Cash Management & Program Income
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Transcript of Cash Management & Program Income
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Cash ManagementCash Management&&
Program IncomeProgram Income
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Now that I know how to manage the money, how do I draw down the cash???
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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
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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/
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Questions?Questions?