[Code of Federal Regulations]

[Title 34, Volume 1]

[Revised as of July 1, 2006]

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

[CITE: 34CFR74.21]



[Page 107-108]

 

                           TITLE 34--EDUCATION

 

PART 74_ADMINISTRATION OF GRANTS AND AGREEMENTS WITH INSTITUTIONS OF 

HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS--Table 

of Contents

 

                    Subpart C_Post-Award Requirements

 

Sec.  74.21  Standards for financial management systems.



    (a) Recipients shall relate financial data to performance data and 

develop unit cost information whenever practical.



[[Page 108]]



    (b) Recipients' financial management systems shall provide for the 

following:

    (1) Accurate, current, and complete disclosure of the financial 

results of each federally-sponsored project in accordance with the 

reporting requirements established in Sec.  74.52. If the Secretary 

requires reporting on an accrual basis from a recipient that maintains 

its records on other than an accrual basis, the recipient shall not be 

required to establish an accrual accounting system. These recipients may 

develop 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 shall contain 

information pertaining to awards, authorizations, obligations, 

unobligated balances, assets, outlays, income, and interest.

    (3) Effective control over and accountability for all funds, 

property, and other assets. Recipients shall adequately safeguard all 

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 

shall 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) Where the Federal Government guarantees or insures the repayment 

of money borrowed by the recipient, the Secretary 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 Secretary may require adequate fidelity bond coverage where 

the recipient lacks sufficient coverage to protect the Federal 

Government's interest.

    (e) Where bonds are required under paragraphs (a) and (b) of this 

section, the bonds shall 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.



(Approved by the Office of Management and Budget under control number 

1880-0513)



(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]