Cash ManagementCash Management&&

Program IncomeProgram Income

Cash ManagementCash Management

State and other governmental State and other governmental agenciesagencies 29 CFR 97.2129 CFR 97.21

Non-governmental entitiesNon-governmental entities 29 CFR 95.2229 CFR 95.22

SubgranteesSubgrantees Follow Parts 95 & 97 as applicableFollow Parts 95 & 97 as applicable

Cash Management – States Cash Management – States 29 CFR 97.2129 CFR 97.21

Cash management requirementsCash management requirements CMIACMIA

31 CFR Part 20531 CFR Part 205 Governs process to transfer fundsGoverns process to transfer funds Techniques and process to manage Techniques and process to manage

funds funds

RequirementsRequirements Both Parts 95 & 97Both Parts 95 & 97 Minimize time -- receipt & Minimize time -- receipt &

disbursementdisbursement Payment in advancePayment in advance

StipulationsStipulations Reimbursement methodReimbursement method

If non-compliance with requirementsIf non-compliance with requirements Funds deposited in minority/women-Funds deposited in minority/women-

owned banksowned banks

More RequirementsMore Requirements

Insured, interest bearing accountInsured, interest bearing account Part 95 grantees onlyPart 95 grantees only Exceptions in 95.Exceptions in 95.

Interest remitted as required by Interest remitted as required by regulationsregulations WIA interest earnings – program incomeWIA interest earnings – program income

Interest Earnings – Non-WIAInterest Earnings – Non-WIA

Governmental GranteesGovernmental Grantees 29 CFR 97.21(i)29 CFR 97.21(i) Quarterly remittance to DHHS/PMSQuarterly remittance to DHHS/PMS Retain $100 per year for expensesRetain $100 per year for expenses States governed by Treasury-State States governed by Treasury-State

AgreementAgreement

Interest Earnings – Non-WIAInterest Earnings – Non-WIA

Non-governmental granteesNon-governmental grantees 29 CFR 95.22(i)29 CFR 95.22(i) Annual remittance to DHHS/PMSAnnual remittance to DHHS/PMS Retain $250 per year for expensesRetain $250 per year for expenses

Subgrantee Payment SystemsSubgrantee Payment Systems

Liquidate cash-on-handLiquidate cash-on-hand Including program income, refunds, etc.Including program income, refunds, etc.

Same standards and processes as Same standards and processes as granteegrantee Written procedures to minimize cashWritten procedures to minimize cash

Limit on cash advancesLimit on cash advances Actual immediate cash needsActual immediate cash needs

Subgrantee systemsSubgrantee systems

Monitor subgrantee practicesMonitor subgrantee practices Grantee policy, banking services, costsGrantee policy, banking services, costs

Maintain cash control ledger/daily Maintain cash control ledger/daily cash balancescash balances

Time disbursements Time disbursements To advancesTo advances Improve cash managementImprove cash management

Subgrantee Systems - Subgrantee Systems - continuedcontinued

Cash forecasting considerationsCash forecasting considerations Taxes & fringe benefitsTaxes & fringe benefits Accrued expendituresAccrued expenditures Obligations Obligations

ReimbursementsReimbursements Required for non-complianceRequired for non-compliance

Working capital advancesWorking capital advances Must be liquidatedMust be liquidated

Funding techniquesFunding techniques

Described in 31 CFR Part 205Described in 31 CFR Part 205 May have different techniques for May have different techniques for

each programeach program May be used by grantees & May be used by grantees &

subgranteessubgrantees Not subject to CMIA requirementsNot subject to CMIA requirements

Promote effective cash managementPromote effective cash management

Zero balance accountingZero balance accounting Same day transactionsSame day transactions

Request fundsRequest funds Deposit fundsDeposit funds Disburse fundsDisburse funds

Also works for subrecipientsAlso works for subrecipients Zero based payroll accountsZero based payroll accounts

DayDay Dollars Paid Dollars Paid (%)(%)

Cash Request Cash Request ($)($)

00 Checks MailedChecks Mailed -0--0-

11 -0--0- -0--0-

22 -0--0- -0--0-

33 -0--0- 450,000450,000

44 3030 600,000600,000

55 4040 300,000300,000

66 2020 150,000150,000

77 1010 -0--0-

Estimated ClearanceEstimated Clearance

Now that I know how to manage the money, how do I draw down the cash???

HHS-PMSHHS-PMS

Payment Management SystemPayment Management System Federal grant cash drawdown systemFederal grant cash drawdown system Maintained and operated by HHSMaintained and operated by HHS

Advance payment systemAdvance payment system $$$ available by appropriation $$$ available by appropriation

(subaccount)(subaccount) Request by 2pm, deposited next dayRequest by 2pm, deposited next day

Payment Management System (PMS)Payment Management System (PMS)

Step 1 - Grant AwardStep 1 - Grant Award Step 2 - Establishing PMS AccountStep 2 - Establishing PMS Account

SF 1199 completed by granteeSF 1199 completed by grantee Sent to Division of AccountingSent to Division of Accounting Form available electronicallyForm available electronically

•http://www.dpm.psc.gov/http://www.dpm.psc.gov/

CASH ADVANCES (continued)CASH ADVANCES (continued)

GranteeGrantee Completes SF 1199 - request to Completes SF 1199 - request to

establish PMS accountestablish PMS account Sends original to DOA, Rm 4702 Sends original to DOA, Rm 4702

FPBFPB SF 1199 can be downloaded from SF 1199 can be downloaded from

Internet atInternet at

Funding the PMS accountFunding the PMS account

Step 3Step 3 PMS PMS

Notifies DOA—Account establishedNotifies DOA—Account established New funds for existing granteeNew funds for existing grantee

• Subaccount established & DOA notifiedSubaccount established & DOA notified DOA transmits funding authority to DOA transmits funding authority to

PMSPMS PMS notifies grantee account PMS notifies grantee account

established established

Initiating use of PMS accountInitiating use of PMS account

Step 4 -Step 4 - PMS notifies person named on SF 1199 PMS notifies person named on SF 1199

by registered mailby registered mail Notice includes account no., temporary Notice includes account no., temporary

password, instructionspassword, instructions For subaccounts, usual proceduresFor subaccounts, usual procedures

ConsiderationsConsiderations

If additional funds or new grantIf additional funds or new grant New subaccountNew subaccount FIFO if practicableFIFO if practicable

• Draw down & expend prior subaccounts Draw down & expend prior subaccounts before using new subaccountbefore using new subaccount

• May use both subaccounts if neededMay use both subaccounts if needed For example, new administrative dollars need to For example, new administrative dollars need to

be expended as the cost limitation for the prior be expended as the cost limitation for the prior grant has been reached. grant has been reached.

At closeout, drawdowns equal At closeout, drawdowns equal expenditures—all subaccountsexpenditures—all subaccounts

Program IncomeProgram Income

Additional revenues for the grantAdditional revenues for the grant Earned as a result of grant activityEarned as a result of grant activity Earned because of grantEarned because of grant

29 CFR 97.25 – Governmental 29 CFR 97.25 – Governmental GranteesGrantees

29 CFR 95.24 – Non-governmental 29 CFR 95.24 – Non-governmental GranteesGrantees

More Program IncomeMore Program Income

Addition method requiredAddition method required 20 CFR 667.200(a)(5)20 CFR 667.200(a)(5)

Reported on ETA 9080Reported on ETA 9080 Expenditure within a grant periodExpenditure within a grant period ETA does not reduce grant ETA does not reduce grant

awardsawards Addition method always applies Addition method always applies

What’s IncludedWhat’s Included

Fees for servicesFees for services User or rental feesUser or rental fees Sale of productsSale of products List included in Part 97List included in Part 97

WIA requirementsWIA requirements Interest incomeInterest income

All WIA Title I programsAll WIA Title I programs Allocated if earned under WIA and non-WIAAllocated if earned under WIA and non-WIA

Revenues in excess of expendituresRevenues in excess of expenditures Applies to governmental or non-profitsApplies to governmental or non-profits Fixed price contractsFixed price contracts Applies to all WIA Title I programsApplies to all WIA Title I programs

What’s Not Included…What’s Not Included…

Applicable creditsApplicable credits Sale of propertySale of property RoyaltiesRoyalties DonationsDonations Profits of commercial organizationsProfits of commercial organizations Income earned after the grant periodIncome earned after the grant period

Program Income RevenuesProgram Income Revenues

Two methods for revenue accountingTwo methods for revenue accounting Net Income MethodNet Income Method

Costs of generating income deducted Costs of generating income deducted from revenuefrom revenue

Gross Income MethodGross Income Method Costs of generating income charged to Costs of generating income charged to

grantgrant

Uses of Program IncomeUses of Program Income

No administrative cost limitationNo administrative cost limitation Allowable activitiesAllowable activities Allowable costs and proper Allowable costs and proper

classificationclassification Included in the scope of auditIncluded in the scope of audit Other administrative rules applyOther administrative rules apply Sanctions for misuseSanctions for misuse

Questions?Questions?