How to Survive an Audit of ARRA Funds

Surviving in today's nonprofit world of increased accountability can be a frustrating and grueling task. For those that have accepted federal funds through the American Recovery and Reinvestment Act (ARRA), the task will most likely prove to be even more difficult. The federal government and American taxpayers expect those who have received stimulus funds to be held accountable for the federal dollars they have received.



Thus, having already faced increased accountability as a result of the actions of organizations such as Enron, non-profits will now have to prepare for increased scrutiny of their organizations and the programs they operate. Following are a few tips for surviving the audits of the ARRA or stimulus funds:

• 1

  Develop and implement strong internal controls. It is important to have written policies and procedures that demonstrate that these controls are in place.

• 2

  Network with professional peers that may have already been through a review. Educate yourself as much as possible about the type and scope of review that you will be subjected to.

• 3

  Ask for a list of documents that you can have prepared in advance. Organize this information and have it indexed in binders for easy access. Make the auditors' job as easy as possible. Don't make them search through a pile of documents for what they need.

• 4

  Make the audit your priority. Be prepared to provide any information the auditors may ask for in a timely, efficient manner. Impressions are important, and being seen as efficient is helpful.

• 5

  Educate staff about the appropriate ways of dealing with the auditors. Give them a list of the things they should do and let them know the things that they should not do.

• 6

  Maintain a friendly, helpful attitude. It is not fun being reviewed, but approaching the auditor with the right attitude will make things easier. Being overly defensive or upset will set the wrong tone.

• 7

  If the auditors discuss a possible finding with you, correct anything that you possibly can before they leave. Obviously, some things require more than a quick fix. However, being willing to immediately fix small things proves your desire to be compliant.