[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1773.3]

[Page 979-980]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1773--POLICY ON AUDITS OF RUS BORROWERS--Table of Contents
 
                    Subpart B--RUS Audit Requirements
 
Sec. 1773.3  Annual audit.


    (a) Each borrower must have its financial statements audited 
annually by a CPA selected by the borrower and approved by RUS as set 
forth in Sec. 1773.4.
    (b) Each borrower must establish an annual as of audit date within 
twelve months of the date of receipt of the first advance of funds from 
grants and insured and guaranteed loans approved by RUS and RTB and must 
prepare financial statements as of the date established.
    (c) Until all loans made or guaranteed by RUS have been repaid, the 
borrower must furnish three copies of the auditor's report, report on 
compliance and on internal control over financial reporting, and 
management letter to RUS within 120 days of the as of audit date.
    (d) A borrower that qualifies as a unit of state or local government 
or Indian tribe as such terms are defined in the Single Audit Act of 
1984 (31 U.S.C. 7501 et seq.), the Single Audit Act Amendments of 1996 
(31 U.S.C. 7505 et seq.) and OMB Circular A-133, Audits of States, Local 
Governments, and Non-Profit Organizations (copy available from the 
Executive Office of the President, Publication Services, 725 17th St., 
NW., Suite 2200, Washington, DC 20502; 202-395-7332), must comply with 
this part as follows:
    (1) A borrower that expends $300,000 or more in a year in Federal 
awards must have an audit performed and submit an auditor's report 
meeting the requirements of the Single Audit Act of 1984 and the Single 
Audit Act Amendments of 1996.

[[Page 980]]

    (2) A borrower that expends less than $300,000 in Federal awards 
during the year must have an audit performed in accordance with the 
requirements of this part.
    (3) A borrower must notify RUS, in writing, within 30 days of the as 
of audit date, of the total Federal awards expended during the year and 
must state whether it will have an audit performed in accordance with 
the Single Audit Act of 1984 and the Single Audit Act Amendments of 
1996, or this part.
    (i) A borrower that elects to comply with this part must select a 
CPA that meets the qualifications set forth in Sec. 1773.5.
    (ii) If an audit is performed in accordance with the Single Audit 
Act of 1984 and the Single Audit Act Amendments of 1996, an auditor's 
report that meets the requirements of the Single Audit Act of 1984, and 
the Single Audit Act Amendments of 1996, will be sufficient to satisfy 
that borrower's obligations under this part.
    (e) OMB Circular A-133, Audits of States, Local Governments, and 
Non-Profit Organizations does not apply to audits of RUS electric and 
telecommunications cooperatives and commercial telecommunications 
borrowers.

[56 FR 63360, Dec. 3, 1991, as amended at 59 FR 659, Jan. 6, 1994; 63 FR 
38722, July 17, 1998; 66 FR 27835, May 21, 2001]