Depending on the size of the grant awarded and suspicion level, there are different types of grant audits that might be performed. The nonprofit is accountable for every penny spent. An audit is performed to verify whether or not the grant program accomplished its initial objectives.
The Government Performance and Results Act (GPRA) declares federal agencies must demonstrate how the money spent actually accomplishes their mission, goals and objectives. An audit, whether brief or extremely detailed helps to verify this process.
Types of Grant Audits
- Desk Audit
A desk audit is the easiest type of grant audit. It is simply a phone call from the program manager asking a series of questions about the grant. It can last from five to thirty minutes. If the questions were answered honestly and thoroughly, it could be all that is required. However, if there is any reason to doubt or a desire for further investigation, the program manager will schedule an on-site visit for a more detailed audit.
- Monitoring Site Visit
This isn’t always the next step in the audit process. Frequently, the desk audit is forgone and a monitoring site visit is performed instead. A program officer is the one making the personal call.
A program officer investigates the following:
- financial systems (internal controls system)
- program compliance
- subgrantee monitoring
- procurement system
- property management or inventory systems
- project performance based on the GPRA
- travel system
- personnel system (time and attendance records)
- financial status, progress and closeout reports
- Inspector General Audit
This audit is performed by the Office of Inspector General under the U.S. Department of State. It is only performed when there is substantial suspicion of fraud, waste, abuse and misconduct. If an organization undergoes an inspector general audit, it means it could be in serious distress. If the accusations are merited, the money may need to be paid back, heavy penalties incurred and jail time ordered.