Hiding from and Audit

Surviving an Audit: How to be Ready

For grantees, an audit can mean life or death for a project. The word “audit” has the ability to put even the most well-organized administration team on edge. I have had the good fortune to be part of an organization that went to great lengths to be prepared for audits. I have also been part of a grant compliance team that audited several institutions, some of which had been cited for being out of compliance with requirements, making inappropriate expenditures, breaching time commitments, and having a lack of documentation. In most of these cases, the provost or upper administrative personnel had to resign or were fired. Somehow, they had forgotten that a grant is a fiscal contract between the donor and the awardee. For this reason, accountability is demonstrative of credibility and can predict the success of a proposal. Prior to receiving grants, agencies must have internal control systems and performance measures to facilitate grant management. Granting agencies need an effective post-award process for managing performance, as well as the ability to assess grant results. Accountability and compliance are what institutions must demonstrate to the satisfaction of the donor. Establishing financial procedures and protocol are dependent on these five areas:

Internal Control Systems

Grant-winning institutions must have a tight system of policies and procedures in place that are recognized and respected at all levels of the organization. Normally, this system is managed by the Sponsored Research Office or another fiscal administration office, whose ultimate responsibility is to manage grants for the organization. Most often, this office will provide grant management training for staff and grantees, in addition to coordinating programs with similar goals and purposes.

Performance Measures

Monitoring the progress of program objectives to meet short-, mid-, and long-term outcomes in accordance to the request and timelines of the funded grant is a major way to achieve performance measures. Working with grantees to ensure the objectives and outcomes are linked with the activities can lead to compliance and collaboration. This is especially important with new grantees, who may not be aware of the regulations for grant awards. A sound and ongoing training process will greatly facilitate this effort.

Pre-Award Process

During the pre-award process, institutional grant administration personnel review compliance regulations and requirements in the RFPs and RFAs, and convey these to the applicant. Doing so makes certain that all parties are aware of the scope of management and responsibility of the grant. Specifically, the grant administrators will finalize the budget, ensure appropriate internal signatures, and – for a federal grant – submit the proposal through Grants.gov.

Post-award process

If the pre-award process is carefully designed and administered, the post-award procedure to ensure results will be a simpler undertaking. Three main areas control this aspect of grant management: financial compliance, performance monitoring, and time commitments of grantees. Awarded, in-kind, and matching funds will need to be tracked, along with payroll and participant records. Monetary conformity and the time commitment of the staff are essential for success. Poor management in the latter aspect has often resulted in institutions having to return money to donors. When a grant is awarded with a time commitment from existing full-time personnel, the awardee institutions must demonstrate a reduction in the existing duties of said personnel that corresponds to their reported time commitment for grant activities. This is why payroll and participant records need to be especially accurate and specific.

Assessing and Using Results

The donor organization’s monitoring process should be a blanket effort over all awarded grants, which will ensure compliance and grant success. Serving as both a grantee and a compliance team officer has given me the perspective from both sides. As a grantee, I wanted to expedite a program that may or may not have been precisely executed according to what I had promised the donor in my grant request. As a compliance team officer, I had to guarantee that what had been promised by the grantee was being achieved. These two roles are often more cacophonous than harmonious. Nevertheless, grantees must provide progress reports throughout the various phases of their work, including demonstration of achievement. Ongoing and continuous evaluation of the program objectives – along with results assessment and alterations to the program, if needed – is a good method to ensure that the original promise to the donor is met by the end of the grant. At the end of the day, the institution that has a strong system of regulations and reiterates those to their grantees is an institution that need not worry about audits.

The last time your institution was audited, what was the outcome? Share your experience in the comments.

Mathilda Harris

Over the past 18 years, she has written grants, conducted capital campaigns, developed strategic plans for grant procurement, and assisted individuals and institutions to write winning proposals for various donors.

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