section .1000 – auditing procedures

 

10a NCAC 01a .1001       SINGLE AUDITS OF LOCAL GOVERNMENTS AND

PUBLIC AUTHORITIES

(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.

 

History Note:        Authority G.S. 143B‑10(j); 143B‑139.1;

143B‑139.3; 159‑34;

Eff. January 1, 1990;

Amended Eff. August 1, 2000.