[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: 7CFR250.18]



[Page 466-467]

 

                          TITLE 7--AGRICULTURE

 

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

 

PART 250_DONATION OF FOODS FOR USE IN THE UNITED STATES, ITS TERRITORIES 

AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION--Table of Contents

 

                 Subpart B_General Operating Provisions

 

Sec. 250.18  Audits.



    (a) Right of inspection and audit. The Secretary, the Comptroller 

General of the United States, or any of their duly authorized 

representatives, may inspect and inventory donated foods in storage or 

the facilities used in the handling or storage of such donated foods, 

and may inspect and audit all records, including financial records, and 

reports pertaining to the distribution of donated foods and may review 

or audit the procedures and methods used in carrying out the 

requirements of this part at any reasonable time. Subdistributing 

agencies, recipient agencies, processors, food service management 

companies and warehouses shall be required to permit similar inspection 

and audit by such entities or their representatives. Fiscal matters 

shall continue to be reviewed in audits under the Single Audit Act (31 

U.S.C. 7501-07) and the Department's Uniform Federal Assistance 

Regulations (7 CFR part 3015).

    (b) Independent CPA audits of multi-State processors. (1) For any 

year in which a multi-State processor receives more than $250,000 in 

donated foods, the processor shall obtain an independent CPA (certified 

public accountant) audit for that year. Multi-State processors which 

receive $75,000 to $250,000 in donated food each year shall obtain an 

independent CPA audit every two years and those which receive less than 

$75,000 in donated foods each year shall obtain an independent CPA audit 

every three years. Those multi-State processors which are in the two or 

three-year audit cycle shall move into the next audit cycle at the point 

in time in which the value of donated foods received reaches $75,000 or 

$250,000 in any year. The total value of donated food received shall be 

computed by adding the value of food received under State and National 

Commodity Processing contracts. In instances in which the Department 

determines that the audit is not acceptable or that the audit has 

disclosed serious deficiencies, the processor shall be subject to 

additional audits at the request of FNS.

    (2) Audits shall be conducted in accordance with the auditing 

provisions set forth under the Uniform Federal Assistance Regulations (7 

CFR part 3015, subpart I) and the FNS Audit Guide for Multi-State 

Processors. At the discretion of FNS, auditors will be required to 

attend training sessions conducted by the Department.

    (3) The costs of the audits, including those costs associated with 

training, shall be borne by the processors.

    (4) Audit findings relative to those elements associated with the 

processing of donated food shall be submitted to the processor and to 

FNS concurrently.

    (5) Noncompliance with the audit requirements in paragraph (b)(1) of 

this section will render the processor ineligible to enter into another 

processing contract with any contracting agency until the required audit 

has been conducted and deficiencies corrected.

    (6) Processor response. Multi-State processors shall develop a 

written response to FNS addressing deficiencies which have been 

identified in the audit. Such responses shall include:

    (i) Corrective action which has already been taken to eliminate the 

deficiency;

    (ii) Corrective action which the processor proposes to take to 

eliminate the deficiency;

    (iii) The timeframes for the implementation and completion of the 

corrective action;

    (iv) A determination of what caused the deficiency; and



[[Page 467]]



    (v) Deficiencies which have been identified that the processor takes 

exception to and an explanation for the exception.



Multi-State processors shall submit a written response to FNS in 

accordance with timeframes established by FNS.



[53 FR 20426, June 3, 1988, as amended at 54 FR 7525, Feb. 22, 1989]