[Code of Federal Regulations]
[Title 28, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 28CFR70.22]

[Page 264-265]
 
                    TITLE 28--JUDICIAL ADMINISTRATION
 
              CHAPTER I--DEPARTMENT OF JUSTICE (Continued)
 
  PART 70--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS (INCLUDING SUBAWARDS) WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS AND OTHER NON-
PROFIT ORGANIZATIONS--Table of Contents
 
                   Subpart C--Post-Award Requirements
 
Sec. 70.22  Payment.

    (a) Payment methods must 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 must 
be consistent with Treasury-State CMIA agreements or default procedures 
codified at 31 CFR part 205.
    (b) Recipients may be paid in advance, provided they maintain or 
demonstrate the willingness to maintain written procedures that minimize 
the time elapsing between the transfer of funds and disbursement by the 
recipient, and financial management systems that meet the standards for 
fund control and accountability as established in Sec. 70.21. Cash 
advances to a recipient organization will 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 must 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 will be consolidated to cover 
anticipated cash needs for all awards made by the Department to the 
recipient.
    (1) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer.
    (2) Advance payment mechanisms are subject to 31 CFR part 205.
    (3) Recipients may be authorized to submit requests for advances and 
reimbursements at least monthly when electronic fund transfers are not 
used.
    (d) Requests for Treasury check advance payment must be submitted on 
SF-270, ``Request for Advance or Reimbursement.''
    (e) Reimbursement is the method that will be used when the 
requirements in paragraph (b) of this section cannot be met. The 
Department 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, the Department will make 
payment within 30 days after receipt of the billing, unless the billing 
is improper.
    (2) Recipients will be authorized to submit requests for 
reimbursement at least monthly when electronic funds transfers are not 
used.
    (f) If a recipient cannot meet the criteria for advance payments and 
the Department has determined that reimbursement is not feasible because 
the recipient lacks sufficient working capital, the Department may 
provide cash on a working capital advance basis. Under this procedure, 
the Department will advance cash to the recipient to cover its estimated 
disbursement needs for an initial period generally geared to the 
awardee's disbursing cycle. Thereafter, the Department will reimburse 
the recipient for its actual cash disbursements. The working capital 
advance method of payment will 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 must 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, the Department will not 
withhold payments for proper charges made by recipients at any time 
during the project period unless paragraph (h) (1) or (2) of this 
section apply.
    (1) A recipient has failed to comply with the project objectives, 
the terms and conditions of the award, or the Department's 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, the Department may, upon 
reasonable notice, inform the recipient that payments must not be made 
for obligations incurred after a specified date until the

[[Page 265]]

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, the Department will 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 the Department funds must 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 are 
encouraged to use women-owned and minority-owned banks (a bank which is 
owned at least fifty percent by women or minority group members).
    (k) Recipients must maintain advances of the Department's funds in 
interest bearing accounts, unless paragraphs (k) (1), (2) or (3) of this 
section apply.
    (1) The recipient receives less than $120,000 in Federal awards per 
year.
    (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.
    (l) For those entities where CMIA and its implementing regulations 
do not apply, interest earned on Federal advances deposited in interest 
bearing accounts must be remitted annually to Department of Health and 
Human Services, (HHS), 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 must 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 the Department, 
it waives its right to recover the interest under CMIA. In keeping with 
Electronic Funds Transfer rules, (31 CFR part 206), interest should be 
remitted to the HHS Payment Management System through an electronic 
medium such as the FEDWIRE Deposit System. Recipients which do not have 
this capability should use a check.
    (m) Recipients must use the SF-270, Request for Advance or 
Reimbursement or other standard form for all nonconstruction programs 
when electronic funds transfer is not used.

[Order No. 1980-95, 60 FR 38242, July 26, 1995; Order No. 1998-95, 60 FR 
57931, Nov. 24, 1995]