CRA Quality Assurance Programs 2 — Questions and Answers
Question 1: Which element is most critical when designing a quality assurance monitoring plan for a federally sponsored research project?
- Selecting the lowest-cost audit firm
- Aligning monitoring activities with risk levels identified during project planning (Correct answer)
- Conducting all reviews at the end of the project period
- Limiting QA activities to financial transactions only
Correct answer: Aligning monitoring activities with risk levels identified during project planning
A risk-based monitoring approach ensures that QA resources are focused where the likelihood and impact of errors are greatest.
Question 2: A CRA discovers that a subrecipient has consistently failed to submit required financial reports on time. Under 2 CFR 200, what is the most appropriate corrective action?
- Terminate the subaward immediately without notice
- Issue a high-risk designation and increase monitoring intensity (Correct answer)
- Transfer the subrecipient's funds to a different organization
- Waive the reporting requirement for the remainder of the award
Correct answer: Issue a high-risk designation and increase monitoring intensity
2 CFR 200.332 allows pass-through entities to impose additional conditions on high-risk subrecipients, including enhanced monitoring.
Question 3: What is the primary purpose of an internal controls questionnaire (ICQ) in a research administration QA program?
- To replace the need for annual financial audits
- To assess whether existing controls are adequately designed and operating effectively (Correct answer)
- To calculate indirect cost rates for sponsored projects
- To document principal investigator effort certifications
Correct answer: To assess whether existing controls are adequately designed and operating effectively
An ICQ systematically evaluates the design and effectiveness of controls that mitigate risks in research administration processes.
Question 4: Which QA technique involves selecting transactions based on dollar value thresholds rather than random sampling?
- Attribute sampling
- Discovery sampling
- Monetary unit sampling (Correct answer)
- Judgmental sampling
Correct answer: Monetary unit sampling
Monetary unit sampling (MUS) weights selection by dollar amount, making larger transactions more likely to be tested.
Question 5: A university's QA review finds that effort reports were certified by someone other than the person with first-hand knowledge of the work performed. Which federal guidance is most directly violated?
- 2 CFR 200.430 standards for documenting personnel activity (Correct answer)
- OMB Circular A-21 indirect cost rate guidance
- FAR Part 31 cost principles for contracts
- NSF Award and Administration Guide Chapter V
Correct answer: 2 CFR 200.430 standards for documenting personnel activity
2 CFR 200.430 requires that personnel activity be certified by an employee or supervisory official with first-hand knowledge of the work.
Question 6: During a QA walkthrough of the purchasing process, an auditor notes that the same employee approves purchase orders and reconciles the P-card statement. This represents which type of control weakness?
- Compensating control deficiency
- Segregation of duties failure (Correct answer)
- Authorization limit violation
- Collusion risk acceptance
Correct answer: Segregation of duties failure
Segregation of duties requires that incompatible functions—such as authorization and reconciliation—be performed by different individuals.
Question 7: What distinguishes a material weakness from a significant deficiency in the context of a Single Audit under 2 CFR 200?
- A material weakness involves dollar amounts over $750,000
- A material weakness has a reasonable possibility of resulting in material misstatement of financial statements (Correct answer)
- A significant deficiency always requires a corrective action plan
- A significant deficiency is limited to compliance findings only
Correct answer: A material weakness has a reasonable possibility of resulting in material misstatement of financial statements
Under auditing standards, a material weakness represents a more severe deficiency where there is a reasonable possibility that a material misstatement will not be prevented or detected.
CRA Quality Assurance Programs 2
Which element is most critical when designing a quality assurance monitoring plan for a federally sponsored research project?