[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR247.31]

[Page 424-425]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 247_COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents
 
Sec.  247.31  Audits and investigations.

    (a) What is the purpose of an audit? The purpose of an audit is to 
ensure that:
    (1) Financial operations are properly conducted;
    (2) Financial reports are fairly presented;
    (3) Proper inventory controls are maintained; and
    (4) Applicable laws, regulations, and administrative requirements 
are followed.
    (b) When may the Department conduct an audit or investigation of the 
program? The Department may conduct an audit of the program at the State 
or local agency level at its discretion, or may investigate an 
allegation that the State or local agency has not complied with Federal 
requirements. An investigation may include a review of any State or 
local agency policies or practices related to the specific area of 
concern.
    (c) What are the responsibilities of the State agency in responding 
to an audit by the Department? In responding to an audit by the 
Department, the State agency must:
    (1) Provide access to any records or documents compiled by the State 
or local agencies, or contractors; and
    (2) Submit a response or statement to FNS describing the actions 
planned or taken in response to audit findings or recommendations. The 
corrective action plan must include time frames for implementation and 
completion of actions. FNS will determine if actions or planned actions 
adequately respond to the program deficiencies identified in the audit. 
If additional actions are needed, FNS will schedule a follow-up review 
and allow sufficient time for further corrective actions. The State 
agency may also take exception to particular audit findings or 
recommendations.
    (d) When is a State or local agency audit required? State and local 
agency audits must be conducted in accordance with part 3052 of this 
title, which contains the Department's regulations pertaining to audits 
of States, local governments, and nonprofit organizations. The value of 
CSFP commodities distributed by the agency or organization must be 
considered part of the Federal award.
    (e) What are the requirements for State or local agency audits? 
State and local agency audits must be conducted in accordance with the 
requirements of part 3052 of this title, which contains the Department's 
regulations pertaining to audits of States, local governments, and 
nonprofit organizations. The State agency must ensure that local 
agencies

[[Page 425]]

meet the audit requirements. The State agency must ensure that all State 
or local agency audit reports are available for FNS review.

(Approved by the Office of Management and Budget under control number 
0584-0293)