1. Orange isn’t my color – How to stay out of audit jail
A Review of University Audit Findings

2. Presenters Jeremy Hamlin, CPA – Contract and Grant Accounting Manager
Jeremy Hamlin is the new Manager for Main Campus Contract and Grant Accounting at the University of New Mexico. He graduated from the Anderson School of Management, with his BBA in Accounting, and is a Certified Public Accountant (CPA). Before becoming Manager of Contract and Grant Accounting, Jeremy was a Supervisor in the department for two and a half years. Prior to coming to UNM, he spent eight years in public accounting, specializing in governmental audits and single audits. His audit experience from the perspective of both an auditor and auditee has solidified his understanding and knowledge of federal compliance requirements.
Frances Marin, MA – Contract and Grant Accounting, Senior Financial Services Accountant
Frances Marin is a Senior Financial Services Accountant for Contract and Grant Accounting at the University of New Mexico. She received her BBA in Accounting at University of New Mexico, and her Master of Accountancy at New Mexico State University. Her experience in monitoring contract and grants for higher education began in 2006, under NMSU Office of Sponsored Projects Accounting, followed by the position of Senior Staff Accountant in charge of federal grants and contracts for Claremont Colleges in California, and currently as a monitor of sponsored funds for UNM. Additional experience includes the position of Financial Analyst in private industry, Internal Auditor for NMSU, and ten years working for the Internal Revenue Service, as a taxpayer specialist and office auditor.

3. Today’s Objectives
Identify areas susceptible to audit scrutiny in Federally Sponsored Research
Obtain an understanding of the importance of financial compliance in the world of sponsored research and restricted accounting by reviewing major audit findings from other universities
Define the roles and responsibilities of PI’s/Project Managers, Department Administrators and Accountants, and the Contract & Grant Accounting Office
Review resources available to help keep you clear in case of audit inspection

4. What is an allowable cost?
Necessary
Reasonable
Consistent Treatment
Adequately Documented
Allocable

5. Key Audit Issues Purchases near end of period of performance.
Timing of Purchases (Pre and Post Award)
Unreasonable, Unallocable, and Unsupported expenditures.
Travel that does not directly benefit the award.
Participant Support
Does not include Employee costs
No prior approval to rebudget

7. Lessons Learned from UNM audits
(in the world of sponsored research and restricted accounting)

8. NSF-OIG Audit Covered 3 years (FY14-FY16)
Over $1.7 Million in expenditures tested
250 transactions on 92 NSF Awards

9. Areas Highly Scrutinized
Purchase of equipment at the end of an award
Unreasonable travel costs
Re-budgeting participant support costs without prior, written approval

10. Active Award Risks Unallowable, Unallocable, Unreasonable Costs
Inadequate Documentation
Burn Rate
Late / Inadequate Reports (Financial & Progress)
Sub-awards vs. Consultants and inadequate monitoring
Excessive cost transfers
Excessive re-budgeting with potential change in scope

11. Award End Risks Late Final Reports (Financial & Progress)
Excessive cost transfers at end of award
Spend-out
Refer to graph on next slide
Unmet cost share

12. Monitoring Financial Performance
As presented by Marie Maguire, CPA at NSF-OIG Presentation at NCURA 58th Meeting on August 10, 2016

13. THE IMPORTANCE OF compliance
(in the world of sponsored research and restricted accounting)

14. Federal Compliance… WHY do we care?
Strengthens trust between the sponsor and recipient
More trust, more funding
Suggests a presence of stewardship necessary to safeguard the Federal Government’s programs
As taxpayers, we should all care about this
Negative publicity may cause harm to reputation (including the University)
May cost $ millions in payback
Loss of Federal expanded authorities, additional oversight

15. How to comply Effective management and monitoring of spending
Familiarity and adherence to laws, regulations and guidelines
Both federal and sponsor guidelines
Effective planning
Utilize resources available

16. Roles and Responsibilities
The Players:
Principal Investigator (PI) or Program Manager
Department/Unit Administrator & Accountants
Contract & Grant Accounting (Core Office)

17. Roles and Responsibilities
Principal Investigator/
Project Manager
Department/Unit Administrator
and Accountants
Contract & Grant Accounting
Be aware of sponsor requirements and regulations
Be aware of and assist in compliance with sponsor requirements and regulations, including federal compliance requirements
Accounting and compliance management on all aspects of the award
Adhere to terms and conditions of award
Assist in compliance with terms and conditions of award
Financial liaison with sponsoring agencies
Monitor and oversee all project activity (including spending)
Provide administrative support for day to day aspects of the project, including transaction postings
Prepare billings, financial reports and other accounting statements. Review and approve transactions (JV’s, Requisitions, Labor Redistributions)
Prepare required progress reports. Certify effort twice per year
Facilitate reporting requirements with PI and C&G Accounting. Pre-review effort twice per year
Provide support for Effort Certification reporting system, submit financial reports to sponsor, and track compliance
Authorize expenditures via invoice approval for consultants and subcontractors
Monitor expenditures of award funds, obtain authorized signatures. Post transactions
Financial liaison with campus departments. Review and approve transactions (JV’s, Requisitions, Labor Redistributions)
Submit Final Progress Reports. Certify Fund Recon and Patent Questionnaire. Assist as needed with audit inquiries.
Assist C&G Accounting with closeout and/or audit inquiries
Closeout awards w/in 90 days of project end. Complete and submit Final Financial, Property, and Patent Reports. Direct point of contact with external auditors

18. Resources Uniform Guidance Federal Acquisition Regulation (FAR)
Title II, Part 200
Federal Acquisition Regulation (FAR)
Research Terms and Conditions
OMB Compliance Supplement
gov/files/omb/circulars/A133/2017/Complian ce_Supplement_2017.pdf

19. References Federal Grants News for Colleges and Universities
Report on Research Compliance
Anomalous Drawdown Patterns
Presentation given by Marie Maguire, CPA at the 58th Meeting of National Council of University Research Administrators (NCURA) on August 10, 2016

20. THANK YOU FOR ATTENDING!
Q&A Session