Community Colleges & Universities Audits

The audit requirements referenced in OSBM-administered grant contracts require organizations to follow the requirements set out in G.S. 159-34. This is in addition to the reporting obligations in the contract.

The audit requirement is addition to requirements already covered by the Local Government Finance Act. It does not supersede an organization’s existing annual audit requirement. 

Any organization that receives, holds, uses, or expends state financial assistance in an amount equal to or greater the dollar amount requiring audit listed in federal code 2 CFR 2  00.501(a) should have a single or program specific audit completed annually.

If the audit performed every other year for your college includes the grant funds in its scope, that fulfils the requirement for your grant contract for that year. On the off years, organizations can have a program specific audit completed for the grant funds.

Admininstrative Code Language

(a)  For the purposes of this Subchapter, there are two reporting levels established for recipients and subrecipients receiving grants. Reporting levels are based on the allocated funds from all grants disbursed through the State of North Carolina. The reporting levels are: 

  1. Level I – A recipient or subrecipient that receives, holds, uses, or expends grants in an amount less than the dollar amount requiring audit as listed in the Code of Federal Regulations 2 CFR 200.501(a) within its fiscal year. The dollar amount requiring audit listed in 2 CFR 200.501(a) is herein incorporated by reference, including subsequent amendments and editions, and can be accessed free of charge at Code of Federal Regulations. 
  2. Level II - A recipient or subrecipient that receives, holds, uses, or expends grants in an amount equal to or greater than the dollar amount requiring audit as listed in 2 CFR 200.501(a) within its fiscal year. The dollar amount requiring audit listed in 2 CFR 200.501(a) is herein incorporated by reference, including subsequent amendments and editions, and can be accessed free of charge at the Code of Federal Regulations.

(b)  Agencies shall require recipients to meet the following reporting standards on an annual basis: 

  1.  All recipients and subrecipients shall provide to the distributing agency a certification that grants received or held were used for the purposes for which the grants were awarded. 
  2. All recipients and subrecipients shall provide an accounting to the distributing agency of all grants received, held, used, or expended. 
  3. All recipients and subrecipients shall report on activities and accomplishments undertaken by the recipient, including reporting on any performance measures established in the contract. 
  4. Level II recipients and subrecipients shall have a single or program-specific audit prepared and completed in accordance with Generally Accepted Government Auditing Standards, also known as the Yellow Book, which is herein incorporated by reference, including subsequent amendments and editions, and can be accessed free of charge at GAO Government Audit Standards.

Community Colleges and Universities are considered Non State Agencies in Session Law 2023-134 in reference to auditing requirements:

Grants to Non-State Entities

Section 40.7 Requirements -  For purposes of this Part, nonrecurring funds allocated from the State Capital and Infrastructure Fund as grants to non-state entities, as defined by G.S. 143C-1-1(d), are subject to all of the following requirements:

  1. As soon as practicable after the effective date of this act, each State agency administering grants shall begin disbursement of funds to each grantee non-State entity when all applicable requirements are met. However, disbursement of grant funds allocated for the 2021-2022 fiscal year shall commence no later than 100 days after the date this act becomes law, and disbursement in full to all grantees shall be completed no later than nine months after the date this act becomes law. Disbursement of grants allocated for the 2022- 2023 fiscal year shall be completed no later than 100 days after the beginning of the 2022- 2023 fiscal year.
  2. G.S. 143C-6-23(b) through (f) and (f2) through (k) apply to the grants.

Section 2 above does not include 143C-6-23 (a) where it provides definitions of grantee that would typically exclude Community Colleges from an audit requirement. Since the definition is not included then they are not excluded from the requirement.

Directed Grants to Non-State Entities

Section 5.3(a) Definitions - For purposes of this act and the Committee Report described in Section 43.2 of this act, the following definitions apply: 

  1. Directed grant. – Nonrecurring funds allocated by a State agency to a non-State entity as directed by an act of the General Assembly. 
  2. Non-State entity. – As defined in G.S. 143C-1-1. 

SECTION 5.3.(b) Requirements. – Nonrecurring funds appropriated in this act as directed grants are subject to all of the following requirements: 

  1. Directed grants are subject to the provisions of subsections (b) through (k), except for subdivision (1) of (f1), of G.S. 143C-6-23.

Section 2 above reiterates the same information regarding the definition of a “non-state entity.”
 

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