Policies to Help Your Uniform Guidance Audit Go Smoothly

May 21, 2019

All organizations should have policies in place to ensure that processes are effective, efficient, and provide needed information to management and staff. Organizations that spend more than $750,000 in federal grant award money are required to have a compliance audit under Uniform Guidance (UG). If your organization is subject to this type of audit, it is important that your policies help staff and management comply with the UG guidelines. In this blog article, we will break down the five types of policies that an organization should have to ensure a smooth UG audit and a reduced risk of audit findings.

  • Procurement
  • Reporting
  • Sub recipient monitoring
  • Unallowable costs
  • Timekeeping

1. Procurement

Organizations are required under UG to have a procurement policy. This type of policy has internal and external value for your organization, as it provides guidelines to purchasers and, when given to employees leading certain projects, sets a tone to help ensure that purchase processes adhere to UG.

Your procurement policy should include:                                                                               

  • Micro-purchases and simplified acquisition thresholds
    • Thresholds are currently $10,000 and $250,000
  • Guidance on sole source justification
  • The type of documentation required to be completed and maintained

2. Reporting

A reporting policy offers guidelines to those responsible for reporting, ensuring that reports are uniform and understandable. Distributing the policy to employees in charge of making decisions about certain projects sets an expectation and establishes accountability.

Your reporting policy should include:

  • A breakdown of the employees responsible for different types of reports
  • Standard method for tracking various types of required reports
  • Due dates for reports
  • Standard templates that should be used when creating reports

3. Subrecipient Monitoring

This type of policy serves to establish uniformity in how monitoring will be performed. Providing the policy to employees that handle federal awards reinforces the importance of subrecipient monitoring.

Your subrecipient monitoring policy should include:

  • Procedures used to monitor subrecipients
    • Procedures may be broken down the size of the subawards
  • Checklists for the procedures performed
  • Timeline of when monitoring procedures are performed

4. Unallowable Costs

An unallowable cost policy serves as a guide to those charging costs to grants. This kind of policy ensures that unallowable costs are properly segregated from allowable direct and indirect costs, as well as reduces the risk of having questioned costs.

Your unallowable costs policy should include:

  • A list of costs considered unallowable
  • Coding for costs considered unallowable
  • Process for determining if a cost not specifically mentioned as unallowable is allowable under the grant

5. Timekeeping

Payroll costs directly charged to grants need to be allocated based on the time spent. This is where having a timekeeping policy comes into play. A timekeeping policy will help you ensure that overtime and shift differential pay are treated uniformly. Additionally, this serves as a way for an employer to review the amount of time spent on certain projects, which can increase productivity and help create better budgets.

Your timekeeping policy should include:

  • Guidelines defining which activities are directly related to grant work
  • Explanation of different coding types and when they should be charged
  • Information required when completing a timekeeping record

The above policies will help organizations be more effective and efficient, but this list is just a starting point for organizations looking to reduce their risk of having audit findings. For more information on policies to help your Uniform Guidance Audit go smoothly, please contact Eric Hittle or one of our Uniform Guidance specialists at 301.231.6200.