CA BOARD OF CORRECTIONS 3 - 2005

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the project must be preserved a minimum of three years after closeout of the grant project and shall be subject at all reasonable times to inspection, examination, monitoring, copying, excerpting, transcribing, and auditing by the Board or designees. If any litigation, claim, negotiation, audit, or other action involving the records has been started before the expiration of the three-year period, the records must be retained until the completion of the action and resolution of all issues which arise from it or until the end of the regular three-year period, whichever is later. ARTICLE 7. ACCOUNTING AND AUDIT REQUIREMENTS . All funds received by the Grantee shall be deposited into separate fund accounts which identify the funds and clearly show the manner of their disposition. Grantee agrees that the audit and accounting procedures shall be in accordance with generally accepted government accounting principles and practices (see Accounting Standards and Procedures for Counties, California State Controller, Division of Local Government Fiscal Affairs) and adequate supporting documentation shall be maintained in such detail so as to provide an audit trail which will permit tracing transactions from support documentation to the accounting records to the financial reports and billings. The Grantee further agrees to the following audit requirements: A. Federal Single Audit Act If the Grantee expends $500,000 or more in a year in federal funds, Grantee. agrees to comply with the provisions pursuant to the Federal Office of Management and Budget Circular No. A-133, "Audits of States, Local Governments, and Non-Profit Organizations." Circular No. A-1'33 requires non-federal entities which meet the expenditure criteria to have either a single or program specific audit conducted for that expenditure year; B. Pre-payment Audit Prior to the deposit of grant funds into the separate account, the Board may require the Grantee to have a system audit performed by an auditor satisfactory to the Board to insure that the Grantee's accounting system meets generally accepted government accounting principles; C. Interim Audit The Board reserves the right to call for a program audit or a system audit at any time between the execution of this Grant Agreement and the completion or termination of the project. At any time, the Board may disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action determined to be not in compliance with the terms and conditions of this Grant Agreement, or take other remedies legally available; and, D. Final Audit Within 120 calendar days of the Grant Agreement end date, all Grantees must obtain and submit a final program audit to the Board. Only Grantees expending $500,000 or more in a year are authorized to use federal funds to pay the costs associated with Grantee: City of Santa Ana 70111 Exhibit A. Grant Agreement BDC #333-04