(a)Right of inspection and audit. The Secretary, the Comptroller General of the United States, or any of their duly authorized representatives, may inspect and inventory donated foods in storage or the facilities used in the handling or storage of such donated foods, and may inspect and audit all records, including financial records, and reports pertaining to the distribution of donated foods and may review or audit the procedures and methods used in carrying out the requirements of this part at any reasonable time. Subdistributing agencies, recipient agencies, processors, food service management companies and warehouses shall be required to permit similar inspection and audit by such entities or their representatives. Fiscal matters shall continue to be reviewed in audits under the Single Audit Act (31 U.S.C. 7501-07) and the Department's Uniform Federal Assistance Regulations (7 CFR part 3015).
(b)Independent CPA audits of multi-State processors. (1) For any year in which a multi-State processor receives more than $250,000 in donated foods, the processor shall obtain an independent CPA (certified public accountant) audit for that year. Multi-State processors which receive $75,000 to $250,000 in donated food each year shall obtain an independent CPA audit every two years and those which receive less than $75,000 in donated foods each year shall obtain an independent CPA audit every three years. Those multi-State processors which are in the two or three-year audit cycle shall move into the next audit cycle at the point in time in which the value of donated foods received reaches $75,000 or $250,000 in any year. The total value of donated food received shall be computed by adding the value of food received under State and National Commodity Processing contracts. In instances in which the Department determines that the audit is not acceptable or that the audit has disclosed serious deficiencies, the processor shall be subject to additional audits at the request of FNS.
(2) Audits shall be conducted in accordance with the auditing provisions set forth under the Uniform Federal Assistance Regulations (7 CFR part 3015, subpart I) and the FNS Audit Guide for Multi-State Processors. At the discretion of FNS, auditors will be required to attend training sessions conducted by the Department.
(3) The costs of the audits, including those costs associated with training, shall be borne by the processors.
(4) Audit findings relative to those elements associated with the processing of donated food shall be submitted to the processor and to FNS concurrently.
(5) Noncompliance with the audit requirements in paragraph (b)(1) of this section will render the processor ineligible to enter into another processing contract with any contracting agency until the required audit has been conducted and deficiencies corrected.
(6)Processor response. Multi-State processors shall develop a written response to FNS addressing deficiencies which have been identified in the audit. Such responses shall include:
(i) Corrective action which has already been taken to eliminate the deficiency;
(ii) Corrective action which the processor proposes to take to eliminate the deficiency;
(iii) The timeframes for the implementation and completion of the corrective action;
(iv) A determination of what caused the deficiency; and
(v) Deficiencies which have been identified that the processor takes exception to and an explanation for the exception.
Multi-State processors shall submit a written response to FNS in accordance with timeframes established by FNS.
[53 FR 20426, June 3, 1988, as amended at 54 FR 7525, Feb. 22, 1989]
Title 7 published on 2014-01-01
no entries appear in the Federal Register after this date.
This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.