Utah Admin. Code R33-12-605 - Right to Audit

(1) As used in this rule:

(a) "Authorized representative" includes:

(i) a purchasing procurement unit;

(ii) an internal auditor or other employee of the procurement unit;

(iii) an audit firm, consultant or examiner under contract with the procurement unit;

(iv) the State Auditor;

(v) the Legislative Auditor General; or

(vi) federal auditors.

(b) "Books and records" mean written or electronic information pertaining to the applicable contract between the procurement unit and the contractor including:

(i) accounting information, financial statements, files, invoices, reports, and statements;

(ii) pricing data;

(iii) usage reports;

(iv) transaction histories;

(v) delivery logs;

(vi) contracts, contract amendments, and other legal documents; and

(vii) performance evaluations.

(2) Any contract between a contractor and a procurement unit that involves the expenditure of public funds may include or incorporate by reference a right to audit clause that may contain the following provisions:

(a) a statement indicating that the procurement unit or its authorized representative has the right to audit the books and records of a contractor or any subcontractor under any contract or subcontract to the extent that the books and records relate to the performance of the contract or subcontract;

(b) notification procedures for initiating an audit and reporting audit findings;

(c) dispute resolution procedures, including, to the extent practicable, negotiation, settlement, and final resolution of audit findings;

(d) a statement requiring the contractor and its subcontractors to:

(i) maintain books and records relating to a contract for six years after the day on which the contractor receives the final payment under the contract, or until audits initiated under this section within the six-year period have been completed, whichever is later;

(ii) establish and maintain an accounting and record-keeping system that enables the procurement unit or its authorized representative to readily have access to the contractor's books and records in both written and electronic format;

(iii) upon request, provide to the procurement unit or its authorized representative an electronic copy of the contractor's books and records within 30 days of the request;

(iv) allow the procurement unit or its authorized representative to interview the contractor's employees, agents, subcontractors, partners, resellers, and any other person who might reasonably have information related to the contractor's performance of the contract;

(v) correct errors and repay overcharges to the contracting procurement unit within 30 days of receiving written notice of the errors or overcharges documented in an audit finding;

(A) payments relating to overcharges or other audit findings involving state cooperative contracts shall be repaid to the Utah Division of Purchasing; and

(vi) if contract errors or overcharges are in dispute, correct errors and repay overcharges within 30 days of receipt of a notice of decision issued by the procurement official after a hearing has been conducted to attempt to resolve the dispute, or a court order;

(e) a statement indicating that:

(i) the procurement unit or its authorized representative have the right to audit the contract at any time during or after the term of the contract between the contractor and the procurement unit; including the right to examine, make copies of, or extract data from any record required to be maintained by the contractor; and

(ii) an audit or other request shall:

(A) be limited to records or other information related to or pertaining to the applicable contract;

(B) include access to records necessary to properly account for the contractor's performance under the contract and the payments made by the procurement unit to the contractor; and

(C) be carried out at a reasonable time and place;

(f) a notice that if a contractor fails to maintain or provide records in accordance with the contract, the procurement unit may:

(i) consider the contractor to be in breach of its contract with the procurement unit;

(ii) enter into negotiations with the contractor to initiate a corrective action plan to bring the contractor into compliance; or

(iii) cancel the contract;

(g) a notice that the procurement unit may initiate debarment or suspension proceedings against a contractor under Section 63G-6a-904, or pursue other legal action, for any of the following:

(i) failure to respond to an audit;

(ii) failure to correct errors or repay overcharges;

(iii) an illegal act or fraud documented in an audit; or

(iv) other reasons as determined by the procurement official.

Notes

Utah Admin. Code R33-12-605

Amended by Utah State Bulletin Number 2017-14, effective 6/21/2017 Amended by Utah State Bulletin Number 2021-03, effective 1/22/2021 Amended by Utah State Bulletin Number 2022-11, effective 5/23/2022