04 NCAC 20B .0604          AUDIT RESOLUTION PROCESS

(a)  The auditor that conducts a financial and compliance audit of a subrecipient has the responsibility to identify questioned costs in funded activities. The failure of the auditor to identify questioned costs shall not prevent the Division or USDOL from identifying questioned costs. The Division may identify questioned costs at any time, including prior to audit as during monitoring, except that the Division will not identify questioned costs after acceptance of the audit and audit resolution by USDOL.

(b)  The Division will make the initial determination on the allowability of questioned costs in audits. The Division will be guided in its determination by its audit resolution manual, which is updated as necessary and which is available for inspection by the public. The Division is not bound by its initial determination, as the determination may be overturned by USDOL. The subrecipient is responsible for cooperating in the gathering of information to support allowability. The Division shall not be required to resolve the questioned costs of a subrecipient who fails to cooperate in audit resolution.

(c)  The subrecipient is responsible for preparing documentation in a timely fashion for the Division to submit to USDOL to support an application for a waiver of liability under Section 164 of the JTPA.

(d)  USDOL makes the final decisions on the acceptability of audits and on the allowance, waiver of liability or disallowance of questioned costs in audits.

(e)  A subrecipient may seek administrative review of a determination by the Division to disallow costs that were questioned in an audit or of a division order to recoup disallowed costs that have been disallowed by USDOL. The failure to seek administrative review within thirty days of receipt of such a determination may result in an order of the Secretary authorizing recoupment.

History Note:        Authority G.S. 143B‑430(b); Ex. O. 93, June 8, 1983; 20 C.F.R. 629.42; OMB Circular 102, January, 1981;

Eff. November 17, 1976;

Transferred from T01: 18 Eff. September 15, 1981;

Amended Eff. October 1, 1984; August 1, 1982;

Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. April 27, 2019.