KINDS OF AUDITS
All audits carried out at Stanford can be grouped into one of five distinct types. Each type focuses on specific questions, discussed in Section 7 in this Guide.
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- CLAIMED COST AUDITS
- Sponsors may request their auditors to verify the allowability, allocability, and reasonableness of direct costs that have been charged and billed by Stanford, especially in connection with cost-reimbursable grants and contracts. Audits of claimed direct costs are most commonly carried out at the completion of a sponsored project, when Stanford presents a close-out bill to the sponsor.
- INDIRECT COST AUDITS
- Stanford recovers its facilities and administration costs associated with sponsored projects, i.e., its indirect costs, through the application of indirect cost rates to sponsored project billings. Periodically, Government Cost and Rate Studies (GCRS) prepares proposals and incurred cost studies to serve as the basis for negotiating these rates with ONR. DCAA audits these proposals and cost studies to advise ONR on the allowability, allocability, and reasonableness of proposed and incurred indirect costs. Similarly, GCRS establishes a staff benefit rate to be applied to salaries charged to sponsored projects. DCAA audits these studies and ONR then determines the appropriate benefit rate to be charged.
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- PREAWARD AUDITS
- Preaward audits are typically conducted by DCAA and other sponsor auditors to verify the estimated costs submitted in proposals for large sponsored research projects. Preaward audits are generally less common than audits of claimed or indirect costs. However, since sponsor contracting officers require these audits to be completed before they will negotiate an award, auditors give preaward audits scheduling priority over other types of audits.
- COMPLIANCE AND GENERAL CONTROLS AUDITS
- Stanford is required to comply with a large and constantly changing array of government rules and regulations. Auditors of all types depend on Stanford's internal controls to achieve compliance, and they periodically undertake separate audits to test the effectiveness of our controls. Our independent public accountants, assisted by the Stanford Internal Audit Department, annually conduct a single federal compliance audit as required by the provisions
of OMB Circular A-133; such audits are required of all major research universities. In addition, DCAA undertakes a series of University Mandatory Annual Audit Requirements (UMAARs). Finally, for the last several years, the Stanford Internal Audit Department has conducted regular departmental management and compliance audits.
The Internal Audit Department's Audit Program for Operating Unit Compliance Audits includes links to all related Stanford policy documents.
- FINANCIAL STATEMENT AUDITS
- Annually, the independent public accountants for Stanford University (C&L) conduct audits to assess the accuracy and fairness of the University's year-end financial statements.
In general, departmental staff are not contacted in connection with these annual audits, although the independent accountants may use the results of general control reviews (described above) to verify their understanding of the existence and effectiveness
of Stanford's internal accounting controls.
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