North Carolina Administrative Code › Title 10A - HEALTH AND HUMAN SERVICES › Chapter 01 - DEPARTMENTAL RULES › Subchapter A - PROCEDURE › Section .1000 - AUDITING PROCEDURES › Section 01A .1001 - SINGLE AUDITS OF LOCAL GOVERNMENTS AND PUBLIC AUTHORITIES

Current through Register Vol. 39, No. 2, July 15, 2024
(a) Independent auditors retained to conduct
				  single audits for local governments or public authorities may be notified by
				  the Department of Health and Human Services (hereinafter "the Department") or
				  the Local Government Commission of problem areas that the audit shall
				  address.
(b) The Local Government
				  Commission shall review single audits for compliance with OMB Circular A-133
				  and accept those single audits for the State that have been determined to
				  comply with Federal and State requirements. Whenever a single audit is
				  performed on a local government or public authority that received funds from
				  the Department during the fiscal year audited, the Local Government Commission
				  shall provide the Department with a copy of the audit report(s).
(c) Following receipt of the audit report by
				  the Controller of the Department, relevant portions of the report shall be sent
				  to the Controller's Office employee who is assigned division responsibility for
				  coordination of a departmental position on the corrective actions planned or
				  taken.
(d) The Department or any
				  affected division of the Department may request any additional information
				  deemed necessary for clarification of an audit finding, recommendation,
				  questioned cost or the corrective action plan. The local government or public
				  authority shall provide the information to the requesting official within 30
				  days after the receipt of the request. If additional information or
				  clarification from the independent auditor is requested, the local government
				  or public authority shall direct its auditor to provide the information
				  requested to the requesting official within the 30 day response time.
(e) If the Department has reason to believe
				  that due professional care was not used in conducting a single audit or if a
				  local government or public authority or their independent auditor is unwilling
				  or unable to provide clarification or additional information requested by an
				  official of the Department, a written request for review of the auditor's work
				  papers may be filed with the Office of the State Auditor by the Controller. The
				  Controller shall make or arrange for any review of the auditor's work papers
				  deemed necessary for timely resolution of single audit findings,
				  recommendations, or questioned cost.
(f) Following receipt of any additional
				  information requested, the Controller's Office shall prepare a recommendation
				  to accept or reject the corrective action plan for each fiscal compliance
				  finding, recommendation or questioned cost. The Director of an affected
				  division shall prepare a recommendation to accept or reject the corrective
				  action plan for each program-specific compliance finding or recommendation. If
				  the corrective action plan is rejected, the reasons for the rejection and an
				  acceptable corrective action shall be specified. These recommendations shall be
				  forwarded to the Controller's Office Audit Resolution Coordinator for
				  Governmental Audits for coordination of a Departmental position on the
				  corrective action plan.
(g) The
				  Secretary of the Department shall provide the local government or public
				  authority with a written determination which accepts or rejects the corrective
				  action plan for each audit finding, recommendation or questioned cost that
				  pertains to or otherwise affects a program of the Department. If the corrective
				  action plan is rejected the reasons for the rejection and an acceptable
				  corrective action shall be specified in the determination letter. If the
				  corrective action plan indicates that the proposed corrective action for
				  nonmonetary findings has not been implemented, the determination on all
				  nonmonetary findings shall specify the time by which the local government or
				  public authority shall implement the corrective action if different from the
				  time proposed in the corrective action plan. The determination on all
				  questioned costs or other charges to the Department shall state whether the
				  cost or other charge is allowable or unallowable for reimbursement to the local
				  government or public authority under applicable laws and rules. If a cost or
				  other charge to the Department is determined to be unallowable for
				  reimbursement, the determination letter shall require full monetary repayment
				  to the Department within 60 days of the date of the determination letter. The
				  amount of any cost or other charge determined to be unallowable shall
				  constitute a debt due the State of North Carolina until repayment in full is
				  received by the Department.
(h) A
				  determination by the Secretary of the Department required under Paragraph (g)
				  of this Rule shall become final unless a petition for a contested case is filed
				  in accordance with
				  G.S.
				  150B-23.
(i) Upon a petition for a contested case
				  filed in accordance with
				  G.S.
				  150B-23 monetary repayment or implementation
				  of a corrective action required under Paragraph (g) of this Rule shall be
				  suspended only for individual determinations or parts of a determination
				  specifically disputed in the appeal. Interest may be charged under the
				  conditions specified under Paragraph (j) of this Rule on the amount of any cost
				  or other charge determined to be unallowable under Paragraph (g) of this
				  Rule.
(j) Except where otherwise
				  provided by statutes or rules, Federal agencies are required to charge interest
				  on overdue amounts in accordance with the Federal Claims Collection Standards
				  (4 CFR Ch. II). The date from which interest is computed is not extended by
				  litigation or the filing of any form of appeal. If a Federal agency charges the
				  Department interest on the Federal share of an overdue amount from a local
				  government or public authority, the Department shall charge the interest to the
				  local government or public authority.
(k) If a local government or public authority
				  fails to make repayment of an amount due to the Department or obtain Department
				  approval of a deferred payment plan by the "due date" specified in Paragraph
				  (g) of this Rule, the Department shall offset the amount of the disallowance or
				  any portion thereof remaining unpaid and any interest due from subsequent
				  reimbursements or other amounts due the local government or public authority
				  until the amount due is fully recovered.
(l) A local government or public authority
				  may propose a plan for repayment of amounts determined to be unallowable on an
				  installment basis. The local government or public authority must certify that
				  it is unable to make repayment by the "due date" specified in Paragraph (g) of
				  this Rule and that commercial financing can not be obtained. Repayment of the
				  Federal share of amounts determined to be unallowable shall not be allowed on
				  an installment basis unless the Federal grantor agency approves of the
				  installment plan or otherwise allows the Department the same installment
				  repayment terms. Interest may be charged as specified under Paragraph (j) of
				  this Rule while awaiting Federal approval of an installment plan or on
				  installment payments.
(m) If a
				  local government or public authority fails to submit additional information
				  requested under Paragraph (d) of this Rule or fails to implement corrective
				  action within the time frame established by the Secretary under Paragraph (g)
				  of this Rule, the Secretary of the Department or the Director of the requesting
				  division may suspend all or any portion of the administrative and indirect cost
				  funding administered by the Department until such time as the required
				  corrective action plan or additional information is submitted as requested.
				  Alternatively, the Secretary of the Department may issue a unilateral
				  determination on the audit findings, recommendations, and questioned cost
				  requiring any corrective action and repayment of questioned cost deemed
				  necessary for compliance with the laws and rules governing assistance programs
				  affected.
Authority
					 G.S.
					 143B-10(j);
					 143B-139.1;
					 143B-139.3;
					 159-34;
Eff. January
					 1, 1990;
Amended Eff. August 1, 2000;
Pursuant to
					 G.S.
					 150B-21.3A, rule is necessary without
					 substantive public interest Eff. April 23,
					 2017.