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representatives to inspect all work, materials, payrolls, and other data and ,records with regard <br />to the Project, and to audit the books, records, and accounts of the Contractor pertaining to the <br />Project. The Department shall reserve the right to reject any and all materials and workmanship <br />for defects and incompatibility with Project Description or excessive cost. The Department shall <br />notify the Contractor, in writing, if materials and/or workmanship are found to be unacceptable. <br />The Contractor shall have ninety (90) days from notification to correct defects or to provide <br />acceptable materials and/or workmanship. Failure by the Contractor to provide acceptable <br />materials and/or workmanship, or to correct noted defects, shall constitute a breach of contract. <br />d. Proiect Closeout. The Contractor agrees that Project closeout does not alter <br />the reporting and record retention requirements of this Section 6 of this Agreement. <br />Section 7. Proiect Completion Audit Settlement, and Closeout. <br />a. Proiect Completion. Within ninety (90) calendar days following Project <br />completion, the end of the Project's period of pertormance, or termination by the Department, <br />the Contractor agrees to submit a final reimbursement request to the Department for eligible <br />Project expenses. <br />b. Financial Reporting and Audit Requirements. In accordance with OMB <br />Circular A-133, "Audits of State, Local Governments and Non-Prot•tt Organizations," revised on <br />June 27, 2003, and N.C.G.S. 159-34, the Contractor shall have its accounts audited as soon as <br />possible after the close of each fiscal year by an independent auditor. The Contractor agrees to <br />submit the required number of copies of the audit reporting package to the Local Government <br />Commission four months after the Contractor's fiscal year-end. <br />c: Audit Costs. Unless prohibited by law,. the costs of audits made in <br />accordance with the provisions of OMB Circular A-133 are allowable charges to State awards. <br />The charges may be considered a direct cost or an allocated indirect cost, as determined in <br />accordance with cost principles outlined in OMB Circular A-87 "Cost Principles for State, Local, <br />07-SC-056 Page 17 of 59 <br />Orange County <br />