Sec. 13a.02.07.05. Audits of Federal Awards

A. Additional Audit Requirements and Standards. In addition to the requirements of Regulation .04 of this chapter, if a local board expends $500,000 or more in a fiscal year in federal awards, the local board shall have an audit made in accordance with the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 and the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.

B. Submission of Report. The local superintendent of schools shall submit a copy of the audit reporting package required under §A of this regulation and responses to the findings noted therein to the State Superintendent of Schools and to the federally designated central clearinghouse within 30 days after receipt of the audit report, but not later than December 31 after the end of the fiscal year.

C. Costs. Additional costs incurred by a local board in meeting the requirements of this regulation may be charged to federal awards as a direct expenditure provided that all standards are met. The percentage of costs charged to federal awards for this purpose may not exceed the percentage that federal funds expended represent of total funds expended by the local board during the fiscal year. The percentage may be exceeded if the costs are the subject of a separate and distinct billing supported with appropriate documentation that demonstrates higher actual costs. The cost of an audit of expenditures of federal awards of less than $500,000 in a fiscal year may not be charged to federal awards.

D. Auditor Selection. If federal funds are used to pay for any of the costs of an audit, the local board shall follow the procurement standards prescribed by 34 CFR Part 74, Subpart P, "Procurement Standards", and shall give small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals the maximum practicable opportunity to participate in contracts awarded.