2014-206 Health - NC Dept. of Health and Human Services Division of Public Health - FY 2015 Consolidated Agreement

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Consolidated Agreement FYI Page 15 of 28 The State may withhold payment to the Department until the State can determine whether the Department is entitled to further payment or whether the State is entitled to a refund. K. COMPLIANCE 1. The State shall respond to non-compliance with all terms of this agreement as follows: a. Upon determination of non-compliance, the State shall give the Department 60 days written notice to come into compliance. If the deficiency is corrected, the Department shall submit a written report to the State that sets forth the corrective action taken. b. If the above deficiencies should not be corrected to the satisfaction of the State after the 60-day period, disbursement of funds for the particular activity may be temporarily suspended pending negotiation of a plan of corrective action. c. If the deficiency is still not corrected within the next 30 days following temporary suspension of funding, program funds may be permanently suspended until the Department can provide evidence that the deficiencies have been corrected. "d. In the event of the Department's non-compliance with clauses of this Agreement, the State may cancel, terminate, or suspend this agreement in whole or in part and the Department may be declared ineligible for further State contracts or agreements. Such terminations for non- compliance shall not occur until (1)the provisions of Section K.1.a through K.1.c have been followed, documented, and have failed to provide a resolution, and (2) all other reasonable administrative remedies have been exhausted. 2. Monitoring—OMB Circular A-133 (Audits of States, Local Government, and Non-Profit Organizations) as revised on June 27, 2003 requires that pass-through entities monitor the activities of their subcontractors as necessary to ensure that federal awards are used for authorized purposes in compliance with laws, regulations and the provision of contracts or grant agreements and that performance goals are achieved. North Carolina establishes comparable monitoring requirements for State funds received by subrecipients in N.C.G.S.158-34,Annual independent audit. rules and regulations, for local units of government. Also, the State must perform monitoring as required in the DHHS Policy and Procedure Manual entitled"Monitoring of Programs" dated August 1, 2002 and its Monitoring Plan dated January 2006. Additionally, the Department is required under Circular A-133, N.C.G.S.143-6.2 and N.C.G.S.159- 34 to perform monitoring of its subrecipients and to maintain records to support such monitoring activities and results. Accordingly, the Department shall participate fully in monitoring by the State and shall appropriately monitor its subrecipients to the extent necessary based on the assessed level of risk. 3. If the Department or the State should be determined out of compliance with the provisions of the agreement, either party may file a formal appeal with the Office of Administrative Hearings. L. RECORD RETENTION In accordance with the State's basic records retention policy, records resulting from these Services shall not be destroyed, purged or disposed of without the express written consent of the Division during the period specified in the State's records retention policy and in accordance with state and federal law. State basic records retention policy requires all grant records to be retained for a minimum of five years or until all audit exceptions have been resolved, whichever is longer. If the contract is subject to Federal