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4-001 AUDITS OF EXTRAMURAL FUNDS - GENERAL
4-300 AUDITS OF EXTRAMURAL FUNDING AGREEMENTS BY EXTRAMURAL FUNDING AGENCIES
4-500 FUNDING OF COST DISALLOWANCES
EXTERNAL REQUIREMENTS--FEDERAL
All performance under extramural funding agreements (contracts, grants, and cooperative agreements) is subject both to internal and external audit. The Senior Vice President--Business and Finance coordinates external audit activities and is responsible for the internal audit function. Chancellors, the Vice President--Agriculture and Natural Resources, and certain other officers also have specific responsibilities with respect to internal and external audits.
All administrative performance under extramural funding agreements is subject to audit by the University Internal Auditors on behalf of the President and the Chancellors.
a. As the governing body of a Corporation administering a public trust, the Board of Regents of the University of California is responsible for the security of University funds, including extramural funds. Its Committee on Audit recommends to the Board a firm of independent certified public accountants to audit the University's financial statements on an annual basis in accordance with generally accepted auditing standards and to make such studies as are authorized by the Committee for the information of the Board. For the purpose of application of provisions which follow, the firm appointed is not considered an extramural agency.
b. Extramural funding agreements normally provide that the sponsor shall have access to pertinent records in order to perform audits. The Department of Health and Human Services is the cognizant agency assigned to perform Federal audits of Federal funding agreements at the University.
4-300 AUDITS OF EXTRAMURAL FUNDING AGREEMENTS BY EXTRAMURAL FUNDING AGENCIES
a. With regard to audits concerning individual extramural funding agreements and University compliance with sponsor requirements, the Senior Vice President--Business and Finance has responsibility for assuring that audits are conducted, and audit issues are resolved, in the best interest of the University.
b. Chancellors and the Vice President--Agriculture and Natural Resources are responsible for:
1. immediately communicating to the Senior Vice President--Business and Finance, attention: Director, Research Administration Office, any request from any extramural audit agency or sponsor (Federal and non-Federal) concerning an audit, (excluding routine contract or grant closeout audits), investigation, or review of an extramural funding agreement, the University's indirect cost rates or their application, or the University's compliance with sponsor requirements,
2. making appropriate arrangements and providing reasonable assistance for the audit team, and
3. providing copies of audit reports for review and coordination by the Director, Research Administration Office if the audit report:
(i) raises a policy issue which may set a precedent for one campus or for more than one campus; questions the adequacy of University policies or procedures; takes issue with University compliance with sponsor regulations or requirements; raises an issue involving the interpretation of sponsor or University policy; or raises an issue which affects more than one of a group or a class of funding agreements;
(ii) raises no policy issue but questions costs in excess of $10,000;
(iii) states that no opinion is expressed.
a. The Senior Vice President--Business and Finance is the University Officer responsible for assuring that audits are resolved in the best interest of the University.
b. The Research Administration Office (RAO) is the office in the Office of the President designated by the Senior Vice President--Business and Finance as responsible for reviewing and coordinating responses to Federal and non-Federal extramural agency audit disallowances pertaining to extramural funding agreements.
c. The responsibility for the negotiation and resolution of audit disallowances shall be as follows:
Chancellors and the Vice President--Agriculture and Natural Resources are responsible for developing responses to and negotiating resolution of audit reports on extramural funding agreements administered within their areas of responsibility if the report is not required under Section 4-300 b.3. to be submitted for review and coordination.
d. Regarding audit reports which are required by Section 4-300 b.3.(i) and 4-300 b.3.(ii) to be submitted to the Senior Vice President--Business and Finance, campuses shall develop their responses to the audit finding(s) and issue(s) and submit them to RAO, for review and coordination prior to communication of the University position to the sponsor agency. Campuses may respond directly to the sponsor agencies on audit reports that express no opinion and need not send these responses to RAO. RAO will review audit reports and campus negotiating positions for policy and precedent implications. Depending on the nature of the audit issues, RAO will assign, either to the campus or to RAO, the responsibilities for preparing and submitting the response and for negotiating the audit resolution. If campus assignment is made, RAO will provide policy guidance or assistance as requested by the campus. When RAO assumes the audit resolution responsibility, the campus shall provide factual responses to audit findings and additional information about the statement of issues as requested by RAO.
e. Campuses shall provide to the RAO copies of all audit settlements made with sponsor agencies on extramural funding agreement audits for which the campus is responsible for resolution as assigned under Section 4-400 d. Campuses need not provide the RAO with copies of settlements on audits which were resolved under Section 4-400 c.
4-500 FUNDING OF COST DISALLOWANCES
It is the responsibility of the Chancellor or Vice President--Agriculture and Natural Resources to initiate funding actions to satisfy audit settlements. The following steps should be taken:
a. Campus should select an appropriate fund source depending on the nature and circumstances of the audit and disallowance.
b. If the appropriate fund source is Federal Contract and Grant Overhead (fund 69750), the procedures governing the write-off of disallowed claims as set forth in the Accounting Manual, Chapter C-557-23, should be followed.
c. If the appropriate action is the write-off of a State or private agreement claim, the procedures governing the
write-off of disallowed claims as set forth in the Accounting Manual, Chapter R-212-2 should be
followed.
[RESERVED]
4-F01 OMB Circular No. A-133