Internal audit reveals inefficiencies and control gaps in the grant management process

Client need

As part of their annual internal audit risk assessment, a large tribal government identified grant management as a high-risk function within the organization. As a result, it was incorporated into the annual internal audit plan for the upcoming year. Grant management was prioritized largely as a result of the organization’s dependence on federal and state grant revenues.

A review of the grant management function would include two primary components:

• An evaluation of the current grant management processes
• Testing of grant expenditures and financial reports for compliance with grant requirements and federal law 

Baker Tilly solution

Baker Tilly’s public sector consulting team conducted a review of the grant management function. Using a sample grant transactions, interviews with key process owners and a comparison against industry best practices, the team developed an understanding of the current processes and practices along with recommendations for improvement. Subsequently, the team traced a sample of costs to supporting documentation as a method of determining if expenditures were allowable, approved as required and accurately recorded. Finally, Baker Tilly compared the grant budget to grant spend amount for the six grants selected and documented reasons for unspent funds.

Results

The team presented their findings to the Tribal Council, the Chief Financial Officer and other executive management. Key recommendations highlighted the need to improve the efficiency of the grant application process as well as increase funding opportunities available to operating departments. Input from across the organization led to these recommendations and will enable the tribe to improve programs through increased funding. 

For questions about how sample expenditures were selected, the key personnel interview process and the recommendations provided, please connect with us.