SETWorks

How to Prepare for an Audit 101

Follow these tips to get your disability service agency ready for your next audit.

team sitting around table to prepare for an audit

We’ve all been there. A letter arrives in the mail, notifying you that you’re the subject of a dreaded audit. The letter spells out the names and dates of service for which the auditor wants to see records. And oh, by the way, the auditor will be there in a few short weeks. 

 

Even if you’ve been proactive about keeping your records up to date, the fear of falling short of perfect compliance and having to repay thousands of dollars can cause a lot of agency leaders to lose sleep. 

 

Unfortunately, audits are a fact of life for disability services agencies. This can include unscheduled audits for Medicaid, as well as regular audits such as CARF or other entities. Minor audits, like a service coordinator auditing an individual’s services on a monthly or quarterly basis, could also cause significant stress. 

 

No matter which type of audit you’re facing, this guide will provide you with some best practices along with tips and tricks we’ve picked up from other disability service agencies so you can maintain a state of audit-readiness.

Practical tips to prepare for an audit

1. As soon as you receive an audit notice, collect all the information you need to know. This might include what’s being audited, who’s being audited, and when the audit will occur. If possible, ask the auditor for their checklist so you can gather the appropriate documentation. This also signals to the auditor that you’re on top of things, which can help set the right tone for their visit. 

 

2. Tap into your network. Contact other providers in your community to find out whether they’ve already undergone this audit. If so, they may be able to tell you if there’s a specific area that the auditor was focused on or share helpful information so that you can prepare. 

 

3. Prepare the file. Few things are as frustrating for an auditor as having to repeatedly ask for the documents they need. You can avoid this situation by having all the requested information ready for them in a computer file or even printed out and organized in a manila folder. The easier you can make things for the auditor, the easier it will be for you and your team. 

 

4. Set up and maintain an effective file structure. Establishing a folder structure and standardized naming conventions will greatly reduce the amount of time you spend looking for files. Once you establish your organization system, be sure to document and communicate these expectations to your team so that everyone is on the same page.

An example of an effective file structure in SETWorks from one of our clients

5. Scan documents in smaller batches. Nothing is as panic-inducing as having to scroll through 52 pages to find a document while an auditor looks over your shoulder. Save yourself the anxiety by breaking up files into smaller sections before scanning them in (similar to how you would create sections in a binder with dividers).

 

6. Have robust internal audits and quality controls. While the old adage, “The best defense is a good offense” is true for football, the same applies to audits as well. One of the best ways to avoid findings during an audit is to be proactive about uncovering these deficiencies before the auditor arrives. Performing internal audits and quality checks weekly, monthly, or quarterly can help with this.

 

Depending on your resources, this might be as simple as creating a checklist that someone completes once a month for a handful of files so that you’re encouraging good quality assurance practices throughout the year. 

 

7. Update your processes with each audit. Prepping for an audit takes a tremendous amount of time and energy, so it can be tempting to skip the most important final step: the debriefing. But in doing so, you miss out on a valuable opportunity to take what you’ve learned and use it to make your next audit more successful. Even if you only have 20 minutes, it’s worth celebrating with your team on what went well and discussing what you should focus on to improve in the future.

What's next?

Whether random or expected, an audit can throw your entire team for a loop. By following the steps above, you’ll be in a much better position when your next audit notice arrives. You can also download our free guide, “5 Ways to Become a Data-Driven Organization” for more tips on how to make your data work for you — instead of the other way around.

Free Guide: 5 Ways to Become a Data-Driven Organization
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