Compliance/Audit
Effective financial management involves ethical decision-making and compliance with award terms and conditions, in addition to fiscal considerations.
Monitoring Project Expenditures – Department Administrators, in consultation with the Principal Investigator (PI), should perform a monthly review and reconciliation of financial activities posted against their projects to ensure that all costs are appropriately charged to the accounts. Match/cost sharing must be monitored/tracked on these activities, if applicable. Reviewing the activities ensures all transactions are properly recorded and are in compliance with specific guidelines/terms and conditions set forth in the award agreement.
Charging Costs to your project – Familiarize yourself with the sponsor's specific guidance will help provide details of which costs are allowable on an award/project. If in doubt and/or have any questions, please contact the Office of Sponsored Programs.
If a cost is generally considered a Facilities and Administrative (F&A) cost, always follow the established guidelines for determining when it is appropriate to charge such costs directly to a project. Please review the 2CFR 200-Uniformed Guidance.
The Sponsored Program Analysts assigned to Federal awards conduct compliance reviews to ensure that the university adheres to all federal guidelines. The Department Administrator receives an email if additional detailed justifications or further action is required.
Audit
The University of Tennessee Health Science Center (UTHSC) undergoes various internal and external audits. The UT System and/or UTHSC's Internal Audit Department manage and perform internal audits, whereas external audits are conducted by entities outside of UTHSC. As per the federal government's mandate, any institution that spends more than $750,000 in federal funds during its fiscal year must complete a "Single Audit." The requirements for a Single Audit are explained in Uniform Guidance-Subpart F. As the federally funded expenses of UTHSC exceed this threshold, the University must conduct this audit annually. Additionally, as the university is a part of the State of Tennessee, it is also subject to external audits conducted by the state.
Here are a few Audit Readiness Guidelines:
- The audit begins at award setup when the Notice of Award (NoA) is received. Familiarize yourself with the award terms and conditions and review your project budget in our financial system for accuracy.
- Review expense transactions posted to your projects monthly for accuracy, legitimacy, and completeness.
- Resolve issues immediately when discovered or as they arise. DO NOT WAIT TO handle the issue!
- Create and document your procedures/business processes and ensure everyone managing or assigned to projects follows your documented procedures.
- Maintain all supporting documentation for each transaction in a readily accessible location, ideally attached to the related transaction.
- Ensure all payroll corrections and effort percentages are well documented and justified.
- Review prior audits to assist in identifying high-risk areas of grant management.