Audit

Audit

Who Completes This Task: Chief Financial Officer, Controller, Program Clerk, Program Manager

Timeframe: 1-24 Months, from initial notice to final report

Desk reviews usually only take a month or two. The more in-depth an audit, the longer it can be expected to take.

Process

Audits are used to ensure grant funds are used responsibly and for the intended purpose. They aren’t an assumption of inappropriate activity. Audits can be conducted by the state, independent auditors, or the Federal Agency’s Office of the Inspector General (OIG). Most audits at SPPS are conducted by a private auditing firm or the state.

OIG audits study the effectiveness of federal programs and identify waste, fraud, and abuse. The Single Audit is a federal examination of an organization as a whole, rather than of an individual grant or program. A desk audit is a limited scope record review. 

If necessary, investigations are referred to prosecutors for trial. In the Midwest there are usually about 100 open investigations at any time.

It is the grant manager’s job to keep the district safe from unfavorable audit findings such as:

1. Mistakes of Omission
   1. Inadequate controls or policies
   2. Failure to follow existing policies or abide by regulations
   3. Poor organization and documentation
2. Fraud
   1. Intentional misdirection of resources for personal gain

 See Common Findings for a list of the most frequent negative findings in federal audits.

Criteria

Audits are not random; there is always a reason they show up.

• Ongoing monitoring of sub-recipients to meet federal requirements
• Grants coming from Legacy Amendment funds over $50,000
• Organizations receiving more than $750,000 annually
• SPPS must retain an auditor annually
• Suspicion of fraud, waste or abuse of public funds

Steps

1. A notice for an audit is received by the contact listed on the grant application
   1. Usually arrives by email
   2. Includes a timeline
   3. Contact is usually the grant manager, accountant, or superintendent
2. Key staff must be notified immediately, and one person (usually the chief financial officer) will take the lead in the audit response
   1. Supervisor
   2. Chief financial officer (CFO)
   3. Program accountant
   4. Grants management coordinator (GMC)
3. Schedule the audit according to notification
4. Prepare appropriate financial statements
5. Provide the auditor access needed to perform the audit
   1. Personnel
   2. Accounts
   3. Books
   4. Records
   5. Supporting documentation
6. Upon receiving audit report, follow up and take corrective action on any findings
   1. Work with the CFO or designee
   2. Summary schedule of prior audit findings
   3. A corrective action plan

Documentation Required

• See Document Retention and Access