[Code of Federal Regulations]
[Title 7 Volume 4]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR247.9]

[Page 373-374]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 247--COMMODITY SUPPLEMENTAL FOOD PROGRAM--Table of Contents
 
Sec. 247.9  Financial management systems.

    (a) Disclosure of expenditures. The State agency shall maintain a 
financial management system which provides accurate, current and 
complete disclosure of the financial status of the Program. This shall 
include an accounting for all property and other assets and all Program 
funds received and expended each fiscal year.
    (b) Reports. The State agency shall maintain its financial and 
donated food accounts in a manner sufficient to permit the preparation 
of the reports required in Sec. 247.13.
    (c) Record of expenditures. The State agency shall maintain records 
which adequately identify the source and use of funds expended for 
Program activities. These records shall contain, but are not limited to, 
information pertaining to authorization, receipt of funds, obligations, 
unobligated balances, assets, liabilities, outlays and income.
    (d) Payment of costs. The State agency shall implement procedures 
which ensure prompt and accurate payment of allowable costs, and ensure 
the allowability and allocation of costs in accordance with the cost 
principles and standard provisions of this part, and FMC 74-4.
    (e) Identification of obligated funds. The State agency shall 
implement procedures which accurately identify obligated Program funds 
at the time obligations are made.
    (f) Resolutions of audit findings. The State agency shall implement 
procedures which ensure timely and appropriate resolution of claims and 
other matters resulting from audit findings and recommendations.
    (g) Letters of Credit. All administrative funds made available under 
this section shall be provided to participating State agencies by means 
of issuance of Letters of Credit unless other funding arrangements are 
made with FNS. If at the end of the fiscal year, funds authorized by a 
Letter of Credit issued to any State agency exceed obligations, FNS 
shall reduce the amount of the Letter of Credit by the unobligated 
portion.
    (h) Payments. Letters of Credit shall be issued to the appropriate 
Regional Disbursing Office in favor of the State agency. The State 
agency shall obtain funds needed through presentation by designated 
officials of a payment voucher on the Letter of Credit in accordance 
with procedures prescribed by

[[Page 374]]

FNS and consistent with the U.S. Treasury Department Circular 1075.
    (i) Transfer of cash. The State agency shall have controls to 
minimize the time elapsing between receipt of Federal funds from the 
U.S. Department of Treasury and the disbursement of these funds for 
Program costs. In the Letter of Credit system, the State agency shall 
make drawdowns from the U.S. Department of Treasury's Regional 
Disbursing Office as close as possible to the time of the actual 
disbursement of funds. Advances made by the State agency to local 
agencies shall also conform to these same standards.
    (j) Local agency financial management. The State agency shall ensure 
that all local agencies develop and implement a financial management 
system consistent with the requirements prescribed by the State agency 
pursuant to the requirements of this section.

(Approved by the Office of Management and Budget under control number 
0584-0063)

[46 FR 6341, Jan. 21, 1981, as amended at 47 FR 746, Jan. 7, 1982]