a. Re orts,, The Contractor shall advise the Department regarding the progress of the
<br />Project at a minimum quarterly and at such time and in such a manner as the Department may
<br />require. Such reporting and Ala cur nentation may include, but not be limited to: operating statistics,
<br />equipment Usage, rneetings, progress reports, and monthly performance reports. The Conti-actor
<br />shall collect and submit to the Department Such financial staternents, data, records, contracts, and
<br />other docurnents related to the Project as may be deemed necessary by the Department, Such
<br />reports shall include narrative and financial staternents of sufficient substance to be in
<br />conformance with the reporting requirements of the Department. Progress reports throughout the
<br />useful life of the project equipment shall be used, in part, to document utilization of the project
<br />equipment. Failure to fully utilize the project equipment in the manner directed by the Department shall
<br />constitute a breach of contract, and after written notification by the Department, may result in
<br />termination of the Agreement or any such remedy as the Department deems appropriate.
<br />b. Record Retention, The Contractor and its third party contractors shall retain all
<br />records pertaining to this Project for a period of five (5) years from the date of final payment to the
<br />Contractor, or unntill all audit exceptions have been resolved, whichever is longer, m accordance with
<br />"Records Retention and Disposition Schedule — Public Transportation Systems and Authorities, April 1,
<br />2006," at (http,://www,ah.dcr.st�ate.ric.us/records/local/).
<br />C. Access to Records of Contractor and Subcontractors. The Contractor shall permit
<br />and shall require its third party contractors to permit the Department, the Comptroller General of the
<br />United States,, and the Secretary of the United States Department of Transportation, or their authorized
<br />representatives, to inspect all work, materials, payrolls, and other data and records with regard to the
<br />Project, and to audit the books, records, and accounts of the Contractor pertaining to the Project, The
<br />Department shall reserve the right to reject any and all materials and workmanship for defects and
<br />incompatibility with Project Description or excessive cost. The Department shall notify the Contractor, in
<br />writing, if materials and/or workmanship are found to be unacceptable. The Contractor shall have
<br />ninety (90) days from notification to correct defects or to provide acceptable materials and/or
<br />workmanship. Failure by the Conti-actor to provide acceptable materials and/or workmanship, or to
<br />correct noted defects, shall constitute a breach of contract.
<br />cl. Pro '�ect Closeout. The Contractor agrees that Project closeolut does not alter the
<br />reporting and record retention requirements of this Section 6 of this Agreement.
<br />Section '10.tPrr2iegc2tL!oll�olletioni Audit. Settlement, and Closeout,
<br />Project Completion, Within ninety (90) calendar days followingi Project completion,
<br />the end of the Project's period of performance, or termination by the Department, the Contractor agrees
<br />to submit a final reirnbursement request to the Department for eligible Project expenses.
<br />b, Financial Reporting and Audit ReQUirements. lin accordance with 2 CFR 200
<br />Subpart F, " "Audit Requirements" effective December 26, 2014and N.C.G.S. 159-34, the Contractor
<br />shall have its accounts audited as soon as possible after the close of each fiscal year by an
<br />independent auditor, The Contractor agrees to submit the required number of copies of the audit
<br />reporting package to the Local Government Commission four rnonths after the Contractor's, fiscal year-
<br />end.
<br />c. Audit Costs. Unless prohibited by law, the costs of audits rnade in
<br />accordance with Title 2 CFR 200, Subpart F — Audit ReqUirernents (formerly OMB
<br />Circular A-133),are allowable charges to State and Federal awards, The charges may
<br />be considered a direct cost or an allocated indirect cost, as determined in accordance
<br />with cost principles outlined in
<br />Title 2 CFR 2019, Subpart E — Cost Principles (-formerly OMB Circular A-87-rhe cost of
<br />any audit not conducted in accordance with Title 2 CFR 200 and N,C.G.S. 159-34 is
<br />unallowable and shall not be charged to State or Federal grants.
<br />d. Funds Owed to the Deparb-nent. The Contractor agrees to remit to the Department
<br />any excess payments rnade to the Contractor, any costs disallowed by the Department, and any
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