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3.19 Audit Requirements

Audit Objectives

Awards are subject to conditions of fiscal, program, and general administration to which the recipient expressly agrees upon acceptance of the award.

  • The audit objective is to review the recipient’s accountability of funds and required non-Federal contributions to determine whether the recipient has done all of the following:
  • Established an accounting system with adequate internal controls that provide full accountability for revenues, expenditures, assets, and liabilities.
  • Prepared financial statements which are presented fairly and in accordance with generally accepted accounting principles.
  • Submitted financial reports (including Federal Finance Reports [SF-425s]; cash reports; and claims for advances and reimbursements) that contain accurate and reliable financial data and are presented in accordance with the terms of applicable agreements.
  • Expended Federal funds in accordance with the terms of award agreements and those provisions of Federal law or regulations that could have a material effect on the financial statements or on the awards tested.