Current nonprofit sector research and recommendations for effective day-to-day practice from ASU faculty, staff, students, and the nonprofit and philanthropic community.
Andrea L. Norman, MBA,
Director of Research, Behavioral
Health and Wellness,
Southwest Center for HIV/AIDS
Like many people, every year as I file my taxes I have an itchy feeling when I consider I might be audited by the Internal Revenue Service. I have always been squeaky clean honest in my filings, but the idea of being scrutinized by people portrayed as whimsical and unreasonable is nerve-wracking.
Imagine my surprise when in my new position as Director of Research, Behavioral Health and Wellness, I was subjected to audits by not one or two regulatory bodies, but by four: the Food and Drug Administration, the State, the County, and the Regional Behavioral Health Authority. While none of them are the IRS, my fear has greatly subsided after experiencing FOUR audits in the last six months.
PRIOR TO THE AUDITORS ARRIVING:
- If possible, get as much advance information about what the regulatory body may be auditing.
- Review any guidelines that have been provided in the past about the rules that govern the area being audited. For example, the auditors may review where files are kept and the security surrounding them.
- Then, perform an internal analysis of the information to be audited.
- If the analysis shows that there are holes or areas that will be a problem, fix anything that is fixable. DO NOT FALSIFY OR CHANGE ANYTHING THAT WOULD BE UNETHICAL TO CHANGE.
- Create a list or notes about the areas that are of concern and prepare answers to questions that may be asked.
- Ensure everyone in the organization knows when and where there will be auditors present. Brief them on the rules and encourage them to mind their manners, use good judgment, talk less and listen more.
- Provide a visual reminder to staff by asking the auditors to wear badges that clearly label them.
- Prepare a space, away from the daily hustle and bustle, for the auditors to perform their work. Ensure they have internet or network access and any other tools they may need to be effective.
- Realize that audits are an opportunity to improve. They provide an outside perspective on what you are doing well and where there is opportunity for improvement.
WHEN AUDITORS ARE PRESENT:
- Greet them with a friendly and professional attitude.
- Check their identification. (They will expect this verification.)
- Give them a tour, if appropriate. If not, usher them to the area where they will set up.
- Request a “kick-off” meeting that should cover their goals, data requirements, and audit areas.
- Bring the files and/or data to them. If they are auditing electronically, provide them with an auditor log in that limits their access to only the areas they need to perform the audit.
- Assign someone to serve as a host or “runner” who can provide guidance, ensure they are comfortable and can perform the audit with ease.
- Answer any questions promptly and honestly. However, this is not the time to elaborate, gossip, provide opinions, or share any concerns or doubts. Answer the questions and only the questions.
- Be friendly and conversational, but avoid personal opinions about ANYTHING.
- Request a briefing at the end of each day to help you prepare for the next audit day.
- At the conclusion of the audit, request an overview of findings. Sometimes they will share their findings. Other times, they will not. Thank them for their time.
AFTER THE AUDIT:
- Request the findings, informally, if possible, before they are finalized.
- Understand the implications of any findings (both good and bad.)
- Celebrate any successes!
- Create a corrective action plan for improvement.
I have found auditors across the board to be friendly, reasonable, and helpful. They understand the complexities of your business and provide an outside, consultative view of your performance. Like a report card, audits aren’t always welcomed, especially if your organization fell short of their goals, but it does give a clear path for improvement. And, regulatory bodies seem to be particularly responsive to attempts at improvement. Successful, positive change is recognized and noted. Good luck!
Andrea Norman is the Director of Research, Behavioral Health and Wellness at the Southwest Center for HIV/AIDS, where she leads a staff of 18 while managing four key areas of the agency, including: the behavioral health practice, clinical trials research, medical nutrition, and partnerships with educational institutions. In addition to her leadership role, she handles grant management and funding, licensure, communications, compliance and regulatory oversight. Andrea’s background includes leadership roles at IBM, PriceWaterhouseCoopers, Leo A Daly Architects, and her own small business. She has been active in the community, serving as Chair of the Public Art Committee for the Phoenix Arts and Culture Commission, as well as serving on multiple boards and commissions in the Phoenix Metro area. Andrea earned an MBA from the University of Southern California in Finance, where she was a Simonsen Fellow.
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