Title 7

SECTION 990.5

990.5 Audit of State or Tribal plan compliance.

§ 990.5 Audit of State or Tribal plan compliance.

The Secretary may conduct an audit of the compliance of a State or Indian Tribe with an approved plan.

(a) Frequency of audits. Compliance audits may be scheduled, at minimum, once every three years and may include an onsite-visit, a desk-audit, or both. The USDA may adjust the frequency of audits if deemed appropriate based on program performance, compliance issues, or other relevant factors identified and provided to the State or Tribal governments by USDA.

(b) Scope of audit review. The audit may include, but is not limited to, a review of the following:

(1) The resources and personnel employed to administer and oversee its approved plan;

(2) The process for licensing and systematic compliance review of hemp producers;

(3) Sampling methods and laboratory testing requirements and components;

(4) Disposal of non-compliant hemp plants or hemp plant material practices, to ensure that correct reporting to the USDA has occurred;

(5) Results of and methodology used for the annual inspections of producers; and

(6) Information collection procedures and information accuracy (i.e., geospatial location, contact information reported to the USDA, legal description of land).

(c) Audit reports. (1) Audit reports will be issued to the State or Tribal government within 60 days after the audit concluded. If the audit reveals that the State or Tribal government is not in compliance with its USDA approved plan, USDA will advise the State or Indian Tribe of non-compliances and the corrective measures that must be completed to come into compliance with the regulations in this part. The USDA will require the State or Tribe to develop a corrective action plan, which will be reviewed and approved by the USDA, and the State or Tribe will be able to demonstrate its compliance with the regulations in this part through a second audit by USDA. If the State or Tribe requests USDA assistance to develop a corrective action plan in the case of a first instance of noncompliance, the State or Tribe must request this assistance not later than 30 days after the issuance of the audit report. The USDA will approve or deny the corrective action plan within 60 days of its receipt.

(2) If the USDA determines that the State or Indian Tribe is not in compliance after the second audit, the USDA may revoke its approval of the State or Tribal plan for a period not to exceed one year. USDA will not approve a State or Indian Tribe's plan until the State or Indian Tribe demonstrates upon inspection that it is in compliance with all regulations in this part.

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