Wednesday July 25 – Friday July 27 in MINNEAPOLIS

  • Wednesday October 17 – Friday October 19 in ATLANTA


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