Presentation on theme: "Offices of Inspector General Audit Update"— Presentation transcript:
1 Offices of Inspector General Audit Update Dr. Brett M. BakerAssistant Inspector General for AuditNational Science FoundationKay DalyDepartment of Health and Human ServicesMarch 12, 2013
2 Department of Heath and Human Services, Office of Inspector General Presented by: Kay DalyDepartment of Heath and Human Services, Office of Inspector General
3 Agenda Overview of Office of Inspector General (OIG) Five Components of OIGWork Plan for 2013- Colleges and UniversitiesPresence of OIG in Colleges and UniversitiesAudit ResultsRevised Reporting Process
4 Office of Inspector General Mission - To protect the integrity of Department of Health & Human Services (HHS) programs as well as the health and welfare of program beneficiaries.Daniel R. Levinson, Inspector General
5 Who we are Established- 1976 Largest Inspector General's office in the Federal Government - more than 1,700 employeesOIG's oversight:All programs under other HHS institutions, including the Centers for Disease Control and Prevention, National Institutes of Health, and the Food and Drug Administration.
7 Office of Inspector General Office of Evaluation and InspectionsOffice of InvestigationsOffice of Management and PolicyOffice of Counsel to the Inspector GeneralOffice of Audit Services
8 Office of Evaluation and Inspections (OEI) Mission- To protect the integrity of HHS programs, as well as the health and welfare of beneficiaries, by conducting evaluations that provide timely, useful, and reliable information and recommendations to decision makers and the public.
9 Office of Investigations (OI) Mission- To protect the integrity of the programs administered by the United States Department of Health and Human Services.
10 Office of Audit Services (OAS) Mission - Identify and report ways to improve, through a shared commitment with management, the economy, efficiency and effectiveness of operations and services to beneficiaries of HHS programs.
11 OAS Organization Gloria L. Jarmon Deputy Inspector General for Audit ServicesMichael J. Armstrong Region ILori S. Pilcher Region IVJames P. Edert Region IIStephen Virbitsky Region IIIKay L. Daly Assistant Inspector General for Audit ServicesLori A. Ahlstrand Region IXSheri L. FulcherRegion VPatricia M. Wheeler Region VIPatrick J. Cogley Region VIIBrian P. Ritchie Assistant Inspector General for Audit Services
14 HHS OIG Work Plan- FY 2013 National Institutes of Health College and University Compliance With Cost PrinciplesEquipment Claims by GranteesReview of Extra Service Compensation Payments Made by Educational InstitutionsRecharge Centers at Colleges and UniversitiesCost Sharing Claimed by UniversitiesCross-Cutting and Other Public-Health Related ReviewsReimbursable AuditsRequested Audit Services
15 College and University Compliance With Cost Principles Assess compliance of costs claimed based on select cost principles issued by OMB Circular A-21, Cost Principles for Educational InstitutionsConduct reviews on the basis of:Dollar value of Federal grants receivedInput from HHS operating divisions and the offices of Assistant Secretary for Financial Resources, and the Assistant Secretary for Administration
16 Equipment Claims by Grantees Assess whether equipment purchases over $25K complied with NIH Grants PolicyObjective: identify unauthorized changes in scope
17 Review of Extra Service Compensation Payments Made by Educational Institutions Determine whether extra service compensation charged to federally sponsored grants, contracts, and cooperative agreements:Complied with Federal Regulations;Were calculated properly; andApproved by the sponsoring agency.
18 Recharge Centers at Colleges and Universities Determine if specialized service facilities (recharge centers):Have rate schedules that ensure that amounts charged are reasonable, consistent, and comply with Federal regulations; andCharge expenses that are reasonable and necessary to function.
19 Cost Sharing Claimed by Universities How are universities meeting cost sharing requirements?
20 OMB Circular A-133 established cognizance- Reimbursable AuditsOMB Circular A-133 established cognizance-Designated which Federal agency has primary responsibility for audit of all Federal funds received by an entity.HHS OIG holds audit cognizance over all State governments and most major research colleges and universities.HHS OIG received reimbursement for audits that it performs on non-HHS funds.
21 Types of audits: Types of Audits Recipient capability audits; Contract and grant closeouts;Indirect cost audits;Bid proposal audits; andOther reviews designed to provide specific information requested by management.
22 Presence of OIG in Colleges and Universities OIG is currently wrapping up two major types of reviews:American Reinvestment and RecoveryAct (ARRA) grant audits; andDirect cost audits.
23 OIG ARRA Audits at Educational Institutions ARRA grant reviews:Rutgers UniversityGeorgetown UniversityUniversity of Central FloridaThomas Jefferson UniversityWayne State UniversityUniversity of Wisconsin-MadisonNorthwestern UniversityUniversity of Texas- Health Science CenterIowa StateUniversity of UtahUniversity of Washington-St LouisClaremont McKenna CollegeUniversity of Colorado
24 OIG Direct Cost Audits at Educational Institutions Direct cost reviews:Thomas Jefferson UniversityFlorida State UniversityOhio State UniversityUniversity of Texas- Southwestern Medical CenterDartmouthUniversity of South FloridaUniversity of Colorado, DenverUniversity of California, San DiegoState University of New York - AlbanyState University of New York - Stony BrookUniversity of North Carolina – Chapel Hill
25 Findings Undocumented administrative costs Cost did not solely benefit sponsored agreementAdmin costs improperly charged as direct costsClerical salaries improperly charged as directExtra Service Compensation – not provided for in the sponsored agreement or approved by sponsoring agency
26 Reporting Process- ARRA Grant Audits Draft Report--Issued to Auditee-Provided 5 days to comment on audit findingsDraft Report-- OPDIV comments are provided to OIG- Summarize all commentsFinal Report--All comments are attached as an appendixDraft Report--Comments are provided to OIG-Auditors review and summarize Auditee’s commentsDraft Report--Issued to OPDIV with Auditee’s comments-Provided 30 days to comment on recommendationsFinal Report--Addressed and Issued to OPDIV-PDF version provided to the Auditee
27 Reporting Process- Non- ARRA Grant Audits Draft Report--Issued to Auditee-Provided 30 days to comment on audit findings and recommendationsDraft Report--Comments are provided to OIG-Auditors review and summarize Auditee’s commentsFinal Report--All comments are attached as an appendixFinal Report--Addressed and Issued to the Auditee
28 OMB’s Proposed Uniform Cost Principles (Jan 2013) Joint HHS-NSF OIG review of four universitiesDemonstration Project on Time and Effort Reporting
30 NCURA Financial Research Administration Conference NSF OIG UpdateNCURA Financial Research Administration ConferenceMarch 12, 2013Brett M. Baker, Ph.D, CPA, CISAAssistant Inspector General for AuditNational Science Foundation
32 Office of Audit Office of NSF Inspector General Audit NSF-funded grants, contracts, and cooperative agreementsDetermine whether claimed costs are allowable, reasonable, and allocated properlyOversee annual audit of NSF’s financial statementPromote economy and efficiency in NSF’s financial, administrative, and program operationsOIG Semiannual Report
33 Audit Planning Work Required by Law: Agency Financial Statement Audit (CFO Act)Federal Information Security Management Act (FISMA)Improper Payment Elimination and Recovery Act (IPERA)American Recovery and Reinvestment Act of 2009 (ARRA)Other:OIG Risk-based AssessmentsReferrals from InvestigationsNSF Management ChallengesNational Science Board and NSF SuggestionsCongressional Requests
35 End to End Process for Grant Oversight CASHDISBURSEMENTSPAY/ENTITLEMENTPRE-AWARDREVIEWCASHREQUESTAWARDCLOSE-OUTSOLICITATIONSPROPOSALSPOST AWARDAWARDPRE-AWARD RISKSACTIVE AWARD RISKSAWARD END RISKSNo /Late FinalReportsCost TransfersSpend-outFinancialAdjustmentsUnmet CostShareUnallowable, Unallocable, Unreasonable CostsInadequate DocumentationGeneral Ledger Differs from Draw AmountBurn RateNo /Late/Inadequate ReportsSub-awards, Consultants, ContractsDuplicate PaymentsExcess Cash on Hand/Cost transfersUnreported Program IncomeFunding Over TimeConflict of InterestFalse StatementsFalse CertificationsDuplicate FundingInflated BudgetsCandidateSuspended/DebarredDATA ANALYSIS Dr. Brett Baker 201035
36 Data Sources Internal Proposals: budgets, panel scores Agency award systems, recipient reportingExternalExcluded Parties List System (EPLS)System for Award Management / Central Contractor RegistrationDun and Bradstreet risk scoresTax filings and public recordsOMB A-133 Single Audit Act reportsRecipient financial system recordsGeneral ledger and subsidiary ledger(s)Property, travel, and purchase card
37 Identification of Questionable Costs Phase IIdentify High Risk InstitutionsPhase IIIdentify Questionable ExpendituresAgency Award DataAward proposalsQuarterly expense reportsCash draw downsAgency Award DataAward proposalsQuarterly expense reportsCash draw downsAwardee Transaction DataGeneral ledgerSubsidiary ledgersSubaward dataData AnalyticsContinuous monitoring ofgrant awards and recipientsData AnalyticsApply fraud indicators to GL dataand compare to Agency dataReviewQuestionableTransactionsExternal DataA-133 audits (FAC)D&B, Recovery BoardSAM/CCR, and EPLSExternal DataA-133 audits (FAC)D&B, Recovery BoardSAM/CCR, and EPLS
38 Risk Assessment and Management Identify systems and key processesMap out End-to-End ProcessIdentify key controlsBrainstorm Risk factorsContinuous MonitoringSet Objectives and Define UniverseBuild Targeted Business Rules, Run Against DataExamine Anomalies in Transaction-Level Data
39 Federal Initiatives and Coordination Recovery Accountability and Transparency Board (RATB)Government Accountability and Transparency Board (GATB)OMB Grant ReformFederal CoordinationCouncil of Inspectors General for Integrity and EfficiencyFederal Audit Executive CouncilSuspension and Debarment Working Groups
40 Recovery Accountability and Transparency Board (RATB) American Recovery and Reinvestment Act 2009To provide transparency of Recovery-related fundsTo detect and prevent fraud, waste, and mismanagement11 Inspectors General on the BoardSunsets on September 30, 2013Maintains websites for public information Recovery.gov FederalTransparency.gov EducationJobsFund.gov
41 Government Accountability and Transparency Board (GATB) Apply lessons from Recovery Act oversightSupport collection and display of government spending dataBuild upon RATB capabilities and techniquesIdentify implementation guidelines for integrating systemsEnsure the reliability of dataBroaden fraud detection technologiesMembers 5 Inspectors General: Education, NSF, HHS, Transportation, USPS 5 Agency representatives: OMB, HHS, Treasury, Defense, VA
42 OMB Grant ReformTo streamline the OMB circulars for financial assistance oversightCost complianceAdministrative principlesAudit monitoring and follow-upAreas under discussion:Single Audit threshold and testingAnnual time and effort reportingCost accounting requirements
43 Questions? Dr. Brett M. Baker, CPA, CISA Assistant Inspector General for AuditNational Science Foundation