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County of Orange <br />OC Community Resources <br />MA-012-25010265 <br />Regional Workforce Training Services <br />Page 28 of 54 <br /> <br /> <br />5. Fiscal Accountability <br />A. Subrecipient shall establish and maintain a sound financial management system, based upon generally <br />accepted accounting principles. Subrecipient’s system shall provide fiscal control and accounting <br />procedures that will include the following: <br />1. Information pertaining to sub-grant and Contract awards, obligations, unobligated balances, <br />assets, expenditures, and income; <br />2. Effective internal controls to safeguard assets and assure their proper use; <br />3. A comparison of actual expenditures with budgeted amounts for each sub grant and Contract; <br />4. Source documentation to support accounting records; and <br />5. Proper charging of costs and cost allocation. <br />B. Subrecipient’s Records. Subrecipient’s records shall be sufficient to: <br />1. Permit preparation of required reports; <br />2. Permit tracking of funds to a level of expenditure adequate to establish that funds have not been <br />used in violation of the applicable restrictions on the use of such funds; <br />3. Permit the tracking of program income earned, and any costs incurred (such as stand-in costs) <br />that are otherwise allowable except for funding limitation; and <br />4. Permit tracking and reporting of leveraging as required by SB734. <br />C. Costs Charged. Cost shall be charged to this Contract only in accordance with the following: <br />a. The WIOA; <br />b. 20 CFR Part 683; <br />c. State implementing legislation; and <br />d. Requirements of Other Funding Sources <br /> <br /> <br />6. Indirect Costs <br />Administrative Costs and Indirect Cost Rates (IDCR) are classified as Indirect Costs by the Parties. The <br />IDCR and Administrative Cost Cap are distinct Indirect Costs. The County of Orange reserves the right to <br />cap the Administrative Costs at 10%. The Subrecipient’s IDCR for the year 2024 is 15.92%. Once the <br />Subrecipient reaches the 10% Total Indirect Contract Maximum Administrative Cost Cap, Subrecipient <br />cannot claim reimbursement any administrative cost exceeding the Administrative Cost Cap of 10% of <br />the total contract amount or expenditures, whichever is less. <br />7. Dissolution of Entity <br />Subrecipient shall notify County immediately of any intention to discontinue its existence or bring an <br />action for dissolution. <br /> <br /> <br />EXHIBIT 1