(a)(1) General. The financial management system and the participant
data system of each recipient and subrecipient shall provide federally
required records and reports that are uniform in definition, accessible
to authorized Federal and State staff, and verifiable for monitoring,
reporting, audit, program management, and evaluation purposes (sections
165(a)(1) and (2), and 182).
(2) An awarding agency may review the adequacy of the financial
management system and participant data system of any recipient/
subrecipient as part of a preaward review or at any time subsequent to
award.
(b) Financial systems. Recipients and subrecipients shall ensure
that their own financial systems as well as those of their subrecipients
provide fiscal control and accounting procedures that are:
(1) In accordance with generally accepted accounting principles
applicable in each State including:
(i) Information pertaining to subgrant and contract awards,
obligations, unobligated balances, assets, liabilities, expenditures,
and income;
(ii) Effective internal controls to safeguard assets and assure
their proper use;
(iii) A comparison of actual expenditures with budgeted amounts for
each subgrant and contract;
(iv) Source documentation to support accounting records; and
(v) Proper charging of costs and cost allocation; and
(2) Sufficient to:
(i) Permit preparation of required reports;
(ii) Permit the tracing of funds to a level of expenditure adequate
to establish that funds have not been used in violation of the
applicable restrictions on the use of such funds;
(iii) As required by section 165(g), permit the tracing of program
income, potential stand-in costs and other funds that are allowable
except for funding limitations, as defined in Sec. 627.480(f) of this
part, Audits; and
(iv) Demonstrate compliance with the matching requirement of section
123(b)(2).
(c) Applicant and participant data systems. Each recipient and
subrecipient shall ensure that records are maintained:
(1) Of each applicant for whom an application has been completed and
a formal determination of eligibility or ineligibility made;
(2) Of each participant's enrollment in a JTPA-funded program in
sufficient detail to demonstrate compliance with the relevant
eligibility criteria attending a particular activity and with the
restrictions on the provision and duration of services and specific
activities imposed by the Act; and
(3) Of such participant information as may be necessary to develop
and measure the achievement of performance standards established by the
Secretary.
