Statewide Office of Internal Audit offers monthly tips and suggestions
by Kathleen McCoy |
"On the Audit Trail" #1
Tips, suggestions and audit related information from the Statewide Office of Internal Audit. For more information, please contact the department at (907) 450-8094.
● Office Logs:
A log used to centralize and track all pertinent information related to a transaction, function or operation is one of the best organizational tools. If an electronic log is used, controls should be in place so that only the custodian has the ability to update or modify the log. If a hard copy log is used, only ink should be used. Regardless of the log format (electronic or hardcopy), it should be accessible by those who need to use it, protected against modification by non-authorized individuals, continually updated, and reconciled against Banner (or other data as needed). The beauty is that you may own as many of these tools as needed, and customize them to suit your office needs. Some examples of logs are purchasing, travel, checks received by mail, and transfer of custody of checks/deposits. Just remember: When developing a log, do not create fields for documenting the full 16-digit credit card number used by a customer or the security code from the back of the card.
● Sponsored Programs Effort Certification:
Effort Certification procedures apply to all individuals who's labor is charged to sponsored programs. The Code of Federal Regulations (CFR), Part 220 (2 CFR, Part 220), OMB Circular A-21, Cost Principles for Higher Educational Institutions, Section J.10. describes several acceptable methods for certification of effort on sponsored program funds. The University of Alaska has implemented the certification after-the-fact method, which is described in the Statewide Accounting and Administrative Manual D-04 'Effort Certification Requirement.'
It is critical that the university maintains compliance with OMB circulars and internal policies and procedures such as D-04. The federal government has placed an emphasis in recent years on audits of effort reported on sponsored program agreements. They conduct their audits against criteria from internal policies and procedures, as well as the OMB circulars. Other higher education institutions have been required to repay millions of dollars due to reasons including, but not limited to, non-compliance with their own policies and procedures, not having policies and procedures deemed critical by the auditors, not having adequate support documentation for labor charged, charging overloads to federal funds, and not being able to demonstrate that the individual certifying the effort was actually in a position to be knowledgeable of the individual's duties for the specified time period.
Furthermore, audit findings may increase the risk of lost future funding.
Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. (International Professional Practices Framework, January 2009)