[Code of Federal Regulations]
[Title 28, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 28CFR70.21]

[Page 263]
 
                    TITLE 28--JUDICIAL ADMINISTRATION
 
              CHAPTER I--DEPARTMENT OF JUSTICE (Continued)
 
  PART 70--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS (INCLUDING SUBAWARDS) WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS AND OTHER NON-
PROFIT ORGANIZATIONS--Table of Contents
 
                   Subpart C--Post-Award Requirements
 
Sec. 70.21  Standards for financial management systems.

    (a) Recipients must relate financial data to performance data and 
development unit cost information whenever practical.
    (b) Recipients' financial management systems must provide for the 
following:
    (1) Accurate, current and complete disclosure of the financial 
results of each Federally-sponsored project or program in accordance 
with the reporting requirements set forth in Sec. 70.52. When the 
Department requires reporting on an accrual basis from a recipient that 
maintains its records on other than an accrual basis, the recipient will 
not be required to establish an accrual accounting system. These 
recipients may develop such accrual data for its reports on the basis of 
an analysis of the documentation on hand.
    (2) Records that identify adequately the source and application of 
funds for Federally-sponsored activities. These records must contain 
information pertaining to Federal awards, authorizations, obligations, 
unobligated balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Recipients must adequately safeguard all such 
assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the recipient from the U.S. Treasury and the 
issuance or redemption of checks, warrants or payments by other means 
for program purposes by the recipient. To the extent that the provisions 
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, 
payment methods of State agencies, instrumentalities, and fiscal agents 
must be consistent with CMIA Treasury-State Agreements or the CMIA 
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash 
from the Treasury for Advances under Federal Grant and Other Programs.''
    (6) Written procedures for determining the reasonableness, 
allocability and allowability of costs in accordance with the provisions 
of the applicable Federal cost principles and the terms and conditions 
of the award.
    (7) Accounting records including cost accounting records that are 
supported by source documentation.
    (c) The Department, at its discretion, may require adequate bonding 
and insurance if the bonding and insurance requirements of the recipient 
are not deemed adequate to protect the interest of the Federal 
Government.
    (d) The Department will require adequate fidelity bond coverage when 
the recipient lacks sufficient coverage to protect the Federal 
Government's interest.
    (e) Where bonds are required in the situations described above, the 
bonds must be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''

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