201.67—Treatment of uncashed or cancelled checks.
(a) Purpose.
This section provides the rules to ensure that States refund the Federal portion of uncashed or cancelled (voided) checks under titles I, IV-A, X, XIV, and XVI (AABD).
(b) Definitions.
As used in this section—Check means a check or warrant that the State or local agency uses to make a payment.
Cancelled (voided) check means a check issued by the State agency or local agency which prior to its being cashed is cancelled (voided) by State or local agency action, thus preventing disbursement of funds.
Uncashed check means a check issued by the State agency or local agency which has not been cashed by the payee.
(c) Refund of Federal financial participation (FFP) for uncashed checks—
(1) General provisions.
If a check remains uncashed beyond a period of 180 days from the date it was issued, i.e., the date of the check, it will no longer be regarded as an amount expended because no funds have actually been disbursed. If the State agency has claimed and received FFP for the amount of the uncashed check, it must refund the amount of FFP received.
(2) Report of refund.
At the end of each calendar quarter, the State agency must identify those checks which remain uncashed beyond a period of 180 days after issuance. The State agency must report on the Quarterly Statement of Expenditures for that quarter all FFP that it received for uncashed checks. Once reported on the Quarterly Statement of Expenditures for a quarter, an uncashed check is not to be reported on a subsequent Quarterly Statement of Expenditures. If an uncashed check is cashed after the refund is made, the State agency may submit a new claim for FFP.
(d) Refund of FFP for cancelled (voided) checks—
(1) General provisions.
If the State agency has claimed and received FFP for the amount of a cancelled (voided) check, it must refund the amount of FFP received.
(2) Report of refund.
At the end of each calendar quarter, the State agency must identify those checks which were cancelled (voided). The State agency must report on the Quarterly Statement of Expenditures for that quarter all FFP received by the State agency for these checks. Once reported on the Quarterly Statement of Expenditures for a quarter, a cancelled (voided) check is not to be reported on a subsequent Quarterly Statement of Expenditures.
[50 FR 37661, Sept. 17, 1985]