[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR247.15]

[Page 405-406]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 247_COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents
 
Sec.  247.15  Audits.

    (a) Federal access to information. The Secretary, the Comptroller 
General of the United States, or any of their duly authorized 
representatives, or State auditors shall have access to any books, 
documents, papers, and rec ords of the State and local agencies and 
their contractors, for the purpose of making surveys, audits, 
examinations, excerpts, and transcripts.
    (b) State agency response. The State agency may take exception to 
particular audit findings and recommendations. The State agency shall 
submit a response or statement to FNS as to the action taken or planned 
regarding the findings. A proposed corrective action plan developed and 
submitted by the State agency shall include specific time frames for its 
implementation and for completion of the correction of deficiencies and 
problems leading to the deficiencies.
    (c) Corrective action. FNS shall determine whether Program 
deficiencies have been adequately corrected. If additional corrective 
action is necessary, FNS shall schedule a followup review, allowing a 
reasonable time for such corrective action to be taken.
    (d) State sponsored audits. (1) Each State agency shall provide for 
an independent audit of the financial operations of the State agency and 
local agencies. Audits may be conducted by State and local government 
audit staffs, State licensed public accountants who were licensed on or 
before December 31, 1970, or by Certified Public Accountants and audit 
firms under contract to the State or local agencies. Audits shall 
conform to: ``The Standards of Audit of Governmental Organizations, 
Program Activities and Functions,'' issued by the Comptroller General of 
the United States (Reprint 1974, for sale by the Superintendent of 
Documents, U.S. Government Printing Office, Washington, DC 20402); the 
``Guidelines for Financial and Compliance Audits of Federally Assisted 
Programs,'' issued by the U.S. General Accounting Office, October 1978 
(for sale by the U.S. General Accounting Office, Distribution Section, 
Room 1518, 441 G Street, NW., Washington, DC 20013); any compliance 
supplements approved by OMB; and generally accepted auditing standards 
established by the American Institute of Certified Public Accountants. 
An audit shall be used to determine whether:
    (i) Financial operations are properly conducted; (ii) the financial 
reports are fairly presented; (iii) the State or local agency has 
complied with applicable laws, regulations, and administrative 
requirements pertaining to financial management; and (iv) proper 
inventory controls (physical and paper) are being maintained.
    (2) The State agency shall conduct audits in accordance with the 
provisions of A-102, Attachment P. Audits of the State agency and the 
local agencies under the State agency's jurisdiction shall be performed 
in a representative sample of grant program audit examinations during 
each audit cycle which occurs, not less frequency than once every two 
years. In some audit cycles, a grant program or programs other than this 
Program may be audited. However, audits of the Program shall be 
performed at intervals frequent enough to ensure consistency with good 
Program management. Also, at any time, the Department, FNS or the State 
agency may at its discretion audit a Program if an audit appears to be 
warranted. If FNS in the course of

[[Page 406]]

Program reviews of State agency operations finds that the efficiency and 
effectiveness of the State agency's financial management system is in 
question, FNS may request the State agency to include the Program in the 
sample for the next audit examination.
    (3) Each State agency shall make all State or local agency sponsored 
audit reports of Program operations under its jurisdiction available for 
the Department's review upon request. The cost of these audits shall be 
considered a part of administrative costs and funded from either State 
or local agency administrative funds.

(Approved by the Office of Management and Budget under control number 
0584-0063)

(44 U.S.C. 3506)

[46 FR 6341, Jan. 21, 1981, as amended at 47 FR 746, Jan. 7, 1982]