Internal Audit Talk: Extra care needed during transition period

BY STEVE JUNG

The advent of the new Oracle Financials System has produced changes in internal controls associated with financial transactions, especially those that impact charges to the government and other external sponsors. We now have new ways of implementing our controls to ensure expense allowability, proper allocability to projects/tasks/awards, valid business purpose, correct application of burdening rules (i.e., application of benefit and overhead rates), etc.

Especially during the Fall Quarter, when people still are learning how best to use the new Oracle Financials System and changes and improvements are still being made by the Delphi Project development team, it is important for all administrators to take extra care with financial transactions -- especially those that represent expenses to externally sponsored projects/tasks/awards (PTAs).

Internal Audit is suggesting staff take the following precautions when initiating, approving and reviewing charges to sponsored PTAs:

• If you are not sure about the allowability per federal cost principles of a particular charge (if you have not yet completed the revised Chart of Accounts course and its Cost Policy module, for example), wait until you are more confident that you know how to do it correctly. The university will be extending the periods during which restricted fund expenditure statements may be reviewed and certified during Fall Quarter.
• Double-check all the Chart of Accounts numbers, including the project, task, award and, especially, expenditure type numbers, until you are as thoroughly familiar with them as you were with the old SUFIN Chart of Accounts numbers and letters.
• If you are not sure about how to process a transaction, don't hesitate to ask for help. The Delphi team has made available extensive extra help resources to assist staff through this transitional period. (Call 5-HELP or enter a HelpSU ticket at http://helpsu.stanford.edu.) Each administrative area also has a transition team leader to assist staff. And don't forget to utilize the designated unit/individuals that each school has made available for this purpose.

Additionally, the online Oracle Financials System Learning Center contains a wealth of information to assist you in the transition and can be found at www.stanford.edu/dept/itss/finsys/learningcenter/index.html.

The site contains links to job aids and resources related to the new Chart of Accounts and new processes. The site also contains online tutorials, including a Cost Policy module in the Chart of Accounts course that was designed to translate what you already know about government cost principles into the new Oracle Financials structure.

Remember, routine audits such as the annual federal compliance audit carried out by PricewaterhouseCoopers under OMB Circular A-133, DCAA's mandatory control process audits and Internal Audit's operating unit compliance audits will be carried out as usual for transactions incurred during this period. There will be no suspension of scrutiny just because we are implementing a new accounting system.

Now, more than ever, the "Total Cost of Ownership" principle applies to our work. When you factor in the cost of having an expenditure questioned during an audit, having the charge disallowed by a sponsor contracting officer and having to correct it and others like it using the expense transfer process or at closeout, it is almost always more efficient to do it right the first time.

Staff can call Internal Audit at 725-0074 with questions or concerns about compliance issues or use the anonymous compliance Helpline on the web at http://institutionalcompliance.stanford.edu/report/.

--Steve Jung, Director of Internal Audit and Institutional Compliance