CFR > Title 20 - Employees' Benefits > CHAPTER V—EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR > PART 627—GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT > SUBPART D—Administrative Standards (§627.400 to §627.495) > 627.425—Standards for financial management and participant data systems.

627.425—Standards for financial management and participant data systems.

(a) (1) General. The financial management system and the participant data system of each recipient and subrecipient shall provide federally required records and reports that are uniform in definition, accessible to authorized Federal and State staff, and verifiable for monitoring, reporting, audit, program management, and evaluation purposes ( sections 165(a)(1) and (2), and 182 ).
(2) An awarding agency may review the adequacy of the financial management system and participant data system of any recipient/subrecipient as part of a preaward review or at any time subsequent to award.
(b) Financial systems. Recipients and subrecipients shall ensure that their own financial systems as well as those of their subrecipients provide fiscal control and accounting procedures that are:
(1) In accordance with generally accepted accounting principles applicable in each State including:
(i) Information pertaining to subgrant and contract awards, obligations, unobligated balances, assets, liabilities, expenditures, and income;
(ii) Effective internal controls to safeguard assets and assure their proper use;
(iii) A comparison of actual expenditures with budgeted amounts for each subgrant and contract;
(iv) Source documentation to support accounting records; and
(v) Proper charging of costs and cost allocation; and
(2) Sufficient to:
(i) Permit preparation of required reports;
(ii) Permit the tracing of funds to a level of expenditure adequate to establish that funds have not been used in violation of the applicable restrictions on the use of such funds;
(iii) As required by section 165(g), permit the tracing of program income, potential stand-in costs and other funds that are allowable except for funding limitations, as defined in § 627.480(f) of this part, Audits; and
(iv) Demonstrate compliance with the matching requirement of section 123(b)(2).
(c) Applicant and participant data systems. Each recipient and subrecipient shall ensure that records are maintained:
(1) Of each applicant for whom an application has been completed and a formal determination of eligibility or ineligibility made;
(2) Of each participant's enrollment in a JTPA-funded program in sufficient detail to demonstrate compliance with the relevant eligibility criteria attending a particular activity and with the restrictions on the provision and duration of services and specific activities imposed by the Act; and
(3) Of such participant information as may be necessary to develop and measure the achievement of performance standards established by the Secretary.