Rule2024-25914
Policy on Audits of RUS Awardees
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 8, 2024
Effective
December 9, 2024
Issuing agencies
Agriculture DepartmentRural Utilities Service
Abstract
The Rural Utilities Service (RUS or Agency), a Rural Development agency of the United States Department of Agriculture (USDA), is issuing a final rule. The intent of this final rule is to revise the Policy on Audits to remove an unnecessary report, update terminology, clarify Agency contacts and filing requirements, and update or remove any outdated references. These changes will provide uniformity and consistency for all RUS awardees.
Full Text
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[Federal Register Volume 89, Number 217 (Friday, November 8, 2024)]
[Rules and Regulations]
[Pages 88631-88635]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-25914]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
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Federal Register / Vol. 89, No. 217 / Friday, November 8, 2024 /
Rules and Regulations
[[Page 88631]]
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1773
[Docket No. RUS-24-AGENCY-0033]
RIN 0572-AC67
Policy on Audits of RUS Awardees
AGENCY: Rural Utilities Service, USDA.
ACTION: Final rule.
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SUMMARY: The Rural Utilities Service (RUS or Agency), a Rural
Development agency of the United States Department of Agriculture
(USDA), is issuing a final rule. The intent of this final rule is to
revise the Policy on Audits to remove an unnecessary report, update
terminology, clarify Agency contacts and filing requirements, and
update or remove any outdated references. These changes will provide
uniformity and consistency for all RUS awardees.
DATES: This final rule is effective December 9, 2024.
FOR FURTHER INFORMATION CONTACT: Jurleme Grey, Chief, Technical
Accounting Review Branch, External Compliance Division, Rural
Development, U.S. Department of Agriculture, 1400 Independence Avenue
SW, Washington, DC 20250, Telephone: (202) 540-9200, Email:
<a href="/cdn-cgi/l/email-protection#85e6eae8f5e9ece4ebe6e0abf1e4f7e7c5f0f6e1e4abe2eaf3"><span class="__cf_email__" data-cfemail="aecdc1c3dec2c7cfc0cdcb80dacfdccceedbddcacf80c9c1d8">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Rural Development is a mission area within the USDA comprising RUS,
Rural Housing Service, and Rural Business-Cooperative Service. Rural
Development's mission is to increase economic opportunity and improve
the quality of life for all rural Americans. The mission is met by
providing loans, loan guarantees, grants, and technical assistance
through numerous programs aimed at creating and improving housing,
business, and infrastructure throughout rural America.
The RUS loan, loan guarantee, and grant programs act as a catalyst
for economic and community development. By financing improvements to
rural electric, water and waste, and telecommunications and broadband
infrastructure, RUS also plays a significant role in improving other
measures of quality of life in rural America, including public health
and safety, environmental protection and cultural and historic
preservation.
An update to this policy occurred on February 2, 2023 (88 FR 7557),
to incorporate changes made to 7 CFR parts 1709, 1719, 1734, 1738, 1739
and 1770. These changes addressed the streamlined procedures, and
clarified when entities must follow RUS' own audit regulations or 2 CFR
part 200.
Since publication, RUS has continued to evaluate and obtain input
from stakeholders. There appears to still be areas that are prone to
misinterpretation and confusion. RUS has determined that the proposed
changes will provide more clarity to awardees and auditors and conform
with Generally Accepted Government Auditing Standards (GAGAS) and
American Institute of Certified Public Accountants (AICPA) guidelines.
To implement these changes, RUS will publish this action as a final
rule. The Administrative Procedures Act exempts from prior notice rules
any action ``relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts'' (5 U.S.C. 553(a)(2)).
As the proposed changes came from the previous comment period, it would
be unnecessary to solicit more comments from the public.
II. Summary of Changes to the Final Rule
The changes made to 7 CFR part 1773 include:
1. Section 1773.1(d), ``an audit'' will be updated to ``audited
financial statements.'' This change is recommended because ``audited
financial statements'' is a more accurate term for the information to
be provided and to conform with American Institute of Certified Public
Accountants (AICPA) suggested changes.
2. Section 1773.2, Definitions, will be updated as follows:
a. Audit means an examination of financial statements by an
independent auditor or audit firm for the purpose of expressing an
opinion on the fairness with which the financial statements present the
financial position, results of operations, and changes in cash flows in
accordance with U.S. generally accepted accounting principles (GAAP)
and for determining whether the auditee has complied with provisions of
laws, regulations, contracts, or grant agreements that could have a
material effect on the financial statements.
This change is recommended because adding ``or audit firm'' after
``an independent auditor'' is more accurate and a clear use of an audit
firm was implied or inferred with the prior language. Also changing
``applicable laws, regulations, and provisions of'' to ``provisions of
laws, regulations,'' conforms with current language in GAGAS and AICPA
guidelines.
b. Peer review means an external review of one or more aspects of
the accounting and auditing practice, not subject to Public Company
Accounting Oversight Board permanent inspection, performed once every
three years by a CPA firm that is not affiliated with the auditor.
This change is recommended because replacing ``approved study,
appraisal, or'' with ``external'' conforms with changes suggested by
AICPA.
c. Regulatory asset means an asset resulting from an action of a
regulator as defined by Financial Accounting Standards Board (FASB) and
Governmental Accounting Standards Board (GASB).
This change is recommended because adding GASB to the definition
acknowledges GASB is the regulatory body for accounting by Government
entities.
d. Regulatory liability means a liability imposed on a regulated
enterprise when there is an enforceable present obligation to deduct an
amount in determining the regulated rate to be charged to customers in
future periods, as defined by FASB and GASB.
This change is recommended because adding ``as defined by FASB and
GASB'' to the definition, acknowledges both as the regulatory bodies
for accounting for Government and non-government entities.
3. Section 1773.3(c), was updated to include ``not subject to 2 CFR
part 200, subpart F'' in the first sentence for clarification. This
change is recommended because adding ``not
[[Page 88632]]
subject to 2 CFR part 200, subpart F'' provides clarity regarding
entities subject to this regulation and conforms with AICPA suggested
changes.
4. Section 1773.3(d)(1), update the citation to ``2 CFR 200.503 (b)
and (c).'' This change is recommended to better align with the current
language in 2 CFR 200.503.
5. Section 1773.4(c)(1), ``as identified'' will be updated to
``based on criteria described''. This change is recommended because
replacing ``as identified'' with ``based on criteria described'' is
more accurate language and conforms with changes suggested by AICPA.
6. Section 1773.9(b) will be updated to, ``If specific information
comes to the auditor's attention that provides evidence concerning the
existence of possible violations of provisions of laws, regulations,
contracts, or grant agreements that could have a material indirect
effect on the financial statements, the auditor should apply audit
procedures specifically directed to obtain sufficient, appropriate
audit evidence regarding those possible violations of provisions of
laws, regulations, contracts, or grant agreements.'' This change is
recommended because replacing ``ascertaining whether a violation'' with
``obtain sufficient appropriate audit evidence regarding those possible
violations'' is more accurate language for the goal of the audit
procedure and conforms with changes suggested by AICPA.
7. Section 1773.9(c) will be updated to, ``Pursuant to the terms of
its audit engagement letter with the auditee, the auditor must, as soon
as practical, report through the methods indicated below, all instances
of fraud, illegal acts, and all indications or instances of
noncompliance with laws, whether material or not, to:
a. The president of the auditee's governance board via the
auditor's preferred method;
b. RUS via email;
c. OC-ECD via email; and
d. OIG, as follows:
i. For all audits performed in accordance with Sec. 1773.3(d)
(audits conducted in accordance with 2 CFR part 200), report to the
USDA-OIG-Audit, National Single Audit Coordinator for USDA, 1400
Independence Ave. SW, Ste. 419, Washington, DC 20250, email: <a href="/cdn-cgi/l/email-protection#b8f7f1ff95edebfcf9cbd1d6dfd4ddd9cddcd1ccf8d7d1df96cdcbdcd996dfd7ce"><span class="__cf_email__" data-cfemail="da95939df78f899e9ba9b3b4bdb6bfbbafbeb3ae9ab5b3bdf4afa9bebbf4bdb5ac">[email protected]</span></a>, or online at: <a href="http://usdaoig.oversight.gov">http://usdaoig.oversight.gov</a>.
ii. For all other audits conducted in accordance with Sec. 1773.3
report to the USDA Office of Inspector General online at:
<a href="http://usdaoig.oversight.gov">usdaoig.oversight.gov</a>.
This change is recommended because replacing ``immediately report,
in writing via email'' with ``as soon as practical, through the methods
indicated below,'' provides more realistic timing for notification, and
enables the auditor to determine the method of notification to the
auditee's governance board, specifies the notification method for RUS
and OC-ECD, and conforms with changes suggested by AICPA. The methods
of notification below will be added for clarity.
8. Section 1773.21(d) will be updated to, ``The auditee must
include a complete reporting package as defined in Sec. 1773.2.'' This
change is to clarify requirements, remove redundant language, and
conform with changes suggested by AICPA.
9. Section 1773.32(a) ``that the tests'' will be updated to ``state
whether the tests'' and remove ``digital'' in reference to the
signature options. This change is recommended because replacing
``that'' with ``state whether'' conforms with changes suggested by
AICPA.
10. Section 1773.32(a) paragraphs (1) through (4) will be updated
to more accurate language and to conform to GAGAS. The additional
language also presents a more accurate description. Changes include:
1. Significant deficiencies and material weaknesses in internal
control;
2. Identified or suspected instances of noncompliance with
provisions of laws, regulations, contracts and grant agreements that
have a material effect on the financial statements or other financial
data significant to the audit objectives and any other instances that
warrant the attention of those charged with governance;
3. Identified or suspected instances of fraud that have a material
effect, either quantitatively or qualitatively, to the financial
statements or other financial data significant to the audit objectives;
and
4. Identified or suspected instances of abuse that have a material
effect, either quantitatively or qualitatively, to the financial
statements or other financial data significant to the audit objectives.
11. Section 1773.32(d) will be deleted and the language will be
included in Sec. 1773.34. This change is recommended because the
language more accurately fits with Sec. 1773.34 as this is part of the
schedule of findings and recommendations and will be added to the end
of that paragraph.
12. Section 1773.40, ``ASC 980'' will be updated to ``FASB
Accounting Standards Codification (ASC) 980 or GASB Statement (GASBS)
62, as appropriate.'' This change is recommended because adding the
specific guidance of FASB ASC 980 or GASB Statement 62 provides more
specific information and criteria for reporting regulatory assets.
13. Section 1773.45 will be updated to, ``The auditor's audit
documentation shall support that all regulatory liabilities comply with
the requirements of FASB Accounting Standards Codification (ASC) 980 or
GASB Statement (GASBS) 62, as appropriate. For electric auditees only,
the auditor's audit documentation shall document whether all regulatory
liabilities have received RUS approval.'' This change is recommended
because adding the specific guidance of FASB ASC 980 or GASB Statement
62 provides more specific information and criteria for reporting
regulatory liabilities.
III. Executive Orders and Acts
Executive Order 12866
This final rule has been determined to be not significant for the
purposes of Executive Order (E.O.) 12866 and, therefore, has not been
reviewed by the Office of Management and Budget (OMB).
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this final
rule as not a major rule, as defined by 5 U.S.C. 804(2).
Executive Order 12372, Intergovernmental Review of Federal Programs
This final rule is excluded from the scope of E.O. 12372,
Intergovernmental Consultation, which may require consultation with
state and local officials. See the final rule related notice entitled,
``Department Programs and Activities Excluded from Executive Order
12372'' (50 FR 47034) advising that RUS loans and loan guarantees were
not covered by E.O. 12372.
Executive Order 12988, Civil Justice Reform
This final rule has been reviewed under E.O. 12988, Civil Justice
Reform. In accordance with this final rule: (1) All State and local
laws and regulations that are in conflict with this rule will be
preempted; (2) No retroactive effect will be given to this rule; and
(3) Administrative proceedings of the National Appeals Division (7 CFR
part 11) must be exhausted before bringing suit in court challenging
action taken under this rule.
[[Page 88633]]
Regulatory Flexibility Act Certification
RUS has determined that this final rule will not have significant
impact on a substantial number of small entities defined in the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS loan
programs provide borrowers with loans at interest rates and terms that
are more favorable than those generally available from the private
sector. Borrowers, as a result of obtaining Federal financing, receive
economic benefits that exceed any direct cost associated with RUS
regulations and requirements.
National Environmental Policy Act
In accordance with the National Environmental Policy Act of 1969,
Public Law 91-190, this final rule has been reviewed in accordance with
7 CFR part 1970 (``Environmental Policies and Procedures''). The Agency
has determined that (i) this action meets the criteria established in 7
CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii)
the action is not ``connected'' to other actions with potentially
significant impacts, is not considered a ``cumulative action'' and is
not precluded by 40 CFR 1506.1. Therefore, the Agency has determined
that the action does not have a significant effect on the human
environment, and therefore neither an Environmental Assessment nor an
Environmental Impact Statement is required.
Assistance Listing Number (Formally Known as the Catalog of Federal
Domestic Assistance)
The Assistance Listing Numbers assigned to the programs described
by this final rule are as follows: 10.751--Rural Energy Savings
Program; 10.752--Rural eConnectivity Pilot Program; 10.850--Rural
Electrification Loans and Loan Guarantees; 10.851--Rural Telephone
Loans and Loan Guarantees; 10.855--Distance Learning and Telemedicine
Loans and Grants; 10.858--Denali Commission Grants and Loans; 10.859--
Assistance to High Energy Cost Rural Communities; 10.863--Community
Connect Grant Program and 10.886--Rural Broadband Access Loans and Loan
Guarantees.
Information Collection and Recordkeeping Requirements
The information collection and record-keeping requirements
contained in this rule are approved by OMB under OMB Control Number
0572-0095. This final rule contains no new reporting or recordkeeping
burdens. The 3-year renewal for this package is pending approval by
OMB.
Administrative Pay-As-You-Go-Act of 2023
The Administrative Pay-As-You-Go Act of 2023 (Act) (see Fiscal
Responsibility Act of 2023, Public Law 118-5, 137 Stat. 31, div. B,
title III), requires the U.S. Government Accountability Office (GAO) to
assess agency compliance with the Act, which establishes requirements
for administrative actions that affect direct spending, in GAO's major
rule reports.
The Act does not apply to this rule because it does not increase
direct spending.
Unfunded Mandates
This final rule contains no Federal mandates (under the regulatory
provision of Title II of the Unfunded Mandates Reform Act of 1995) for
state, local, and tribal governments or the private sector. Thus, this
final rule is not subject to the requirements of sections 202 and 205
of the Unfunded Mandates Reform Act of 1995.
Executive Order 13132--Federalism
The policies contained in this final rule do not have any
substantial direct effect on States, on the relationship between the
National Government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
final rule impose substantial direct compliance costs on state and
local governments. Therefore, consultation with the States is not
required.
Executive Order 13175--Consultation and Coordination With Indian Tribal
Governments
This final rule has been reviewed in accordance with the
requirements of E.O. 13175, Consultation and Coordination with Indian
Tribal Governments. E.O. 13175 requires Federal agencies to consult and
coordinate with Tribes on a government-to-government basis on policies
that have tribal implications, including regulations, legislative
comments, or proposed legislation, or other policy statements or
actions that have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes or on the distribution of power and responsibilities between the
Federal Government and Indian Tribes. The Agency has determined that
this final rule does not, to our knowledge, have Tribal implications
that require formal Tribal consultation under E.O. 13175. If a Tribe
request consultation, RUS will work with the Office of Tribal
Relationships to ensure meaningful consultation is provided where
changes, additions and modifications identified herein are not
expressly mandated by Congress.
E-Government Act Compliance
The Agency is committed to complying with the E-Government Act of
2002, Public Law 107-347, which requires Government agencies in general
to provide the public the option of submitting information or
transacting business electronically to the maximum extent possible and
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Severability
It is USDA's intention that the provisions of this final rule shall
operate independently of each other. In the event that this final rule
or any portion of this final rule is ultimately declared invalid or
stayed as to a particular provision, it is USDA's intent that the final
rule nonetheless be severable and remain valid with respect to those
provisions not affected by a declaration of invalidity or stayed. USDA
concludes it would separately adopt all of the provisions contained in
this final rule.
Civil Rights Impact Analysis
Rural Development, a mission area for which RUS is an agency, has
reviewed this final rule in accordance with USDA Regulation 4300-4,
Civil Rights Impact Analysis, to identify any major civil rights
impacts the final rule might have on program participants on the basis
of age, race, color, national origin, sex, disability, gender identity
(including gender expression), genetic information, political beliefs,
sexual orientation, marital status, familial status, parental status,
veteran status, religion, reprisal and/or resulting from all or a part
of an individual's income being derived from any public assistance
program. After review and analysis of the final rule and available
data, it has been determined that based on the analysis of the program
purpose, application submission and eligibility criteria, issuance of
this final rule is not likely to negatively impact very low, low and
moderate-income populations, minority populations, women, Indian tribes
or persons with disability, by virtue of their race, color, national
origin, sex, age, disability, or marital or familial status. No major
civil rights impact is likely to result from this final rule.
USDA Non-Discrimination Statement
In accordance with Federal civil rights laws and USDA civil rights
[[Page 88634]]
regulations and policies, the USDA, its Mission Areas, agencies, staff
offices, employees, and institutions participating in or administering
USDA programs are prohibited from discriminating based on race, color,
national origin, religion, sex, gender identity (including gender
expression), sexual orientation, disability, age, marital status,
family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Program information may be made available in languages other than
English. Persons with disabilities who require alternative means of
communication to obtain program information (e.g., Braille, large
print, audiotape, American Sign Language) should contact the
responsible Mission Area, agency, or staff office or the 711 Relay
Service.
To file a program discrimination complaint, a complainant should
complete a Form AD-3027, USDA Program Discrimination Complaint Form,
which can be obtained online at <a href="https://www.usda.gov/sites/default/files/documents/ad-3027.pdf">https://www.usda.gov/sites/default/files/documents/ad-3027.pdf</a>, from any USDA office, by calling (866)
632-9992, or by writing a letter addressed to USDA. The letter must
contain the complainant's name, address, telephone number, and a
written description of the alleged discriminatory action in sufficient
detail to inform the Assistant Secretary for Civil Rights (ASCR) about
the nature and date of an alleged civil rights violation. The completed
AD-3027 form or letter must be submitted to USDA by:
(1) Mail: U.S. Department of Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC
20250-9410; or
(2) Fax: (833) 256-1665 or (202) 690-7442; or
(3) Email: <a href="/cdn-cgi/l/email-protection#e292908d8590838fcc8b8c96838987a297918683cc858d94"><span class="__cf_email__" data-cfemail="f8888a979f8a9995d691968c99939db88d8b9c99d69f978e">[email protected]</span></a>.
List of Subjects in 7 CFR Part 1773
Accounting, Auditing, Electric power, Grant programs, Loan
programs--communications, Loan programs--energy, Reporting and
recordkeeping requirements, Rural areas, Telephone.
Accordingly, for the reasons discussed in the preamble, the Agency
amends 7 CFR 1773 as follows:
PART 1773--POLICY ON AUDITS OF RUS AWARDEES
0
1. The authority citation for part 1773 continues to read as follows:
Authority: 7 U.S.C. 901 et seq., 7 U.S.C. 1921 et seq., 7 U.S.C.
6941 et seq.
Subpart A--General Provisions
0
2. Amend Sec. 1773.1 by revising paragraph (d) to read as follows:
Sec. 1773.1 General.
* * * * *
(d) Failure of an auditee to provide audited financial statements
in compliance with this part is a serious violation of the RUS security
agreement. RUS relies on audited financial statements in order to
assess and monitor the financial condition of its awardees and to
fulfill its fiduciary responsibilities.
* * * * *
0
3. Amend Sec. 1773.2 by revising the definitions of ``Audit'', ``Peer
review'', ``Regulatory asset'', and ``Regulatory liability'' to read as
follows:
Sec. 1773.2 Definitions.
* * * * *
Audit means an examination of financial statements by an
independent auditor or audit firm for the purpose of expressing an
opinion on the fairness with which the financial statements present the
financial position, results of operations, and changes in cash flows in
accordance with U.S. generally accepted accounting principles (GAAP)
and for determining whether the auditee has complied with provisions of
laws, regulations, contracts, or grant agreements that could have a
material effect on the financial statements.
* * * * *
Peer review means an external review of one or more aspects of the
accounting and auditing practice, not subject to Public Company
Accounting Oversight Board permanent inspection, performed once every
three years by a CPA firm that is not affiliated with the auditor.
Regulatory asset means an asset resulting from an action of a
regulator as defined by FASB and GASB.
Regulatory liability means a liability imposed on a regulated
enterprise when there is an enforceable present obligation to deduct an
amount in determining the regulated rate to be charged to customers in
future periods, as defined by FASB and GASB.
* * * * *
Subpart B--RUS Audit Requirements
0
4. Amend Sec. 1773.3 by revising paragraphs (c) and (d)(1) to read as
follows:
Sec. 1773.3 Annual audit.
* * * * *
(c) Auditees not subject to 2 CFR part 200, subpart F, must furnish
a reporting package to RUS within 120 days of the audit date. (See
Sec. 1773.21) Until all loans made or guaranteed by RUS are repaid and
unliquidated obligations rescinded, auditees must continue to provide
annual audited financial statements. Auditees with grant funding only
must furnish annual audited financial statements in the year of the
first advance and until all funds have been advanced or rescinded, and
all financial compliance requirements have been fully satisfied.
(d) * * *
(1) For auditees expending less than the threshold for expenditure
in Federal awards during the year, RUS reserves its right under 2 CFR
200.503(b) and (c) to arrange for an audit performed in accordance with
this part.
* * * * *
0
5. Amend Sec. 1773.4 by revising paragraph (c)(1) to read as follows:
Sec. 1773.4 Auditee's responsibilities.
* * * * *
(c) * * *
(1) Within 30 days of the date of receipt of such notice, RUS or
its designated representative will notify the auditee, in writing via
email, if the selection or change in auditor is not satisfactory based
on criteria described in Sec. 1773.5.
* * * * *
0
6. Amend Sec. 1773.9 by revising paragraphs (b) and (c) to read as
follows:
Sec. 1773.9 Disclosure of fraud, and noncompliance with provisions of
law, regulations, contracts, and grant agreements.
* * * * *
(b) If specific information comes to the auditor's attention that
provides evidence concerning the existence of possible violations of
provisions of laws, regulations, contracts, or grant agreements that
could have a material indirect effect on the financial statements, the
auditor should apply audit procedures specifically directed to obtain
sufficient, appropriate audit evidence regarding those possible
violations of provisions of laws, regulations, contracts, or grant
agreements.
(c) Pursuant to the terms of its audit engagement letter with the
auditee, the
[[Page 88635]]
auditor must, as soon as practical, report through the methods
indicated below, all instances of fraud, illegal acts, and all
indications or instances of noncompliance with laws, whether material
or not, to:
(1) The president of the auditee's governance board via the
auditor's preferred method;
(2) RUS via email;
(3) OC-ECD via email; and
(4) OIG, as follows:
(i) For all audits performed in accordance with Sec. 1773.3(d)
(audits conducted in accordance with 2 CFR part 200), report to the
USDA-OIG-Audit, National Single Audit Coordinator for USDA, 1400
Independence Ave. SW, Ste. 419, Washington, DC 20250, email: <a href="/cdn-cgi/l/email-protection#c7888e80ea92948386b4aea9a0aba2a6b2a3aeb387a8aea0e9b2b4a3a6e9a0a8b1"><span class="__cf_email__" data-cfemail="aae5e3ed87fff9eeebd9c3c4cdc6cfcbdfcec3deeac5c3cd84dfd9cecb84cdc5dc">[email protected]</span></a>, or online at: <a href="http://usdaoig.oversight.gov">http://usdaoig.oversight.gov</a>.
(ii) For all other audits conducted in accordance with Sec. 1773.3
report to the USDA Office of Inspector General online at: <a href="https://usdaoig.oversight.gov">https://usdaoig.oversight.gov</a>.
Subpart C--RUS Requirements for the Submission and Review of the
Reporting Package
0
7. Amend Sec. 1773.21 by revising paragraph (d) to read as follows:
Sec. 1773.21 Auditee's review and submission of the reporting
package.
* * * * *
(d) The auditee must include a complete reporting package as
defined in Sec. 1773.2.
* * * * *
Subpart D--RUS Reporting Requirements
0
8. Amend Sec. 1773.32 by revising paragraph (a) and removing paragraph
(d).
The revision reads as follows:
Sec. 1773.32 Reports on internal control; compliance with provisions
of laws, regulations, contracts, and grant agreements; and instances of
fraud.
(a) As required by GAGAS, the auditor must prepare a written report
describing the scope of the auditor's testing of internal control over
financial reporting and of compliance with provisions of laws,
regulations, contracts, and grant agreements, and state whether the
tests provided sufficient, appropriate evidence to support opinions on
the effectiveness of internal control and on compliance with provisions
of laws, regulations, contracts, and grant agreements. This report must
include the manual or printed signature of the audit firm and must
include the following items as appropriate:
(1) Significant deficiencies and material weaknesses in internal
control;
(2) Identified or suspected instances of noncompliance with
provisions of laws, regulations, contracts and grant agreements that
have a material effect on the financial statements or other financial
data significant to the audit objectives and any other instances that
warrant the attention of those charged with governance;
(3) Identified or suspected instances of fraud that have a material
effect, either quantitatively or qualitatively, to the financial
statements or other financial data significant to the audit objectives;
and
(4) Identified or suspected instances of abuse that have a material
effect, either quantitatively or qualitatively, to the financial
statements or other financial data significant to the audit objectives.
* * * * *
0
9. Revise Sec. 1773.34 to read as follows:
Sec. 1773.34 Schedule of findings and recommendations.
The auditor must prepare a schedule of findings and recommendations
to be included with the reports on internal control; compliance with
laws, regulations, contracts, and grant agreements; and instances of
fraud. The report must contain the status of known but uncorrected
deficiencies from prior audits that affect the current audit objective.
The schedule of findings and recommendations shall be developed and
presented utilizing the elements of a finding discussed in GAGAS and
shall include recommendations for remediation. If the schedule does not
include responses from management, as well as any planned corrective
actions, those items must be submitted directly to RUS by management in
accordance with Sec. 1773.4(j).
Subpart E--RUS Audit Requirements and Documentation
0
10. Revise Sec. 1773.40 to read as follows:
Sec. 1773.40 Regulatory assets.
The auditor's audit documentation shall support that the auditor
tested whether all regulatory assets comply with the requirements of
FASB Accounting Standards Codification (ASC) 980 or GASB Statement
(GASBS) 62, as appropriate. For Electric auditees only, the auditor's
audit documentation shall support that all regulatory assets have
received RUS approval.
0
11. Revise Sec. 1773.45 to read as follows:
Sec. 1773.45 Regulatory liabilities.
The auditor's audit documentation shall support that all regulatory
liabilities comply with the requirements of FASB Accounting Standards
Codification (ASC) 980 or GASB Statement (GASBS) 62, as appropriate.
For electric auditees only, the auditor's audit documentation shall
document whether all regulatory liabilities have received RUS approval.
Andrew Berke,
Administrator, Rural Utilities Service, Rural Development.
[FR Doc. 2024-25914 Filed 11-7-24; 8:45 am]
BILLING CODE 3410-15-P
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