[Code of Federal Regulations]
[Title 32, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR37.615]

[Page 215-216]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE
 
PART 37_TECHNOLOGY INVESTMENT AGREEMENTS--Table of Contents
 
 Subpart F_Award Terms Affecting Participants' Financial, Property, and 
                           Purchasing Systems
 
Sec.  37.615  What standards do I include for financial systems of for-profit firms?

    (a) To avoid causing needless changes in participants' financial 
management systems, your expenditure-based TIAs will make for-profit 
participants that currently perform under other expenditure-based 
Federal procurement contracts or assistance awards subject to the same 
standards for financial management systems that apply to those other 
awards. Therefore, if a for-profit participant has expenditure-based DoD 
assistance awards other than TIAs, your TIAs are to apply the standards 
in 32 CFR 34.11. You may grant an exception and allow a for-profit 
participant that has other expenditure-based Federal Government awards 
to use an alternative set of standards that meets the minimum criteria 
in paragraph (b) of this section, if there is a compelling programmatic 
or business reason to do so. For each case in which you grant an

[[Page 216]]

exception, you must document the reason in the award file.
    (b) For an expenditure-based TIA, you are to allow and encourage 
each for-profit participant that does not currently perform under 
expenditure-based Federal procurement contracts or assistance awards 
(other than TIAs) to use its existing financial management system as 
long as the system, as a minimum:
    (1) Complies with Generally Accepted Accounting Principles.
    (2) Effectively controls all project funds, including Federal funds 
and any required cost share. The system must have complete, accurate, 
and current records that document the sources of funds and the purposes 
for which they are disbursed. It also must have procedures for ensuring 
that project funds are used only for purposes permitted by the agreement 
(see Sec.  37.625).
    (3) Includes, if advance payments are authorized under Sec.  37.805, 
procedures to minimize the time elapsing between the payment of funds by 
the Government and the firm's disbursement of the funds for program 
purposes.