Current through Reg. 49, No. 12; March 22, 2024
(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.
