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Exhibit B - 5 <br /> <br />6. Close-Outs: The Subrecipient's obligation to the City shall not end until all close-out <br />requirements are completed, notwithstanding any expiration or termination of this Agreement. <br />Activities during this close-out period shall include, but are not limited to: making final <br />payments, disposing of program assets (including the return of all unused materials, <br />equipment, unspent cash advances, program income balances, and accounts receivable to the <br />City), and determining the custodianship of records. Notwithstanding the foregoing, the terms <br />of this Agreement shall remain in effect during any period that the Subrecipient has control <br />over CDBG funds, including program income. <br /> <br />In the event that this Agreement is terminated in whole or part for any reason, the following <br />provisions shall apply: <br />a. Upon written request by the Subrecipient, the City shall make or arrange for payment to <br />the Subrecipient of allowable reimbursable costs not covered by previous payments. <br />b. The Subrecipient shall submit within thirty (30) days after the date of expiration of this <br />Agreement all financial, performance and other reports required by this Agreement, and <br />in addition, will cooperate in a program audit by the City of Everett or its designee. <br />c. In the event a financial audit has not been performed prior to close-out of this <br />Agreement, the City retains the right to withhold a just and reasonable sum from the final <br />payment to the Subrecipient after fully considering the recommendation on disallowed <br />costs resulting from the final audit. <br /> <br />7. Audits & Inspections: All Subrecipient records with respect to any matters covered by this <br />Agreement shall be made available to the City, its designees or the Federal Government, at any <br />time during normal business hours, as often as the City deems necessary, to audit, examine, and <br />make excerpts or transcripts of all relevant data. Any deficiencies noted in audit reports must be <br />fully cleared by the Subrecipient within 30 days after receipt by the Subrecipient. Failure of the <br />Subrecipient to comply with the above audit requirements will constitute a violation of this <br />Agreement and may result in the withholding of future payments. The Subrecipient hereby <br />agrees to have an annual agency audit conducted in accordance with current City policy <br />concerning Subrecipient audits and, as applicable, 2 CFR Part 200 (Uniform Administrative <br />Requirements, Cost Principles, and Audit Requirements for Federal Awards). <br /> <br />C. Reporting and Payment Procedures <br />1. Program Income: The Subrecipient shall report quarterly all program income as defined at 24 <br />CFR 570.500(a) generated by activities carried out with CDBG funds made available under this <br />Agreement. The use of program income by the Subrecipient shall comply with the requirements <br />set forth at 24 CFR 570.504. By way of further limitations, the Subrecipient may use such income <br />during the contract period for activities permitted under this Agreement and shall reduce <br />requests for additional funds by the amount of any such program income balances on hand. All <br />unused program income shall be returned to the City at the end of the contract period. Any <br />interest earned on cash advances from the U.S. Treasury is not program income and shall be <br />remitted promptly to the City.