Performance/Financial Management and Reporting.

1. Purpose. This section generally covers accounting, records, and reporting requirements. The State shall require all project sponsors to adopt the standards herein.

2. Financial responsibility. The State shall be responsible for the financial management of approved projects. Appropriate internal controls must, therefore, be adopted and installed to insure that the project is accomplished in the most efficient and economical manner.

3. Standards for grantee financial management systems. State and local government systems for the financial management of LWCF assisted activities shall be in accordance with 43 CFR 12 (OMB Circular A-102), and provide for:

LWCF State Assistance Program Manual Effective 10/01/2008 Chapter 7-8 b. records which identify adequately the source and application of funds for grant-

supported activities. These records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income;

c. effective control over and accountability for all funds, property, and other assets. The grantee shall adequately safe-guard all such assets and shall assure they are used solely for authorized purposes;

d. procedures for determining allowable and allocable costs in accordance with the provisions of OMB Circular A-87 and these regulations;

e. accounting records that are supported by source documentation. Separate project

accounts shall be established and identified by the number assigned to the project by the NPS;

f. Audits to be made by the State in accordance with OMB Circular A-133 to determine, at a minimum, the fiscal integrity of financial transactions and reports, and compliance with laws, regulations, and administrative requirements. The State will schedule such audits with the required frequency, usually annually, but not less frequently than once every two years, considering the nature, size, and complexity of the activity; and

g. a systematic method to assure timely and appropriate resolution of audit findings and recommendations.

The State shall require all project sponsors to adopt all of the above standards.

4. Monitoring and reporting of financial and program performance. In accordance with 43 CFR Part 12 (Uniform Administrative Requirements for Grants and Cooperative

Agreements to State and Local Governments), the following sets forth the procedures for monitoring and reporting financial and program performance.

a. States shall constantly monitor the financial and program performance of approved projects to assure time schedules are being met, projected work units by time periods are being accomplished, and financial targets and other performance goals are being

achieved.

b. For LWCF reporting purposes, performance and financial reporting for all active grants shall be accomplished by States in response to the NPS annual call for performance/ financial information. NPS will incorporate the state performance/financial information into one consolidated report for the entire LWCF State Assistance Program. Sufficient space will be provided on the listing of projects for the State to briefly report financial and performance status for each active grant. The NPS shall notify States of the information needed, reporting format and due dates. At a minimum, the report shall include:

LWCF State Assistance Program Manual Effective 10/01/2008 Chapter 7-9 (1) the status of the work required under the project scope including the percent of

work completed and percentage of costs billed and whether the project will meet established target dates for completion;

(2) other pertinent information including, when appropriate, an analysis and explanation of cost overruns, time schedule delays and other similar problems encountered and their expected impact on the project; and

(3) a certification by the SLO noting the information is correct and complete, and all expenditures are for the purposes set forth in the grant agreement/amendment c. If any performance review conducted by the State discloses the need for change in the

Project Agreement, the State shall submit a request for an amendment at least 30 days prior to the project expiration date.

d. The NPS shall make site visits as frequently as practicable on a spot check basis to: (1) review project accomplishments and management control systems, and

(2) to provide technical assistance as may be required.

5. Financial reporting. All recipients must comply with the reporting requirements as set forth in this section and in 43 CFR 12 as appropriate.

6. Retention and custodial requirements for records. In accordance with 43 CFR Part 12, the following policies will apply to records maintenance:

a. Financial records, supporting documents, statistical records, and all other records pertinent to a grant program shall be retained for a period of three years after final payment on a project. The records shall be retained beyond the 3 year period if audit findings have not been resolved.

b. State and local governments are authorized to substitute electronic copies in lieu of original records.

c. The Secretary of the Interior and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the state and local governments and their subgrantee that are pertinent to a specific project for the purpose of making audits, examinations, excerpts and

transcripts.

d. The NPS shall submit, after project closeout and scanning, all copies of significant maps and records to the Federal Archives Record Center for retention into perpetuity and for compliance with Section 6(f)(3) of the LWCF Act

LWCF State Assistance Program Manual Effective 10/01/2008 Chapter 7-10

E. Payments

1. General. Grant payments will be made to States in a manner that minimizes the time elapsing between the disbursement by the State and the transfer of funds from the U.S. Treasury, whether such disbursement occurs prior to or subsequent to the transfer of funds. Grant payments are made through electronic fund transfer (EFT).

2. Monitoring electronic payments. Electronic Fund Transfer (currently SMARTLINK) is the required method of payment for States. Upon completion of an electronic payment on a given date, the State must concurrently (within 24 hours) submit a completed “LWCF Record of Electronic Payment” form to NPS Accounting Operations Division and copy the applicable NPS Office at the same time. Failure to adhere to this requirement will result in removing the State from SMARTLINK and placement on a “request for reimbursement” process through the NPS.

F. Audits

1. Purpose. Recipients must comply with the audit provisions of the Single Audit Act of 1984 (P.L. 98-502), and OMB Circular A-133, "Audit Requirements for State and Local

Governments". These requirements have been incorporated into Department of Interior regulations at 43 CFR Part 12, Subpart F. In accordance with Circular A-133, required audits shall be submitted to the federal audit clearinghouse within the earlier of 30 days after receipt of the auditor’s report or no later than nine months following the end of the State’s fiscal year.

2. Exceptions. An audit exception is a determination by an appropriate authority that an item questioned by the auditor is not properly chargeable to the project agreement and should be disallowed. The NPS determines the allowance or disallowance of items questioned by the auditor. The NPS will be responsible for the review of audit reports received from

cognizant federal agencies and/or the Office of the Inspector General (OIG), Department of the Interior pertaining to LWCF grants. Each Regional Director will be responsible for advising the States of the audit findings, together with recommendations and suggestions for overcoming the deficiencies disclosed by the audit, and also advise the State of the

disallowance of any items.

The Departmental Manual [360 and 361 DM 7.3] requires the State must formally respond to the OIG, through the Director of NPS, concerning audit exceptions within 90 days of the issuance of the audit report. This initial response should include:

a. whether there is agreement with the audit findings and recommendations. If there is non- concurrence, the specific reasons must be stated, and

b. recommendations or support documentation for corrective action (resolution) of the audit exceptions.

LWCF State Assistance Program Manual Effective 10/01/2008 Chapter 7-11 All audit exceptions must be fully resolved within six (6) months of the issuance of the audit report. If resolution of an audit exception indicates the need for reimbursement of the federal share, then such reimbursement must be made within 60 days after such resolution. After the six (6) month period from the date of issuance of the audit report, unresolved audit exceptions will be disallowed and reimbursement of the federal share must be made within sixty (60) days. Reimbursement of the federal share may be accomplished by electronic fund transfer.