DI 39554.200 Authority for Audits – DDS
The authority for audits is the law and regulations listed below.
Section 221(f) of the Social Security Act as amended provides “all money paid to a State under this section shall be used solely for the purpose for which it is paid; and any money so paid which is not used for such purposes shall be returned to the Treasury of the United States for deposit in the Trust Fund.”
20 CFR 404.1625 and 416.1025 regarding records and reports contain the following provision.
“The State will establish and maintain the records and furnish the necessary reports (e.g., schedules, financial, cost and other reports) relating to the administration of the disability programs” as required by SSA.
“The State will permit . . . “SSA”. . . and the Comptroller General of the United States (including duly authorized representatives) access to and the right to examine records relating to the work which the State performs under these regulations.”
OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations contains the following additional provisions.
Independent audits of financial operations, including compliance with certain provisions of Federal law and regulation, may be conducted.
Audits are to be made on an organization-wide (department-wide) basis rather than on a grant-by-grant basis.
State governments shall use their own procedures to arrange for independent audits and to prescribe the scope of audits, provided that the audits comply with the Federal requirements. See DI 39554.205.
The authority of HHS to make an audit of a State department is not limited. However, if independent audits arranged by State governments meet Federal requirements, all Federal agencies will rely on them and any additional audit work will build upon the work already done.