Sneak Preview: RUS Updates Audit Rules for Borrowers, Grantees

June 1, 2018 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) The U.S. Department of Agriculture Rural Utilities Service (RUS) is amending its audit regulations so that they apply to both grantees and borrowers participating in its grant and loan programs, along with making several other significant updates, under a recently released final rule. The rule will become effective July 23 and will be applicable for financial audits for periods ending on or after Dec. 15, 2018.

The final rule, located in the Code of Federal Regulations at 7 C.F.R. Part 1773, incorporates provisions in the Office of Management and Budget’s uniform grant guidance, the Government Auditing Standards (GAGAS) and the clarified audit standards issued by the American Institute of Certified Public Accountants (AICPA).

The current audit regulations require RUS electric and telecommunications borrowers (with no mention of grantees) to prepare and submit to RUS, at least once during each 12-month period, a full and complete report of its financial condition, operations and cash flows “in form and substance satisfactory to RUS.” Such reports are to be audited and certified by an independent audit organization. In the May 7 Federal Register, RUS amended this section now to include coverage of grantees and revised the title of the regulation to “Policy on Audits of RUS Borrowers and Grantees.”

The revised rule incorporates the 2011 GAGAS revisions, which contain key changes that “reinforce the principles of transparency and accountability and provide the framework for high-quality government audits that add value”. It also incorporates AICPA’s clarified audit standards, which were released in October 2011 to “provide clarity and convergence.” It also makes the provisions in Subpart F of the uniform guidance applicable to certain borrowers and grantees that meet the single audit threshold. Subpart F, however, does not apply to audits of RUS electric and telecommunications cooperatives and for-profit telecommunications borrowers unless the borrower has contractually agreed with another federal agency to provide a financial audit performed in accordance with Subpart F.

Along with updating all subparts to include grantees, the revised rule also conforms the language to the generally accepted auditing standards (GAAS) under GAGAS and AICPA standards. RUS also has added, changed or deleted definitions as appropriate to clarify certain existing information.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

As a reminder, we have all of our Federal Funding Training Forums scheduled for 2018. Please let me know if you have questions or can make any of these. We hope to see you there!

  • Wednesday July 25 – Friday July 27 in MINNEAPOLIS

  • Wednesday October 17 – Friday October 19 in ATLANTA


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