Post audit
Post audit is a set of procedures to estimate a capital budgeting decision after the auditing is done.This is an important item in the proper financial handling of sponsored funds. This confirms compliance with related externally imposed regulations through the method of use of sponsored money.The regulations are found in Cost Accounting Standards 501, 502, 505 and 506.
Address consistency deals in assigning expenditures spent for the same objectives and other data on the CAS needs for universities. The Office of Management and Budget is dealt with in Circular A-21.This encompasses three topics. It establishes university cost principles. The direct and indirect costs are defined. There is an impact on indirect cost recovery. The Office of Management and Budget is related to Circular A-110.It directs administrative requirements. The documentation standards are laid out. The remaining sponsor terms and conditions pertaining to reasonableness, allocability and allowability are detailed.
There is a tremendous risk pertaining to finance and reputation when Harvard does not comply with the regulations mentioned above. The OMB circular A-133 is regarding the Federal Audit guidelines and procedures.The findings projected through the University stand for a considerable quantity of costs that are not permitted.The economical exposure of the University is coupled with a risk of reputation concerning the adverse publicity due to disallowed expenditures.
The Office for Sponsored Research carries out an approach involving risks for post-audit reviews carried out on a monthly basis. The reviews are carried out only on federal sponsored awards. The aim is on more risk expenditure categories like consulting fees.The other costs are indirect costs charged to direct costs.
The OMB circular A-21 considers the following.The expenditures that have to be charged to or paid even partially by federal funds are included under the General cost allowability criteria. The principles of A-21 are concerning the costs that would be paid directly from sponsored awards.The other mode is indirect payment through the institutes facilities and administrative reimbursement rate.As per this circular, all costs must fulfill the following three tests the cost must be allowable as per the provisions of A-21 and the terms of a particular award. The cost has to be allocable. The expense must be concerning a project with a great amount of precision. The cost has to be reasonable. The expense must indicate what a prudent person would pay in a similar circumstance.
At Harvard University, the cost allocation methodology can be accepted if the following criteria are met with.There must be a reasonable link between the incurred cost and the use to individual sponsored agreements.The methodology has to be recognized beforehand to assign costs. The documentation has to be such that a person not related to research management must also be able to understand.The methodology has to be used for the entire population of sponsored agreements uniformly amongst those where similar expenses are met with.The population may include a portfolio of sponsored agreements of an individual investigator. This happens if the expenses can be separated from the purchases of other investigators.
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