Recordkeeping and Reporting Requirements

(1) Recordkeeping. The Contractor and its Subcontractors shall keep on file all data necessary to satisfy applicable reporting requirements of the Commonwealth (including EHS, OSD, the Center for Health Information and Analysis and Departments), and financial books, supporting documents, statistical records, and all other records which reflect revenues associated with and costs incurred in or allocated to any Program of services rendered under the Contract. The Contractor and its Subcontractors shall maintain records of all types of expenses and income or other funds pertaining to the Program paid to the Contractor by every source, including from each Client. Books and records shall be maintained in accordance with generally accepted accounting principles as set forth by the American Institute of Certified Public Accountants (AICPA); which for not-for-profit Contractors shall be the Industry Audit Guide for Audits of Voluntary Health and Welfare Organizations, unless otherwise provided in the UFR. In addition, personnel records shall be maintained for each employee in accordance with generally accepted accounting principles recommended by the AICPA and sufficient to meet the requirements of M.G.L. c. 151, the Fair Labor Standards Act of 1938 and contract terms. If the Contractor or a Subcontractor receives any federal funds from the Commonwealth, directly or through subcontracts, the Contractor or Subcontractor shall also keep data necessary to satisfy Federal Office of Management and Budget (OMB) Circular A-133, or successor provision and shall also maintain books and records in accordance with OMB Circular A-110 and OMB Circular A-122, or successor provisions. (2) Annual Audit. Each Contractor and Subcontractor shall, on or before the 15th day of the fifth month after the end of its fiscal year, Submit electronically to OSD a UFR or a certification of exemption, in accordance with the standards and instructions contained in the UFR. The UFR and related materials submitted by a Contractor to OSD shall be certified under pains and penalties of perjury as true, correct and accurate by a Massachusetts independent public accountant engaged by the Contractor or by an authorized signatory for the Board of Directors or officers of the corporation, the Executive Director, or Chief Financial Officer of the Contractor. (3) Other Reporting Requirements. In addition to reports required by contract, secretariats are authorized to develop and implement procedures and reporting requirements for Contractor qualification and risk management purposes. (4) Related Party Transactions. Notice of all Related Party transactions (including the relationship of the Related Party and a description of the nature and amount of the transaction) shall be made in writing to OSD and the Department(s) prior to their execution. In the case of an M.G.L. c. 71B Approved Private School Program, notification shall be given to OSD and ESE. If disclosure was made through a response to a Request for Response pursuant to 801 CMR 21.00: Procurement of Commodities or Services, within an executed contract, or through other formal means, such disclosure will satisfy the requirements of 808 CMR 1.04(4). Prior written disclosure shall not be required where the total value of transactions with a Related Party is less than $100 within the year, and shall not be required where the transaction is a gift to the Contractor from an official, administrator or manager of the Contractor. (5) Inventory of Equipment and Furnishings and Other Goods. Any Contractor in possession of Capital Items, as defined in 808 CMR 1.02 shall label, maintain and keep on file a written inventory of the property in accordance with generally accepted accounting principles. The Department may specify additional inventory requirements for Capital Items acquired with funds from the Commonwealth. Upon termination of the Contractor’s contracts with the Department, Capital Items acquired with Commonwealth funds under a capital budget shall be subject to the following disposal standards: (a) if the Department holds title, the item shall be returned to the Department or transferred to another Contractor, as directed by the Department; (b) if the Contractor holds title and the item has been fully depreciated it shall be retained by the Contractor; or (c) if the Contractor holds title and the item has not been fully depreciated, the item and its title shall be returned to the Department, or transferred to another Contractor, or the item may be retained or sold by the Contractor after paying the Commonwealth for the remaining value of the item not fully depreciated or the proceeds of the sale, as determined by the Department. (6) Requests for Additional Information. Each Contractor and Department shall Submit such additional information as OSD may require, no later than 21 Days after the date of the postmark of a written request or the date an electronic request is sent. (7) Extensions. At its discretion, OSD may in exceptional circumstances grant one extension of the filing deadline for Submission of the reporting requirements contained in 808 CMR 1.04(2) or (6). Extension requests for 808 CMR 1.04(2) must be received electronically. All requests for extensions must be received by OSD prior to the original due date. An extension is deemed to be denied if not granted in writing by OSD prior to the original due date. (8) Access and Examination of Records. A Contractor shall make available for review, inspection and audit all records relating to its operations and those of its affiliates, subsidiaries and Related Parties and shall permit timely and reasonable access to its appropriate personnel for the purpose of interview and discussion related to those records and associated policies to any contracting Department, Executive Office, OSD, the Office of the State Auditor, the Office of Attorney General, the Office of the Inspector General, the federal government or their representatives. Audit of records by OSD or Departments shall be conducted according to the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, as published by the United States General Accounting Office. (9) Field Audits and Quality Control Reviews. OSD may coordinate and conduct field audits of Contractors and quality control reviews of auditor’s reports and work papers in the possession of the Contractor or its independent auditor. OSD may photocopy work papers and related documents, as deemed necessary. (10) Audit Resolution Policy. OSD will maintain an audit resolution policy in accordance with generally accepted government auditing standards. (11) Penalties. (a) Application. OSD, Secretariats and Departments have authority to pursue remedial measures and assess penalties under the provisions of 808 CMR 1.04(11). In addition, OSD or Secretariats may require Departments or the Office of the Comptroller to take action necessary to carry out any penalty assessed by OSD or Secretariats. The availability of penalties under 808 CMR 1.04 shall not limit the Commonwealth’s rights to pursue other remedies available by law, regulation, contract or the audit resolution policy. (b) Failure to Comply with 808 CMR 1.04(1), (2), (3), (6), (8), (9) or (10). If a Contractor fails to comply with 808 CMR 1.04(1), including correction of deficiencies, 808 CMR 1.04(2), (3), (6), (7), (8), (9) or (10) in a timely manner, regardless of the stated reason, the Contractor may be subject to penalties up to and including: delay of payment, disallowance of payment of expenses relative to which documentation sufficient to meet the governmental agencies’ inspection or auditing standards is not provided, restriction on bidding for new contracts, restriction from receiving additional funds or price increases, determination that the Contractor is ineligible for the ready payment system under 815 CMR 3.00, or debarment from doing business with the State. In addition, Contractors of special education services shall be deemed ineligible for an increase to prices authorized pursuant to the provisions of 808 CMR 1.06. (c) Failure to Comply with 808 CMR 1.04(4) or (5) or 1.05. If, after a hearing, OSD finds a violation of 808 CMR 1.04(4) or (5) or 1.05, OSD may order that the contract(s) directly affected by such violation be terminated or may assess a civil penalty of not more than $2,000 or 10% of the Contractor’s annual Maximum Obligation under such contract(s), whichever is greater. If OSD determines after a hearing that a Contractor has committed repeated willful violations of 808 CMR 1.04(4) or (5) or 1.05, OSD may debar the Contractor for a period not to exceed five years.