§ 34.16. Audits.
497 words·~2 min read·
/us/cfr/t32/s§ 34.16·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(a)Any recipient that expends \$750,000 or more in a year under Federal awards shall have an audit made for that year by an independent auditor, in accordance with paragraph
(b)of this section. The audit generally should be made a part of the regularly scheduled, annual audit of the recipient's financial statements. However, it may be more economical in some cases to have the Federal awards separately audited, and a recipient may elect to do so, unless that option is precluded by award terms and conditions, or by Federal laws or regulations applicable to the program(s) under which the awards were made.
(b)The auditor shall determine and report on whether:
(1)The recipient has an internal control structure that provides reasonable assurance that it is managing Federal awards in compliance with Federal laws and regulations, and with the terms and conditions of the awards.
(2)Based on a sampling of Federal award expenditures, the recipient has complied with laws, regulations, and award terms that may have a direct and material effect on Federal awards.
(c)The recipient shall make the auditor's report available to DoD Components whose awards are affected.
(d)The requirement for an annual independent audit is intended to ascertain the adequacy of the recipient's internal financial management systems and to curtail the unnecessary duplication and overlap that usually results when Federal agencies request audits of individual awards on a routine basis. Therefore, a grants officer:
(1)Shall consider whether the independent audit satisfies his or her requirements, before requesting any additional audits; and
(2)When requesting an additional audit, shall:
(i)Limit the scope of such additional audit to areas not adequately addressed by the independent audit.
(ii)Coordinate the audit request with the Federal agency with the predominant fiscal interest in the recipient, as the agency responsible for the scheduling and distribution of audits. If DoD has the predominant fiscal interest in the recipient, the Defense Contract Management Agency
(DCMA)is responsible for monitoring audits, ensuring resolution of audit findings, and distributing audit reports. When an additional audit is requested and DoD has the predominant fiscal interest in the recipient, DCMA shall, to the extent practicable, ensure that the additional audit builds upon the independent audit or other audits performed in accordance with this section.
(e)There may be instances in which Federal auditors have recently performed audits, are performing audits, or are planning to perform audits, of a recipient. In these cases, the recipient and its Federal cognizant agency should seek to have the non-Federal, independent auditors work with the Federal auditors to develop a coordinated audit approach, to minimize duplication of audit work.
(f)Audit costs (including a reasonable allocation of the costs of the audit of the recipient's financial statement, based on the relative benefit to the Government and the recipient) are allowable costs of DoD awards. \[63 FR 12204, Mar. 12, 1998, as amended at 70 FR 49477, Aug. 23, 2005; 85 FR 51244, Aug. 19, 2020\]
Connections8 cite this
Citation graph
cites case law
§ 34.16
Audits.
Fed. Reg.×7
C.F.R.×1
Cites 0Cited by 8 across 2 sources