The Pasteur Principle: Using Sponsored Research Best Practices to Prepare for Audits

While attending a conference is an important part of one’s career development, returning from one (and dealing with an overflowing email inbox and the ongoing demands of the workplace) is also part of the deal. Life doesn’t stop while we’re developing new skills – and the continuous requirement to improve, while preparation_mousetrapmeeting the needs of our current job requires the mastery of a micro-vascular surgeon, the decision making ability of a Fortune 500 CEO, and the time management skills of an air traffic controller at La Guardia. Diet Coke, anyone?

I thoroughly enjoyed the intellectual enterprise that was the NCURA Financial Research Administration Conference in New Orleans.  It’s the best conference they offer- hands down, so mark your calendar for next year’s event.

On Monday evening, I’m off to Milwaukee for the regional NCURA conference with my colleague Matt Irwin to discuss the management of clinical research faculty salaries using our salary and effort management tool. But before I do that, I thought I’d recap the presentation that Melody Delfosse and I gave in New Orleans (which is posted in the presentations section for anyone who is interested).

Catchy Title, Anyone?

Louis Pasteur once said, “Chance favors the prepared mind,” and so it is with being prepared for routine and specific program related audits. Our presentation focused on the types of audits (through which my colleague, Melody has capably served our institution for many years). Melody focused on the A133 audit, which is mandated by the A-133 circular to occur on a yearly basis at institutions that receive $500,000 in federal funds. It forms the basis for assessing best practices for sponsored research accounting at institutions that receive federal research dollars. The A-133 also examines how student financial aid funds are managed as well.

A-133 Audit Focus

It’s no surprise that the A-133 audit focuses on key areas of sponsored research accounting that we’re most familiar with:

  • Are the sub-contractors monitored?
  • Are direct costs and indirect costs consistently allocated across all categories?
  • Are direct cost charges beneficial and appropriate to the award?
  • Are cost transfers minimal, and if they are performed, are they timely?
  • Are internal controls present and consistently supporting purchases made on the awards?
  • Is equipment being tagged, logged and managed if purchased with federal funds?
  • Are effort reports and other technical and financial reports produced in a timely manner?
  • Are service centers managed appropriately?

It Takes a Team to Manage and Monitor Sponsored Research Funds

Melody and I then discussed the roles of central, school level and department level research administration staff in monitoring and managing sponsored research accounts – to ensure compliance and bring a sponsored project through the start up to close out process successfully.

Supporting the Investigator throughout the Award Lifecycle

I described the way in which Research Administration Services supports investigators at the Feinberg School of Medicine, a system which forms the basis of best practices for audit preparedness in a clinical research environment:

  • Ensuring accounts are direct charged whenever possible.
  • Establishing mechanisms to build in reconciliation of accounts.
  • Focus on documentation of decisions at every level to support charging.
  • Timely reporting (effort, progress reports, financial reports)
  • Communication (regular meetings with investigators, administrators and contractors)

Two Powerful Tools: Planning for Salary and Effort and Account Tracking

We reviewed two tools that our group uses to assist our investigators to manage their projects and discussed the impact that these tools have had on the departments that have used them on a regular ongoing basis.

Our salary and effort management tool (you can find this under the resources section of this site) is a living document to track and plan a faculty or staff member’s commitments. My colleague Matt Irwin and I will be talking about how to use this tool more in Milwaukee.

Our project tracker is a one year at a time view of a sponsored research project (also under the resources section of this site). Most institutions provide reports to PI’s by fiscal year – this is patently ridiculous when a project overlaps the fiscal year of an institution and has its own “year”. We’ve found that PI’s can’t keep this straight and need their own report. So we made one. This report gives a balance by month, and allows the PI to see all the information they tend to ask about in a meeting. Am I going to run out of money before the end of the year? What if I did X instead of Y? Is so and so getting paid?  It’s all there.

Here’s a Catchy Title: An Ounce of Prevention is Worth a Pound of Cure

We’ve seen it work, but it’s necessary to have a lot of patience for the investigator who needs to receive a top-line explanation about their balance because they don’t understand all the details. Or the investigator with tons of questions because they haven’t gotten a report on anything in a WHILE. The devil IS in the details.

We can’t skip this part, and we can’t skip through it, because this year, the file that gets pulled into the stack by the A-133 auditors could be ours. And as long as the government will be awarding grants and contracts, we will be held accountable for receiving them. That includes the possibility of an audit.

Three Things You Can Do Right Now

  1. Institute regular meetings with your investigators to review accounts.
  2. Review your institutional record retention policies – you’d be surprised at what you’d need to keep and for how long.
  3. Examine your institution’s systems and see where you can capture ways for documenting decisions without extra work (if you’re filling out an online or paper form for purchasing, and usually skip a section that asks for a reason for the purchase – start filling it in).

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