[Code of Federal Regulations]
[Title 7, Volume 15]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR3015.61]

[Page 109]
 
                          TITLE 7--AGRICULTURE
 
                         CHAPTER XXX--OFFICE OF
                      THE CHIEF FINANCIAL OFFICER,
                        DEPARTMENT OF AGRICULTURE
 
PART 3015_UNIFORM FEDERAL ASSISTANCE REGULATIONS--Table of Contents
 
          Subpart H_Standards for Financial Management Systems
 
Sec. 3015.61  Financial management standards.

    The following standards shall be met by recipients and subrecipients 
in managing their financial management system.
    (a) Financial reporting. Complete, accurate, and current disclosure 
of the financial results of each USDA sponsored project or program shall 
be made in accordance with the financial reporting requirements set 
forth in the grant or subgrant. When a USDA awarding agency requires 
reporting on an accrual basis, the recipient shall not be required to 
establish an accrual accounting system, but shall develop such accrual 
data for its reports on the basis of an analysis of the documentation on 
hand.
    (b) Accounting records. The source and application of funds shall be 
readily identified by the continuous maintenance of updated records. 
Records, as such, shall contain information pertaining to grant or 
subgrant awards, authorizations, obligations, unobligated balances, 
assets, outlays, and income. When the recipient is a governmental 
entity, the records shall also contain liabilities.
    (c) Internal control. Effective control over and accountability for 
all USDA grant or subgrant funds, real and personal property assets 
shall be maintained. Recipients shall adequately safeguard all such 
property and shall ensure that it is used solely for authorized 
purposes. In cases where projects are not 100 percent Federally funded, 
recipients must have effective internal controls to assure that 
expenditures financed with Federal funds are properly chargeable to the 
grant supported project.
    (d) Budgetary control. The actual and budgeted amounts for each 
grant or subgrant shall be compared. If appropriate, or required by the 
awarding agency, financial information shall be related to performance 
and unit cost data. When unit cost data is required, estimates based on 
available documentation may be accepted whenever possible.
    (e) Advance payments. There shall be specific procedures established 
to minimize the time elapsing between the advance of Federal grant or 
subgrant funds and their subsequent disbursement by the recipient. When 
advances are made by a letter of credit method, the recipients shall 
make drawdowns as close as possible to the time of making the 
disbursements. This same procedure shall be followed by recipients who 
advance cash to subrecipients to ensure that timely fiscal transactions 
and reporting requirements are conducted.
    (f) Allowable costs. Established procedures shall be used for 
determining the reasonableness, allowability, and allocability of costs 
in accordance with the cost principles prescribed by Subpart T of this 
part and the provisions of the grant award.
    (g) Source documentation. Accounting records shall be supported by 
source documentation. These documentations include, but are not limited 
to, cancelled checks, paid bills, payrolls, contract and subgrant award 
documents.
    (h) Audit resolution. A systematic method shall be employed by each 
recipient to assure timely and appropriate resolution of audit findings 
and recommendations.

Subpart I [Reserved]