[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR246.20]



[Page 393-394]

 

                          TITLE 7--AGRICULTURE

 

    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE

 

PART 246_SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND 

CHILDREN--Table of Contents

 

                     Subpart F_Monitoring and Review

 

Sec. 246.20  Audits.



    (a) Federal audit responsibilities. (1) OIG reserves the right to 

perform audits of State and local agencies and other organizations 

involved in the Program as determined by OIG to be necessary. In 

performing such audits, OIG will rely to the extent feasible on audit 

work performed by other Federal and non-Federal auditors.

    (2) 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 a proposed corrective action 

plan regarding the findings. A proposed corrective action plan developed 

and submitted by the State agency shall include specific timeframes for 

its implementation and for completion of correction of deficiencies and 

their causes.

    (3) FNS will determine whether Program deficiencies have been 

adequately corrected. If additional corrective action is necessary, FNS 

shall schedule a follow-up review, allowing a reasonable time for such 

corrective action to be taken.



[[Page 394]]



    (b) State audit responsibilities. (1) State agencies shall comply 

with the provisions of 7 CFR part 3016 regarding independent 

organization-wide audits of financial operations. In conformance with 7 

CFR part 3016, State agencies shall arrange for independent audits of 

financial operations, including compliance with appropriate provisions 

of Federal laws and regulations, and shall ensure that audits are made 

on an organization-wide basis rather than on a program basis. When 

organization-wide audits are done the State agency shall cause 

procedures to be established which ensure that FNS programs are included 

in the universe of Federal awards from which a sample is drawn.

    (2) Such organization-wide audits shall be used to determine 

whether--

    (i) Financial operations are conducted properly;

    (ii) Financial statements are presented fairly;

    (iii) State and local agencies are complying with the laws, 

regulations and administrative requirements that affect the expenditure 

of Federal funds;

    (iv) State and local agencies have established internal procedures 

to meet the financial management objectives of federally assisted 

programs; and

    (v) State and local agencies are providing accurate and reliable 

information to the Federal government. If such agencies fail to arrange 

for the required audits at the appropriate frequency or fail to ensure 

that an acceptable audit is performed at the appropriate frequency, the 

respective cognizant audit agencies may arrange for the performance of 

the required audits. If the cognizant audit agencies arrange for the 

required audits because of these circumstances, the State agencies shall 

reimburse the respective cognizant audit agencies for the pro rata cost 

of their organization-wide audits.

    (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 nutrition services and administration costs and may 

be funded from the State or local agency nutrition services and 

administration funds, as appropriate. For purposes of determining the 

Program's pro rata share of indirect costs associated with organization-

wide audits, the cost of food shall not be considered in the total 

dollar amount of the Program.