The audit process
Initial visit – Review of controls and project management arrangements
We prepare for our first audit visit by reviewing the details of the project and claim. This includes, for example, reviewing the project business plan, grant offer letter, claim details and list of transactions, and any special conditions.
We perform the audit fieldwork in two stages, usually in two separate audit visits. During the first audit stage we aim to:
- Meet key project personnel and explain the scope and nature of our audit work;
- Review the design of key controls over the general project management, expenditure and financial controls, and other controls tailored to the size and nature of the project.
- Check that the above controls have been implemented as designed. We achieve this through review of documentation and ‘walk-through’ of a small selection of transactions from initiation to inclusion in the claim form.
- During the first or second stage of the audit, we will also examine compliance with non-financial aspects of the project, for example, inspection of policies and procedures, marketing activity, outcomes and targets.
- For audit efficiency, we may also perform some detailed financial testing at this first stage (expenditure, match-funding, revenue).
The results of this initial visit allow us to determine an appropriate level of detailed financial testing by taking into account the levels of risk and control in each area of the project. We will select a sufficient sample size to form an audit opinion while minimising the level of disruption to your organisation.
Second visit – Detailed financial testing
Arranged to perform the detailed financial testing and complete any other outstanding matters.
At the end of the final day of the visit, we will hold a meeting to explain our initial findings and any potential issues. Agreeing a timetable for the issue of our draft and final audit reports.
Reporting the results
When the necessary audit work is documented and reviewed, we will issue a draft audit report for your review. It will confirm the testing performed and explain any areas of non-compliance or potentially ineligible expenditure based on our findings to date. The purpose of the draft report is to provide an opportunity for you to confirm the factual accuracy of our comments and respond to our recommendations.
After reviewing your responses, we will issue a final audit report. This report will conclude the audit and, if applicable, detail any irregularities that will need to be reported to WEFO for recovery action.
In addition to non-compliance issues and financial irregularities, our audit reports will also provide ‘best practice’ recommendations for improvement.
We will arrange to follow-up key audit report recommendations and agree suitable timescales with you.