Audit Requirements

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Audit Requirements

• Eighth Annual NIH SBIR/STTR Conference

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Audit? Who said anything about having an audit?

• The Department of Health Human Services did!
• HHS specifies requirements for audits of
  for-profit organizations in Title 45 CFR Part
  74.26(d)

http//www.gpoaccess.gov/cfr/retrieve.html
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Can we get that in plain English?

• A for-profit organization is required to
• have an audit if
• it expended 500,000 or more under HHS awards in
  the fiscal year
• AND
• at least one of the awards is an HHS grant

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What is the audit period?

• The audit period is the awardees fiscal year,
  not the grant budget period, the grant project
  period or the Governments fiscal year.

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What type of audit is required?

• Good news !You have a choice.
• 45 CFR 74.26(d) provides for-profit organizations
  with two options regarding the type of audit that
  will satisfy the audit requirement.

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1. A financial related audit as defined in, and
in accordance with, the Government auditing
Standards (a.k.a. the Yellow Book)
OR
2. An audit that meets the requirements of OMB
Circular A-133
http//www.gao.gov/govaud/ybk01.htm
http//www.whitehouse.gov/OMB/circulars/a133/a133.
html
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What is covered in the audit?

• The auditors, among other things, will be looking
  at
• Your internal controls and the adequacy of your
  accounting system
• Compliance issues such as
• Allowable costs/ Cost Principles
• Cash Management
• Property Management
• Reporting

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Is there a due date?

• Yes, 45 CFR 74.26(d) essentially incorporates the
  deadlines of OMB Circular A-133. Audits shall be
  completed and submitted within the earlier of
• 30 days after receipt of the auditors report
• or
• 9 months after the end of the audit period

9
Does a for-profit auditee have to submit a
completed Data Collection Form (SF-SAC) as
required by OMB Cir A-133?

• No. Regardless of the audit option chosen, the
  for-profit auditee is not required to submit a
  Data Collection Form.

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Okay, the auditors have done their work and the
audit is complete. Now what?

• Audit reports of for-profit organizations should
  be submitted to
• National External Audit Review Center
• HHS Office of Audit Services
• 323 West 8th Street
• Lucas Place, Room 514
• Kansas City, MO 64105

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What happens next?

• NEAR will process the auditschecking for
  adequacy and to identify audit findings
• NEAR will code each finding for tracking purposes
  and distribute the reports to the awarding
  component
• The Special Reviews Branch of DFAS is responsible
  for resolving all findings coded by NEAR relating
  to NIH awards

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Great, I didnt expend more than 500,000 in HHS
funds this year so Im off the hook, right?

• While it is true you are not required to have an
  audit for that particular year, keep in mind that
  your grant-related records must be available to
  NIH or other designated officials for review or
  audit.

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Why? Why? Why?

• Why an audit?
• Why is it important to the Federal Government?
• Why is it important to you?

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Where can I get more information?
There are frequently asked questions (FAQs)
related to non-federal audit requirements for
commercial (for-profit) organizations at the
following URL http//oamp.od.nih.gov/dfas/faqfor
profitaudits.asp
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Questions?

• Lorraine Trexler, Chief
• Special Reviews Branch
• Division of Financial Advisory Services
• trexlerl_at_od.nih.gov
• 301-496-4494