Sec.4-236-21. Responsibilities of cognizant agencies, state agencies and non-state entities

(a) A cognizant agency shall:

(1) Provide technical advice and liaison to nonstate entities and independent auditors;

(2) Promptly inform other affected state agencies and appropriate state and local law enforcement officials of any direct reporting by the auditee or its auditor of irregularities or illegal acts, as required by GAGAS or laws and regulations;

(3) Advise the independent auditor and, where appropriate, the auditee of any deficiencies found in an audit report when the deficiencies require corrective action by the independent auditor. When advised of deficiencies, the auditee shall work with the independent auditor to take corrective action. If corrective action is not taken, the cognizant agency shall notify the independent auditor, the auditee, each agency having provided state financial assistance and each pass-through entity of the facts and make recommendations for follow-up action. In cases involving repetitive substandard performance or major inadequacies, the independent auditor may be referred to appropriate state and professional bodies for disciplinary action;

(4) Obtain or conduct quality control reviews of selected audits made by independent auditors of nonstate entities, at its discretion;

(5) Ensure the resolution of audit findings that affect the programs of more than one state agency;

(6) Coordinate, to the extent practical, audits or reviews made by or for state agencies that are in addition to the audits made pursuant to sections 4-236-23 and 4-236-26 of the Regulations of Connecticut State Agencies, so that the additional audits or reviews build upon audits performed in accordance with this part; and

(7) Inform a state awarding agency of an extension granted to an auditee for report submission.

(b) A state agency that provides state financial assistance shall:

(1) At the time of awarding state financial assistance to a nonstate entity, identify each state award made by informing the nonstate entity of the State Program Identification Number, award name, contract number, and award year. When some of this information is not available at the time the award is made, the State agency shall provide information necessary to clearly describe the State award;

(2) Advise nonstate entities of requirements imposed on them by state laws, regulations, and the provisions of contracts or grant agreements;

(3) Work with the cognizant agency to ensure that audits are completed and reports are received in a timely manner;

(4) Promptly notify the cognizant agency if audit reports are not submitted by the due date;

(5) Provide program related technical advice and counsel to nonstate entities and independent auditors as requested;

(6) Follow up on audit findings affecting a state agency's programs and ensure that the auditee takes appropriate and timely corrective action; and

(7) Assign a person the responsibility of providing annual updates of the Compliance Supplement to the secretary.

(c) A nonstate entity that is subject to the audit requirements of sections 4-230 through 4-236, inclusive, of the Connecticut General Statutes shall:

(1) Identify, in its records, any state financial assistance received, the program under which it is authorized, and the amounts expended. State program identification shall include, as applicable, the State Program Identification Number and program name, the contract number and year, the name of the state agency having awarded the assistance, and the name of the pass-through entity;

(2) Maintain internal control over state programs that provides reasonable assurance that the nonstate entity is managing state financial assistance in compliance with laws, regulations and the provisions of contracts or grant agreements that could have a material effect on each of its state programs;

(3) Comply with laws, regulations, and the provisions of contracts or grant agreements related to each state program;

(4) Prepare appropriate financial statements, including a schedule of expenditures of state financial assistance, in accordance with section 4-236-23(a)(4) of the Regulations of Connecticut State Agencies;

(5) Ensure that each audit required by section 4-231 of the Connecticut General Statutes is properly performed and that each audit report is submitted when due;

(6) When notified of an extension to an audit report submission due date, promptly notify each applicable pass-through entity of the extension;

(7) Follow up on audit findings, prepare a corrective action plan and a schedule of prior audit findings in accordance with section 4- 236-24 of the Regulations of Connecticut State Agencies and take corrective action as necessary; and

(8) Promptly notify the cognizant agency and law enforcement officials of any violation of law including illegal acts and irregularities.

(Adopted effective April 2, 2001; Amended December 29, 2010)