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determined by the CITY will constitute non-compliance with this Agreement. If <br />action to correct such substandard performance is not taken by the <br />SUBRECIPIENT within a reasonable period of time after being notified by the <br />CITY, contract suspension or termination procedures will be initiated. <br />X. AUDITS <br />If SUBRECIPIENT expends Federal funds in a fiscal year which equal or exceed <br />Five Hundred Thousand Dollars ($500,000) as specified in OMB Circular A-133- Revised, <br />SUBRECIPIENT shall cause an annual agency audit to be prepared at SUBRECIPIENT's <br />expense by a Certified Public Accountant (CPA) who is a member in good standing with <br />the American Institute of Certified Public Accountants (AICPA) of the California Society of <br />CPA's. The audit must be performed in accordance with Generally Accepted Auditing <br />Standards (GAAS) authorized by the AICPA and Federal laws and regulations governing <br />the programs in which it participates. Furthermore, CITY retains the authority to require <br />SUBRECIPIENT to submit a similarly prepared audit at SUBRECIPIENT's expense even <br />in instances when SUBRECIPIENT's expenditure is less than $500,000. <br />SUBRECIPIENT will be required to identify corrective action taken in response to any <br />findings identified by CPA related to their funded activity or program. <br />SUBRECIPIENT shall submit two (2) copies of such audit report, including a copy <br />of the management letter, to CITY within six (6) months of the end of each AGREEMENT <br />year in which SUBRECIPIENT has received federal funding (i.e. July 1 — June 30). <br />Failure to meet this requirement may result in CITY denying reimbursement of funds to <br />SUBRECIPIENT, as well as future funding qualification. SUBRECIPIENTS which are <br />exempt from statutory audit requirements shall maintain records which are available for <br />review by CITY or Federal officials. SUBRECIPIENT acknowledges that any and all <br />"Financial Statements" submitted to CITY pursuant to this AGREEMENT become Public <br />Records and are subject to public inspection pursuant to Sec.6250 et seq. of the <br />California Government Code. <br />XI. FEDERAL ADMINISTRATIVE REQUIREMENTS <br />A. Financial Management <br />1. Accounting Standards <br />SUBRECIPIENT agrees to comply with Office of Management and <br />Budget (hereinafter referred to as "OMB") Circular A-110 and agrees to adhere to the <br />Page 21 of 28 <br />