| Because each agency determines the rules under | | | | contract specified amount, unallowable costs included |
| which the SBIR will operate, the number of audits | | | | as billable costs, expenditures in categories not |
| and likelihood of audits is different for different | | | | detailed in proposal, and general lack of supporting |
| agencies. This article discusses NSF grants and audits. | | | | documentation. |
| Audits of NSF grants are conducted by the Office of | | | | To avoid being audited, make sure that your budget |
| Audits which is part of the Office of the Attorney | | | | is clear and you are sticking to it. If you need to |
| General. They conduct all financial audits of NSF's | | | | make a change, notify your program manager sooner |
| awards and awardee institutions to determine | | | | rather than later and always in writing. Make sure that |
| whether costs claimed by awardees are allowable, | | | | all of your reports are turned in on time. Do not |
| reasonable, and properly allocated. An NSF grant will | | | | exaggerate any of your findings. |
| only be audited at the request of the program | | | | To make sure that you will have no findings if you |
| officer. | | | | are audited, keep good time and salary reporting |
| For NSF grants, there are two kinds of audits: | | | | documentation, adhere to your cost sharing |
| financial audits and performance audits. Financial audits | | | | agreement, provide adequate equipment purchase |
| review cost sharing, indirect costs, timekeeping, and | | | | justification, and most importantly, keep a paper trail |
| subrecipient monitoring. Performance audits occur if | | | | of every decision you make and every change you |
| the program officer suspects that Phase I results | | | | make. |
| may have been exaggerated or falsified or in a case | | | | In general, the NSF tends to give the awardee the |
| of plagiarism. | | | | benefit of the doubt; however, this does not mean |
| For a financial audit, typical findings include lack of | | | | that the penalties for failing to meet your award |
| time records to support labor costs, lack of | | | | conditions are any less severe than any of the other |
| consulting agreements and invoices to support award | | | | agencies. |
| related services, indirect cost recoveries exceeded | | | | |