Facing a COPS grant audit? Don’t despair, prepare!

graphic of check listMost people cringe when they hear the word audit. Their tendency is to prepare for a chilling experience, but it really doesn’t have to be that way.

The Office of Community Oriented Policing Services (COPS Office) takes stewardship of its grant funds very seriously, and each year the Department of Justice (DOJ) Office of Inspector General (OIG) selects some COPS funded grants and cooperative agreements for an audit. Selection of grants and cooperative agreements to be audited may be based on a COPS Office or OIG observation of a possible irregularity or, as in most cases; it is based on an OIG analysis of selected criteria. An OIG audit may also cover one or more active and/or closed COPS grants.

In the Beginning

Preparation for a possible audit of your COPS Office grant or cooperative agreement starts at the time of application. Attention to detail on the front end pays big dividends throughout the life of your COPS grant, and beyond. Keep the following in mind whenever you apply for a grant or cooperative agreement:

  • Carefully read the entire Request for Proposal (RFP).
  • Ensure that you prepare a thorough, fact-based proposal.
  • Make sure that you accurately reflect the resources that your agency will bring to bear to fulfill your grant obligations.
  • Don’t over promise.
  • Be sure that the goals and objectives of your project are achievable and measurable.
  • Be sure that proposed deliverables are supportive of the goals and objectives of the project.

Paperwork

Once you receive your grant award, carefully read the entire award package prior to signing your award document and returning it to the COPS Office by the deadline. You will not be able to drawdown any funds until award documents are signed and returned to the COPS Office. Failure to return the signed award document by the deadline could jeopardize your funding.

Be sure that you are intimately familiar with all of the requirements and conditions of the grant award. Pay close attention to dates and deadlines for the returning of signed award documents and all reporting requirements.

Document, document, document! Good record keeping is critical and will ensure a more favorable outcome should you be the subject of an OIG audit. Request any changes to your grant in writing and be sure that any requests are approved by the COPS Office before executing programmatic or budgetary changes.

Training

The COPS Office strongly encourages grant administrators to avail themselves of relevant grants management training. As of 2009, COPS Hiring and Recovery Program (CHRP) grantees have had access to free interactive online training. The COPS Office also offers a variety of training and technical assistance opportunities for its grantees that are designed to promote a greater understanding of applicable laws, regulations, guidelines, and terms and conditions of COPS grants.

Procedure

If your COPS grant is selected for audit, normally the OIG will contact you by telephone to try and arrange a mutually convenient time for an Entrance Conference and the process of conducting the audit’s fieldwork. This will be followed by a letter confirming the Entrance Conference date and time, a list of the grants to be audited, an outline of the audit objectives, and a list of documentation the OIG will require at the time of the Entrance Conference. If you can e-mail this documentation before the actual date, it will make the process go more smoothly. Also, the OIG auditors will need a comfortable workspace to conduct the fieldwork. Normally, an office or conference room is sufficient.

The objective of the audit will be to determine if grant costs are allowable, reasonable, and in accordance with applicable laws, regulations guidelines, and the terms and conditions of the grant.
Once the fieldwork is completed the auditor(s) will discuss the preliminary audit findings with the grantee and obtain their comments.

There Is Help

The COPS Office has Audit Liaison staff who are charged with assisting COPS grantees through the audit resolution process—i.e., resolving and bringing to closure any Audit Recommendations contained in the Final Audit Report.

The COPS Office Audit Liaison staff will be copied on the OIG’s audit announcement letter to the grantee and in turn will forward a letter of introduction to the grantee providing contact information of the COPS representative who will work with them throughout the audit process. This Grants Management Analyst will steer the grantee through the process of satisfying the findings and recommendations of the OIG in order to close out the audit report—thereby fulfilling the grantee requirements associated with the OIG Audit.

Findings

According to the DOJ Office of Justice Programs (OJP) 2011 Financial Guidepdf icon, the following findings are the most common issues coming up in DOJ grant audits.

  • Accounting procedures were not documented or needed improvement.
  • Internal control procedures were not documented or needed improvement.
  • Payroll procedures were not documented or needed improvement.
  • Inventory procedures were not documented or needed improvement.
  • Recipient staff were not adequately trained in Generally Accepted Accounting Principles or Government Accounting Responsibilities.
  • The Federal Financial Report (FFR) amounts did not reconcile the recipients accounting system.
  • The Schedule of Expenditures of Federal Awards (SEFA) was not accurate or did not reconcile to accounting records.
  • Subreceipient monitoring was not being conducted.
  • Financial or other program reporting requirements were not filed accurately or in a timely manner.
  • There was no documentation to support accounting transactions, journal entries, or costs.
  • Cash was drawn in excess of amounts needed for immediate disbursement.

At the conclusion of the audit, the OIG will issue a draft audit report outlining details of the audit and any findings and recommendations. Findings are noted deficiencies the OIG has found during the audit process. They may include a failure to comply with the terms and conditions of the grant award, legal requirements, accounting principles, or efficient and effective administration of the grant. Recommendations are suggested courses of action to remedy findings.

To prevent audit findings and recommendations, keep your COPS Grant Manager/Grant Specialist on speed dial and when issues come up such as changes in scope or budget modifications, or any time a question arises, immediately touch base with them. Following their guidance can keep you from having an adverse finding during an audit.

The grantee will have an opportunity to respond to the draft report prior to the issuance of the final audit report. This represents an opportunity to challenge findings and recommendations and/or bring them into compliance prior to the issuance of the Final Audit Report.

Remedies – Or: What You Need to Do

Once the OIGs final audit report is issued the COPS Office Audit Liaison staff will work with the grantee to remedy all of the findings and recommendations.
Remedies may include but not be limited to:

  • Grantee provision of sufficient documentation to substantiate grant expenditures
  • Repayment of all or a portion of grant funds
  • Suspension of grant funds
  • Placement of the agency on a restricted list making the grantee ineligible for future COPS grants
  • Debarment, making the grantee ineligible for any federal assistance

Always remember, preventing findings and recommendations stemming from an OIG audit is the best sign of a grantee’s well managed grant funded project, not how the grantee deals with findings and recommendations.

Karl W. Bickel
Senior Policy Analyst
COPS Office

 

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