If a possible finding arises in an audit or review, respond promptly.
The grant system is designed as a “trust but verify” system, entailing limited direct oversight throughout performance, but powerful after-the-fact audit rights on the part of federal, state, and local awarding agencies.
No program is perfect, and even very well-run programs face ever evolving interpretations by funding agencies. Most programs inevitably face findings to some degree in the various oversight processes: annual Single Audit Act audits, agency Office of Inspector General (“OIG”) audits, and agency programmatic reviews.
Generally, a grantee’s best chance to resolve findings is when the auditors or reviewers are still conducting their field work. A close second is the audit resolution process that immediately follows the audit or review.
Our attorneys routinely assist our clients with:
- Audit and agency review preparation;
- Counsel in the course of audits and agency reviews;
- Addressing potential findings in “comment letter” phase of an audit;
- Resolving apparent findings during audit resolution with the funding agency; and
- Near and long-term strategy on potential cost disallowance matters.
Even when auditors and agency reviewers may be technically correct on a particular finding, their views are often more rigid than necessary. These preliminary conclusions, while impactful, are generally recommendations to the funding agency. A well-advised grantee often has options to mitigate its exposure. Acting early in response to potential findings maximizes a grantee’s options.