Handbook for Principal Investigators

AUDITS AND INVESTIGATIONS

Sponsored accounts are subject to audit by The University of Arizona internal audit staff, the State of Arizona Auditor General, Department of Health and Human Services (our cognizant audit agency), Arizona Board of Regents, and individual sponsors. The controller of the University is the official contact for all audits; Sponsored Projects Services acts as coordinator. All audits of sponsored grants and contracts must be coordinated through Sponsored Projects Services. If an auditor contacts you directly, refer them to the Director of Sponsored Projects Services or the Vice President for Research. Do not allow an external auditor or investigator to look at documents or interview personnel without the involvement of these central offices. Do not allow the FBI, attorneys, or any other investigators of law enforcement officials to proceed with an investigation without involving the Vice President for Research or the UA Attorneys Office.

Audit Letter
The audit agency notifies the University of an audit by letter. The letter should clearly define the scope of the audit and the date. Sufficient lead time is necessary in order to pull appropriate documents and schedule office space for the auditor.

Role of the Auditor
Auditors are not "The Bad Guys." Auditors provide the important function of keeping the system in balance and protecting the public. Occasionally, the auditor provides valuable feedback and advice to management for making improvements to the process.

Role of Central Administration
The central administrators from Sponsored Projects and Financial Services play the role of host. They are the single point of contact between the auditors and institutional staff, coordinating interviews, monitoring the flow of information, and ensuring that the auditors have appropriate space and equipment.

The central administrators monitor the audit to ensure that the audit is conducted within the rules of accepted audit practice and to ensure that the audit is conducted within the originally-defined scope. The Vice President for Research and/or the Controller have the final say in responding to the audit on behalf of the University.

The Audit Process
The auditor will conduct an "Entrance Conference" with the principal investigator, business manager, and representatives from Sponsored Projects and Financial Services. The purpose of the Entrance Conference is to define the scope of the audit and lay the groundrules for the audit.

The auditor will assess the competence and attitude of the University central administrators as well as the principal investigator and departmental business personnel. The auditor will also look at our internal control system, i.e., policies and procedures, and monitoring mechanisms. Based on this assessment, the auditor will determine to what extent he or she can rely on the University systems and the relative risk associated with the audit. In other words, if the University makes a good impression, the auditor will develop an audit plan, selecting transactions on a sample basis to verify that the system is working. If the University makes a bad impression, the auditor will have no choice but to "look at everything."

Auditors will discuss their "findings" with the central administrators. It is the job of central administration to know the regulations and defend the University if we are operating within the rules (and to concede if we are not).

Depending on the type of audit, the University may or may not have the opportunity to respond to the findings and may or may not receive a copy of the final audit report.

Audit Tips

• Do not make the auditors do your work; pull the records for the auditors.
• Do tell the truth and answer questions honestly and directly.
• Do not do the auditors' work for them; limit your response to the question being asked.
• Call a central administrator if you ever feel uncomfortable about the way an audit is being conducted.
• Do not tamper with or manufacture records. If you have no records, say so. This is not the time to make records!
• Be alert. Auditors may not know the regulations applicable to your project as well as you do.
• Auditors are people too. Kindness and respect go a long way.