AUDIT PREPARATION

AND COMMON
AUDIT FINDINGS

Juliet R. Marandure
10/12/2021
KNOW BETTER AND
DO BETTER

Audit Preparation and Common Audit Findings | edc.org 2

AUDIT APPROACH

Documents

Communicati
Interviews
on

AUDIT
Risk &
Communication Procedures

Testing &
Systems

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COMMON ADIT FINDINGS

PROCUREMENT FUEL
TIMESHEETS INVENTORY ADVANCES
S MANAGEMENT

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 COMMON AUDIT FINDINGS
CONTINUED

COST ALLOWABILITY

PAYROLL RELATED LIABILITIES & HUMAN RESOURCES

SUB GRANTS MANAGEMENT

RECONCILIATIONS

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PROCUREMENTS

Poor documentation to
support procurement
decisions, including:
• Poor justification for sole
sourcing and preferred
vendor decisions
• Review and approval of
procurement transactions
• Insufficient supporting
documents
Payments are not
supported by original
Incorrect account
contracts, invoices,
codes used to record
proof of
procurements
delivery/performanc
resulting in
e or other
reclassifications
appropriate
documentation

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FUEL
MANAGEME
NT
INSUFFICIENT MONITORING LACK OF MONITORING OF
OF VEHICLE USAGE FUEL CONSUMPTION

PRIVATE USE OF VEHICLES NON RECONCILIATION OF

THE FUEL PREPAID
ACCOUNT

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 TIMESHEETS
•Timesheets do not consistently
support the actual time charged to
projects.
•Timesheets are not submitted on time
•Incomplete and not accurate
•Insufficient evidence of review and
approval
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 Inventory records
are inaccurate or
INVENTORY incomplete

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Advances are not reconciled in a timely manner

Advances are issued to staff with outstanding

advances.

Insufficient documentation to support the expenses

incurred. ADVANCES
Lack of attendance sheets to support training / event
costs

High Amounts Deposited into Project Account after

the end of an activity

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ADVANCE
RECONCILIATIONS

Employees travel with

huge sums of cash to
activities.

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COST ALLOWABILITY

Lack of documentation
Insufficient justification Prior approvals not
on the business
for the allocability of obtained when
purpose of the cost
the cost incurred required
incurred

Procurement, EPLS and

Cost does not fall
SDN verifications, and
within funder cost
competition process
principles
not documented

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 Accrued leave and
severance accruals are
incorrectly calculated and
recorded
PAYROLL
In Accurate Exchange Rates
Used in calculating Tax
Witholdings

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 Improper calculation of
payroll taxes.

HUMAN Time & attendance sheets

RESOURCES not properly recorded.

Vacant positions not

advertised.

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SUBGRANTS MANAGEMENT

1 2
Lack of evidence or no Sub-award reconciliations
review of sub-award are not performed on a
expenses timely basis.

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 RECONCILIATIONS

RECONCILING ITEMS ARE NOT BANK RECONCILIATIONS ARE NOT LACK OF EVIDENCE OF MANAGEMENT
RESOLVED ON A TIMELY BASIS (I.E. PERFORMED CONSISTENTLY AND REVIEW AND APPROVAL OF
WITHIN 2 MONTHS) REGULARLY RECONCILIATIONS

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 Use of unauthorized exchange rates.

Petty Cash not secured.

FINANCIAL
MANAGEM Deposits in transit.
ENT Doubtful list of training participants.

Bank Reconciliations not reviewed.

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CONTROL GAPS OR WEAKNESSES

Insufficient oversight and No budget monitoring to

Management override of
review of supporting detect excessive
controls in the
documentation for spending on
procurement tendering
expenses paid by the transportation of
process.
fiduciary agents participants.

Conflict of interest checks

between vendors and Physical verification of Lack of a Procurement
between vendors and vendors was not done. Plan
staff were not conducted.

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CONTROL GAPS OR WEAKNESSES CONTINUED

 Payments were able to be made without linkage or matching to a purchase order, which allowed excess payments
to be made.
 Confirmation copies of SWIFT documentation from bank were not reviewed to verify payment made to intended
beneficiary.
 Bank statements did not include names of bank transfer payees to enable verification of payment to intended
beneficiary.
• Lack of culture of “speaking up” about irregularities

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 HOW TO PREVENT AUDIT FINDINGS

DOCUMENTATION!

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Allowable /Unallowable Costs
• OMB Circular A-21 should be disseminated to all who charge time to or
manage federal awards. Additionally , training on unallowable costs should be
held.
• Formalize development and training plans for employees responsible for
federal funds.

ELPS and SDN verification

• EPLS and SDN verifications should be checked prior to awarding contracts to
avoid the expenditure of federal funds to vendors that are suspended.

Fuel cards
• Monitoring of trends in expenditures for items such as fuel may help detect
theft.

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• Policies and Procedures must be
followed.

• Contemporaneous documentation
at the time of a transaction.

• Complete documentation
supporting a decision made.

• Assignment of roles and

responsibilities.
GRANTS MANAGEMENT

Grant Follow the life cycle of the grant(pre-award, live award, post
Management award and close out).
tracking
system Grant Record Keeping and file management.

Grant Reporting and compliance calendar.

Assignment of roles and responsibilities.

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QUESTIONS