(a) Non-Federal Audits--(1) Governments. Each recipient and
governmental subrecipient is responsible for complying with the Single
Audit Act of 1984 (31 U.S.C. 7501-7) and 29 CFR part 96, the Department
of Labor regulations which implement Office of Management and Budget
(OMB) Circular A-128, ``Audits of State and Local Governments''.
(2) Non-governmental organizations. Each non-governmental recipient
or subrecipient shall comply with OMB Circular A-133, ``Audits of
Institutions of Higher Education and Other Nonprofit Institutions'', as
implemented by the Department of Labor regulations at 29 CFR part 96.
The provisions of this paragraph (a)(2) do not apply to any non-
governmental organization that is:
(i) A commercial organization; or
(ii) A hospital or an institution of higher education for which
State or local governments choose to apply OMB Circular A-128.
(3) Commercial organizations. A commercial organization which is a
recipient or subrecipient and which receives $25,000 or more a year in
Federal financial assistance to operate a JTPA program shall have an
audit that:
(i) Is usually performed annually, but not less frequently than
every two years;
(ii) Is completed within one year after the end of the period
covered by the audit and submitted to the awarding agency within one
month after completion;
(iii) Is either:
(A) An independent financial and compliance audit of Federal funds
that includes coverage of the JTPA program within its scope, and is
conducted and prepared in accordance with generally accepted government
auditing standards; or
(B) An organization-wide audit that includes financial and
compliance coverage of the JTPA program within its scope.
(b) Federal audits. The notice of audits conducted or arranged by
the Office of Inspector General or the Comptroller General shall be
provided in advance, as required by section 165(b) of the Act.
(c) Audit reports. (1) Audit reports of recipient-level entities and
other organizations which receive JTPA funds directly from the U.S.
Department of Labor shall be submitted to the Office of Inspector
General.
(2) Audit reports of organizations other than those described in
paragraph (c)(1) of this section shall be submitted to the entity which
provided the JTPA funds.
(d) Each entity that receives JTPA program funds and awards a
portion of those funds to one or more subrecipients shall:
(1) Ensure that each subrecipient complies with the applicable audit
requirements;
(2) Resolve all audit findings that impact the JTPA program with its
subrecipient and ensure that corrective action for all such findings is
instituted within 6 months after receipt of the audit report (where
appropriate, corrective action shall include debt collection action for
all disallowed costs); and
(3) Maintain an audit resolution file documenting the disposition of
reported questioned costs and corrective actions taken for all findings.
The ETA Grant Officer may request that an audit resolution report, as
specified in paragraph (e)(2) of this section, be submitted for such
audits or may have the audit resolution reviewed through the compliance
review process.
(e)(1) Audits of recipient-level entities and other organizations
which receive JTPA funds directly from DOL and all audits conducted by
or under contract for the Office of Inspector General shall be issued by
the OIG to the Employment and Training Administration after acceptance
by OIG.
(2) After receipt of the audit report, the ETA Grant Officer shall
request that the State submit an audit resolution report documenting the
disposition of the reported questioned costs, i.e., whether allowed or
disallowed, the basis for allowing questioned costs, the method of
repayment planned or required, and corrective actions, including debt
collection efforts, taken or planned.
(f) If the recipient intends to propose the use of ``stand-in''
costs as substitutes for otherwise unallowable costs, the proposal shall
be included with the audit resolution report. To be considered, the
proposed ``stand-in'' costs shall have been reported as uncharged JTPA
program costs, included within the scope of the audit, and accounted for
in the auditee's financial system, as required by Sec. 627.425 of this
part, Standards for financial management and participant data systems.
To be accepted, stand-in costs shall be from the same title, and program
year as the costs which they are proposed to replace, and shall not
result in a violation of the applicable cost limitations.
(g) After receiving the audit resolution report, the ETA Grant
Officer shall review the report, the recipient's disposition, and any
liability waiver request submitted in accordance with Sec. 627.704 of
this part. If the Grant Officer agrees with all aspects of the
recipient's disposition of the audit, the Grant Officer shall so notify
the recipient. If the Grant Officer disagrees with the recipient's
conclusion on specific points in the audit, the Grant Officer shall
resolve the audit through the initial and final determination process
described in Sec. 627.606 of this part.
