Federal and non-federal sponsors perform audits to inspect the University’s sponsored accounts and processes to ensure compliance with the sponsor’s financial requirements. Audits occur as part of federal requirements, as part of specific award terms, and on an ad hoc basis at the discretion of the sponsor. All sponsored audit requests must be directed to the OSP Manager of Training and Compliance, firstname.lastname@example.org.
Principal Investigators, School Central Offices, Department/Local Level Managing Units, other offices, and OSP assist with gathering documentation in support of audit inquiries. The OSP Manager of Training and Compliance serves as the liaison between the auditors and Harvard University, which includes fielding inquiries, coordinating support, responding to sponsors, and facilitating the closeout of an audit.
Annual Uniform Guidance (UG) Single Audit
The Office of Management and Budget (OMB) Uniform Guidance Subpart F requires an annual external audit of non-profit institutions expending more than $750,000 in federal funds. Harvard engages an external audit firm to perform the audit, which tests direct costs, cost transfers, financial reporting, letter of credit, and other areas required in Subpart F. The audit tests the expenditures and processes for allowability, allocability, and adherence to sponsor requirements and Harvard policies.
Planning for the UG Audit begins annually in April/May identifying the audit selections for the University. OSP and the audit firm facilitate an audit orientation meeting in late spring to outline timeline and activities for the audit. The auditors perform testing of the selections in the summer/fall. In the fall/winter, the auditors provide preliminary findings and draft reports for University review during this issue resolution period. The auditors provide a final report by the end of March for filing in the Federal Audit Clearinghouse.
The UG Audit Reports in the Federal Audit Clearinghouse serve as “report cards” to assess Harvard’s management of sponsored funding.
Audits Required by Sponsor
Depending on the terms and conditions of an award, sponsors may require audits during the award period or as part of the award closeout. These requirements are specifically stated in the award notice and may require an external audit firm to perform the audit or provide an audit certification. The costs for these audits may be included in the budget, if the sponsor approves them. When the sponsor allows, engagement with Harvard’s Risk Management and Audit Services can assist with fulfilling the audit requirements.
Federal Agency Audits
Federal agencies can engage Harvard in an audit at any point in time to inspect individual awards or multiple projects, depending on the scope of the audit. These requests must be directed to the OSP Manager of Training and Compliance so that they are coordinated effectively.
Other Types of Audits
The following is a list of audit testing that can occur:
- Invoice Testing – a review of transactions on a specific invoice to test for compliance with sponsored award terms
- Transaction Testing – a sampling of transaction on a sponsored award to test for compliance with sponsored award terms
- Internal Control Testing – assessment of the policies and procedures related to financial transactions to ensure proper controls are in place and being adhered to
- Site Visits – a review of a specific program or project to ensure all aspects of the project are being managed in accordance with sponsor requirements
- Desk Review – a general review of the institution and its internal controls