[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR627.430]

[Page 209-210]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT--Table of Contents
 
                   Subpart D--Administrative Standards
 
Sec. 627.430  Grant payments.

    (a) Except as provided in paragraph (h)(2) of this section, JTPA 
grant payments shall be made to the Governor in accordance with the Cash 
Management Improvement Act of 1990 (31 U.S.C. 6501, et seq.), Department 
of Treasury regulations at 31 CFR part 205, and the State Agreement 
entered into with the Department of the Treasury.
    (b) Basic standard. Except as provided in paragraphs (d) and (e) of 
this section, each recipient and subrecipient shall be paid in advance, 
provided it demonstrates the willingness and ability to limit advanced 
funds to the actual immediate disbursement needs in carrying out the 
JTPA program.
    (c) Advance payments. To the maximum extent feasible, each 
subrecipient shall be provided advance payments via electronic funds 
transfer, following the procedures of the awarding agency.
    (d) Reimbursement. (1) Reimbursement is the preferred method when 
the requirements in paragraph (b) of this section are not met.
    (i) Each recipient shall submit requests for reimbursement in 
accordance with the provisions at 31 CFR part 205.
    (ii) Each subrecipient shall submit requests for reimbursement in 
accordance with requirements established by the awarding agency.
    (2) Each subrecipient shall be paid as promptly as possible after 
receipt of a proper request for reimbursement.
    (e) Working capital advance payments. If a subrecipient cannot meet 
the criteria for advance payments described in paragraph (b) of this 
section, and the awarding agency has determined that reimbursement is 
not feasible because the subrecipient lacks sufficient working capital, 
the awarding agency may provide cash on a working capital advance 
payment basis. Under this procedure, the awarding agency shall advance 
cash to the subrecipient to cover its estimated disbursement needs for 
an initial period, generally geared to the subrecipient's disbursing 
cycle. In

[[Page 210]]

no event may such an advance exceed 20 percent of the award amount. 
Thereafter, the awarding agency shall reimburse the subrecipient for its 
actual cash disbursements. The working capital advance method of payment 
shall not be used by recipients or subrecipients if the reason for using 
such method is the unwillingness or inability of the recipient or 
subrecipient to provide timely advances to the subrecipient to meet the 
subrecipient's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. Each recipient and subrecipient shall disburse cash received as 
a result of program income, rebates, refunds, contract settlements, 
audit recoveries, and interest earned on such funds before requesting 
additional cash payments.
    (g) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, each 
recipient and subrecipient is encouraged to use minority-owned banks (a 
bank which is at least 50 percent owned by minority group members). 
Additional information may be obtained from the Minority Business 
Development Agency, Department of Commerce, Washington, DC 20230.
    (2) A recipient or subrecipient shall not be required to maintain a 
separate bank account but shall separately account for Federal funds on 
deposit.
    (h) Interest earned on advances. (1) An interest liability shall 
accrue on advance payments between Federal agencies and State 
governments, as provided by the Cash Management Improvement Act (31 
U.S.C. 6501, et seq.) and implementing regulations at 31 CFR part 205.
    (2) Each recipient and subrecipient shall account for interest 
earned on advances of Federal funds as program income, as provided at 
Sec. 627.450 of this part, Program income.