[Federal Register: June 16, 2005 (Volume 70, Number 115)]
[Rules and Regulations]
[Page 34985-34986]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jn05-1]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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[[Page 34985]]
DEPARTMENT OF AGRICULTURE
Office of the Chief Financial Officer
7 CFR Part 3052
Audits of States, Local Governments, and Non-Profit Organizations
AGENCY: Office of the Chief Financial Officer, USDA.
ACTION: Direct final rule.
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SUMMARY: The United States Department of Agriculture (USDA) is amending
7 CFR part 3052 to implement the Office of Management and Budget (OMB)
revisions to Circular No. A-133. These amendments increase the
threshold for audit from $300,000 to $500,000; increase the threshold
for cognizant agency for audit from $25 million to $50 million; make
related technical changes to facilitate the determination of cognizant
agency for audit; and provide for Federal agency reassignment of
oversight agency for audit.
DATES: This rule will be effective August 15, 2005, unless written
adverse comments within the scope of this rulemaking or written notice
of intent to submit them are received by August 30, 2005. If USDA
receives adverse comments, the Federal Register will report on the
rule's nullification.
ADDRESSES: You may submit comments by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: matthew.faulkner@usda.gov. Include Regulatory
Information Number (RIN) number 0505-AA12 in the subject line of the
message.
Fax: (202) 690-1529.
Mail: OCFO/CTGP Room 3425A-S, Stop 9010, 1400 Independence
Avenue, SW., Washington, DC 20250-9020.
Hand Delivery/Courier: OCFO/CTGP Room 3425A-S, Stop 9010,
1400 Independence Avenue, SW., Washington, DC 20250-9010.
Instructions: All submissions received must include the agency name
and docket number or RIN for this rulemaking. All comments received
will be posted without change to http://www.regulations.gov, including
any personal information provided. For detailed instructions on
submitting comments and additional information on the rulemaking
process, see the ``Public Participation'' heading of the SUPPLEMENTARY
INFORMATION section of this document.
Docket: For access to the docket to read background
documents or comments received, contact Matthew Faulkner at
matthew.faulkner@usda.gov or at: OCFO/CTGP Room 3425A-S, Stop 9010,
Room 1400 Independence Avenue, SW., Washington, DC 20250-9020.
FOR FURTHER INFORMATION CONTACT: Matthew Faulkner, Office of the Chief
Financial Officer, Credit, Travel and Grants Policy Division, United
States Department of Agriculture, (202) 720-1307,
matthew.faulkner@usda.gov.
SUPPLEMENTARY INFORMATION: Previously, USDA promulgated 7 CFR part 3052
to implement OMB Circular No. A-133, ``Audits of States, Local
Governments, and Non-Profit Organizations.'' The Office of Management
and Budget (OMB) has published the aforementioned final revisions (68
FR 38401, June 27, 2003). Through this rulemaking, USDA is amending its
implementing regulations at part 3052 to conform to the revised
circular.
OMB made the following changes in the final revision to Circular
No. A-133, ``Audits of States, Local Governments, and Non-Profit
Organizations.'' The revisions (1) increase the threshold for audit
from $300,000 to $500,000; (2) increase the threshold for cognizant
agency for audit from $25 million to $50 million; and (3) make related
technical changes to facilitate the determination of cognizant agency
for audit and provide for Federal agency reassignment of oversight
agency for audit. There are not additional substantive changes. For a
discussion of the rationale and public comments regarding the OMB
revisions, please see the published final OMB notices in the June 27,
2003, Federal Register (68 FR 38401).
Through this Direct Final Rule, USDA is implementing these changes
verbatim.
Impact Analysis
Executive Order 12866
Executive Order 12866 requires that a regulatory impact analysis be
prepared for ``significant regulatory actions.'' This order defines a
significant regulatory action as any rule that affects the national
economy by at least $100 million or has other specified effects.
USDA does not believe that the rule will be a significant
regulatory action.
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988, Civil Justice Reform. The provisions of this proposed rule
neither preempt State laws nor involve administrative appeals. These
amendments are effective retroactively to January 1, 2004.
Executive Order 13132
It has been determined that this rule does not have sufficient
federalism implications to warrant a Federalism Assessment. The
provisions contained in this rulemaking will not affect States or their
political subdivisions substantially. They also will not impact the
distribution of power and responsibilities among the various levels of
government substantially.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an
analysis to be prepared for each rule with a significant economic
impact on a substantial number of small entities. The analysis should
describe the rule's impact on small entities and identify any
significant alternatives to the rule that would minimize the economic
impact on such entities. Section 605 of the Regulatory Flexibility Act
allows USDA to certify a rule, in lieu of preparing an analysis, if the
proposed rulemaking is not expected to have such an impact.
USDA certifies that this rule would not have the aforementioned
impact. The final rule will have a positive impact on small businesses
because of the assistance these entities receive from other agencies.
It also will ease the administrative requirements for USDA to offer
financial assistance.
[[Page 34986]]
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) requires agencies to prepare several analyses before
proposing any rule that may result in annual expenditures of at least
$100 million annually by State, local and Indian tribal governments, or
the private sector. USDA certifies that this rule will not result in
expenditures of this magnitude.
Paperwork Reduction Act of 1995
This rule will not impose additional reporting or record keeping
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35).
List of Subjects in 7 CFR Part 3052
Accounting, Grant programs, Intergovernmental relations, Nonprofit
organizations, Reporting and recordkeeping requirements.
0
For the reasons set forth in the preamble, part 3052 of Chapter XXX of
Title 7 of the Code of Federal Regulations is amended as follows:
PART 3052--AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-
PROFITORGANIZATIONS
0
1. The authority citation for part 3052 continues to read as follows:
Authority: 5 U.S.C. 301.
0
2. Amend Sec. 3052.105 by revising the definition of ``Oversight
agency for audit'' to read as follows:
Sec. 3052.105 Definitions.
* * * * *
Oversight agency for audit means the Federal awarding agency that
provides the predominant amount of direct funding to a recipient not
assigned a cognizant agency for audit. When there is no direct funding,
the Federal agency with the predominant indirect funding shall assume
the oversight responsibilities. The duties of the oversight agency for
audit are described in Sec. 3052.400(b). A Federal agency with
oversight for an auditee may reassign oversight to another Federal
agency, which provides substantial funding and agrees to be the
oversight agency for audit. Within 30 days after any reassignment, both
the old and the new oversight agency for audit shall notify the
auditee, and, if known, the auditor of the reassignment.
* * * * *
0
3. Amend Sec. 3052.400 by revising paragraph (a) to read as follows:
Sec. 3052.400 Responsibilities.
(a) Cognizant agency for audit responsibilities. Recipients
expending more than $50 million in a year in Federal awards shall have
a cognizant agency for audit. The designated cognizant agency for audit
shall be the Federal awarding agency that provides the predominant
amount of direct funding to a recipient unless OMB makes a specific
cognizant agency for audit assignment. The determination of the
predominant amount of direct funding shall be based upon direct Federal
awards expended in the recipient's fiscal years ending in 2004, 2009,
2014, and every fifth year thereafter. For example, audit cognizance
for periods ending in 2006 through 2010 will be determined based on
Federal awards expended in 2004. (However, for 2001 through 2005, the
cognizant agency for audit is determined based on the predominant
amount of direct Federal awards expended in the recipient's fiscal year
ending in 2000.) Notwithstanding the manner in which audit cognizance
is determined, a Federal awarding agency with cognizance for an auditee
may reassign cognizance to another Federal awarding agency which
provides substantial direct funding and agrees to be the cognizant
agency for audit. Within 30 days after any reassignment, both the old
and the new cognizant agency for audit shall notify the auditee, and,
if known, the auditor of the reassignment. The cognizant agency for
audit shall:
(1) Provide technical audit advice and liaison to auditees and
auditors.
(2) Consider auditee requests for extensions to the report
submission due date required by Sec. 3052.320(a). The cognizant agency
for audit may grant extensions for good cause.
(3) Obtain or conduct quality control reviews of selected audits
made by non-Federal auditors, and provide the results, when
appropriate, to other interested organizations.
(4) Promptly inform other affected Federal agencies and appropriate
Federal law enforcement officials of any direct reporting by the
auditee or its auditor of irregularities or illegal acts, as required
by GAGAS or laws and regulations.
(5) Advise the auditor and, where appropriate, the auditee of any
deficiencies found in the audits when the deficiencies require
corrective action by the auditor. When advised of deficiencies, the
auditee shall work with the auditor to take corrective action. If
corrective action is not taken, the cognizant agency for audit shall
notify the auditor, the auditee, and applicable Federal awarding
agencies and pass-through entities of the facts and make
recommendations for follow-up action. Major inadequacies or repetitive
substandard performance by auditors shall be referred to appropriate
State licensing agencies and professional bodies for disciplinary
action.
(6) Coordinate, to the extent practical, audits or reviews made by
or for Federal agencies that are in addition to the audits made
pursuant to this part, so that the additional audits or reviews build
upon audits performed in accordance with this part.
(7) Coordinate a management decision for audit findings that affect
the Federal programs of more than one agency.
(8) Coordinate the audit work and reporting responsibilities among
auditors to achieve the most cost-effective audit.
(9) For biennial audits permitted under Sec. 3052.220, consider
auditee requests to qualify as a low-risk auditee under Sec.
3052.530(a).
* * * * *
Sec. Sec. 3052.200, 3052.230, 3052.400 [Amended]
0
4. In addition to the amendments set forth above, in 7 CFR part 3052
remove the term ``$300,000'' and add, in its place, the term
``$500,000'' in the following places:
(a) Section 3052.200(a), (b), and (d);
(b) Section 3052.230(b)(2); and
(c) Section 3052.400 (d)(4).
Dated: May 9, 2005.
Patricia E. Healy,
Acting Chief Financial Officer.
Dated: May 11, 2005.
Mike Johanns,
Secretary, United States Department of Agriculture.
[FR Doc. 05-11840 Filed 6-15-05; 8:45 am]
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