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<br />v <br />ARTICLE V <br />AUDITS, THIRD PARTY CONTRACTING, RECORDS RETENTION AND REPORTS <br />1. STATE reserves the right to conduct technical and financial audits of PROJECT work anc: <br />records when determined to be necessary or appropriate and ADMINISTERING AGENCY agrees <br />and shall require its contractors and subcontractors to agree, to cooperate with STATE by makinc; <br />all appropriate and relevant PROJECT records available for audit and copying as required b~, <br />paragraph three (3) of ARTICLE V. <br />2. ADMINISTERING AGENCY, its contractors and subcontractors shall establish and maintain ar~ <br />accounting system and records that properly accumulate and segregate incurred PROJECT cost:: <br />and matching funds by line item for the PROJECT. The accounting system of ADMINISTERING; <br />AGENCY, its contractors and all subcontractors shall conform to Generally Accepted Accountinc: <br />Principles, enable the determination of incurred costs at interim points of completion, and providE: <br />support for reimbursement payment vouchers or invoices sent to or paid by STATE. <br />3. For the purpose of determining compliance with Title 21, California Code of Regulations <br />Chapter 21, section 2500 et seq., when applicable, and other matters connected with thE: <br />performance of ADMINISTERING AGENCY's contracts with third parties, ADMINISTERING; <br />AGENCY, ADMINISTERING AGENCY's contractors and subcontractors, and STATE shall each <br />maintain and make available for inspection and audit all books, documents, papers, accountinc: <br />records, and other evidence pertaining to the performance of such contracts, including, but no <br />limited to, the costs of administering those various contracts. All of the above referenced parties: <br />shall make such AGREEMENT and PROGRAM SUPPLEMENT materials available at their <br />respective offices at all reasonable times during the entire PROJECT period and for three (3 <br />years from the date of final payment to ADMINISTERING AGENCY under any PROGRAI~~ <br />SUPPLEMENT. STATE, the California State Auditor, or any duly authorized representative o' <br />STATE or the United States, shall each have access to any books, records, and documents than <br />are pertinent to a PROJECT for audits, examinations, excerpts, and transactions anc: <br />ADMINISTERING AGENCY shall furnish copies thereof if requested. <br />4. ADMINISTERING AGENCY is required to have an audit in accordance with the Single Audit Ac' <br />of OMB Circular A-133 if it receives a total of $500,000 or more in Federal Funds in a single fiscal <br />year. The Federal Funds received under a PROGRAM SUPPLEMENT are a part of thE: <br />Catalogue of Federal Domestic Assistance (CFDA) 20.205, Highway Planning and Research. <br />5. ADMINISTERING AGENCY agrees to include all PROGRAM SUPPLEMENTS adopting thE: <br />terms of this AGREEMENT in the schedule of projects to be examined in ADMINISTERING; <br />AGENCY's annual audit and in the schedule of projects to be examined under its single audi~ <br />prepared in accordance with OMB Circular A-133. <br />6. ADMINISTERING AGENCY shall not award a construction contract over $10,000 or other <br />contracts over $25,000 (excluding professional service contracts of the type which are required tc: <br />be procured in accordance with Government Code sections 4525 (d), (e) and (f) on the basis of ~: <br />noncompetitive negotiation for work to be performed under this AGREEMENT without the prior <br />written approval of STATE. Contracts awarded by ADMINISTERING AGENCY, if intended a:: <br />local match credit, must meet the requirements set forth in this AGREEMENT regarding loca. <br />match funds. <br />Page 11 of 26 <br />