DFAC Cash Management - Federal Programs

DFAC

Cash Management – Federal Programs

(Sample Procedure)

Cash Management – Federal Programs

Generally, the school district receives payment of federal funds from the Kansas State Department of Education (KSDE) on a reimbursement basis. In some circumstances, the district may receive an advance of federal grant funds. This procedure addresses responsibilities of the district and district staff under those alternative payment methods. In either case, the district shall maintain accounting methods and internal controls and procedures that assure those responsibilities are met when dealing with federal funding.

Payment Methods

Reimbursements -

The school district will initially charge federal grant expenditures to nonfederal funds.

The Superintendent, Business Manager and Federal Programs Coordinator will request reimbursement for actual expenditures incurred under the federal grants monthly and quarterly.

Such requests shall be submitted with appropriate documentation and signed by the requestor.

Requests for reimbursements will be approved by the Superintendent, Business Manager and Federal Programs Coordinator.

Reimbursement will be submitted on the appropriate form to the KSDE portal. All reimbursements are based on actual disbursements, not on obligations. KSDE will process reimbursement requests within the timeframes required for disbursement.

Consistent with state and federal requirements, the school district will maintain source documentation supporting the federal expenditures (invoices, time sheets, payroll stubs, etc.) and will make such documentation available for KSDE to review upon request.

Reimbursements of actual expenditures do not involve interest calculations.

Advances -

When the district receives advance payments of federal grant funds, it must minimize the time elapsing between the transfer of funds to the district and the expenditure of those funds on allowable costs of the applicable federal program. (2 CFR Sec. 200.305(b)) The district shall attempt to expend all advances of federal funds within seventy-two (72) hours of receipt.

When applicable, the district shall use existing resources available within a program before requesting additional advances. If available, the recipient or subrecipient must disburse funds available from program income (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on federal funds before requesting additional cash payments. (2 CFR Sec. 305(b)(5))

Advance payments of Federal funds must be deposited and maintained in insured accounts whenever possible.

The recipient or subrecipient must maintain advance payments of Federal funds in interest-bearing accounts unless one of the following applies:

• (i) The recipient or subrecipient receives less than $250,000 in Federal funding per year;
• (ii) The best available interest-bearing account would not reasonably be expected to earn interest in excess of $500 per year on Federal cash balances;
• (iii) The depository would require an average or minimum balance so high that it would not be feasible with the expected Federal and non-Federal cash resources;
• (iv) A foreign government or banking system prohibits or precludes interest-bearing accounts; or
• (v) An interest-bearing account is not readily accessible (for example, due to public or political unrest in a foreign country).

The school district is permitted to retain for administrative expenses up to $500 per year of interest earned on federal funds. Regardless of the federal awarding agency, interest earnings exceeding $500 per year shall be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through either the Automated Clearing House (ACH) network or a Fedwire Funds Service payment. (2 CFR Sec. 200.305(b)(12))

Pursuant to federal guidelines, interest earnings shall be calculated from the date that the federal funds are drawn down from the G5/G6 system until the date on which those funds are disbursed by the district.

Consistent with state guidelines, interest accruing on total federal grant cash balances shall be calculated on cash balances per grant and applying the actual or average interest rate earned.

Remittance of interest shall be responsibility of the Superintendent, Business Manager and Federal Programs Coordinator.

Approved: KASB Recommended – 6/17; 12/24