How to prepare for an audit

If your department collects cash from sources outside the University, your cash handling procedures should be periodically reviewed to ensure the following:

1. Do you have written procedures that explain how your department performs the collection, depositing, recording and reconciliation processes for cash? Is there adequate separation of duties in handling cash and recording in the accounting records? The following processes should be managed by different individuals whenever possible:
   1. Cashier/accepting of payments
   2. Preparation of deposit and delivery to cashiering office
   3. Reconciliation of cash deposits to your department records
   4. Authorization to write off bad debts (should be performed by a supervisor)
2. Are all collections recorded on pre-numbered receipts (or cash registers)? Are handwritten receipts filled out completely?
3. Are missing receipts accounted for?
4. Does the department maintain a check log for checks received by mail? Are checks endorsed "For Deposit Only" immediately upon receipt?
5. Physical security of cash collected.
   1. Are separate cash registers, log-ins, or cash boxes available to each person collecting money and is it reconciled on a daily basis to products sold or services performed?
   2. How is money safeguarded before presenting it for deposit (overnight storage)?
   3. Is the safe combination periodically changed?
   4. Are all deposits turned in to the Cashier’s Office in accordance with established procedures?

You should obtain a current inventory list of items assigned to your department. You may obtain this list by contacting the Asset Management at 6-2302. This list should be compared with inventory items that are actually present in your department. Also, close attention should be paid to items that you have recently received or recently disposed of. ANY discrepancies that are noted should be reported to the Asset Management so that your inventory list may be updated. A mechanism should be established to track items below the capitalization limit of $5,000.

All disbursements made through the university system should have supporting documentation: the date, cost, item description, and budget line item being charged. Supporting documentation should also clearly indicate that the amount charged is an appropriate according to UW rules and regulations. Ensure that:

1. supporting documentation reflect cost incurred
2. expenditures fall within allowable costs for the University

Research grants are a high risk to the organization due to the extensive rules and regulations which require higher levels of accountability and therefore need to be tracked carefully. Institutions of Higher Education are required to be in compliance with The Uniform Guidance if they are in receipt of any federal funds. This provides guidance on the cost principles of federal funds and allowability of costs. Common items reviewed:

1. Time and effort reporting
   1. Signed agreements
   2. Budget
   3. Accuracy of reporting
   4. Final product
2. Release time
3. Allowability of cost
4. Cost allocation
5. Cost sharing
6. Indirect costs

All contracts must be properly executed.

1. Both parties should initial any changes made to the contract.
2. Non-standard form contracts are approved by legal counsel. Legal Counsel can be reached at 6-4123.
3. Certificates of Insurance have been obtained for all service contracts administered by your department.

The auditors will check to see if written procedures are in place, appropriate and ensure your department is following them. If the department utilizes a “shadow system” (i.e. QuickBooks, Peachtree, etc. or spreadsheet built by office personnel) to manage its finances in addition to WyoCloud, the passwords to the “shadow system” should be changed on a regular basis. The “shadow system” should be reconciled to WyoCloud monthly. The Auditor will ask to see the reconciliation documentation.