[Code of Federal Regulations]
[Title 32, Volume 2]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR266.5]

[Page 609-610]
 
                       TITLE 32--NATIONAL DEFENSE
 
        CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE (CONTINUED)
 
PART 266_AUDITS OF STATE AND LOCAL GOVERNMENTS, INSTITUTIONS OF HIGHER 
 
Sec. 266.5  Responsibilities.

    (a) The Inspector General of the Department of Defense shall:
    (1) Serve as the DoD senior official under OMB Circulars A-128 and 
A-133 for policy guidance, direction, and coordination with DoD 
Components and other Federal Agencies on audit matters related to State 
and local governments, institutions of higher education and other 
nonprofit institutions.
    (2) For State and local governments, institutions of higher 
education, and other nonprofit institutions for which the OMB has 
assigned the DoD cognizance, do the following:
    (i) Ensure that audits are made and reports are received in a timely 
manner and in accordance with the requirements of OMB Circulars A-128 
and A-133.
    (ii) Provide technical advice and liaison through the DoD Components 
to State and local governments, institutions of higher education, other 
nonprofit institutions, and independent auditors.
    (iii) Make desk reviews of all reports received, and also make 
quality control reviews of selected audits made by non-Federal audit 
organizations and provide the results, when appropriate, to other 
interested organizations.
    (iv) Promptly inform other affected Federal Agencies and appropriate 
law enforcement officials of any reported illegal acts or irregularities 
in accordance with requirements of OMB Circulars A-128 and A-133.
    (v) Advise the recipient of audits that have been found not to have 
met the requirements in OMB Circulars A-128 and A-133. In such 
instances, the recipient will work with the auditor to take corrective 
action. If corrective action is not taken, the cognizant agency shall 
notify the recipient and Federal awarding agencies of the facts and make 
recommendations for followup action. Major inadequacies or repetitive 
sub-standard performance of independent auditors shall be referred to 
appropriate professional bodies for disciplinary action.
    (vi) Coordinate, to the extent practicable, audits requested by 
other Federal Agencies, in addition to those required by OMB Circulars 
A-128 and A-133.
    (vii) Ensure the resolution of audit findings and recommendations 
that affect DoD programs and those findings affecting programs of more 
than one Federal Agency. Ensure that a management decision affecting 
audit resolution shall be made within 6 months after receipt of the 
audit report.
    (3) For local governments, institutions of higher education, and 
other nonprofit institutions for which the Department of Defense has 
assumed oversight responsibility, do the following:
    (i) Provide technical advice and counsel through DoD Components to 
institutions and independent auditors when requested.
    (ii) Assume all or some of the cognizant agency responsibilities 
(see paragraph (a)(2) of this section), as deemed necessary.
    (4) For other State and local governments, institutions of higher 
education, and other nonprofit institutions, receive and distribute 
copies of single audit reports to appropriate DoD Components for 
appropriate action and followup by designated program officials.
    (5) For audit reports that contain conditions affecting DoD 
programs, institute followup efforts to ensure that corrective actions 
have been taken by DoD organizations responsible for managing associated 
programs or funds.
    (b) The Heads of the DoD Components shall:
    (1) Designate an official to coordinate with the IG, DoD, on matters 
dealing with audits of financial assistance provided by the DoD 
Component to State and local governments, institutions of higher 
education, and other nonprofit institutions.
    (2) Ensure input of accurate award data for Federal financial 
assistance to

[[Page 610]]

the appropriate DoD management information system.
    (3) Ensure that the State or local government, institution of higher 
education, or other nonprofit institution takes appropriate actions to 
correct audit deficiencies involving financial assistance provided by 
the DoD Component.
    (4) For State and local governments, institutions of higher 
education, and other nonprofit institutions for which the OMB has 
assigned DoD cognizance, do the following:
    (i) Coordinate with the IG, DoD, on requests from other Federal 
Agencies for audits of State and local governments, institutions of 
higher education, and other nonprofit institutions, in addition to those 
required by OMB Circulars A-128 and A-133.
    (ii) Seek the views of other interested agencies when a coordinated 
audit approach is to be used and before completing a coordinated 
program.
    (iii) Help coordinate the audit work and reporting responsibilities 
among independent public accountants, State auditors, and both resident 
and non-resident Federal auditors to achieve the most cost-effective 
audit.