3.19 Audit Requirements
Resolution of Audit Reports
For an audit to be effective, it is important for a recipient to have policies and procedures in place to ensure timely corrective action on audit recommendations.
Each recipient must designate officials responsible for the following tasks:
- Following up on audit recommendations.
- Maintaining a record of the corrective action taken on recommendations, including time schedules for completing corrective action, such as those stated in a Corrective Action Plan (CAP).
- Typically, the CAP letter will include a description of the finding, specific steps to take to implement the recommendation, including written formal procedures; a timetable for performance of each corrective action; and a description of monitoring to be performed to ensure implementation of the CAP.
- The recipient must generate a response to the CAP letter within the specified timeframe, usually within 30 days after receipt of the letter.
- Implementing audit recommendations.
- Providing an audit report special condition on all subawards.
- This special condition should include the audit report period, required audit report submission date, and name and address of the cognizant Federal agency.
- The policy of the awarding agency is to not make new awards to applicants who are not in compliance with the audit requirements.
- A special condition will be placed on new awards if an audit report is delinquent.
Financial Management Tip
The awarding agency monitors the audit report requirements for commercial organizations through its audit tracking system. Once audit reports are received through the DOJ single audit process, OJP will track the reports until the audit has been resolved and officially closed by the Office of the Inspector General.
