External Closeout Audit Report

MnDOT Policy #FM003
Revised: June 25, 2025

Please go to the MnDOT Org Chart to find specific contact information: Org Chart.

Responsible Senior Officer: Deputy Commissioner/Chief Administrative Officer
Policy Owner: Director, Office of Audit
Policy Contact: External Audit Manager, Office of Audit

Policy statement

The Office of Audit performs closeout audits in compliance with the Generally Accepted Government Auditing Standards (GAGAS) promulgated by the United States Government Accountability Office at the close of contracts and grant agreements. The Office of Audit issues reports to Minnesota Department of Transportation (MnDOT) Requesting Offices to communicate the results of its audits.

Closeout audits are an integral safeguard against overpayments; payments for unallowable costs; misuse of funds; noncompliance with federal, state, and contractual requirements; and reputational risk. Closeout audits inform MnDOT about the accuracy, completeness, and compliance of its payments to other entities.

MnDOT management must follow the External Closeout Audit Report Procedures, published by the Office of Audit, to:

Submit contracts and grant agreements to be audited by the Office of Audit
Receive and communicate the External Closeout Audit results
Assist in timely resolving rebuttals, if applicable

Reason for policy

The purpose of this policy and associated procedures is to:

Provide Requesting Offices reasonable assurance that their payments to external entities are accurate and complete and comply with federal, state, and contractual requirements;
Establish procedures for responding to External Closeout Audit Reports;
Assure consistency in rebuttals;
Assure offices and districts communicate rebuttals and administrative adjustment decisions to the Office of Audit;
Maintain integrity of audits; and
Assure compliance with GAGAS and all applicable federal and state laws and regulations.

Applicability

All MnDOT employees must comply with this policy.

Key stakeholders with responsibilities under this policy include:

Office of Audit
Requesting Offices
Deputy Commissioners

Exclusions

This policy and the External Closeout Audit Procedures are not applicable to:

Contracts and grant agreements under the thresholds provided in the External Closeout Audit Report Procedures; and
Closeout reviews that the Office of Audit conducts of transit grant recipients that include in-person observations of facilities and selected procedures.

Definitions

Audit

For the purposes of this policy, “audit” is a blanket term used to describe examination, review, and non-attest services provided by the Office of Audit that results in an External Closeout Audit Report.

Requesting Offices

MnDOT offices that administer contracts and grant agreements. The Requesting Offices are responsible for requesting an audit of contracts or grant agreements that they administer at the close of the contract or grant agreement.

Responsibilities

Office of Audit

Perform audits at the closeout of contracts and grant agreements in compliance with the GAGAS.
Provide External Closeout Audit Reports to the MnDOT office that requested the audit.
Review rebuttal requests, work with the Requesting Office to resolve the rebuttal and make and communicate final recommendations.
Receive and file notification of administrative adjustments from the Requesting Office.
Finalize and close audit according to the External Closeout Audit Report Procedures.

Requesting Office

Submit a request for audit at the closeout of contracts and grants agreement according to the External Closeout Audit Report Procedures.
Receive, review, and communicate to the consultant or grantee the External Closeout Audit results provided by the Office of Audit.
If applicable, request a rebuttal to the External Closeout Audit Report within 60 calendar days.
Notify the Office of Audit of administrative adjustments that the requesting office made.
Work with the appropriate office to pay or bill the consultant or grantee the balance due to align with audit results.

Deputy Commissioners

Work with the Office of Audit and Requesting Office to resolve any outstanding disagreements after completing the rebuttal process.

Policy Owner (Director, Office of Audit)

Review policy every two years, or sooner as necessary, to ensure policy remains up to date.
Ensure procedures and other documents associated with the policy remain current.
Monitor state, federal, enterprise, agency, or other requirements that apply to the policy or procedures.
Consult with the Office of Chief Counsel to ensure the policy and procedures remain compliant with all state, federal, enterprise, agency, or other requirements.
Obtain necessary approvals from state or federal agencies before implementing changes to the policy or procedures.
Work with the Policy Coordinator to revise the policy and/or confirm its accuracy.
Communicate policy revisions, reviews, and retirements to stakeholders.

Resources and related information

Processes, Procedures, and Instructions

External Closeout Audit Report Procedures
Office of Audit Final Audit Checklist

Resources

Generally Accepted Government Auditing Standards(GAGAS)
Federal Agency Regulations, Subpart 1.3 Agency Acquisition Regulations (1.301 Policy)
Business Data Catalog (BDC) – accessible from employee Intranet
MnDOT’s Policy Website

History and updates

Adopted

January 7, 2013 (Audit Certificates Policy #FM013)

Superseded

Guideline 2.81-1-G1A – Audit Certificates (11-23-1992)
Guideline 2.82-1A-G2A – Audit Section Follow-up (11-23-1992)
Guideline 2.84-3-G3A – Audit Section External Audit Certificates (11-23-1992)
Procedure 2.82-1A – Contract Administrator Final Audit Certificates (11-23-1992)
Procedure 2.84-P2A – Audit Section Follow-up (11-23-1992)
Procedures 2.84-3-P2A – Audit Follow-up Procedures (5-2-1984)

Revised

First Revision: June 25, 2025

Policy Review

This policy's next scheduled review is due June 2027.