[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR627.425]

[Page 208-209]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT--Table of Contents
 
                   Subpart D--Administrative Standards
 
Sec. 627.425  Standards for financial management and participant data systems.

    (a)(1) General. The financial management system and the participant 
data system of each recipient and subrecipient shall provide federally 
required records and reports that are uniform in definition, accessible 
to authorized Federal and State staff, and verifiable for monitoring, 
reporting, audit, program management, and evaluation purposes (sections 
165(a)(1) and (2), and 182).
    (2) An awarding agency may review the adequacy of the financial 
management system and participant data system of any recipient/
subrecipient as

[[Page 209]]

part of a preaward review or at any time subsequent to award.
    (b) Financial systems. Recipients and subrecipients shall ensure 
that their own financial systems as well as those of their subrecipients 
provide fiscal control and accounting procedures that are:
    (1) In accordance with generally accepted accounting principles 
applicable in each State including:
    (i) Information pertaining to subgrant and contract awards, 
obligations, unobligated balances, assets, liabilities, expenditures, 
and income;
    (ii) Effective internal controls to safeguard assets and assure 
their proper use;
    (iii) A comparison of actual expenditures with budgeted amounts for 
each subgrant and contract;
    (iv) Source documentation to support accounting records; and
    (v) Proper charging of costs and cost allocation; and
    (2) Sufficient to:
    (i) Permit preparation of required reports;
    (ii) Permit the tracing of funds to a level of expenditure adequate 
to establish that funds have not been used in violation of the 
applicable restrictions on the use of such funds;
    (iii) As required by section 165(g), permit the tracing of program 
income, potential stand-in costs and other funds that are allowable 
except for funding limitations, as defined in Sec. 627.480(f) of this 
part, Audits; and
    (iv) Demonstrate compliance with the matching requirement of section 
123(b)(2).
    (c) Applicant and participant data systems. Each recipient and 
subrecipient shall ensure that records are maintained:
    (1) Of each applicant for whom an application has been completed and 
a formal determination of eligibility or ineligibility made;
    (2) Of each participant's enrollment in a JTPA-funded program in 
sufficient detail to demonstrate compliance with the relevant 
eligibility criteria attending a particular activity and with the 
restrictions on the provision and duration of services and specific 
activities imposed by the Act; and
    (3) Of such participant information as may be necessary to develop 
and measure the achievement of performance standards established by the 
Secretary.