Periodically, sponsored project accounts may be audited by external agencies or by University of Houston Internal Audit. Audits can be one of three types:
- Audit of direct costs under general expenditure systems (e.g., Time and Effort Reporting, Prior Approval System, Procurement System)
- Compliance audit under Office of Management and Budget Circular A-133 "Audits of Institutions of Higher Education and Other Nonprofit Institutions"; or
- Individual award audit for all award expenditures.
The Office of Contracts and Grants is responsible for coordinating each audit. If the audit team requires files, documentation or discussion with other campus personnel, arrangements are made through the Office of Contracts and Grants. All questions regarding allowability of expenditures, contract modifications, etc. are to be directed to the Office of Contracts and Grants. If you are contacted directly by an auditor, refer the auditor to the Office of Contracts and Grants. This is the best way to assure an accurate audit report.
During an audit it may be necessary for the Office of Contracts and Grants to contact departments or Principal Investigators to request information about a specific contract or grant. It is the responsibility of the Principal Investigator and business manager to keep accurate records supporting all costs for a minimum of three years after the agency has accepted the final financial and/or audit report. Copies of progress reports, laboratory notes, documentation of the selection process used to hire contractors and of time and effort expended must be maintained for the same amount of time. Therefore, Principal Investigators, Project Directors and Business Managers should retain complete grant/contract files for a minimum of five years following project termination. After that date, contact the Office of Contracts and Grants to ascertain whether a longer retention is necessary.
If there is a disallowance on a specific grant or contract, the disallowed charges must be moved to a nonsponsored project cost center.