By Kathleen Hall & Marilyn Surbey  (Sept/Oct 2005 NCURA Newsletter)

This article is the second in a series of three addressing some of the questions auditors are currently asking that expand the audit scope for non-salary costs. Please refer to the July/August issue for the article on supplies and salaries. Additional cost categories are outlined below.

P-Card

P-cards have long been a hot topic in the research administration arena. Our institutional policies and procedures need to satisfactorily address the following questions.

• Who made the request for departmental P-Cards and authorized their use on sponsored programs? Are they familiar with the terms and needs of the grant program as well as the program's financial terms and conditions? If not, did someone with that knowledge approve the cost before posting it to the sponsored account?

• Do the individuals that purchase or approve individual P-Cards have knowledge of the program terms, needs, and financial terms and conditions? If not, does documentation exist proving that individuals with that knowledge or authority approved the cost before posting it to the account?

• How are grant-related authorities documented? Where are the receipts? Where is the documentation for group meals, catering, food, etc., that outlines the grant-related purpose and lists the attendees? How is the allocation methodology documented and explained if the costs are split? (Dollars available is not the right answer!)

• How is the post-review procedure documented? Why would P-Card transactions be transferred after posting and be allocated to a different project if transactions are being handled appropriately and costs do not post to the account without a review and approval process?

• Are there written internal procedures?

Equipment

How is the allocation methodology documented and explained if costs are split? Who decided the split and how did they make the determination? Are there written internal procedures that outline the purchase request, approval, receipt of equipment, and post review process?

Consultants and Speakers

Where is the written agreement or offer letter? Where is the documentation or explanation of how rates were determined?

Where is the documentation of the event for speakers, lecturers, etc.? Does the event documentation include an explanation of the purpose of the event and outline how it relates to the grant program? Does the event documentation include a list of attendees? Does the event and attendee documentation provide proof that100% of the speaker fee should be allocated to the grant? In case of a split, how was the allocation determined?

Cost Share

Can you prove the same level and type of documentation of knowledgeable and appropriate prior approval, review, cost appropriateness, and allocation procedures for cost shared costs?

How can you prove that an individual item is appropriately allocated to cost share for the specific program?

The final article will discuss filing and record retention and make some general observations.

Kathleen Hall is Associate Director, Office of Grants and Contracts Accounting, Emory University and Marilyn Surbey is Associate Vice President for Finance and Research, Emory University .