OSHA Instruction FIN 3.3 AUG 27, 1984 Office of Program Budgeting Planning and Financial Management

Subject: Audit Resolution of Occupational Safety and Health Administration Assistance Programs

A. Purpose. This instruction establishes procedures to be followed during the resolution of audits performed by or for the Department of Labor, Office of the Inspector General on the Occupational Safety and Health Administration 23(g) operational grants, OSHA/BLS statistical grants, New Directions Training and Education grants and 7(c)(1) On-Site Consultation Agreements.

B. Scope. This instruction applies to all Regional Administrators and National Office components directly engaged in the financial and administrative operations of the OSHA assistance programs.

C. References: The following documents provide guidelines and regulations applicable to the OSHA assistance programs and are the basic guidance for the audit process:

1. 41 CFR 29-70, Public Contracts and Property Management; Federal Standards for Federally Funded Grants and Agreements, July 20, 1979 and December 16, 1980,

2. OMB Circular A-21, "Cost Principles for Educational Institutions."

3. OMB Circular A-87, "Cost Principles for State and Local Governments."

4. OMB Circular A-122, "Cost Principles for Nonprofit Organizations."

5. OMB Circular A-5O Revised, "Audit Followup."

6. DLMS 8, Audits and Investigations, Chapter 500 - Audit Resolution and Followup.

D. Action. Regional Administrators should ensure that the audits of OSHA assistance programs are resolved in a timely manner in accordance with the standards contained in OMB Circular A-50, "Audit Followup" and DLMS 8, "Audit and Investigations", Chapter 500 - Audit Resolution and Followup.

OSHA Instruction FIN 3.3 AUG 27, 1984 Office of Program Budgeting Planning and Financial Management

E. Background. OSHA assistance programs have been audited and are continuously being audited by the OIG or an agent of the OIG. The resolution of these audits has not always been completed in a uniform manner. With the inception of OMB Circular A-50 revised on September 29, 1982, the requirement that all audits be resolved within 180 days after the final report has been issued has led to a number of questions on who has what responsibility in the resolution of these audits. These questions and the new audit resolution requirements mandated that an instruction of uniform procedures be developed.

F. Responsibilities. The resolution of audits for the OSHA assistance programs is a shared responsibility of the Assistant Secretary, the Regional Administrators and the Directorate of Administrative Programs as defined below.

1. The Assistant Secretary. The Assistant Secretary is responsible for:

a. Including audit resolution and follow-up responsibilities in the Senior Executive Service (SES) standards and evaluation criteria of all officials with responsibilities for audit resolution and followup.

b. Providing a final resolution on all appeals by grantees on the "Findings and Determination" letter from the Regional Administrators.

2. Regional Administrators. Each Regional Administrator is responsible for:

a. Receiving, analyzing and resolving audit reports.

b. Assuring that resolution actions are consistent with law, regulation and Administration policy.

c. Providing timely responses to the Regional OIG on audit resolution recommendations.

d. Implementing corrective actions on a timely basis.

e. Maintaining accurate records and tracking of the status of audit reports or recommendations through the entire process of resolution and corrective action, including appropriate collection controls over amounts determined to be due the government.

OSHA Instruction FIN 3.3 August 27, 1984 Office of Program Budgeting Planning and Financial Management

3. The Directorate of Administrative Programs. The Director of Administrative Programs is the OSHA official responsible for the liaison with the OIG and for overall audit resolution, implementation and activities. Through the Office of Program Budgeting, Planning and Financial Management, Division of Grants Management, the Directorate shall be responsible for:

a. Ensuring that status reports furnished by the OIG are reconciled with Agency records, annotated to reflect updated status, and returned to the OIG.

b. Recording disallowed costs subject to debt collection as an Agency accounts receivable when the final determination is made.

c. Ensuring that audit resolution and followup procedures are fully supportive of the policies reflected in the Federal Claims Collection Act of 1966 (P.L. 89-5O8) and the Debt Collection Act of 1982 (P.L. 97-365) including, as appropriate, the accrual of interest on amounts owed the Department and other remedies provided under the Acts.

d. Carrying out timely debt collection procedures in accordance with the Federal Claims Collection Standards and assuring that the payment of audit-related debts does not result in charges to other Federal programs or in a reduced level of program activity, unless the actions are specified by statute or otherwise appropriate.

e. Forwarding to the OIG an information copy of the quarterly subsidiary report on receivables resulting from audit findings (subsidiary to Schedule 9, SF 220, "Report on Status of Accounts and Loans Receivable Due From the Public," as required by Vol. I the Treasury Financial Manual 2-4100).

G. Procedures. The audit resolution and followup process is designed to initiate effective action to correct problems uncovered by an audit. The success of this process relies on continuous communications between all parties involved with audit resolution. The resolution process is described in detail in DLMS 8 Audits and Investigations, Chapter 500, Audit Resolution and Followup. Refer to that document for a detailed explanation of the process. The following will provide a synopsis of that process which OSHA staff should follow during audit resolution:

OSHA Instruction FIN 3.3 August 27, 1984 Office of Program Budgeting Planning and Financial Management

1. Audit Report is issued by the Regional OIG or its representative.

2. Within 60 days, the appropriate OSHA Regional Administrator will respond to the audit report, addressing each audit finding and recommendation.

3. Regional OIG will review the response and notify the OSHA Regional Administrator within 20 days of their agreement with the response or return it with comments. OSHA and OIG differences should be negotiated at the Regional level and a letter of "Findings and Determination" should be sent to the grantee whose program has been audited. A copy of this letter should be sent to the Division of Grants Management in the National Office.

4. If OIG and OSHA Regional staff cannot reach an agreement, the resolution will be elevated to the National Office in the following manner:

Both the OSHA Regional Administrator and the Regional OIG will prepare, in writing, statements of their position on the subject audit, discussing why the audit should be resolved in a particular manner. The discussion should include references to administrative regulations that support their position wherever possible. These statements will be submitted to the respective National Offices in Washington, D.C. The DOL Audit Followup Official in the OIG will work with the Office of Program Budgeting, Planning and Financial Management for a mutually acceptable agreement. This resolution will be transmitted to the Regional Administrator and Regional OIG by their National Office counterparts for final action.

5. If the grantee agrees with the "Findings and Determination", they should submit to the Region within 30 calendar days a check for all disallowed costs and a plan of action to implement any administrative recommendations that were made in the audit.

6. If the grantee disagrees with the "Findings and Determination", they can appeal within 30 days of receipt of the letter directly to the Assistant Secretary. The Assistant Secretary's final decision will be forwarded to

OSHA Instruction FIN 3.3 AUG 27 1984 Office of Program Budgeting Planning and Financial Management

the grantee with a copy to the Region within 60 days of receipt of the appeal letter.

7. Followup on the audit should include a review of the implementation of administrative recommendations during the on-site visits and assurance that a refund for disallowed costs has been received by OSHA.

David C. Zeigler Director Administrative Programs

Distribution: OSHA National Office & Regional Offices/BLS National and Regional Offices

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