§ 1773.9 Disclosure of fraud, and noncompliance with provisions of law, regulations, contracts, and grant agreements.

(a) In accordance with GAGAS, the auditor is responsible for planning and performing the audit to provide reasonable assurance about whether the financial statements are free of material misstatement due to error or fraud. The auditor must also plan the audit to provide reasonable assurance of detecting material misstatements resulting from violations of provisions of laws, regulations, contracts, or grant agreements that could have a direct and material effect on the financial statements. (b) If specific information comes to the auditor's attention that provides evidence concerning the existence of possible violations of provisions of laws, regulations, contracts, or grant agreements that could have a material indirect effect on the financial statements, the auditor should apply audit procedures specifically directed to obtain sufficient, appropriate audit evidence regarding those possible violations of provisions of laws, regulations, contracts, or grant agreements. (c) Pursuant to the terms of its audit engagement letter with the auditee, the auditor must, as soon as practical, report through the methods indicated below, all instances of fraud, illegal acts, and all indications or instances of noncompliance with laws, whether material or not, to: (1) The president of the auditee's governance board via the auditor's preferred method; (2) RUS via email; (3) OC-ECD via email; and (4) OIG, as follows: (i) For all audits performed in accordance with § 1773.3(d) (audits conducted in accordance with 2 CFR part 200), report to the USDA-OIG-Audit, National Single Audit Coordinator for USDA, 1400 Independence Ave. SW, Ste. 419, Washington, DC 20250, email: OIG-USDAsingleaudit@oig.usda.gov, or online at: http://usdaoig.oversight.gov. (ii) For all other audits conducted in accordance with § 1773.3 report to the USDA Office of Inspector General online at: https://usdaoig.oversight.gov.