PURPOSE: This rule describes the requirements that the area agency shall meet in managing all funds related to programs funded in whole or in part with state or federal funds associated by the Division of Aging.

PUBLISHER’S NOTE: The publication of the full text of the material that the adopting agency has incorporated by reference in this rule would be unduly cumbersome or expensive. Therefore, the full text of that material will be made available to any interested person at both the Office of the Secretary of State and the office of the adopting agency, pursuant to section 536.031.4, RSMo. Such material will be provided at the cost established by state law.

1. (1) The area agency shall establish a system to monitor financial expenditures of grants and contracts. In order to ensure adequate monitoring, at a minimum, the area agency shall—

   1. (A) Establish written policies and procedures governing the expenditures of funds by service providers. These procedures shall provide for record maintenance by each service provider;

      1. (B) Document, through assessment re-

ports, that expenditures are made in accordance with the provisions of part 74 of Title 45 CFR;

1. (C) Monitor quarterly the financial transactions of grants and contracts;
2. (D) Assure that service providers have recorded documentation of the amount of cash and in-kind resources provided as a match; and
3. (E) Require adequate bonding of persons handling fiscal responsibilities.

1. (2) The area agency shall submit written requests for transfers according to the procedures established by the division.
2. (3) The area agency, upon request, shall provide fiscal information to the division, from area agency documentation.
3. (4) The area agency shall provide assurances that an adequate proportion of the amount allotted for supportive services (Part B) to the planning and service area will be expended for the delivery of each of the priority services. Adequate proportion shall be determined by considering the area agency budget and history for each service and current needs assessment data related to each service.
4. (5) The area agency annually shall specify in the area plan, as submitted or as amended, in detail, the amount of funds expended for each category of services during the fiscal year most recently concluded.

5. (6) Nonfederal matching requirements shall be met by the area agency on the aggregate net cost of social and nutrition services and administration under Title III. Further requirements are as follows:

   1. (A) The nonfederal match shall be in the form of allowable costs of third-party in-kind contributions;
   2. (B) The nonfederal match for administrative costs shall be no less than twenty-five percent (25%) of the net administrative cost;
   3. (C) The nonfederal match for social and nutrition services’ net costs shall be no less than fifteen percent (15%) of the net cost;
   4. (D) No less than twenty-five percent (25%) of the nonfederal match shall be in the form of allowable costs of state or local public agencies; and
   5. (E) Five percent (5%) of the net cost shall be met by allowable costs of the state and shall be included toward meeting the nonfederal matching requirements.
6. (7) The area agency shall have an organization-wide audit completed by an independent certified public accountant at least every two

7. (2) years (covering the previous two (2)-year period); however, yearly audits are recommended. Further requirements are as follows:

   1. (A) Audits shall be completed and submitted to the division no later than ninety (90) calendar days after the close of the agency’s fiscal year;
   2. (B) The area agency may request, in writing, a one (1)-month extension from the division. The request shall include the reason(s) for the extension and shall be received by the division’s auditor no later than ten (10) working days before the audit due date. The division shall approve or reject a request for extension no more than five (5) working days after receipt of the written request;

   3. (C) The criteria to be followed in auditing an area agency shall be for—

      1. 1. Governmental agencies, Office of

Management and Budget (OMB) Circular A-128 shall apply for fiscal years beginning after December 31, 1984; and

1. 2. All other agencies, the audit provi-

sions in OMB Circular A-110, Attachment F shall apply; and

1. (D) The audit shall be received by the division by the due date or the approved extended due date. Audits not in compliance with federal regulations will not be accepted.

1. (8) The area agency shall not request information or data from providers which is not pertinent to services furnished pursuant to a payment made for those services.
2. (9) The area agency shall not delegate authority to award or administer funds under Title III to other agencies. The exception may be for transportation agreements with agencies which administer programs under the Rehabilitation Act of 1973 and Titles XIX and XX of the Social Security Act to meet the common need for transportation of service recipients under the separate programs.
3. (10) Unexpended Title III B, III C-1, III C-2 funds and administrative allotments for which there are no legal obligations shall not exceed fifteen percent (15%) of each subpart’s total allotment at the end of each fiscal year.

4. (11) Program income shall be—

   1. (A) Earned gross income by an area agency from activities, part or all of the cost of which is either borne as a direct cost by a grant or counted as a direct cost toward meeting a cost-sharing or matching requirement of a grant. It includes, but is not limited to, income in the form of fees for services performed during the grant or subgrant period, proceeds from sale of tangible personal or real property, usage or rental fees and patent or copyright royalties. If income meets this definition, it shall be considered program income regardless of the method used to calculate the amount paid to the area agency;
   2. (B) Used to expand supportive and nutrition services for the elderly in the program from which it was earned;
   3. (C) Expended in the current fiscal year or following fiscal year; and
   4. (D) Documented as to the program under which income was earned and expended.

5. (12) The area agency shall submit fiscal reports to the division on an accrual accounting basis. If the area agency’s fiscal records show effective control and accountability, the agency may develop the reports through available documentation. The area agency may estimate outlays in instances where—

   1. (A) There is adequate documentation on which to develop a sound and reasonable estimate of outlays; and
   2. (B) The area agency is unable to obtain actual data in time to meet reporting deadlines.

6. (13) The area agency shall follow Title 45 CFR part 74 Administration of Grants except where inconsistent with federal statutes, regulations or other terms of a grant or when either the language of the provision itself or other text in the same subpart indicates the provision affects service provider agencies (subgrantees) and use of the term—

   1. (A) Recipient shall be taken as referring to area agencies (subgrantees); and
   2. (B) Awarding party shall be taken as referring to the division (granting agency).

7. (14) The area agency shall meet requirements concerning advancements, reimbursements or interest earned on federal funds as follows:

   1. (A) Use methods and procedures to minimize the time lapse between the transfer of funds and disbursement;
   2. (B) Not request reimbursement for the federal share of amounts withheld from contractors to ensure satisfactory completion of work until it makes those payments;
   3. (C) Expend interest earned on federal funds for allowable costs in the fiscal year in which it was earned;
   4. (D) Expend interest earned on federal funds for allowable costs of the funds which earned the interest;
   5. (E) Budget and report interest earned of federal funds, distinguishing the interest from the fund which earned the interest; and
   6. (F) Maintain documentation of compliance.
8. (15) The area agency shall submit monthly invoices for reimbursement of expenditures to the division within fifteen (15) days after the close of each fiscal month on forms prescribed by the division.

9. (16) The area agency shall meet the division’s reporting requirements for quarterly and final financial reports as follows:

   1. (A) Submit quarterly financial and program reports with the appropriate invoice;
   2. (B) Submit a final financial report to the division within ninety (90) days after the fiscal year of the grant ending; 13 CSR 15-4
   3. (C) Submit financial reports on the forms prescribed by the division; and
   4. (D) Be subject to the withholding of payments for failure to comply with reporting requirements, until such time as reports are received.

10. (17) Any cost allocation plans and indirect costs rates shall be determined in accordance with the following guidelines:

    1. (A) For governments, OMB Circular A-87, including any amendments to the circular published by the United States OMB;
    2. (B) For institutions of higher education, OMB Circular A-21 and as published in the Federal Register by OMB; and
    3. (C) For other nonprofit organizations, OMB Circular A-122.
11. (18) In order to minimize a loss of funds in the event of bank insolvency, the area agency shall not deposit contributions and federal grant funds in any one (1) bank in an amount that exceeds that bank’s maximum insured amount by the Federal Deposit Insurance Corporation (FDIC). The total deposits in one (1) bank, regardless of the number of separate accounts, shall not exceed the maximum amount insured by the FDIC. An acceptable alternative is to request the bank to pledge securities to the area agency. These securities shall act as insurance for excessive cash balances. Documentation of compliance shall be maintained by the area agency.
12. (19) Contributions shall be handled according to procedures as required for service providers in 13 CSR 15-7.010(13).

AUTHORITY: section 660.050, RSMo Supp. 1987.* This rule was previously filed as 13 CSR 15-6.200. Original rule filed Jan. 6, 1986, effective April 30, 1986. Amended: Filed Feb. 17, 1988, effective June 15, 1988. *Original authority 1984, amended 1988.