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3.19 Audit Requirements

Audit Reporting Requirements

Independent auditors should follow the requirements prescribed in Office of Management and Budget (OMB) Circular A-133 [PDF - 176 Kb]

  • The recipient’s accounting records must support all amounts reported to the Office of Justice Programs (OJP).
  • The recipient’s financial activity reported to OJP should reconcile to the amounts reported on the recipient’s audited financial statements.
  • If there are any differences between the recipient’s audited financial statements and the financial activity reported to OJP, the recipient must be able to explain the differences.
  • If the auditor becomes aware of illegal acts or other irregularities, he or she must give prompt notice to the recipient's management officials above the level of involvement.
  • The recipient, in turn, must promptly notify the Federal cognizant agency and/or awarding agency of the illegal acts or irregularities and of proposed and actual actions, if any.
  • All awarding agency personnel are responsible for informing the following individuals and groups of any known violations of the law within their respective area of jurisdiction:
  • OJP Office of the Chief Financial Officer
  • OJP Office of the General Counsel
  • U.S. Department of Justice Office of the Inspector General (OIG)
  • State and local law enforcement agencies or prosecuting authorities, as appropriate (see Chapter 3.21: Grant Fraud, Waste, and Abuse).

information iconFinancial Management Tip

Costs for audits not required or not performed in accordance with OMB Circular A-133 are unallowable. If you did not expend $500,000 or more in Federal funds during your organization’s fiscal year, but contracted with a certified public accountant to perform an audit, those costs may not be charged to the grant.

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Audit costs, if allowable by your award, should be prorated and charged to the grant based on the ratio of all Federal grants being audited.