Source: https://www.ecfr.gov/cgi-bin/text-idx?mc=true&node=pt29.1.99&rgn=div5
Timestamp: 2020-08-11 19:12:14
Document Index: 476889150

Matched Legal Cases: ['art 99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', 'arts 30', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', 'art 97', 'art 215', 'art 42', 'art 215', 'art 42', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99', '§99']

Title 29 → Subtitle A → Part 99
§99.205 Basis for determining Federal awards expended.
§99.210 Subrecipient and vendor determinations.
§99.220 Frequency of audits.
§99.225 Sanctions.
§99.230 Audit costs.
§99.235 Program-specific audits.
§99.305 Auditor selection.
§99.505 Audit reporting.
§99.515 Audit working papers.
§99.520 Major program determination.
§99.530 Criteria for a low-risk auditee.
Authority: Public Law 104-156, 110 Stat. 1396 (31 U.S.C. 7500 et seq.) and OMB Circular A-133, as amended.
Source: 64 FR 14541, Mar. 25, 1999, unless otherwise noted.
(a) Allowable costs. Unless prohibited by law, the cost of audits made in accordance with the provisions of this part are allowable charges to Federal awards. The charges may be considered a direct cost or an allocated indirect cost, as determined in accordance with the provisions of applicable OMB cost principles circulars, the Federal Acquisition Regulation (FAR)(48 CFR parts 30 and 31), or other applicable cost principles or regulations.
(2) The cost of auditing a non-Federal entity which has Federal awards expended of less than $300,000 per year (or $500,000 for fiscal years ending after December 31, 2003) and is thereby exempted under §99.200(d) from having an audit conducted under this part. However, this does not prohibit a pass-through entity from charging Federal awards for the cost of limited scope audits to monitor its subrecipients in accordance with §99.400(d)(3), provided the subrecipient does not have a single audit. For purposes of this part, limited scope audits only include agreed-upon procedures engagements conducted in accordance with either the AICPA's generally accepted auditing standards or attestation standards, that are paid for and arranged by a pass-through entity and address only one or more of the following types of compliance requirements: activities allowed or unallowed; allowable costs/cost principles; eligibility; matching; level of effort; earmarking; and, reporting.
(2) The auditee shall prepare the financial statement(s) for the Federal program that includes, at a minimum, a schedule of expenditures of Federal awards for the program and notes that describe the significant accounting policies used in preparing the schedule, a summary schedule of prior audit findings consistent with the requirements of §99.315(b), and a corrective action plan consistent with the requirements of §99.315(c).
(ii) Obtain an understanding of internal control and perform tests of internal control over the Federal program consistent with the requirements of §99.500(c) for a major program;
(iii) Perform procedures to determine whether the auditee has complied with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on the Federal program consistent with the requirements of §99.500(d) for a major program; and
(iv) Follow up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee, and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding in accordance with the requirements of §99.500(e).
(iv) A schedule of findings and questioned costs for the Federal program that includes a summary of the auditor's results relative to the Federal program in a format consistent with §99.505(d)(1), and findings and questioned costs consistent with the requirements of §99.505(d)(3).
(c) Report submission for program-specific audits. (1) The audit shall be completed and the reporting required by paragraph (c)(2) or (c)(3) of this section submitted within the earlier of 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a longer period is agreed to in advance by the Federal agency that provided the funding or a different period is specified in a program-specific audit guide. (However, for fiscal years beginning on or before June 30, 1998, the audit shall be completed and the required reporting shall be submitted within the earlier of 30 days after receipt of the auditor's report(s), or 13 months after the end of the audit period, unless a different period is specified in a program-specific audit guide.) Unless restricted by law or regulation, the auditee shall make report copies available for public inspection.
(2) When a program-specific audit guide is available, the auditee shall submit to the Federal clearinghouse designated by the OMB, the data collection form prepared in accordance with §99.320(b), as applicable to a program-specific audit, and the reporting required by the program-specific audit guide to be retained as an archival copy. Also, the auditee shall submit to the Federal awarding agency or pass-through entity the reporting required by the program-specific audit guide.
(3) When a program-specific audit guide is not available, the reporting package for a program-specific audit shall consist of the financial statement(s) of the Federal program, a summary schedule of prior audit findings, and a corrective action plan as described in paragraph (b)(2) of this section, and the auditor's report(s) described in paragraph (b)(4) of this section. The data collection form prepared in accordance with §99.320(b), as applicable to a program-specific audit, and one copy of this reporting package shall be submitted to the Federal clearinghouse designated by the OMB to be retained as an archival copy. Also, when the schedule of findings and questioned costs disclosed audit findings or the summary schedule of prior audit findings reported the status of any audit findings, the auditee shall submit one copy of the reporting package to the Federal clearinghouse on behalf of the Federal awarding agency, or directly to the pass-through entity in the case of a subrecipient. Instead of submitting the reporting package to the pass-through entity, when a subrecipient is not required to submit a reporting package to the pass-through entity, the subrecipient shall provide written notification to the pass-through entity, consistent with the requirements of §99.320(e)(2). A subrecipient may submit a copy of the reporting package to the pass-through entity to comply with this notification requirement.
(d) Other sections of this part may apply. Program-specific audits are subject to §§99.100 through 99.215(b), §§99.220 through 99.230, §§99.300 through 99.305, §99.315, §§99.320(f) through 99.320(j), §§99.400 through 99.405, §§99.510 through ;99.515, and other referenced provisions of this part unless contrary to the provisions of this section, a program-specific audit guide, or program laws and regulations.
(a) Auditor procurement. In procuring audit services, auditees shall follow the procurement standards prescribed by OMB Circular A-102, “Grants and Cooperative Agreements with State and Local Governments;” 29 CFR part 97, “Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments;” OMB Circular A-110, “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations;” (codified at 2 CFR part 215); or the FAR (48 CFR part 42), as applicable. (OMB Circulars are available on-line at http://www.whitehouse.gov/omb/circulars/index.html.) Whenever possible, auditees shall make positive efforts to utilize small businesses, minority-owned firms, and women's business enterprises, in procuring audit services as stated in OMB Circular A-102, OMB Circular A-110 (2 CFR part 215), or the FAR (48 CFR part 42), as applicable. In requesting proposals for audit services, the objectives and scope of the audit should be made clear. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of external quality control reviews, and price.
(vi) A statement as to whether the audit disclosed any audit findings which the auditor is required to report under §99.510(a);
(viii) The dollar threshold used to distinguish between Type A and Type B programs, as described in §99.520(b); and
(ix) A statement as to whether the auditee qualified as a low-risk auditee under §99.530.
(3) Findings and questioned costs for Federal awards which shall include audit findings as defined in §99.510(a).
(i) $300,000 (or $500,000 for fiscal years ending after December 31, 2003) or three percent (.03) of total Federal awards expended in the case of an auditee for which total Federal awards expended equal or exceed $300,000 but are less than or equal to $100 million.
(4) For biennial audits permitted under §99.220, the determination of Type A and Type B programs shall be based upon the Federal awards expended during the two-year period.
(c) Step 2. (1) The auditor shall identify Type A programs which are low-risk. For a Type A program to be considered low-risk, it shall have been audited as a major program in at least one of the two most recent audit periods (in the most recent audit period in the case of a biennial audit), and, in the most recent audit period, it shall have had no audit findings under §99.510(a). However, the auditor may use judgment and consider that audit findings from questioned costs under §99.510(a)(3) and §99.510(a)(4), fraud under §99.510(a)(6), and audit follow-up for the summary schedule of prior audit findings under §99.510(a)(7) do not preclude the Type A program from being low-risk. The auditor shall consider: the criteria in §99.525(c), §99.525(d)(1), §99.525(d)(2), and §99.525(d)(3); the results of audit follow-up; whether any changes in personnel or systems affecting a Type A program have significantly increased risk; and apply professional judgment in determining whether a Type A program is low-risk.
(d) Step 3. (1) The auditor shall identify Type B programs which are high-risk using professional judgment and the criteria in §99.525. However, should the auditor select Option 2 under Step 4 (paragraph (e)(2)(i)(B) of this section), the auditor is not required to identify more high-risk Type B programs than the number of low-risk Type A programs. Except for known reportable conditions in internal control or compliance problems as discussed in §99.525(b)(1), §99.525(b)(2), and §99.525(c)(1), a single criteria in §99.525 would seldom cause a Type B program to be considered high-risk.
(ii) $300,000 (or $500,000 for fiscal years ending after December 31, 2003) or three-hundredths of one percent (.0003) of total Federal awards expended when the auditee has more than $100 million in total Federal awards expended.
(2)(i) High-risk Type B programs as identified under either of the following two options:
(f) Percentage of coverage rule. The auditor shall audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 50 percent of total Federal awards expended. If the auditee meets the criteria in §99.530 for a low-risk auditee, the auditor need only audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 25 percent of total Federal awards expended.
An auditee which meets all of the following conditions for each of the preceding two years (or, in the case of biennial audits, preceding two audit periods) shall qualify as a low-risk auditee and be eligible for reduced audit coverage in accordance with §99.520: