New Mexico Administrative Code
Title 6 - PRIMARY AND SECONDARY EDUCATION
Chapter 21 - PUBLIC SCHOOL FINANCE - AUDIT
Part 2 - AUDIT RESOLUTION PROCESS, APPLICATION HEARING PROCESS, ENFORCEMENT PROCESS
Section 6.21.2.8 - PROCESSING AUDIT REPORTS CONDUCTED IN ACCORDANCE WITH THE SINGLE AUDIT ACT OF 1984, AS AMENDED, OMB CIRCULAR A-133, AND/OR THE STATE AUDIT ACT

Universal Citation: 6 NM Admin Code 6.21.2.8

Current through Register Vol. 35, No. 18, September 24, 2024

A. Purpose of audits: Audits conducted in accordance with the Single Audit Act of 1984, as amended, OMB Circular A-133 and/or the Audit Act Sections 12-6-1 through 12-6-14 NMSA 1978 serve to provide the department with information on activities performed under subgrants. These audits provide an opinion as to whether legal requirements regarding expenditure of funds are being met with regard to:

(1) contract, grant, subgrant or cooperative agreement obligations are met;

(2) all applicable federal and state laws, rules, and regulations are being adhered to;

(3) claimed costs are eligible; and

(4) adequate internal control systems are in place.

B. The receipt date of the audit report marks the commencement of the timeframe in which the department will ultimately issue its management decision on any audit finding noted.

(1) Desk review: A desk review is conducted on all audit reports received. The objectives of the review are as follows:

(a) determine if the audit report contains the required components pursuant to OMB Circular A-133;

(b) identify audit finding(s), and/or recommendation(s);

(d) coordinate and solicit input from the appropriate agencies/individuals in determining the department's resolution request on audit findings) and/or recommendation(s);

(e) determine if appropriate department personnel should provide technical assistance to the subgrantee, when applicable;

(f) develop and forward to the subgrantee a letter outlining the results of the desk review, to include the identification of any outstanding audit findings) or recommendation(s), the subrecipient's response to the state auditor, if applicable, the department's resolution and corrective action request, and the due date for a response from the subgrantee.

(g) forward a closeout letter for those audit reports, which do not contain audit findings.

(h) if any subgrantee audit report includes audit finding(s) and/or recommendations) concerning direct grants, the resolution of these findings will he the responsibility of the awarding agency; if, however, these audit findings are considered by the department to involve crosscutting issues, the resolution of the audit finding(s) will also be addressed in the desk review letter.

(2) After the desk review is conducted, the department will issue a desk review letter to the subgrantee outlining the results of the desk review relative to the subgrantee's audit report. The department will attempt to resolve any audit findings through written correspondence, submission of documentation or any other method deemed appropriate such as telephone conversation, or on-site visits. A public school district's response to the department with regard to the resolution of any audit findings shall be approved by the local school board at a legally scheduled meeting.

(3) A final letter of determination will be issued to a subgrantee and will include those desk audit finding(s) or recommendation(s) which were not resolved as a result of a subgrantee's failure to comply with the department's resolution and corrective action request as identified in the desk review letter. The following components must be included in this letter:

(a) audit findings) or recommendation(s);

(b) the subgrantee's response to the state auditor, if applicable;

(d) activities subsequent to the issuance of the desk review letter;

(e) due date for response from the subgrantee; and

(f) the subgrantee's right to appeal.

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