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<br />writing prior to the thirtieth (30th) day preceding the date of termination of such determination; the
<br />reasons for such termination; the effective date of such termination; and in the case of partial
<br />termination, the portion of the contract to be terminated.
<br />
<br />B. Either of the parties to this contract shall have the right to terminate this contract, in whole or in
<br />part, when both parties agree that the continuation of the activities funded under this contract would
<br />not produce beneficial results commensurate with the further expenditure of funds; provided that both
<br />parties agree, in writing, upon the termination conditions, including the effective date of such
<br />termination; and in the case of partial termination, the portion of the contract to be terminated.
<br />
<br />C. Upon termination or receipt of notice to terminate, whichever occurs first, Contractor shall cancel,
<br />withdraw, or otherwise terminate any outstanding orders or subcontracts related to the performance
<br />of this contract or the part of this contract to be terminated, and shall cease to incur costs thereunder.
<br />Department shall not be liable to Contractor or to Contractor's creditors for costs incurred after
<br />termination of this contract.
<br />
<br />D. Notwithstanding any exercise by Department of its right of suspension under Section 17 of this
<br />contract, or of early termination pursuant to this Section 18, Contractor shall not be relieved of any
<br />liability to Department for damages due to Department by virtue of any breach of this contract by
<br />Contractor. Department may withhold payments to Contractor until such time as the exact amount of
<br />damages due to Department from Contractor is agreed upon or is otherwise determined.
<br />
<br />SECTION 19.
<br />
<br />AUDIT
<br />
<br />A. Unless otherwise directed by Department, Contractor shall arrange for the performance of an
<br />annual financial and compliance audit of funds received and performances rendered under this
<br />contract, subject to the following conditions and limitations:
<br />
<br />1. Contractor shall have an audit made in accordance with the Single Audit Act of 1984,31
<br />U.S.C. Sec. 7501 et. seq., and OMS Circular No. 128, "Audits of State and Local Governments", and
<br />the implementing regulations at 24 CFR Part 44, for any of its fiscal years included within the contract
<br />period specified in Section 2 and ending before June 30, 1997 of this contract in which Contractor
<br />receives more than $25,000 in Federal financial assistance, Contractor shall have such an audit
<br />made for any fiscal year included within the contract period and ending on or after June 30, 1997
<br />during which Contractor expended $300,000 or more in Federal financial assistance. For purposes of
<br />this Section 19, "Federal financial assistance" means assistance provided by a Federal agency in the
<br />form of grants, contracts, loans, loan guarantees, property, cooperative agreements, interest
<br />subsidies, insurance or direct appropriations, but does not include direct federal cash assistance to
<br />individuals. The term includes awards of Federal financial assistance received directly from Federal
<br />agencies, or indirectly through other units of State and local government;
<br />
<br />2. At the option of Contractor, each audit required by this section may cover either Contractor's
<br />entire operations or each department, agency, or establishment of Contractor which received,
<br />expended, or otherwise administered federal funds;
<br />
<br />3. Notwithstanding Section 4 (a)(5) and Section 4 (a)(6), Contractor shall utilize funds budgeted
<br />under this contract to pay for that portion of the cost of such audit services properly allocable to the
<br />activities funded by Department under this contract, provided however that Department shall not
<br />make payment for the cost of'such audit services until Department has received a satisfactory audit
<br />report as determined by Department, from Contractor.
<br />
<br />4, Unless otherwise specifically authorized by Department in writing, Contractor shall submit the
<br />report of such audit to Department within thirty (30) days after completion of the audit, but no later
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