6112 - CASH MANAGEMENT OF GRANTS
In order to provide reasonable assurance that all assets, including Federal, State, and local funds, are safeguarded against waste, loss, unauthorized use, or misappropriation, the Superintendent shall implement internal controls in the area of cash management.
The District’s payment methods shall minimize the time elapsing between the transfer of funds from theFederal agencyor the Michigan Department of Education (MDE) (pass-through entity) and disbursement by the District, regardless of whether the payment is made by electronic fund transfer, or issuance or redemption of checks, warrants, or payment by other means.
The District shall use forms and procedures required by the grantor agency or pass-through entity to request payment. The District shall request grantfundpayments in accordance with the provisions of the grant. Additionally, the District’s financial management systems shall meet the standards for fund control and accountability as established by the awarding agency.
The Superintendent is authorized to submitpayment requests as often as necessary when electronic fund transfers are used or at least monthly when electronic transfers are not used. Seethe Electronic Fund Transfer Act (15 U.S.C. 1693-1693r).
When the District uses a cash advance payment method, the following standards shall apply:
The timing and amount of the advance payment requestedmustbe as close as is administratively feasible to the actual disbursementby the District for direct program or project costs and the proportionate share of any allowable indirect costs.
The District shall make timely payments to contractors in accordance with contract provisions.
Whenever possible, advance payment requests by the District must be consolidated to cover anticipated cash needs for all Federal awards received by the recipient from the awarding Federal agency or MDE.
Ifavailable, the District shall disburse funds available from program income (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned onFederalfunds before requesting additional cash payments.
The District shall account for the receipt, obligation and expenditure of funds.
Advance payments will be deposited and maintained in insured accounts whenever possible.
Advance payments will be maintained in interest bearing accounts unless the following apply:
The District receives less than $250,000in Federalfundingper year.
The best available interest-bearing account would notreasonably be expected to earn interest in excess of $500 per year on Federal cash balances.
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.
A foreign government or banking system prohibits or precludes interest bearing accounts.
An interest-bearing account is not readily accessible (for example, due to public or political unrest in a foreign country).
Pursuant to Federal law and regulations, the District may retain interest earned in an amount up to $500 per year for administrative costs. Any additional interest earned on Federalfunds must be returnedannually to the Department of Health and Human Services Payment Management System ("PMS") through an electronic medium using either theAutomated Clearing House ("ACH") network or a Fedwire Funds Service payment.
All interest in excess of $500 per year must be returned to PMS regardless of whether the District was paid through PMS. Instructions for returning interest can be found at https://pms.psc.gov/grant-recipients/returning-funds-interest.html.
All other Federal funds must be returned to the payment system of the Federal agency. Returns should follow the instructions provided by the Federal agency. All returns to PMS should follow the instructions provided at https://pms.psc.gov/grant-recipients/returning-funds-interest.html.
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