| (a) The Grant Recipient is responsible for managing
the day-to-day operations of the activities supported by the Grant
Award and is accountable to Institute for the performance of the Grant
Award, including the appropriate expenditure of Grant Award funds
by all parties and all other obligations of the Grant Recipient.
(b) The Grant Recipient must maintain a sound financial
management system that provides appropriate fiscal controls and accounting
procedures to ensure accurate preparation of reports by the Grant
Contract and adequate identification of the source and application
of Grant Award funds.
(1) The Grant Recipient may use its established controls
and policies, as long as the controls and policies are consistent
with requirements described in the Institute's administrative rules,
the Grant Contract, and other applicable standards.
(2) The Grant Recipient's system of internal controls
should encompass segregation of functions, proper authorization of
transactions, proper recording of transactions, limited access to
assets, and monitoring of internal controls. The extent to which internal
controls are established is dependent upon the nature and size of
the organization involved.
(3) The Grant Recipient's accounting system must conform
to Generally Accepted Accounting Principles applicable to state and
federal grant funds and conform to the standards for financial management
set forth in the Texas Grant Management Standards (TxGMS).
(4) The Institute may review the adequacy of the financial
management system of any Grant Recipient to ensure that the system
is appropriate to fulfill the Institute's administrative rules, the
Grant Contract, and other applicable standards.
(c) The Grant Recipient shall use cash basis accounting
when reporting expenses to be reimbursed with Grant Award funds.
(1) A Grant Recipient utilizing an accrual basis of
accounting in its normal operations must present expenses on a cash
basis and reflect actual costs incurred during the payment period.
(2) A subcontractor is not required to record the adjustment
in the general ledger; the adjustment should be documented by memo
entries along with a reconciliation of the expense reported to the
Institute and the expense recorded to the general ledger.
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| Source Note: The provisions of this §703.15 adopted to be effective December 21, 2009, 34 TexReg 9213; amended to be effective March 2, 2014, 39 TexReg 1386; amended to be effective December 7, 2016, 41 TexReg 9527; amended to be effective December 8, 2022, 47 TexReg 8042 |
