Subpart O-Financial Management § 100a.300 Scope of subpart. This subpart prescribes standards for financial management systems of federally-supported activities conducted by recipients. (OMB Circular No. A-102, Attachment G.) § 100a.301 Standards. Financial management systems for grants and contracts shall provide for: (a) Accurate, current, and complete disclosure of the financial results of each grant or contract in accordance with Subpart P of this part. Except when specifically required by law, the Commissioner will not require financial reporting on the accrual basis from organizations whose records are not maintained on that basis. However, when accrual reporting is required by law, organizations whose records are not maintained on that basis will not be required to convert their accounting systems to the accrual basis; they may develop the accrual information through an analysis of the documentation on hand or on the basis of best estimates. (b) Records which identify adequately the source and application of funds for grant- or contract-supported activities. These records shall contain information pertaining to grant or contract awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income. (c) Effective control over and accountability for all grant or contract funds, and real and personal property acquired with grant or contract runds. Grantees and contractors shall adequately safeguard all such property and shall assure that it is used solely for authorized purposes. (d) Comparison of actual with budgeted amounts for each grant or contract, and, when specifically required by the performance reporting requirements of the grant or contract, relation of financial information with performance or productivity data, including the production of unit cost information. (e) Procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement by the recipient, whenever cash is advanced by the Federal Government. When advances are made by a letter-ofcredit method, the recipient shall make drawdowns from the U.S. Treasury through its commercial bank as close as possible to the time of making the disbursements. (f) Procedures for determining the allowability and allocability of costs in accordance with the applicable cost principles prescribed by Subpart G of this part. (g) Accounting records which are supported by source documentation. (h) (1) If the grantee or contractor is a State or local government, audits to be made by the State or local government or at its direction to determine, at a minimum, the fiscal integrity of grant or contract financial transactions and reports, and the compliance with the terms and conditions of the grant or contract. The grantee or contractor will schedule such audits with reasonable frequency, usually annually, but not less frequently than once every two years, considering the nature, size, and complexity of the activity. (2) Recipients other than State and local governments are encouraged, but not required, to meet the standards set forth in subparagraph (1) of this paragraph. (1) A systematic method to assure timely and appropriate resolution of audit findings and recommendations. (OMB Circular No. A-102, Attachment G.) Subpart P-Financial Reporting Requirements § 100a.400 Scope of subpart. (a) This subpart prescribes requirements for recipients to report financial information to the Commissioner and to request advances and reimbursement when a letter-of-credit method is not used, and promulgates standard forms incident thereto. (OMB Circular No. A-102, Attachment H) (b) Notwithstanding § 100a.10, this subpart shall not apply to recipients, other than State and local government recipients (if any), under the following federal programs: (1) Language development under title VI of the National Defense Education Act of 1958 (20 U.S.C. 511); (2) Special programs and projects relating to national and regional problems under section 106 of title I of the Higher Education Act of 1965 (20 U.S.C. 1005a); (3) College Library resources and library training and research under parts A and B, respectively, of title II of the Higher Education Act of 1965 (20 U.S.C. 1021, 1031); (4) Strengthening developing institutions under title III of the Higher Education Act of 1965 (20 U.S.C. 1051). (5) Special programs for students from disadvantaged backgrounds under part A-4 of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070d); (6) Cooperative education programs under title IV-D of the Higher Education Act of 1965 (20 U.S.C. 1087a); (7) Training programs for higher education personnel under Part E of the Education Professions Development Act (20 U.S.C. 1119b); (8) Financial assistance for the improvement of undergraduate instruction under title VI of the Higher Education Act of 1965 (20 U.S.C. 1121); (9) Construction of academic facilities under title VII of the Higher Education Act of 1965 (20 U.S.C. 1132a); and (10) Education programs in foreign language and area studies under section 102 (b) (6) of the Mutual Educational and Cultural Exchange Act of 1961 (22 U.S.C. 2452 (b) (6)). (20 U.S.C. 1221c(b)(1)) [39 FR 19212, May 31, 1974] As used in this subpart and in the forms identified by this subpart: "Accrued expenditures" are the charges incurred by the recipient during a given period requiring the provision of funds for: (a) Goods and other tangible property received; (b) services performed by employees, contractors, and other payees; and (c) amounts becoming owed under programs for which no current services or performance are required. "Accrued income" is the earnings during a given period which is a source of funds resulting from (a) services performed by the recipient, (b) goods and other tangible property delivered to purchasers, and (c) amounts becoming owed to the recipient for which no current services or performances are required by the recepient. "Disbursements" are payments in cash or by check. "Federal funds authorized" represents the total amount of the Federal funds authorized for obligations and establishes the ceiling for obligation of Federal funds. This amount may include any authorized carryover of unobligated funds from prior fiscal years. "In-kind contributions" represent the value of noncash contributions pro vided by the recipient or third parties. In-kind contributions may consist of charges for real property and nonexpendable personal property, and value of goods and services directly benefiting and specifically identifiable to the federally supported activity. Unless otherwise authorized by Federal legislation, charges for property purchased wholly with Federal funds, and charges based on the Federal share of the value of property purchased partly with Federal funds, may not be considered as the recipient's in-kind contributions. "Obligations" are the amounts of orders placed, contracts awarded, services received, and similar transactions during a given period, which will require payment during the same or a future period. "Outlays" represent charges made to the project or program. Outlays may be reported on a cash or accrued expenditure basis. "Program income" represents earnings by the recipient realized from the federally supported activities as a result of the grant or contract. Such earnings exclude interest income and may include, but will not be limited to, income from service fees, sale of commodities, usage or rental fees, sale of assets purchased with grant or contract funds, and royalties on patents and copyrights. Program income may be reported on a cash or accrued income basis. "Unobligated balance" is the portion of the funds authorized by the Commissioner which has not been obligated by the recipient and is determined by deducting the cumulative obligations from the funds authorized. "Unpaid obligations" represent the amount of obligations incurred by the recipient which have not been paid. (OMB Circular No. A-102, Attachment H.) § 100a.402 Authorized forms and instructions. (a) Only those forms specified in §§ 100a.403 through 100a.406, inclusive, and such supplementary or other forms as may from time to time be authorized by the Commission, may be used: (1) For obtaining financial information from recipients for federally-assisted programs, or (2) For requesting advances or reimbursements when letters of credit are not used. (b) All applicable standard instructions promulgated for use in connection with the forms specified in §§ 100a.403 through 100a.406, inclusive, shall be followed. (c) Recipients shall submit the original and two copies of the forms required pursuant to this subpart. However, the Commissioner may waive the requirement for the second copy, or both copies, when not needed. (d) The forms (with their instructions) specified in §§ 100a.403 through 100a.406, inclusive, will be available to the public upon request to the Commissioner. (OMB Circular No. A-102, Attachment H.) § 100a.403 Financial status report. (a) Form. Recipients shall use the standard Financial Status Report prescribed by Attachment H of OMB Circular No. A-102 (HEW Form 601T) to report the status of funds for all nonconstruction projects. The Commissioner may choose not to require the Financial Status Report when the Request for Advance or Reimbursement (see § 100a.405) is determined to provide adequate information to meet his needs, except that a final Financial Status Report is required at the completion of the grant or contract when the Request for Advance or Reimbursement form is used only for advances. (b) Accounting basis. Each recipient shall report outlays and program income on the same accounting basis, i.e., cash or accrued expenditure (accrual), which it used in maintaining its accounting records. The basis used by a recipient must be consistent for all grants and contracts. (c) Frequency. For research project grants and contracts, reports shall be submitted annually, and a final report shall be submitted upon completion or termination of Federal support. For all other types of grants and contracts, the Commissioner will prescribe the frequency of the report, considering the size and complexity of the particular program. However, the report will not be required more frequently than quarterly, or less frequently than annually, and a final report is required upon completion or termination of Federal support. (d) Due date. When reports are required on a quarterly or semi-annual basis, they shall be due thirty days after the end of the specified reporting period. When required on an annual basis, they shall be due ninety days after the end of the grant or contract year. Final reports shall be due ninety days after the completion or termination of Federal support. Justified requests from individual recipi- transactions. (a) Form. When funds are advanced to recipients through letters of credit or with Treasury checks, each recipient shall submit the Report of Federal Cash Transactions prescribed by Attachment H of OMB Circular No. A-102 (HEW Forms 602T, 603T). This report will be used to monitor cash advanced to recipients and to obtain disbursement or outlay information for each project from the recipients. The format of the report may be adapted as appropriate when reporting is to be accomplished with the assistance of automatic data processing equipment, provided that the information to be submitted is not changed. (b) Forecasts of Federal cash requirements. Forecasts of Federal cash requirements may be required in the "Remarks" section of the report. (c) Cash in hands of secondary recipients. When deemed necessary and feasible by the Commissioner, recipients may be required to report in the "Remarks" section of the report the amount of cash advances in excess of three days' requirements in the hands of secondary recipients, and to provide short narrative explanations of actions taken by the recipients to reduce the excess balances. (d) Frequency and due date. Recipients shall submit the Report of Federal Cash Transactions no later than fifteen working days following the end of each quarter. However, where a letter of credit authorizes advances at an annualized rate of one million dollars or more, the Commissioner may require the reports to be submitted within fifteen working days following the end of each month. (e) Waiver. The Commissioner may waive the requirement for submission of the Report of Federal Cash Transactions when a recipient's monthly advances do not exceed $10,000: Provided, That such advances are monitored through other forms authorized pursuant to this subpart, or the recipient's accounting controls are adequate to minimize excessive Federal advances. (OMB Circular No. A-102, Attachment H.) imbursement. (a) Recipients shall submit their requests for advance payments or reim bursements under nonconstruction grants or contracts and their requests for advance payments under construction grants or contracts, on the Request for Advance or Reimbursement form prescribed by Attachment H of OMB Circular No. A-102 (HEW Form 604T) when letters of credit or predetermined automatic Treasury check advance methods are not used. Additionally, the Commissioner may prescribe this form for construction grants in lieu of the Outlay Report and Request for Reimbursement for Construction Programs as specified in § 100a.406(d). (b) Recipients will be authorized to submit no less often than monthly their requests for advances or reimbursement when letters of credit or predetermined automatic Treasury check advance methods are not used. (OMB Circular No. A-102, Attachment H.) § 100a.406 Outlay report and request for reimbursement for construction projects. (a) Construction grants paid by reimbursement method. (1) Requests for reimbursement under construction grants and contracts shall be submitted on the Outlay Report and Request for Reimbursement for Construction Programs form prescribed by Attachment H of OMB Circular No. A-102. The Commissioner may, however, substitute the Request for Advance or Reimbursement form specified in § 100a.405 in lieu of this form when he determines that the former provides adequate information to meet his needs. (2) Recipients will be authorized to submit no less often than monthly their requests for reimbursement under construction grants and contracts. (b) Construction grants and contracts paid by letter of credit or Treasury check advances. (1) When a construction grant or contract is paid by letter of credit or Treasury check advances, the recipient shall report its outlays to the Commissioner using the Outlay Report and Request for Reimbursement for Construction Programs form prescribed by Attachment H of OMB Circular No. A-102. In these cases, the recipient should leave blank those items on the form which are applicable only when requesting reimbursement, i.e., items 3, 5, 10, 11t, 11u, and 11v. (2) In lieu of the certification and signatures in items 12, 12a, and 12b, the following certification, signed on behalf of the recipient by an authorized official of the recipient, shall be submitted to the Commissioner with the outlay report: I certify that to the best of my knowledge and belief the accompanying report is correct and complete and that all outlays reported therein are for the purposes set forth in the grant (contract) award documents. Information as to percentage of project completion and certification thereof by the Government representative shall be submitted independently of the outlay report at such times and by such means as may be prescribed by the Commissioner. (3) Frequency and due date of the Outlay Report and Request for Reimbursement for Construction Programs shall be governed by § 100a.403 (c) and (d). (c) Accounting basis. The accounting basis for the Outlay Report and Request for Reimbursement for Construction Programs shall be governed by § 100a.403(b). (d) Alternative forms. For construction grants and contracts paid by the reimbursement method, or by Treasury check advances based on periodic requests from the recipient, the Commissioner may substitute the Request for Advance or Reimbursement specified in § 100a.405 in lieu of the Outlay Report and Request for Reimbursement for Construction Programs. When any other payment method is used, the Commissioner may substitute the Financial Status Report specified in § 100a.403. (OMB Circular No. A-102, Attachment H.) Subpart Q-Monitoring and Reporting of Program Performance § 100a.430 Scope of subpart. This subpart sets forth the procedures for monitoring and reporting program performance. These procedures are designed to place greater reliance on recipients to manage the day-to-day operations of their federally-supported activities. (OMB Circular No. A-102, Attachment I.) § 100a.431 Monitoring by recipients. Recipients shall constantly monitor the performance under federally-supported activities to assure that adequate progress is being made towards achieving the goals of the project. This review shall be made for each function or activity of each project as set forth in the approved grant application or contract document. (OMB Circular No. A-102, Attachment I.) § 100a.432 Performance reports nonconstruction projects. for (a) Where the Commissioner determines that performance information sufficient to meet his programmatic needs will be available from continuation or renewal applications, the Commissioner will require the recipient to submit a performance report only with the final Financial Status Report (or other financial report equivalent thereto). Note that the "Application for Federal Assistance (Nonconstruction Programs" prescribed by Subpart C of this part, when used to request a continuation or renewal, provides information substantially equivalent to a performance report. (b) Except as provided in paragraph (a) of this section, grantees shall submit a performance report with each Financial Status Report (or other financial report equivalent thereto) in the frequency established by Subpart P of this part. The Commissioner will prescribe the frequency with which performance reports will be submitted with the Request for Advance or Reimbursement when that form is used in lieu of the Financial Status Report; in such cases, performance reports will be required not more frequently than quarterly, or less frequently than annually. (c) Performance reports shall include, to the extent appropriate to the particular grant or contract, a brief presentation of the following for each function or activity involved: (1) A comparison of actual accomplishments to the goals established for the period. Where the output of projects can be readily quantified, such quantitative data shall be related to cost data for computation of unit costs. (2) Reasons for slippage in those cases where established goals were not met. (3) Other pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs. (OMB Circular No. A-102, Attachment I.) construction projects. In general, the Commissioner will rely heavily on onsite technical inspection and certified percentage-of-completion data to keep himself informed as to prog ress under construction grants and con- (OMB Circular No. A-102, Attachment I.) Between the scheduled performance reporting dates, events may occur which have significant impact upon the federally-supported activity. In such cases, the recipient shall inform the Commissioner as soon as the following types of conditions become known: (a) Problems, delays, or adverse conditions which will materially impair the ability to attain the objectives of the grant or contract. This disclosure shall be accompanied by a statement of the action taken, or contemplated, and any Federal assistance needed to resolve the situation. (b) Favorable developments or events which enable meeting time schedules and goals sooner or at less cost than anticipated or producing more beneficial results than originally projected. (OMB Circular No. A-102, Attachment I.) § 100a.435 Budget revision. If any performance review conducted by the recipient discloses the need for change in the budget estimates in accordance with the criteria established in § 100a.29, the recipient shall submit a request for budget revision. (OMB Circular No. A-102, Attachment I.) Site visits will be made by representatives of the Department or the Commissioner as frequently as practicable to: (a) Review program accomplishments and management control systems; and (b) Provide such technical assistance as may be required. (OMB Circular No. A-102, Attachment I.) Subpart R-Accountability for Federal Funds § 100a.477 Retention of records. (a) Records. Each recipient shall keep intact and accessible records relating to the receipt and expenditure of Federal funds (and to the expenditure of the recipient's contribution to the cost of the project, if any) in accordance with section 434(a) of the General Education |