(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 ad

vances.

(OMB Circular No. A-102, Attachment H.)

§ 1008.405 Request for advance or reimbursement.

(a) Recipients shall submit their requests for advance payments or reimbursements 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 8 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 for nonconstruction projects.

(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.)

§ 100a.433 Performance reports for 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 progress under construction grants and contracts. Therefore, formal performance reports from recipients to supplement those sources of information will be required only if deemed necessary by the Commission

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 Provisions Act, including all accounting records and related original and supporting documents that substantiate direct and indirect costs charged to the award.

(b) Period of retention. (1) Except as provided in paragraphs (b)(2) and (d) of this section, the records specified in paragraph (a) of this section shall be retained (i) for 3 years after the date of the submission of the final expenditure report or (ii) for grants and contracts which are renewed annually, for 3 years after the date of the submission of the annual expenditure report.

(2) Records for nonexpendable personal property which was acquired with Federal funds shall be retained for 3 years after its final disposition.

(c) Microfilm copies. Recipients may substitute microfilm copies in lieu of original records in meeting the requirements of this section.

(d) Audit questions. The records involved in any claim or expenditure which has been questioned by Federal audit shall be further retained until resolution of any such audit questions: Provided, however, That records need not be retained if they relate to a grant or contract with respect to which actions by the United States to recover for diversion of Federal funds are barred by the statute of limitation in 28 U.S.C. 2415(b).

(e) Audit and examinations. (1) The Secretary and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access for the purpose of audit and examination to the records specified in paragraph (a) of this section and to any other pertinent books, documents, papers, and records of the recipient.

(2) In the case of a contract or subcontract negotiated by the recipient

and exceeding $2,500, the recipient, the Secretary, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the contractor or subcontractor which the recipient, the Secretary, the Comptroller General of the United States, or any of their duly authorized representatives determine are pertinent to the specific grant or contract for the purpose of making audit, examination, excerpts, and transcripts.

(f) Records for indirect cost rate proposals, etc.-(1) Applicability. This paragraph applies to records supporting (1) indirect cost rate proposals, (ii) cost allocation plans of State and local governments pursuant to Appendix B of this subchapter, (iii) hospital patient care rate proposals, and (iv) any similar accounting computations of the rate at which a particular group of costs is chargeable to a grant or contract. Examples of the latter are computer usage chargeback rate computations and composite fringe benefit rate computations.

(2) If submitted to the Federal Government. If the proposal, plan, or other computation is required to be submitted to the Federal Government to form the basis for negotiation of the rate, then the three-year retention period for its supporting records starts from the date of such submission.

(3) If not submitted to the Federal Government. If the proposal, plan, or other computation is not required to be submitted to the Federal Government for negotiation purposes, then the three-year retention period for its supporting records starts from the end of the recipient's fiscal year (or other accounting period) covered by the proposal, plan, or other computation.

(20 U.S.C. 1232c(a); 28 U.S.C. 2415(b); OMB Circular No. A-102, Attachment C.)

§ 100a.481 Unexpended funds.

In the event that the amounts previously awarded have not been obligated pursuant to the approved project and, in the judgment of the Commissioner, will not be obligated for such purposes, the Commissioner may, upon notice to the recipient, reduce the amount of the grant or contract to an

amount consistent with the recipient's needs pursuant to § 100a.495.

(20 U.S.C. 1232d.)

§ 100a.482 Withholding of funds.

The approval of a grant, or the entering into of a contract or other arrangement, and any payment pursuant thereto, shall not be deemed to waive the right of the Commissioner to withhold funds by reason of the failure of a recipient to observe, either before or after such administrative action, any Federal requirements.

(20 U.S.C. 1221c(b)(1).)

§ 100a.483 Waiver of law prohibited.

No official, agent, or employee of the Office of Education or the Department of Health, Education, and Welfare shall have the authority to waive or alter any provision of the regulations in this chapter (except through amendment by publication in the FEDERAL REGISTER), or other relevant statute or regulation, and no action or failure to act on the part of such official, agent, or employee shall operate in derogation of the Commissioner's right to enforcement of said provisions in accordance with their terms. (43 Dec. Comp. Gen. 31 (1963).)

§ 100a.494 Closeout.

(a) "Closeout" means the process by which the Commissioner determines that all applicable administrative actions and all required work of the grant or contract have been completed by the recipient and the Commission

er.

(b) In closing out grants and contracts, the following shall be observed:

(1) Upon request, the Commissioner will make, or arrange for, prompt payment to the recipient for allowable reimbursable costs not covered by previous payments.

(2) The recipient shall immediately refund to the Federal Government, or otherwise dispose of in accordance with instructions from the Commissioner, any unencumbered balance of cash advanced to the recipient.

(3) The recipient shall submit, within 90 days after the date of completion of the grant or contract, all fi

nancial, performance, and other reports required as a condition of the grant or contract. The Commissioner may grant extensions when requested by the recipient.

(4) The Commissioner will make a settlement for any upward or downward adjustment of the Federal share of costs, to the extent called for by applicable statutes, regulations, or the terms and conditions of the grant or contract.

(5) In the event a final audit has not been performed prior to the closeout of the grant or contract, the Commissioner retains the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.

(b) The provisions of Subpart L of this part shall be observed by the recipient in accounting for any property acquired with Federal funds, or received from the Federal Government in connection with the grant or contract.

(OMB Circular No. A-102, Attachment L.)

(a) Termination. (1) This section applies to the Federal programs of assistance listed in § 100a.10(a), except those Federal programs under which recipients are entitled to an opportunity for a hearing pursuant to 5 U.S.C. 554. (2) This section applies to contracts other than those specified in § 100a.10(b). (3) Assistance under any Federal program to which this part is applicable may be terminated in whole or in part if the Commissioner determines, after affording the recipient reasonable notice and an opportunity to be heard, that the recipient has failed to carry out its approved project proposal in accordance with the applicable law and the terms of such assist-, ance or has otherwise failed to comply with any law, regulation, assurance, term or condition applicable to the grant or contract.

(b) Notice of termination. Proceedings with respect to the termination of the grant or contract shall be initiated by the mailing of a notice to the recipient setting forth the basis of the

proposed termination and the procedures available to the recipient under this section and Part 16 of this title.

(c) Suspension of assistance. Subject to paragraph (f) of this section, assistance may be suspended during the pendency of a termination proceeding initiated pursuant to this section.

(d) Notice of suspension. If the Commissioner determines that suspension of assistance during the pendency of a termination proceeding is necessary, notice of the suspension shall be mailed to the recipient (which may be included in the notice of termination). The notice of suspension shall: (1) Inform the recipient of that determination, (2) advise the recipient of the effective date of the suspension (which will be no earlier than the date of the notice of termination) and (3) offer the recipient an opportunity to show cause why such action should not be taken.

(e) Effect of notice of suspension. (1) The notice required under paragraph (d) of this section shall advise the recipient that no new expenditures or obligations made or incurred in connection with the grant or contract during the period of the suspension will be recognized by the Government in the event that assistance is ultimately terminated.

(2) Expenditures to fulfill legally enforceable commitments made prior to the notice of suspension, in good faith and in accordance with the recipient's approved project, and not in anticipation of suspension or termination, will not be considered new expenditures.

(f) Opportunity to show cause. If the recipient requests an opportunity to show cause why a suspension of assistance should not be continued or imposed, the Commissioner will, within 7 days after receiving such request, hold an informal meeting for that purpose.

(g) Grant appeals board. (1) The recipient may appeal the Government's decision to terminate the grant or contract by submitting an application for review to the Departmental Grant Appeals Board pursuant to Part 16 of this title. (2) Either the recipient or the Commissioner may request an informal meeting regarding the proposed termination, but for the purposes of § 16.5(b)(2) of this title, the