California Code of Regulations
Title 4 - Business Regulations
Division 15 - California School Finance Authority
Article 2 - 2004 and 2009 State Charter School Facilities Incentive Grants Programs
Section 10190 - Audits and Conflicts of Interest

(a) The Authority and/or the Bureau of State Audits may conduct or require periodic audits to ensure subgrantees are using grant funds consistent with the requirements and the terms of the Program, the State Charter School Facilities Incentive Grant, and this article as approved. Subgrantees shall retain all documentation and financial data necessary to substantiate the purposes for which the grant funds were spent for a period of three years after the certification of completion of the project has been submitted or three years after the end of the funding period, whichever is longer.

(b) Subgrantees must avoid apparent and actual conflicts of interest when administering grants from the U.S. Department of Education. Department regulations at 34 CFR 75.525(a) prohibit a person from participating in an administrative decision regarding a project if (a) the decision is likely to benefit that person or his or her immediate family members; and (b) the person is a public official or has a family or business relationship with the subgrantee. Section 75.525(b) provides further that a subgrantee may not permit any person participating in a project to use his or her position for a purpose that is -- or gives the appearance of being -- motivated by a desire for a private or financial gain for that person or for others.

(c) When using federal funds to enter into a contract, a State or local entity receiving a grant must comply with 34 CFR 80.36 . These standards require federal grant subgrantees to develop written procurement procedures and to conduct all procurement transactions in a manner that provides, to the maximum extent possible, open and free competition. No employee, officer, or agent of the subgrantee may participate in the selection, award, or administration of any contract supported by federal funds if a real or apparent conflict of interest exists.

(d) When these funds are used for construction-related activities, such as constructing a school building, renovating an existing owned school facility, or making leasehold improvements, contractors or subcontractors on the projects assisted with these federal funds must be in compliance with Davis-Bacon and Related Acts. (40 U.S.C. § 3141, et seq.; 29 U.S.C. § 201, et seq.; 40 U.S.C. § 3701, et seq.; 40 U.S.C. § 3145; and 18 U.S.C. § 874.)

(e) The Authority reserves the right to conduct site visits to any charter school facility or project receiving a grant pursuant to this Article.