Financial Services
Policies and Procedures - Contracts and Grants
Policy 10 - Audit Matters and Reports
General
All contract and grant funds awarded to the University are subject to audit. This audit can be performed by any one or combination of the following people:
- University Internal Auditor -- He performs unannounced petty cash reconciliations. He also analyzes detailed transactions charged to contract or grant funds.
- Office of the State Auditor -- All funds at UNCG (including contracts and grants) are audited annually by the Office of the State Auditor. In compliance with the Single Audit Act, federal funds are audited by the State Auditors under the guidelines outlined in OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
- Federal Auditors -- A copy of the Single Audit report published by the State Auditors is provided to each federal agency funding contracts or grants for that particular year. Normally this audit eliminates the need for a federal audit. However, under some circumstances some federal agencies may still elect to perform their own audit of a particular contract or grant.
- Public Auditors -- Some awarding agencies (particularly a foundation) may elect to request an on-site audit by their public accounting firm.
Focal Point For Audit Matters
The Office of Contracts and Grants is responsible for coordinating all audit matters relative to sponsored research of the University.
All federal, state and public firm auditors are requested to make their initial contact with the Office of Contracts and Grants when conducting audits relative to contract and grant matters. Subsequent contacts by auditors with other University departments will be preceded by advance notice from the Office of Contracts and Grants. The purpose of the advance contact is to identify the auditors, outline the general purpose of the visit, and facilitate the audit. If there are any questions concerning the official status of an auditor, the Office of Contracts and Grants must be contacted.
Grants Accounting Administration Representation
Depending upon the nature of the audit or subject matter, the Office of Contracts and Grants may elect to be represented in audit discussions at the departmental level. Should departmental personnel deem guidance necessary at any time, the Office of Contracts and Grants must be contacted without hesitation. The Office of Contracts and Grants participates in and coordinates audit exit briefing as deemed necessary by the significance and nature of the audit findings and recommendations.
Right of Access
Under the legal terms of grants and contracts awards, auditors have the right of access to all official University records associated with an award. The University is obligated to make such records readily available for examination.
Exit Conference
At the conclusion of an audit and prior to the issuance of the formal report, auditors normally conduct an exit conference. The purpose of this meeting is to review audit findings and tentative conclusions, exceptions and recommendations. At this meeting, the University has an opportunity to comment on the audit findings and to provide additional information where appropriate.
Audit Response
The Office of Contracts and Grants is responsible for coordinating the University's response to those audits concerned with contracts and grants. This responsibility in no way relieves the principal investigator or department concerned from providing necessary input in a timely manner or from resolving financial liability which may ultimately be assessed as a result of audit exceptions.
The University's response must be coordinated through established channels. There are no circumstances under which a department or individual must initiate a direct response to an audit.
Cost Disallowances
Established University policy is that financial responsibility for audit disallowances, which may be ultimately sustained, rests with the principal investigator, department and school having primary responsibility for the project on which costs are questioned. Disallowances cannot be charged to any federal or state-funded accounts. Personal liability may be considered and assessed when circumstances sustain that an audit disallowance stemmed from gross negligence or malfeasance on the part of an employee or staff member.