Event 16

Audit Request

The sponsor requests documentation for selected project expenses. Marcus must help the team assemble a clear, complete, and defensible project record through the appropriate institutional response process.

Year 3 Event 16 Audit Preparation

Story Background

The project file is now being tested

Throughout Years 1 and 2, Marcus reminded the project team that documentation matters. Receipts, approvals, logs, meeting notes, invoices, progress reports, and review notes were not just administrative clutter. They created the record of what happened.

Now, in Year 3, that record is being tested. The sponsor requests documentation for several selected charges, including outreach materials, participant incentives, subrecipient invoice support, and a cost transfer.

Dr. Brown is concerned because the project is busy and the team is preparing for final activities. Marcus understands the pressure, but he also knows that audit requests require a careful, organized, and coordinated response.

The issue is not whether Marcus can explain the expenses verbally. The issue is whether the project file can support the charges with documentation that an outside reviewer can follow.

Trigger Issue

The sponsor asks for supporting records

Training Concept

Audit readiness is built before the audit request arrives

An audit request asks the project team to show that charges were allowable, allocable, reasonable, documented, and consistent with the award. Marcus must help organize the records so someone outside the project can understand what happened.

Documentation

Records that explain what happened, why it happened, who approved it, and how it relates to the project.

Audit Preparation

The process of organizing support before responding to a sponsor, auditor, or reviewer.

Allowability

Shows that the cost was permitted under sponsor, federal, and institutional requirements.

Allocability

Shows that the cost benefited the project being charged.

Reasonableness

Shows that the cost made sense under the circumstances and was not excessive.

Missing Support

If documentation is incomplete, Marcus must identify the gap, reconstruct the record if possible, explain limitations, and coordinate next steps through the appropriate process.

What Marcus Reviews

Each selected transaction needs a support package

Receipts and Invoices

Show what was purchased, the cost, date, vendor, and transaction details.

Approvals

Show who reviewed or approved the expense, transfer, invoice, or purchase.

Project Activity Support

Connects the cost to outreach events, recruitment activity, data collection, or other approved work.

Participant Records

Support incentive purchases, distribution, acknowledgments, and reconciliation.

Subrecipient Records

Include CHAN invoices, progress reports, monitoring checklists, and follow-up documentation.

Cost Transfer File

Includes the transfer form, original expense detail, justification, timing explanation, and review notes.

Audit Review

What does the documentation show?

Audit Support Snapshot

Selected transaction review

Documentation Requested
Selected Item Support Needed Risk if Missing Marcus’s Action
Participant incentives Purchase record, distribution log, acknowledgments Cannot verify distribution Reconcile records
Outreach materials Receipt, event support, project purpose Cost may look general Connect to activity
CHAN invoice Invoice, progress report, monitoring checklist Performance not supported Include monitoring file
Cost transfer Request form, justification, timing explanation Late transfer scrutiny Provide full transfer file

The goal is not to send a pile of documents. The goal is to send a clear record that explains why each cost belongs on the award.

Marcus’s Analysis

Questions before submitting the response

Marcus prepares the documentation package, but the final response may need to be reviewed or submitted through the institution’s sponsored programs, finance, compliance, or audit response process.

Does each cost have a clear project purpose?

Marcus checks whether someone outside the project could understand how the cost supported approved activities.

Can the project benefit be traced?

Records should connect each charge to specific project work, events, participants, deliverables, or approved objectives.

Are approvals visible?

Marcus confirms that purchases, invoices, transfers, or monitoring decisions were reviewed appropriately.

Are there documentation gaps?

Missing support should be identified before submission, not discovered by the sponsor first.

Does the response tell the story?

Marcus organizes the response so the sponsor can follow the transaction from expense to project purpose to approval.

What should be improved going forward?

Audit requests often reveal file organization, tracking, or documentation practices that should be strengthened.

Decision Point

How should Marcus respond to the audit request?

The sponsor requests documentation for incentives, outreach materials, CHAN invoice support, and a cost transfer. What is the best response?

Resolution

Marcus prepares the documentation package for institutional review

Marcus coordinates with Dr. Brown, David, Jasmine, and the CHAN monitoring file to assemble the selected transaction support. He prepares the package so the appropriate institutional office can review or submit the response according to local procedure.

Audit Response Preparation Notes

Prepared by Marcus Rivera

Issue Identified Sponsor requested supporting documentation for selected project transactions.
Records Assembled Receipts, invoices, approvals, incentive logs, activity support, subrecipient monitoring records, cost transfer documentation, and review notes.
Administrative Review Marcus checked whether each item showed project purpose, allowability, allocability, reasonableness, approval, and documentation.
Response Approach Organize support packages by transaction and route the package through the appropriate institutional response process before it is submitted to the sponsor.

Audit readiness is the result of everyday documentation habits. The stronger the project file, the easier it is to respond through the proper review process.

Common Misconceptions

What learners should not assume

“A receipt is enough.”

A receipt shows that something was purchased. It does not always show why the cost belongs on the sponsored project.

“If the PI remembers the purpose, documentation is not needed.”

Audit support should be based on records, not memory or verbal explanations.

“Audit preparation starts when the request arrives.”

Audit readiness is built throughout the life of the award through consistent documentation and file organization.

Year 3 Connection

Audit requests preview closeout readiness

Closeout depends on the same habits that support audit response: complete records, reconciled transactions, documented decisions, and clear evidence of project activity.

Transaction support

Each selected cost should have enough support to show why it was charged to the award.

Organized project file

A well-organized file helps Marcus respond quickly and reduces stress during review.

Closeout preparation

Documentation gaps discovered during audit review should be fixed before final closeout.

Resources

References behind this scenario

These references show why documentation and audit preparation are central to responsible award management. A post-award research administrator should help assemble support that shows costs are allowable, allocable, reasonable, documented, retained, and routed through the proper institutional response process.

2 CFR 200.403 — Factors Affecting Allowability

This federal cost principle explains that costs charged to a federal award must meet allowability standards, including being necessary, reasonable, allocable, consistently treated, documented, and compliant with applicable requirements.

Connection to Event 16: selected charges must be allowable and supported before they can withstand sponsor review.

2 CFR 200.405 — Allocable Costs

This federal cost principle explains that a cost must benefit the specific award being charged and be assigned in proportion to the benefit received.

Connection to Event 16: audit support should connect each cost to project activity, not just to a receipt.

2 CFR 200.334 — Retention Requirements for Records

This federal requirement addresses how long award records must be retained and available for review after the relevant period, subject to applicable award and institutional requirements.

Connection to Event 16: the project file must be retained and available to support sponsor review.

Institutional Audit Response Procedures

Institutional procedures explain how documentation requests should be coordinated, reviewed, approved, and submitted to a sponsor, auditor, or reviewer.

Connection to Event 16: Marcus should follow the institutional response process instead of sending an informal document dump.

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