community action—fiscal responsibility and accounting

community action—fiscal responsibility and accounting Sec. 209. Section 205 of the Act is amended by inserting at the end thereof (after the subsections added by section 208) the following: “(k) No funds shall be released to any public or private nonprofit agency, or combination thereof, under this section unless the grantee organization has submitted to the Director either— “(1) a statement from the appropriate public financial officer of the community or of the public agency which will maintain the accounts of the grantee, stating that such officer accepts responsibility for providing financial services adequate to insure the establishment and maintenance of an accounting system by such agency and its delegate agencies, with internal controls adequate to safeguard the assets of such agencies, check the accuracy and reliability of accounting data, promote operational efficiency and encourage adherence to prescribed management policies; or 80 Stat. 1460 “(2) an opinion from a Certified Public Accountant or a duly licensed public accountant stating that the grantee has established such an accounting system.” “(l) (1) The Director shall make or cause to be made a preliminary audit survey within 3 months after the effective date of a grant or contract with any public or private nonprofit agency, or combination (hereof, under this section to review and evaluate the adequacy of the grantee organization’s and its delegate agencies’ accounting systems and internal controls. “(2) Within 30 days of the completion of such survey, the Director shall determine on the basis of the findings and conclusions resulting from such survey whether the accounting systems of the grantee organization and its delegate agencies meet the standards set forth in subsections (k) (1) and (k) (2). If he shall determine that the standards have not been met, he shall immediately notify the grantee organization of his determination and he shall consider whether suspension of further payment of Federal funds under the subject grant is warranted. “(3) In the event of suspension of any grant funds pursuant to subsection (1) (2), the affected agency shall he given not more than six months from the date of notice of suspension in which to establish, with the advice of Office of Economic Opportunity auditors, the procedures prescribed in subsection (k). A new audit shall be performed within this period and if, by the end of this period, the Director is still unable to determine that the accounting system meets the required standards he shall terminate the contract or grant. “(m) The Director shall establish such rules and regulations as may be required to insure that public or private nonprofit agencies, or combinations thereof, maintain the standards of accounting set forth in sections 205(k) (1) and (2) during the period of any grant or contract under this section.”