[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: 7CFR1773.9]

[Page 984-985]
 
                          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. 1773.9  Disclosure of fraud, illegal acts, and other noncompliance.

    (a) In accordance with GAGAS, the auditor must design the audit to 
provide reasonable assurance of detecting fraud that is material to the 
financial statements and material misstatements resulting from direct 
and material illegal acts, and noncompliance with the provisions of 
contracts or grant agreements that could have a direct and material 
effect on financial statements amounts.
    (b) If specific information comes to the auditor's attention that 
provides evidence concerning the existence of possible illegal acts that 
could have a material indirect effect on the financial statements or 
material noncompliance with the provisions of contracts or grant 
agreements that could have a material indirect effect on the financial 
statements, auditors should apply audit procedures specifically directed 
to ascertaining whether an illegal act or noncompliance with provisions 
of contract or grant agreements has occurred.
    (c) Pursuant to the terms of its audit engagement letter with the 
borrower, the CPA must immediately report, in writing, all instances of 
fraud and all indications or instances of illegal acts, whether material 
or not, to:
    (1) The president of the borrower's board of directors;
    (2) The Assistant Administrator, Program Accounting and Regulatory 
Analysis; and
    (3) OIG, as follows:
    (i) For the States of Delaware, District of Columbia, Maryland, 
Pennsylvania, Virginia, West Virginia, Connecticut, Maine, 
Massachusetts, New Hampshire, New Jersey, New York, Puerto Rico, Rhode 
Island, Vermont and the Virgin Islands, report to USDA-OIG-Audit, 
Northeast Region, Regional Inspector General, 6505 Belcrest Road, room 
428-A, Hyattsville, Maryland 20782;
    (ii) For the States of Alabama, Florida, Georgia, Kentucky, 
Mississippi, North Carolina, South Carolina, and Tennessee, report to 
USDA-OIG-Audit, Southeast Region, Regional Inspector General, 401 W. 
Peachtree Street, NW., room 2328, Atlanta, Georgia 30365-3520;
    (iii) For the States of Illinois, Indiana, Michigan, Minnesota, 
Ohio, and Wisconsin, report to USDA-OIG-Audit, Midwest Region, Regional 
Inspector General, 111 N. Canal Street, Suite 1130, Chicago, Illinois 
60606;
    (iv) For the States of Arkansas, Louisiana, New Mexico, Oklahoma, 
and Texas, report to USDA-OIG-Audit, Southwest Region, Regional 
Inspector General, 101 South Main, room 324, Temple, Texas 76501;
    (v) For the States of Colorado, Iowa, Kansas, Missouri, Montana, 
Nebraska, North Dakota, South Dakota, Wyoming, and Utah, report to USDA-
OIG-Audit, Great Plains Region, Regional Inspector General, P.O. Box 
293, Kansas City, Missouri 64141; and

[[Page 985]]

    (vi) For the States of Alaska, Arizona, California, Hawaii, Idaho, 
Nevada, Oregon, Territory of Guam, Trust Territories of Pacific, and 
Washington, report to USDA-OIG-Audit, Western Region, Regional Inspector 
General, 555 Battery Street, room 511, San Francisco, California 94111.

[56 FR 63360, Dec. 3, 1991, as amended at 61 FR 108, Jan. 3, 1996; 66 FR 
27836, May 21, 2001]