[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR627.480]

[Page 221-222]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT--Table of Contents
 
                   Subpart D--Administrative Standards
 
Sec. 627.480  Audits.

    (a) Non-Federal Audits--(1) Governments. Each recipient and 
governmental subrecipient is responsible for complying with the Single 
Audit Act of 1984 (31 U.S.C. 7501-7) and 29 CFR part 96, the Department 
of Labor regulations which implement Office of Management and Budget 
(OMB) Circular A-128, ``Audits of State and Local Governments''.
    (2) Non-governmental organizations. Each non-governmental recipient 
or subrecipient shall comply with OMB Circular A-133, ``Audits of 
Institutions of Higher Education and Other Nonprofit Institutions'', as 
implemented by the Department of Labor regulations at 29 CFR part 96. 
The provisions of this paragraph (a)(2) do not apply to any non-
governmental organization that is:
    (i) A commercial organization; or
    (ii) A hospital or an institution of higher education for which 
State or local governments choose to apply OMB Circular A-128.
    (3) Commercial organizations. A commercial organization which is a 
recipient or subrecipient and which receives $25,000 or more a year in 
Federal financial assistance to operate a JTPA program shall have an 
audit that:
    (i) Is usually performed annually, but not less frequently than 
every two years;
    (ii) Is completed within one year after the end of the period 
covered by the audit and submitted to the awarding agency within one 
month after completion;
    (iii) Is either:
    (A) An independent financial and compliance audit of Federal funds 
that includes coverage of the JTPA program within its scope, and is 
conducted and prepared in accordance with generally accepted government 
auditing standards; or
    (B) An organization-wide audit that includes financial and 
compliance coverage of the JTPA program within its scope.
    (b) Federal audits. The notice of audits conducted or arranged by 
the Office of Inspector General or the Comptroller General shall be 
provided in advance, as required by section 165(b) of the Act.
    (c) Audit reports. (1) Audit reports of recipient-level entities and 
other organizations which receive JTPA funds directly from the U.S. 
Department of Labor shall be submitted to the Office of Inspector 
General.
    (2) Audit reports of organizations other than those described in 
paragraph (c)(1) of this section shall be submitted to the entity which 
provided the JTPA funds.
    (d) Each entity that receives JTPA program funds and awards a 
portion of those funds to one or more subrecipients shall:
    (1) Ensure that each subrecipient complies with the applicable audit 
requirements;
    (2) Resolve all audit findings that impact the JTPA program with its 
subrecipient and ensure that corrective action for all such findings is 
instituted within 6 months after receipt of the audit report (where 
appropriate, corrective action shall include debt collection action for 
all disallowed costs); and
    (3) Maintain an audit resolution file documenting the disposition of 
reported questioned costs and corrective actions taken for all findings. 
The ETA

[[Page 222]]

Grant Officer may request that an audit resolution report, as specified 
in paragraph (e)(2) of this section, be submitted for such audits or may 
have the audit resolution reviewed through the compliance review 
process.
    (e)(1) Audits of recipient-level entities and other organizations 
which receive JTPA funds directly from DOL and all audits conducted by 
or under contract for the Office of Inspector General shall be issued by 
the OIG to the Employment and Training Administration after acceptance 
by OIG.
    (2) After receipt of the audit report, the ETA Grant Officer shall 
request that the State submit an audit resolution report documenting the 
disposition of the reported questioned costs, i.e., whether allowed or 
disallowed, the basis for allowing questioned costs, the method of 
repayment planned or required, and corrective actions, including debt 
collection efforts, taken or planned.
    (f) If the recipient intends to propose the use of ``stand-in'' 
costs as substitutes for otherwise unallowable costs, the proposal shall 
be included with the audit resolution report. To be considered, the 
proposed ``stand-in'' costs shall have been reported as uncharged JTPA 
program costs, included within the scope of the audit, and accounted for 
in the auditee's financial system, as required by Sec. 627.425 of this 
part, Standards for financial management and participant data systems. 
To be accepted, stand-in costs shall be from the same title, and program 
year as the costs which they are proposed to replace, and shall not 
result in a violation of the applicable cost limitations.
    (g) After receiving the audit resolution report, the ETA Grant 
Officer shall review the report, the recipient's disposition, and any 
liability waiver request submitted in accordance with Sec. 627.704 of 
this part. If the Grant Officer agrees with all aspects of the 
recipient's disposition of the audit, the Grant Officer shall so notify 
the recipient. If the Grant Officer disagrees with the recipient's 
conclusion on specific points in the audit, the Grant Officer shall 
resolve the audit through the initial and final determination process 
described in Sec. 627.606 of this part.