Chances are you haven’t seen your auditor around the office for quite a while — and some people might be just fine with that. After all, audits normally don’t rank highly on a financial aid professional’s list of favorite annual activities.
However, the past two-plus years of pandemic gave rise to a compromise solution that some people may prefer: E-audits, or “remote” audits. Indeed, just as how personal workspaces went to a fully remote or hybrid model, so has the work of auditing. But as the world begins to open again — and barring any future flare-ups — institutions may have a choice of whether they prefer their auditors to come into the office or continue to do their work remotely.
Concerning E-audits, however, there are pros and cons:
Pro: Saves Time and Money
For both the institution and auditor alike, an E-audit can be less costly. After all, there are extra expenses if an auditor is coming from across the country, paying for flights, rental cars, hotel stays and all that comes with traveling. All those expenses may be built into the audit. An E-audit, on the other hand, can be completed from the comfort of the auditor’s regular workspace, potentially leading to a less costly, more swiftly completed audit.
Con: Communication Difficulties
We’re in a world that’s more connected than ever, but you can still lose things in translation when you don’t have face-to-face contact or the ability to just drop by an office to ask a question. Solve these challenges with daily check-ins over a video chat platform, such as Zoom or Microsoft Teams, open an instant messaging channel to those who should be in contact, and provide access to shared documents that can be easily updated and reviewed.
Pro: More Flexibility
To help an E-audit go more smoothly — or even an on-site audit, for that matter — auditors may be given access to systems they did not have previously, such as a Student Information System (SIS) or a Financial Aid Management (FAM) System. This way an auditor can retrieve information quickly, have access to reporting functionality and identify ways the institution can use its SIS or FAM more effectively. These expanded capabilities and flexibilities that E-audits encourage can make for a more enriching experience that goes beyond a simple report.
Con: Less Accountability
Of course, if an auditor has access to more sensitive information and communication is less frequent during the process, trust and staying accountable is vital. If an institution and an auditor have an existing relationship built over years, this is less of a concern. Nevertheless, an institution should be asking, “Is our auditor using our private information correctly,” and an auditor should consider, “Is the institution trying to hide anything?” Institutions should also consider the privacy provisions in the Gramm-Leach-Bliley Act and ensure access to digital files is limited only to who needs to see them.
Pro: Less Administrative Burden
E-audits may be less of an administrative burden for the financial aid staff, depending on how information is provided. Arranging remote access to the SIS/FAM is ideal, however printing or scanning to a PDF is an adequate alternative. Once all documentation is sent to the auditor, the auditor will sift through the documents and let the institution know what is missing. This can be done through video chats, phone calls or shared spreadsheets. The communication is short, time conscious and efficient for obtaining the missing documentation.
Con: Less Personal
Those trusting relationships built between institutions and their auditors are built not only by the work being done efficiently and without incident, but through business lunches, friendly discussions and developing personal connections. When interactions are limited to a video chat or an email, it is simply not the same. Financial aid professionals and their auditors don’t have to be best friends, of course, but strong relationships make for better communication and the ability to work through problems more productively.
Pros and Cons — What wins?
As we see, E-audits have several benefits, most geared toward efficiency. The negatives are prominent, too, particularly when it comes to communication issues that can ripple to other areas. Ultimately, an institution must maintain regular contact with its auditor and build trust.
To learn more about E-audits and how they can be a great option to overcome audit phobia, reach out to McClintock & Associates, where our staffers specialize in Title IV compliance audits. Schedule a call today and don’t miss our recent webinar on facing audit phobia.