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14. What are the requirements for my organization's financial management system? Your organization's financial management system must meet the applicable federal requirements (tor example, 45 CPR § 1180.53 and 45 CFR § 1183.20), consistent with the following standards. Accounting System You must have an accounting system that provides accurate, current, and complete disclosure of all financial transactions related to each federally sponsored project. Accounting records must contain information pertaining to federal awards, authorizations, obligations, unobligated balances, assets, outlays, income, and interest. These records must be maintained on a current basis and balanced at least quarterly. Cash contributions to the project from third parties must be accounted for in the general ledger with other grant funds. Third party in -kind (non -cash) contributions are not required to be recorded in the general ledger, but must be under accounting control, possibly through the use of a memorandum ledger. Source Documentation Accounting records must be supported by such source documentation as canceled checks, bank statements, invoices, paid bills, donor letters, time and attendance records, activity reports, travel reports, and contractual and consultant agreements. All supporting documentation should be clearly identified with the grant and general ledger accounts that are to be charged or credited. The documentation required for salary charges to grants is prescribed by the cost principles applicable to your organization, for example: • 2 CFR, Part 220 (Cost Principles for Educational Institutions) • 2 CFR, Part 230 (Cost Principles for Non - Profit Organizations), • 2 CFR, Part 225 (Cost Principles for State, Local, and Indian Tribal Governments) Personnel activity reports must account on an after -the -fact basis for one hundred percent of the employee's actual time, separately indicating the time spent on the IMLS grant, other grants or projects, vacation or sick leave, and administrative time if applicable. The reports must be signed by the employee, approved by the appropriate official, and coincide with a pay period. These time records should be used to record the distribution of salary costs to the appropriate accounts no less frequently than quarterly. Formal agreements with independent contractors, such as consultants, must include a description of the services to be performed, the period of performance, the fee and method of payment, an itemization of travel and other costs which are chargeable to the agreement, and the signatures of both the contractor and an appropriate official of the your organization. If third party in -kind (non -cash) contributions are used on a project, the valuation of these contributions must be supported with adequate documentation.