Waiver of the Audit Requirement

Audits may be waived under certain circumstances, such as when the contract is relatively small, when the audit cost is a disproportionate share of the contract amount, and when there are alternate means of monitoring available. All requests for waivers of audits need to be referred to the granting agency, which needs to obtain approval from the department’s regional office. The department requires department approval because it has had situations where an agency requests a waiver of its audit from one purchaser when it actually has contracts with multiple purchasers. We also want to avoid situations where audits of group homes and child caring institutions are waived, which prevents the department from being able to claim federal funding because such claims are dependent on audits.

The 1999 revision to the Provider Agency Audit Guide introduces the concept of using a systematic risk-based approach to determining whether to waive an audit or what kind of audit to require.  This revision is effective for audits of years ending on or after December 31, 1999.

Last Revised:  May 30, 2007