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Local Government's CDBG project, unless a longer period is required to resolve audit findings or <br />litigation. In such cases, the Local Government will request a longer period of record retention. <br />3. Audits and Inspections <br />All Subrecipient records with respect to any matters covered by this Agreement will be made <br />available to the Local Government, Commerce, and duly authorized officials of the state and <br />federal government, at any time during normal business hours, as often as deemed necessary, to <br />audit, examine, and make excerpts or transcripts of all relevant data. <br />Any deficiencies noted in audit reports must be fully cleared by the Subrecipient within 30 days <br />after receipt by the Subrecipient. Failure of the Subrecipient to comply with the above audit <br />requirements will constitute a violation of this Agreement and may result in the withholding of <br />future payments. <br />The Subrecipient that expends $750,000 or more in a fiscal year in federal funds from all sources <br />hereby agrees to have an annual agency audit conducted in accordance with current Local <br />Government policy concerning Subrecipient audits and 2 CRF 200.501. The Catalog of Federal <br />Domestic Assistance (CFDA) number is 14.228. <br />C. Reporting <br />1. Program Income <br />The Subrecipient will report annually all program income (as defined at 24 CFR 570.500(a)) <br />generated by activities carried out with CDBG funds made available under this Agreement. The <br />use of program income by the Subrecipient will comply with the requirements set forth at 24 CFR <br />570.504. <br />2. Pe_riodic_Reports <br />The Subrecipient, at such times and in such forms as the Local Government may require, will <br />furnish the Local Government such periodic reports as it may request pertaining to the work or <br />services undertaken pursuant to this Agreement, the costs and obligations incurred or to be <br />incurred in connection therewith, and any other matters covered by this Agreement. <br />D. Use and Reversion of Assets <br />The use and disposition of real property and equipment under this Agreement will be in compliance <br />with the requirements of 2 CFR 200.311 and 313, 24 CFR 570.502, 570.503, 570.504, as applicable, <br />which include but are not limited to the following: <br />1. The Subrecipient will transfer to the Local Government any CDBG funds on hand and any accounts <br />receivable attributable to the use of funds under this Agreement at the time of expiration, <br />cancellation, or termination. <br />2. Real property under the Subrecipient's control that was acquired or improved, in whole or in part, <br />with funds under this Agreement in excess of $25,000 will be used to meet one of the CDBG <br />National Objectives pursuant to 24 CFR 570.208 until ten (10) years after the contract between <br />Commerce and the Local Government is closed. If the Subrecipient fails to use CDBG-assisted real <br />property in a manner that meets a CDBG National Objective for this 10 -year period of time, the <br />Subrecipient will pay the Local Government an amount equal to the current fair market value of <br />the property less any portion of the value attributable to expenditures of non-CDBG funds for <br />acquisition of, or improvement to, the property after the CDBG program's approval. Such <br />payment will constitute program income to the Local Government. The Subrecipient may retain <br />real property acquired or improved under this Agreement after the expiration of the ten-year <br />period. <br />64 <br />