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MJSP Project Audits

Requirements

A financial audit of MJSP projects is expected within 90 days of the final day of the grant period, as recorded on the Grant Agreement.

  • The audit must be conducted by a CPA, the State Auditor or the Legislative Auditor's office.
  • The audit must be conducted in accordance with generally accepted auditing standards (GAAS).
  • The audit is used as a third-party independent verification of costs incurred and revenue received. The audit is also used to verify the accuracy of the institution's final financial reports and request for payment.

The audit must have the following statements:

  • Balance Sheet
  • Revenue and Expense statement
  • Statement of Budgeted, Incurred and Questioned Cost by Revenue Source (i.e., MJSP, Contributing Business, Grantee/Linkage)

The following factors should be considered in defining the scope and methodology of the audit:

  • The auditor may rely on the work of others in regard to elements of the grantee's internal control structure common to all operations.
  • The audit must be on the project period recorded on the Grant Agreement.
  • The auditor should compare warrants received by the Grantee with a list of warrants issued by the Partnership. A list of the dates and amounts of warrants will be supplied by the Partnership upon written request.
  • The audit should confirm that all match is properly documented and valued fairly. Minimum documentation for in-kind contributions consists of a properly completed receipt voucher, as described in the Guide to Program Operations.
  • Items which are inconsistent with planned matching contributions as described in the Grant Proposal and Memorandum of Agreement should be questioned and should be examined to determine their relevance to project activities. The items should be identified and an opinion should be expressed as to whether such items are allowable in the Notes to the Financial Statements.
  • The auditor should insure that matching contributions are made specifically for the project described in the Grant Proposal and determine that the contribution would not otherwise have been contributed to the Grantee.
  • The auditor should insure that equipment purchased with grant funds is properly identified and in the possession of the educational institution.
  • The audit should confirm that the Grantee has appropriate documentation of actual costs incurred including, but not limited to, contracts or time records of actual time spent on project activities for personnel expenses and receipts for any equipment or materials purchased.
  • The auditor should confirm that the Grantor Administrative Overhead Costs do not exceed 5 percent of the actual direct costs.

Pursuant to Section VI.A of the Grant Agreement, which includes the statement, "Costs in excess of budget categories will not be approved unless approved prior to their incurrence by the PARTNERSHIP," the auditor should question any costs in excess of budget categories as stated in the Grant Agreement.

The auditor should conduct an exit interview with the Grantee. The interview should be performed to resolve differences before final issuance of the audit. The auditor may provide written explanation, which should accompany the audit, of any unresolvable differences.

The auditor must mail two (2) copies of the audit report directly to the Minnesota Job Skills Partnership, 1st National Bank Building, 332 Minnesota Street, Suite E200, St. Paul, MN 55101-1351.

Download a sample Grant Closeout Audit.

Preparation

In preparation for the MJSP program audit, the following items should be organized and readily available for the auditor's review:

  • Financial Reports for all trimesters
  • All copies of the Receipt Vouchers for In-Kind Contributions
  • Grant Agreement with any amendments and/or budget revisions
  • Grant Proposal with detailed budget
  • The Audit Requirements memo and Sample Audit provided by MJSP
  • Detailed listing of expenses incurred for the project and the following supporting documents:
    • Invoices and/or purchase orders for equipment, materials or supplies purchased
    • Invoices or approved expense reports for travel expenses
    • Time records or contracts for personnel expenses

Following are some important points for preparing the final financial report:

  • Be sure to include the audit fee and additional administrative overhead.
  • Double check all costs reported on the final report for support. If anything has been reported under the wrong category or if there are differences between what was reported and your supporting documentation, correct these before the audit begins.
  • No budget revisions will be allowed after the grant period has ended, so it's important to anticipate problems which could cause questioned costs.
  • MJSP compares the college's final Financial Report to the audit report and approves final payment based on the outcome. The final Financial Report must be essentially the same as the audit report.

MJSP will not approve final payment until all reporting requirements have been met including the Final Narrative Evaluation Report, final Contributing Business Status Report and the final Project Trainee Report complete with placement information.

MJSP Experienced Auditors

This is a list of auditors experienced with auditing MJSP program funds. However, any independent certified public accountant (CPA) may be used to conduct a grant closeout audit

CPAs interested in being listed may email deed.mjsp@state.mn.us. Note: This list is provided for information purposes only. MJSP does not claim responsibility for these auditors' services, nor does MJSP endorse a particular auditor.

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