Fiscal Compliance Corner Recent Happenings, etc. MRAM September 2014 Ted Mordhorst Assistant Director for Post Award Financial Compliance Research Accounting & Analysis

Audit News Audits from NIH OIG, NASA and NSF. Significant items NASA – No questioned cost but cited weaknesses in internal controls that led to cost over-runs and delayed receivables NSF – Findings related to “senior project personnel” salary charges exceeding the 2 month limit. NIH – Institutional policies were not followed

Cost Transfers  University Policy: GIM 15  Indicator of adequate internal controls  Frequency  Timing  justification

Cost Transfers  Frequency  A high volume of cost transfers necessary to correct costing errors may be an indication of poor internal controls.  Review your procedures used to detect errors.  Procedures should be established to detect coding errors in a timely manner.

Cost Transfers  Timing  Transfers should be processed within 90 days of when the error occurred.  Additional explanation required for transfers 120 days or more after the transaction posted.  This explanation should include steps taken to detect errors and make corrections in a more timely manner.

Cost Transfers  Justification  Two parts  How the error occurred in the first place and what steps are being taken to prevent the error from occurring in the future.  Explain the allocability or benefit to the budget being charged.  Be specific.  If a portion of a cost, explain how the correct portion was determined.

Cost Transfers  Final comments Whenever possible avoid having one person prepare and submit cost transfers. Attach notes and/or s from faculty or other staff when available. Document departmental internal control procedures so everyone knows what is expected. Never, ever use “availability of funds”, or lack thereof as a justification for transferring a cost to a sponsored project.