[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR246.13]

[Page 374-375]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 246_SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND 
 
                    Subpart E_State Agency Provisions
 
Sec.  246.13  Financial management system.

    (a) Disclosure of expenditures. The State agency shall maintain a 
financial management system which provides accurate, current and 
complete disclosure of the financial status of the Program. This shall 
include an accounting for all property and other assets and all Program 
funds received and expended each fiscal year.
    (b) Internal control. The State agency shall maintain effective 
control over and accountability for all Program grants and funds. The 
State agency must have effective internal controls to ensure that 
expenditures financed with Program funds are authorized and properly 
chargeable to the Program.
    (c) Record of expenditures. The State agency shall maintain records 
which adequately identify the source and use of funds expended for 
Program activities. These records shall contain, but are not limited to, 
information pertaining to authorization, receipt of funds, obligations, 
unobligated balances, assets, liabilities, outlays, and income.
    (d) Payment of costs. The State shall implement procedures which 
ensure prompt and accurate payment of allowable costs, and ensure the 
allowability and allocability of costs in accordance with the cost 
principles and standard provisions of this part, 7 CFR part 3016, and 
FNS guidelines and instructions.
    (e) Identification of obligated funds. The State agency shall 
implement procedures which accurately identify obligated Program funds 
at the time the obligations are made.
    (f) Resolution of audit findings. The State agency shall implement 
procedures which ensure timely and appropriate resolution of claims and 
other matters resulting from audit findings and recommendations.
    (g) Use of minority- and women-owned banks. Consistent with the 
national goals of expanding opportunities for minority business 
enterprises, State and local agencies are encouraged to use minority- 
and women-owned banks.
    (h) Adjustment of expenditures. The State agency must adjust 
projected expenditures to account for redeemed food instruments and for 
other changes as appropriate.
    (i) Transfer of cash. The State agency shall have controls to 
minimize the time elapsing between receipt of Federal funds from the 
U.S. Department of Treasury and the disbursements of these funds for 
Program costs. In the Letter of Credit system, the State agency shall 
make drawdowns from the U.S. Department of Treasury's Regional 
Disbursing Office as close as possible to the actual date that 
disbursement of funds is made. Advances made by the State agency to 
local

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agencies shall also conform to these same standards.
    (j) Local agency financial management. The State agency shall ensure 
that all local agencies develop and implement a financial management 
system consistent with requirements prescribed by FNS and the State 
agency pursuant to the requirements of this section.

[50 FR 6121, Feb. 13, 1985; 50 FR 8098, Feb. 28, 1985, as amended at 65 
FR 83286, Dec. 29, 2000]