(a) What are the Federal requirements for State and local agencies with regard to financial management? State and local public agencies must maintain a financial management system that complies with the Federal regulations contained in part 3016 of this title, while nonprofit organizations must comply with the Federal regulations contained in part 3019 of this title. The State agency's financial management system must provide accurate, current, and complete disclosure of the financial status of the program, including an accounting of all program funds received and expended each fiscal year. The State agency must ensure that local agencies develop and implement a financial management system that allows them to meet Federal requirements.
(b) What are some of the major components of the State agency's financial management system? In addition to other requirements, the State agency's financial management system must provide for:
(1) Prompt and accurate payment of allowable costs;
(2) Timely disbursement of funds to local agencies;
(3) Timely and appropriate resolution of claims and audit findings; and
(4) Maintenance of records identifying the receipt and use of administrative funds, funds recovered as a result of claims actions, program income (as defined under Sec. 247.25(e)), and property and other assets procured with program funds.