Audits and Auditors

What are audits and who are the Institute’s auditors?

Auditors and audits are necessary components of the research administration function. Webster’s Dictionary defines the noun “audit” as “a methodical examination and review.” As a verb, it means “to examine with intent to verify.” The fact is, audits of one type or another are a regular part of the administrative process. No matter where you work at MIT, you can expect to encounter audits. The ability of faculty and DLCI staff to contribute efficiently and effectively will play a big role in the outcome.

There are several different groups of auditors here on the MIT campus. They include:

Federal auditors perform both systems audits and contract-specific audits as well as F&A and other compliance audits. The majority of external systems audits are performed to comply with the requirements of the federal audit circular, OMB Circular A-133 and its compliance supplement. The Institute engages Pricewaterhouse-Coopers (PwC) to perform Institute-wide financial and compliance audits.

In addition, MIT has an active Audit Division, whose mission is to deliver audit services Institute-wide through a risk-based program of audit coverage, including compliance assessments and financial, operational, and information technology reviews and audits. A full description of the Audit Division’s Audit Process is found on the web.

The Audit Division has prepared a list of Frequently Asked Questions about what to expect, concerning the audit selection, process, and reporting mechanisms.

The best way to assure that audits go smoothly is to create and maintain good records. MIT relies on central data bases and records whenever possible. However, often the information needed, e.g., the back-up documentation for an expense transfer or the certification of a monthly expenditure statement, resides in a DLCI, and complete, orderly records can prove the truth of the old saying “An ounce of prevention is worth a pound of cure.”

What information does the Institute make available to auditors?

MIT will provide, on a reasonably timely basis, government auditors with access to all documents and data that are relevant to government audit purpose, including:

Electronically Maintained Accounting Information

The Defense Contract Audit Agency has been provided with online access to relevant Institute accounting and sponsored projects records and may access these data freely for the purpose of audit engagements that have gone through the appropriate opening procedures.

Online Documents

DCAA has Internet access through which DCAA and other government auditors may freely access the most up-to-date version of Institute policy and procedure documents.

Other Published Institute Documents

MIT will provide government auditors with copies of all published (i.e., available to the general public) documents upon verbal request. The Institute will also endeavor to provide DCAA with hard copies of important published Institute reports that are not available online.

Unpublished Institute Documents

MIT will provide government auditors with copies of all relevant unpublished Institute documents, except those deemed by the Institute to be legally privileged or protected. Questions about whether a particular document (including special data analyses) might be deemed to be privileged or protected should be directed to the VPR (for DCAA) or Audit Division (for PwC) before that information is provided.

Interview Information

Government auditors may interview Institute personnel in connection with any audits that have gone through the appropriate opening procedures. VPR will set up these interviews upon request by government auditors. It is normal for VPR staff to be present at all such interviews.

What should I do if I am asked to speak with an external auditor?

Before an audit is begun by any external auditors at MIT, the external auditors will be asked to communicate with the VPR Office of Cost Analysis. Audits concerning research projects should be coordinated with the VPR Office of Cost Analysis [email]. Normally there will be an opening audit conference with the external auditors to discuss the scope, goals, and timing for the planned audit engagement.

Other Institute personnel who might be expected to be involved in the planned audit will be invited to this opening conference. After an understanding has been reached as to the scope of the proposed audit, and presuming it is deemed to be relevant, the external auditors may initiate procedures to seek information and documents from MIT.

MIT personnel who are contacted directly by external auditors should contact the VPR Office of Cost Analysis. If MIT personnel are unsure whether an external audit has been approved, or have any other questions about an ongoing audit, they should communicate with the appropriate members of the VPR Office of Cost Analysis (for DCAA) or Audit Division staff (for PwC).