[Code of Federal Regulations]

[Title 7, Volume 4]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 7CFR246.17]



[Page 388-389]

 

                          TITLE 7--AGRICULTURE

 

    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE

 

PART 246_SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND 

CHILDREN--Table of Contents

 

                    Subpart E_State Agency Provisions

 

Sec. 246.17  Closeout procedures.



    (a) General. State agencies shall submit preliminary and final 

closeout reports for each fiscal year. All obligations shall be 

liquidated before closure of a fiscal year grant. Obligations shall be 

reported for the fiscal year in which they occur.

    (b) Fiscal year closeout reports. State agencies--

    (1) Shall submit to FNS, within 30 days after the end of the fiscal 

year, preliminary financial reports which show cumulative actual 

expenditures and obligations for the fiscal year, or part thereof, for 

which Program funds were made available;

    (2) Shall submit to FNS, within 150 days after the end of the fiscal 

year, final fiscal year closeout reports;

    (3) May submit revised closeout reports. FNS will reimburse State 

agencies for additional costs claimed in a revised closeout report up to 

the State's original grant level, if costs are properly justified and if 

funds are available for the fiscal year pertaining to the request. FNS 

will not be responsible for reimbursing State agencies for unreported 

expenditures later than one year after the end of the fiscal year in 

which they were incurred.

    (c) Grant closeout procedures. When grants to State agencies are 

terminated, the following procedures shall be performed in accordance 

with 7 CFR part 3016.

    (1) FNS may disqualify a State agency's participation under the 

Program, in whole or in part, or take such remedies as may be legal and 

appropriate, whenever FNS determines that the State agency failed to 

comply with the conditions prescribed in this part, in its Federal-State 

Agreement, or in FNS guidelines and instructions. FNS will promptly 

notify the State agency in writing of the disqualification together with 

the effective date. A State



[[Page 389]]



agency shall disqualify a local agency by written notice whenever it is 

determined by FNS or the State agency that the local agency has failed 

to comply with the requirements of the Program.

    (2) FNS or the State agency may disqualify the State agency or 

restrict its participation in the Program when both parties agree that 

continuation under the Program would not produce beneficial results 

commensurate with the further expenditure of funds. The State agency or 

the local agency may disqualify the local agency or restrict its 

participation in the Program under the same conditions. The two parties 

shall agree upon the conditions of disqualification, including the 

effective date thereof, and, in the case of partial disqualification, 

the portion to be disqualified.

    (3) Upon termination of a grant, the affected agency shall not incur 

new obligations for the disqualified portion after the effective date, 

and shall cancel as many outstanding obligations as possible. FNS will 

allow full credit to the State agency for the Federal share of the 

noncancellable obligations properly incurred by the State agency prior 

to disqualification, and the State agency shall do the same for the 

local agency.

    (4) A grant closeout shall not affect the retention period for, or 

Federal rights of access to, grant records as specified in Sec. 246.25. 

The closeout of a grant does not affect the State or local agency's 

responsibilities regarding property or with respect to any Program 

income for which the State or local agency is still accountable.

    (5) A final audit is not a required part of the grant closeout and 

should not be needed unless there are problems with the grant that 

require attention. If FNS considers a final audit to be necessary, it 

shall so inform OIG. OIG will be resonsible for ensuring that necessary 

final audits are performed and for any necessary coordination with other 

Federal cognizant audit agencies or the State or local auditors. Audits 

performed in accordance with Sec. 246.20 may serve as final audits 

providing such audits meet the needs of requesting agencies. If the 

grant is closed out without the audit, FNS reserves the right to 

disallow and recover an appropriate amount after fully considering any 

recommended disallowances resulting from an audit which may be conducted 

later.