(a) Purpose. The Department's Office of Inspector General (OIG) periodically audits State operations in order to determine whether—
- (1) The program is being operated in a cost-efficient manner; and
- (2) Funds are being properly expended for the purposes for which they were appropriated under Federal and State law and regulations.
(b) Reports.
- (1) The OIG releases audit reports simultaneously to State officials and the Department's program officials.
- (2) The reports set forth OIG opinion and recommendations regarding the practices it reviewed, and the allowability of the costs it audited.
- (3) Cognizant officials of the Department make final determinations on all audit findings.
- (c) Action on audit exceptions—(1) Concurrence or clearance. The State agency has the opportunity of concurring in the exceptions or submitting additional facts that support clearance of the exceptions.
- (2) Appeal. Any exceptions that are not disposed of under paragraph (c)(1) of this section are included in a disallowance letter that constitutes the Department's final decision unless the State requests reconsideration by the Administrator or the Departmental Appeals Board. (Specific rules are set forth in § 430.42.)
- (3) Adjustment. If the decision by the Board requires an adjustment of FFP, either upward or downward, a subsequent grant award promptly reflects the amount of increase or decrease.
[53 FR 36571, Sept. 21, 1988, as amended at 56 FR 8846, Mar. 1, 1991; 77 FR 31507, May 29, 2012]