SECTION 27.55. Financial Assistance Agreement

(a) Executive Director. The executive director will negotiate the terms of agreements deemed necessary to comply with any requirements of preliminary approval, to protect the public's safety, and to prudently provide for the protection of public funds while furthering the purposes of this subchapter. These agreements shall include, but not be limited to, terms provided for in this section, as applicable to a particular project. The department shall provide in an agreement such assurances as are reasonably and customarily required by the requestor that are necessary for the purpose of obtaining financial assistance for, developing, or operating a particular project, provided that such assurances are, in the department's reasonable judgment, consistent with the provisions of the agreement.

(b) Performance of work.

(1) The requestor shall comply with applicable state and federal law, and with all terms and conditions of any agreements. If approval or concurrence of the Federal Highway Administration, the Federal Transit Administration, or any other federal agency is required, the department may require that the requestor seek approval or concurrence through the department. Upon request and, to the extent applicable and permitted by federal law, after reasonable advance notice and opportunity to cure from the department, the requestor shall reimburse the department for any federal funds that are applied by the requestor to pay costs not incurred in conformity with applicable state and federal law.

(2) The requestor shall maintain its books and records in accordance with generally accepted accounting principles in the United States, as promulgated by the Governmental Accounting Standards Board, the Financial Accounting Standards Board, or pursuant to applicable federal or state laws or regulations, and with all other applicable federal and state requirements, subject to any exceptions required by existing bond indentures of the requestor that are applicable to the project, and any exceptions the requestor has historically implemented that have been acceptable to the public debt markets.

(3) The requestor shall, at the requestor's cost, have a full audit performed annually of its books and records by an independent certified public accountant selected by the requestor and reasonably acceptable to the department. The audit must be conducted in accordance with generally accepted auditing standards promulgated by the Financial Accounting Standards Board, the Governmental Accounting Standards Board, or the standards of the Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-profit Organizations, as applicable, and with all other applicable federal and state requirements. The requestor shall cause the auditor to provide a full copy of the audit report and any other management letters or auditor's comments directly to the department within a reasonable period of time after they have been provided to the governing body of the requestor.

(4) The requestor shall retain all work papers and reports for a minimum of four years from the date of the audit report, unless the department notifies the requestor in writing to extend the retention period. If requested by the department, audit work papers shall be made available to the department, within 30 days of request, at any time during the retention period.

(5) The requestor shall retain all original project files, records, accounts, and supporting documents until project completion or until all financial assistance under this subchapter has been repaid, if applicable, or for the period of time required by applicable federal and state law, if longer, unless relieved of this requirement by the department in writing.

(6) Prior to the department assuming jurisdiction of the project, if applicable, the requestor shall ensure that the project, including all its components and appurtenances, is in a condition that complies with §27.57 of this subchapter. All design data, surveys, construction plans, right of way maps, utility permits, and agreements with other entities relating to the project shall be transferred to the department once the department assumes jurisdiction of the project. This paragraph applies to projects that will become a part of the state highway system.

Source Note: The provisions of this §27.55 adopted to be effective August 15, 2002, 27 TexReg 7178; amended to be effective May 16, 2018, 43 TexReg 3122