# Presentation: 489449

## Audit Requirements

- Ninth Annual NIH SBIR/STTR Conference
- Las Vegas, Nevada
- February 26-27, 2007

## Audit?  Who said anything about having an audit?

- The Department of Health & Human Services did!
- HHS specifies requirements for audits of for-profit organizations in Title 45 CFR Part 74.26(d)*

- * http://www.gpoaccess.gov/cfr/retrieve.html

## Can we get that in plain English?

- A for-profit organization is required to
- have an audit **if:**
- it expended $500,000 or more under HHS awards in the fiscal year
-  _**AND**_
- at least one of the awards is an HHS _grant_

## What is the audit period?

- The audit period is the awardee’s fiscal year,  not the grant budget period, the grant project period or the Government’s fiscal year.

## What type of audit is required?

- Good news !You have a choice.
- 45 CFR 74.26(d) provides for-profit organizations with two options regarding the type of audit that will satisfy the audit requirement.

## 1.  A financial related audit as defined in, and in accordance with, the Government auditing Standards (a.k.a. the “Yellow Book”)*

- 2.  An audit that meets the requirements of OMB Circular A-133**

*****  http://www.gao.gov/govaud/ybk01.htm
****** http://www.whitehouse.gov/OMB/circulars/a133/a133.html

**OR**

## What is covered in the audit?

- The auditors, among other things, will be looking at:
- Your internal controls and the adequacy of your accounting system
- Compliance issues such as
- Allowable costs/ Cost Principles
- Cash Management
- Property Management
- Reporting

## Is there a due date? 

- Yes, 45 CFR 74.26(d) essentially incorporates the deadlines of OMB Circular A-133.  Audits shall be completed and submitted within the _earlier of_:
- 30 days after receipt of the auditor’s report
-                               or
- 9 months after the end of the audit period

## Does a for-profit auditee have to submit a completed Data Collection Form (SF-SAC) as required by OMB Cir A-133? 

- No.  Regardless of the audit option chosen, the for-profit auditee is _not_ required to submit a Data Collection Form.

## Okay, the auditors have done their work and the audit is complete.  Now what?

- Audit reports of for-profit organizations should be submitted to:
**National External Audit Review Center**
**HHS Office of Audit Services**
**323 West 8th Street**
**Lucas Place, Room 514**
**Kansas City, MO 64105**

## What happens next?

- NEAR will process the audits—checking for adequacy and to identify audit findings
- NEAR will code each finding for tracking purposes and distribute the reports to the awarding component
- The Special Reviews Branch of DFAS is responsible for resolving all findings coded by NEAR relating to NIH awards

## Great, I didn’t expend more than $500,000 in HHS funds this year so I’m “off the hook,” right?

- While it is true you are not required to have an audit for that particular year, keep in mind that your grant-related records must be available to NIH or other designated officials for review or audit.

## Why? Why? Why?

- Why an audit?
- Why is it important to the Federal Government?
- Why is it important to you?

## Where can I get more information?

- There are frequently asked questions (FAQs) related to non-federal audit requirements for commercial (for-profit) organizations at the following URL:
- http://oamp.od.nih.gov/dfas/faqforprofitaudits.asp

## Questions?

- Lorraine Trexler
- Chief,
- Special Reviews Branch
- Division of Financial Advisory Services
- trexlerl@od.nih.gov
- 301-496-4494