95.22—Payment.
(a)
Payment methods shall minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients. Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State CMIA agreements or default procedures codified at 31 CFR part 205.
(b)
Recipients are to be paid in advance, provided they maintain or demonstrate the willingness to maintain:
(1)
Written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and
(2)
Financial management systems that meet the standards for fund control and accountability as established in § 95.21.
Cash advances to a recipient organization shall be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs.
(c)
Whenever possible, advances shall be consolidated to cover anticipated cash needs for all awards made by DOL to the recipient.
(1)
Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer.
(3)
Recipients are authorized to submit requests for advances monthly when electronic fund transfers are not used.
(d)
Requests for Treasury check advance payment shall be submitted on SF-270, “Request for Advance or Reimbursement,” or other forms as may be authorized by OMB. This form is not to be used when Treasury check advance payments are made to the recipient automatically through the use of a predetermined payment schedule or if precluded by special DOL instructions for electronic funds transfer.
(e)
Reimbursement is the preferred method when the requirements in paragraph (b) of this section cannot be met. DOL may also use this method on any construction agreement, or if the major portion of the construction project is accomplished through private market financing or Federal loans, and the Federal assistance constitutes a minor portion of the project.
(1)
When the reimbursement method is used, DOL shall make payment within 30 days after receipt of the billing, unless the billing is improper.
(2)
Recipients are authorized to submit requests for reimbursement monthly when electronic funds transfers are not used.
(f)
If a recipient cannot meet the criteria for advance payments and DOL has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, DOL may provide cash on a working capital advance basis. Under this procedure, DOL shall advance cash to the recipient to cover its estimated disbursement needs for an initial period generally geared to the awardee's disbursing cycle. Thereafter, DOL shall reimburse the recipient for its actual cash disbursements. The working capital advance method of payment shall not be used for recipients unwilling or unable to provide timely advances to their subrecipient to meet the subrecipient's actual cash disbursements.
(g)
To the extent available, recipients shall disburse funds available from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.
(h)
Unless otherwise required by statute, DOL shall not withhold payments for proper charges made by recipients at any time during the project period unless paragraphs (h)(1) or (h)(2) of this section apply.
(1)
A recipient has failed to comply with the project objectives, the terms and conditions of the award, or Federal reporting requirements.
(2)
The recipient or subrecipient is delinquent in a debt to the United States as defined in OMB Circular A-129, “Managing Federal Credit Programs.” Under such conditions, DOL may, upon reasonable notice, inform the recipient that payments shall not be made for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.
(i)
Standards governing the use of banks and other institutions as depositories of funds advanced under awards are as follows:
(1)
Except for situations described in paragraph (i)(2) of this section, DOL shall not require separate depository accounts for funds provided to a recipient or establish any eligibility requirements for depositories for funds provided to a recipient. However, recipients must be able to account for the receipt, obligation and expenditure of funds.
(2)
Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.
(j)
Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises, recipients shall be encouraged to use women-owned and minority-owned banks (a bank which is owned at least 50 percent by women or minority group members).
(k)
Recipients shall maintain advances of Federal funds in interest bearing accounts, unless paragraph (k)(1), (k)(2), or (k)(3) of this section apply.
(2)
The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances.
(3)
The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.
Code of Federal Regulations
(l)
For those entities where CMIA and its implementing regulations do not apply, interest earned on Federal advances deposited in interest bearing accounts shall be remitted annually to Department of Health and Human Services, Payment Management System, P.O. Box 6021, Rockville, MD 20852. Interest amounts up to $250 per year may be retained by the recipient for administrative expense. State universities and hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses its own funds to pay pre-award costs for discretionary awards without prior written approval from DOL, it waives its right to recover the interest under CMIA.
(m)
Except as noted elsewhere in this part, only the following forms shall be authorized for the recipients in requesting advances and reimbursements. DOL shall not require more than an original and two copies of these forms.
(1)
SF-270, Request for Advance or Reimbursement. The SF-270 is the standard form for all nonconstruction programs when electronic funds transfer or predetermined advance methods are not used. DOL, however, has the option of using this form for construction programs in lieu of the SF-271, “Outlay Report and Request for Reimbursement for Construction Programs.”
(2)
SF-271, Outlay Report and Request for Reimbursement for Construction Programs. The SF-271 is the standard form to be used for requesting reimbursement for construction programs. However, DOL may substitute the SF-270 when DOL determines that it provides adequate information to meet Federal needs.