[Code of Federal Regulations]
[Title 20, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR435.21]

[Page 1111]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
               CHAPTER III--SOCIAL SECURITY ADMINISTRATION
 
  PART 435_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS 
 
                    Subpart C_Post-Award Requirements
 
Sec. 435.21  Standards for financial management systems.

    (a) Introduction. SSA requires recipients to relate financial data 
to performance data and develop unit cost information whenever 
practical.
    (b) Basic requirements. 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. 435.52. If SSA 
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) (Public Law 101-453; 31 
U.S.C. 6501) 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) Bonding and insurance requirements. Where the Federal Government 
guarantees or insures the repayment of money borrowed by the recipient, 
SSA, 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) Fidelity bond coverage requirements. SSA may require adequate 
fidelity bond coverage where the recipient lacks sufficient coverage to 
protect the Federal Government's interest.
    (e) Obtaining bonds. Where bonds are required in the situations 
described in paragraphs (c) and (d) of this section, 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.''