SECTION 31.47. Audit and Project Close-Out Standards

(a) Purpose. This section describes audit and close-out requirements for recipients of state and federal public transportation grant funds.

(b) Audit standards. Contractor audit procedures shall meet or exceed the single audit report requirement of 2 C.F.R. Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

(1) Access. The United States Secretary of Transportation, the Comptroller General of the United States, the executive director of the department, and the State Auditor, and any of their authorized representatives, shall have access to the financial and other project records at all reasonable times during the contract period and for the record retention period for the purpose of making audits, examinations, excerpts and transcripts.

(2) Documentation. The contractor shall maintain financial records, supporting documents, statistical records, and all other records of the public transportation grant.

(3) Records retention. Financial records, supporting documents, statistical records, and all other records of the public transportation grant shall be retained for a period of three years after grant closeout, with the following qualifications.

(A) Litigation. If any litigation, claim, or audit is started before the expiration of the three-year period, the records shall be retained until all litigations, claims, and audit findings involving the records have been resolved.

(B) Nonexpendable property. Records for nonexpendable property acquired with federal or state funds shall be retained for three years after its final disposition.

(C) Transfer of records. The three-year retention requirement is not applicable to the contractor when the records are transferred to or maintained by the federal or state grantor agency.

(D) Procurement records. The three-year retention requirement is not applicable to capital projects covered under §31.44(b)(3) of this chapter.

(4) Project close-outs. The contractor shall make every reasonable effort to complete all project activities and request appropriate reimbursements within the time period specified in the project agreement. Project audits shall also be completed within the specified time period and any findings resolved with all practicable speed. Upon completion of these activities, the contractor shall provide the department written notification of project close-out and the release of any unspent project balances.

Source Note: The provisions of this §31.47 adopted to be effective August 11, 1994, 19 TexReg 5880; amended to be effective April 17, 2003, 28 TexReg 3080; amended to be effective February 21, 2008, 33 TexReg 1380; amended to be effective December 6, 2017, 42 TexReg 6815