An audit firm is conducting grant compliance audits on behalf of a governmental entity.
The public office engages with various not-for-profit and private organizations to deliver services and community support programs. These organizations are funded through grants from the public and must comply with reporting requirements intended to ensure transparency, accountability, and performance.
Grant compliance audits determine whether grant recipients have used the funds appropriately, maintained internal controls, achieved program objectives, and complied with regulations. The findings and recommendations of the audit allow the government to improve grant management practices, understand how funding is being used, and provide higher-quality services to its constituents and stakeholders
The Challenge – Time-Consuming Data Collection and Testing
The government provides grant funding to dozens of different organizations. Each grant has its own terms, mandate, and performance criteria. Recipients submit monthly reports to the government that demonstrate how the funding was used, the beneficiaries, and the results of the program.
The auditor then reviews these reports, compares them to the relevant financial and grant process data, and performs various tests to determine whether the funds are being used in accordance with the terms of the grant and state/provincial and federal regulations.
This time-consuming process requires hours of work from multiple auditors. Auditors must manually collect and review the grant reports, identify potential areas of risk, design appropriate tests, and verify the transactions for each grant recipient.
The volume of data, the number of grant reports, and the complexity of the grant requirements limit the auditor’s ability to conduct a complete and comprehensive audit for every funding recipient.
Additionally, inadequate systems and tools make it difficult to conduct an in-depth analysis of the data, further reducing the value of the audit to the government. Without these granular insights, governments are unable to fully understand how funds are being used, limiting their ability to hold recipients accountable and show value for money to their constituents.
The Challenges
- Extensive report documentation from numerous grant recipients
- Insufficient systems for data collection, extraction, and analysis
- Time-consuming and manual integration, review, and testing processes
- Shortage of skilled and experienced auditors
- Changing compliance legislation and regulatory requirements
- Data security and privacy risks associated with sensitive information
The Solution – Vizschön™ Platform for Grant Compliance Audits
The Vizschön™ Platform by Vigilant AI significantly reduces the time, cost, and resources required to conduct grant compliance audits.
The intelligent data management platform simplifies data capture from multiple sources, automates the collection and review of grant reports, and pinpoints discrepancies or areas of risk for further testing.
Advanced artificial intelligence and machine learning (AI/ML) links all available data to every accounting entry provided in a fully contextualized data lake, allowing auditors to more rapidly confirm simple grant rules, and allow them the time to review more complex assertions.
Auditors can design and automate financial, compliance, programmatic, and control tests for each grant recipient, including allowable cost tests, allocation tests, eligibility tests, or performance tests.
The tests can then be adapted to align with the specific terms of the grant and/or regulatory and legislative requirements.
Key Intelligent Data Management Platform Features
- Automated scanning and tagging of grant reports and supporting business process documents
- Rapid cross-correlation of business process documents to accounting entries
- Ability to collect, analyze, and store documents in multiple formats
- Fully adaptable to changing testing and reporting requirements
- Secure and encrypted data architecture
The Results – Faster Grant Compliance Audits and Greater Accountability
The Vizschön™ Platform by Vigilant AI allows auditors to conduct a more thorough, complete, and comprehensive grant compliance audit for each funding recipient.
The unified system enables a more in-depth and granular analysis, allowing auditors to provide a greater level of detail in their reports. With more information available to them, governments can improve transparency, demand greater accountability, and provide higher quality services to residents.
By reducing the time and cost of the audit, auditors can review more transactions, delve deeper into areas of risk, and deliver more value to the government and their main stakeholder: the public.
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