Cash Monitoring Procedures at the Sub-recipient Level and Reimbursement of Expenses

ADMINISTRATIVE LETTER NO:  19
POLICY CODE:  DM

TO: Superintendents of Schools, Directors of Career and Technical Education Regions
FROM: Angela R. Faherty, Ph.D., Commissioner of Education
DATE: October 4, 2010
RE: Cash Monitoring Procedures at the Sub-recipient Level and Reimbursement of Expenses

The United States Department of Education has issued a memorandum regarding the Department of Education Cash Management Policies for Grants and Cooperative Agreements that serves as a reminder about existing cash management requirements.  This memorandum can be found at http://www.maine.gov/education/cashmanagepolicies.pdf .

The department is working towards establishing a system of internal control with procedures in place to comply with federal cash management regulations. In order to adhere to these requirements, the department will begin by making a change in the current payment process.

If your quarterly EF-U-415 report reflects a cash-on-hand balance of $1,500 or more in a program, no payments will be issued for that program until a revised report is submitted that reflects a cash balance of less than $1,500.  This change will take effect immediately.  This change is documented in the Cash Management Report Instructions available at   http://maine.gov/education/forms/edfinance/efu415instr.rtf .

EDGAR Part 80.2 (b) states that “methods and procedures for payment shall minimize the time elapsing between the transfer of funds and disbursement by the grantee or sub-grantee in accordance with Treasury regulations at 31 CFR part 205.”  31 CFR §205.12(b)(4) states that “cash advance (pre-issuance or post-issuance) funding means that a Federal Program Agency transfers the actual amount of Federal funds to a State that will be paid out by the State, in a lump sum, not more than three business days prior to the day the State issues checks or initiates EFT payments.”  The department will be moving towards a reimbursement system based on a request for payment for all federal funds. We are currently researching how best to implement this system.  We will notify you in the near future with the details and the implementation date.

If you have questions concerning the EF-U-415 report, please contact Darlene Tarr, Managing Staff Accountant at 624-7395 or with the policy, contact Wanda Monthey at wanda.monthey@maine.gov .

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