In our previous blog, “What Happens During a Uniform Guidance Audit,” we discussed what happens during the UGA from hiring an auditor to the audit testing with a focus on direct costs. In this blog, the third in our UGA series, we’ll talk about internal controls and FAR Part 31 compliance.
In this part of the UGA, your auditor will test to see if your business is operating properly, in accordance with FAR Part 31.
This is the time to demonstrate that you employ good, consistent record-keeping and financial oversight. The auditor will expect to see:
Because you have a cost-reimbursable government award, you must comply with FAR Part 31. During the UGA, your auditor will ensure that you are doing just that.
To make sure that your internal record keeping is, indeed, FAR compliant, your auditor will test the following:
Timesheets are a critical part of your internal controls. They’re also one of the areas where issues frequently occur. In a Unified Guidance Audit, you must demonstrate to your auditor that, when it comes to timesheets, you have systemic rules and controls in place and are abiding by the following rules:
This doesn’t have to be done on a piece of paper. Electronic timekeeping systems that create a forensic audit trail and have these built-in controls are fine. However, an Excel spreadsheet populated online is not, as the auditor can’t be certain if the time was entered by the employee or someone in the accounting department.
To require a Uniform Guidance Audit, you have to expend a minimum of $750,000 in government funding in one year and the funding agency wants to make sure you are spending it appropriately. There are two ways that your auditor can make sure you’re handling your award correctly.
Clearly, the UGA is an in-depth audit that covers a wide range of areas. In our next two blogs in this series, we’ll discuss common UGA findings and what they can mean.
In the meantime, if there’s one thing you could walk away with from this blog, it should be this:
A FAR-compliant accounting system, good record keeping, and well-planned and maintained internal controls will go a long way to help you stay out of trouble during a UGA audit.If you need help maintaining a FAR-compliant accounting system, Contact Us to schedule a time to speak to one of our government funding experts, and we will follow up within 48 hours!
A FAR-compliant accounting system, good record keeping, and well-planned and maintained internal controls will go a long way to help you stay out of trouble during a UGA audit.
If you need help maintaining a FAR-compliant accounting system, Contact Us to schedule a time to speak to one of our government funding experts, and we will follow up within 48 hours!
If you want to learn more about our proprietary FAR-compliant account system, read up on JamesonWorx.
Read through the rest of our series about the Uniform Guidance Audit.
This is the third of our seven-part series about the Uniform Guidance Audit:
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