menting the legislative requirements of the Economic Opportunity Act will be found in references (3) through (6) of this subpart.

(b) Accounting for the non-federal share. (1) The Statement of CSA Grant, Form 314, shows the minimum percentage of total program expenditures which non-Federal funds must constitute in the grant period. The grantee is expected to maintain the rate of contribution of the non-Federal share so that throughout the grant period Federal funds will not be used to pay for a substantially larger percentage of project costs than the Federal funds shown on the Statement of CSA Grant constitute.

(2) It is important to note that the Federal share may never exceed either the dollar amount shown on the Statement of CSA Grant or the maximum percentage of the total program expenditures that this constitutes. The grantee must provide only sufficient non-Federal contributions so that the Federal share remains at or below the maximum percentage; however, the grantee may choose to provide additional non-Federal share, to insure a margin of safety, in the event that annual audits disallow some contributions.

(3) The non-Federal share may be provided in one program account for the entire grant or it may be spread among several program accounts. (See reference (3) to this subpart.)

(4) Non-Federal share contributions of cash shall be recorded as they occur. It is not necessary to maintain separate ledger accounts for the expenditures of grantee cash.

(5) All in-kind contributions, including those applicable to delegate agencies, must be recorded in the ledger accounts, either in separate accounts or in separate columns, as grant costs when the in-kind services or goods are performed or received. Records, including required supporting documentation, on in-kind services or goods performed or received must be established and maintained on a current basis.

(6) The non-Federal share is subject to audit, as is the Federal share.

(c) Required documentation-Volunteered services. All volunteered serv

ices claimed as non-Federal share must be substantiated by time cards or records that are signed by both the volunteer and his supervisor as is required for all other employees. Such records must show the actual hours worked and the specific duties performed. They should also indicate the basis for determining the rate of volunteer's contribution and such documentation must be available for audit.

(d) Financial assistance of Title II of the Ecomomic Opportunity Act of 1964, as amended, may be used to provide the required 10% matching share of the wages of students employed under the College Work Study Program (CWSP) who work in Community Action Programs.

[42 FR 18034, Apr. 4, 1977, as amended at 44 FR 56549, Oct. 1, 1979]

(1) OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (Attachment F).

(2) FMC 74-7, Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments. (Attachment G.)

(3) OEO Instruction 6710-02, Instruction for Defining Cost Categories.

(4) CSA Instruction 6710-7, Amending a Grant Under Title VII of the Community Services Act.

(5) CSA Instruction 6710-8, Preparing a Budget for a Title VII Grant Under the Community Services Act.

(6) CSA Instruction 6800-6, Cost Sharing and Matching (Uniform Federal Standard). (45 CFR 1050-50.)

(7) OEO Instruction 6801-1, Grantee Fiscal Responsibility and Auditing, and Changes 1 and 2 to that Instruction.

(8) OEO Instruction 6803-1a, Allowances and Reimbursements for Members of Policy Making Bodies.

(9) OEO Instruction 6803-2, Allowability of Costs Incurred to Borrow Funds.

(10) OEO Instruction 6806-01, Establishing and Maintaining Program Accounts. (11) OEO Instruction 6806-04, Accounting for Delegated or Contracted Activities.

(12) OEO Instruction 6807-1, Limitation on CAA Administrative Costs.

(13) CSA Instruction 7050-1, General Conditions Governing CSA Grants Funded

Under Titles II, III-B and VII of the EOA of 1964 as amended. (45 CFR 1067.5.)

(14) OEO Instruction 7570-1, Applying for a New Research or Demonstration Grant Under the Economic Opportunity Act.

(15) OEO Instruction 7570-2, Applying for Continuation of a Research or Demonstration Grant Under the Economic Opportunity Act.

81050.61 Standards.

(a) Following are the standards for financial management systems for grantees. (References (3) through (15) contain CSA's detailed implementing policies and procedures.) CSA will impose no additional standards on grantees unless they are specifically provided for in applicable statutes. Grantees' financial management systems will provide for the following: (1) Accurate, current and complete disclosure of each CSA sponsored project or program in accordance with the financial reporting requirements set forth in § 1050.70 (CSA Instruction 6800-8).

(2) Records that identify adequately the source and application of funds for CSA sponsored projects. These records shall contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays and income.

(3) Effective control over and accountability for all funds, property and other assets. Grantees shall adequately safeguard all such assets and shall assure that they are used solely for authorized purposes.

(4) Comparison of actual outlays with budget amounts for each grant or other agreement. Financial information should be related to performance and unit cost data.

(5) Procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement by the grantee, whenever funds are advanced by the Federal Government. When advances are made by a letter-of-credit method, the grantee shall make drawdowns as close as possible to the time of making disbursement.

[See 1050.90 (Instructions 6800-10) for letter-of-credit procedures.]

(6) Procedures for determining the reasonableness, allowability and allocability of costs in accordance with the

provisions of the applicable Federal cost principles and the terms of the grant or other agreement.

(7) Accounting records that are supported by source documentation.

(8) Examinations in the form of audits or internal audits.1 Such audits shall be made by qualified individuals who are sufficiently independent of those who authorize the expenditure of Federal funds, to produce unbiased opinions, conclusions or judgments. They shall meet the independence criteria along the lines of Chapter 3, Part 3 of the U.S. General Accounting Office publication, Standards for Audit of Governmental Organizations, Programs, Activities and Functions. These examinations are intended to ascertain the effectiveness of the financial management systems, and internal procedures that have been established to meet the terms and conditions of the agreements.

It is not intended that each agreement awarded to the grantee be examined. Generally examinations should be conducted on an organization wide basis to test the fiscal integrity of financial transactions, as well as compliance with the terms and conditions of Federal grants and other agreements. Such tests will include an appropriate sampling of Federal agreements.2 Examination will be conducted with reasonable frequency on a continuing basis or at scheduled intervals but at least annually in accordance with reference (7) and Section 243 of the Economic Opportunity Act of 1964 as amended.

(9) Audits to be made by the grantee or at his direction to determine, at a minimum, the fiscal integrity of financial transactions and reports, and the compliance with laws, regulations, and

'Applicable to private grantees only.

2 Because Section 243 of the Economic Opportunity Act of 1964, as amended, requires more frequent audits, i.e., at least annually, than that prescribed for grants funded by most other Federal agencies, the independent auditor may be requested by the grantee to examine CSA agreements only. In those cases, of course, the audit would limit his/her examination to CSA agreements and would include a sampling of CSA agreements only.

administrative

requirements. The grantee will schedule such audits annually in accordance with reference (7) and section 243 of the Economic Opportunity Act of 1964 as amended.3

(10) A systematic method to assure timely and appropriate resolution of audit findings and recommendations.

(b) Delegate agencies. Grantees shall require delegate agencies to adopt the standards in § 1050.61(a) except for the requirement in (5), regarding the use of the letter-of-credit method and that part of (1) regarding reporting forms and frequencies prescribed in § 1050.70 (CSA Instruction 6800-8).

§ 1050.62 CSA implementing policies and procedures.

(See references (3) through (15) of this subpart for CSA's implementing policies and procedures as they relate to the standards set forth in this subpart.)

(a) Accrued expenditures. Charges incurred by the grantee during a given period requiring the provision of funds for: (1) Goods and other tangible property received; (2) services performed by employees, contractors, delegate agencies, and other payees; and (3) amounts becoming owed by the grantee under programs for which no current services or performance are required by the grantee.

(b) Accrued income, The earnings during a given period which is a source of funds resulting from (1) services performed by the grantee, (2) goods and other tangible property delivered

'Applicable to public grantees only.

to purchasers, and (3) amounts becoming owed to the grantee for which no current services or performance are required by the grantee.

(c) Disbursements. Payments in cash or check.

(d) Federal funds authorized. Represents the total amount of the Federal funds (in this case CSA funds) authorized for obligations as established in the grant document. This amount shall include any authorized carryover or unobligated funds from prior fiscal or program year.

(e) In-Kind contributions. Represent the value of noncash contributions provided by (1) the grantee, (2) other public agencies and institutions, and (3) private organizations and individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically indentifiable to the grant program. When authorized by Federal legislation property purchased with Federal funds may be considered as grantee's in-kind contribution.

(f) Obligations. The amounts of orders placed, contracts and grants awarded, services received, and similar transactions during a given period, which will require payment during the same or a future period.

(g) Outlays. Represent charges made to the grant project or program. Outlays can be reported on a cash or accrued expenditure basis.

(h) Program income. Represents earnings by the grantee realized from the grant-supported activities. Such earnings exclude interest income and may include, but will not be limited to, income from services fees, sale of commodities, usage or rental fees, sale of assets purchased with grant funds, and royalties on patents and copyrights. Program income can be reported on a cash or accrued income basis.

(i) Unobligated balance. The portion of the funds authorized by CSA which has not been obligated by the grantee and is determined by deducting the cumulative obligations from the funds authorized.

(j) Unliquidated obligations. Represent the amount of obligations incurred by the grantee which have not been paid.

(k) Program year. A grantee's 12month accounting period. For Community Action Agencies this is the funding period for the principal grant that provides funds for most of the grantee's administrative costs. For other agencies funded by CSA, this is their usual 12-month accounting period which may or may not correspond with funding period of their grant(s) from CSA.

(1) Funding period. A program account funding period extends from the effective date of a new or refunding action through the termination date, or expiration of the planned number of months for which funds are provided.

(a) CSA will continue to utilize either the Letter of Credit or the predetermined monthly check issue as the two methods for making funds available to all construction and nonconstruction projects or programs. For the purpose of determining the status of those funds and to insure sound cash management on the part of grantees and delegate agencies CSA requires the submission of the following quarterly reports:

(1) Reports required. (i) Financial Status Report, SF 269 (for nonconstruction projects or programs).

(ii) Federal Cash Transactions Report, SF 272 (and 272A-Continuation Sheet, if necessary).

(iii) Outlay Report and Request for Reimbursement for Construction Programs, SF 271 (for construction programs only).

(2) Preparation of reports. Reports may be prepared on either a cash or an accrual basis with the appropriate indication on the report as to the method utilized. In the event that CSA should require all reports to be submitted on an accrual basis grantees will not be required to convert their accounting system, but shall develop such accrual information through estimates based on an analysis of documentation on hand.

(3) Submission. Reports are required within 15 working days after the end of each quarter of the grantees program year with a final report due within 90 days after the completion or

termination of the grant. Extensions to reporting dates may be approved upon request of the grantee. CSA may require monthly reports from grantees with awards of $1 million or more annually.

(b) SF 272, report of Federal cash transactions. (1) CSA will use this report to monitor cash advanced to grantees and to obtain disbursement information for each agreement from the grantees. (2) CSA requires that grantees indicate in the "remarks" section of the SF 272 report the reason(s) for having and the need for retaining a cash balance of Federal funds in excess of current operating needs. For grantees on Letter of Credit current needs will relate to the amount of time required to fully effect a draw down in order to meet daily disbursement requirements. For grantees on monthly check issue current cash needs will mean a cash balance no greater than is necessary to meet operating requirements.

(c) Additional reporting requirements. When CSA needs additional information or more frequent reports in order to comply with legislative requirements or to monitor a grantee that has failed to meet the Standard for Financial Management as defined in CSA Instruction 6800-7, CSA will, prior to making any such request, adhere to the requirements imposed by OMB Circular No. A-40.

(d) CSA has the option of shading out any line item on any report that is unnecessary for decision-making purposes.

(e) CSA will accept the identical information from grantees in machine usable format or computer printouts in lieu of prescribed formats.

(f) CSA may provide computer outputs to grantee when it will expedite or contribute to the accuracy of reporting.

(g) CSA is authorized to reproduce these forms.

§ 1050.73 CSA implementing policies and procedures.

(a) Policy. (1) If any CSA regulation prescribes policies or requirements that differ from the provisions provid

ed herein, the provisions of this subpart shall govern.

(2) All references to CSA Forms 315 and 315a in other documents will be deemed to mean SF-272 and the SF269. CSA Forms 315 and 315a will be obsolete after April 30, 1977.

(3) Quarterly financial reports which are due subsequent to April 30, 1977 will be reported on SF-269, Financial Status Report. The SF-272, Federal Transactions Report, will be submitted at the same time.

(b) General instructions. (1) These general instructions apply to the preparation of Standard Forms 269, 271, and 272. Detailed instructions for their preparation will be found on the forms themselves.

(i) How many copies to prepare. Grantees shall prepare sufficient copies of the reports for each program year to make the distribution as shown below.

(ii) Where to send reports. (A) Grantees whose grant is administered by a CSA Regional Office will send one copy to the appropriate Regional Office and one copy to the Grant Accounting Branch, Finance and Grants Management Division, CSA Headquarters, 1200 19th Street NW., Washington, DC 20506.

(B) Grantees who have CSA grants administered by both a CSA Regional Office and a Headquarters Office(s) will send one copy to the appropriate Regional Office, one copy to each funding office in the CSA Headquarters, and one copy to the Grant Accounting Branch, Finance and Grants Management Division, CSA Headquar

ters.

(C) Grants receiving funds solely from Headquarters program offices will submit one copy to each funding office and one copy to the Grant Accounting Branch, Finance and Grants Management Division, CSA Headquar

ters.

(iii) When to report. (A) Standard Forms 269, 272, (and SF 271 when required for Construction Programs) will be submitted quarterly based upon the grantee's program year. The reports are to be submitted to the appropriate CSA Office 15 working days following the end of each quarter.

(B) Grantees are required to submit a final financial report for all programs with a fixed termination date within 90 days after the termination date. In those situations where the terminated program is the grantee's only CSA-funded program, a check (payable to CSA) for the amount of the unexpended funds should accompany the report.

(iv) What to report. CSA grants are to be charged only with those costs related to Community Services Administration sponsored programs.

(v) Reporting delegate agency data. When delays do not permit reporting in time to meet the CSA grantee reporting deadlines, expenditures of the delegate agencies should be estimated by the parent organization and incorporated into the grantee quarterly Financial Status Reports. However, these amounts should be identified by an asterisk to show that they include estimates. Adjustments should be made in subsequent quarterly financial reports by netting the effects of the adjustments made into the information reported for the current report quarter; it will not be necessary to amend previously submitted financial reports except in those instances where the error reported was in a final report for a terminated program.

(vi) Amounts reported. All amounts are to be rounded to the nearest dollar. Do not report cents.

(vii) Delegate agency responsibilities. Delegate agencies are required to provide their parent organizations with all data needed to prepare quarterly financial reports which will include cash balances and expenditures of the delegate agencies.

(2) Other financial report requirements. An administrative costs report is required annually. See OEO Instruction 6807-1 for detailed procedures for completing and submitting CSA Form 315d, Administrative Costs Report.

(3) Availability of forms. Supply of referenced forms are available upon written request to: CSA Publications and Distribution Center, 5458 3rd Street NE., Washington, DC 20001.