Federal Cash Reimbursement System Changes

ADMINISTRATIVE LETTER: 42
POLICY CODE: KL

On July 1, 2011, the Department of Education will implement the reimbursement system for distributing all federal funds.

On October 4, 2010 school administrators received Administrative Letter #19 in which you were notified that the Department was moving to a reimbursement system based on federal cash management regulations for all federal programs effective July 1, 2011.  This letter stated that all recipients of federal funds would be required to submit a “request for reimbursement” in order to receive federal program funds. This action will bring the Department into compliance with federal regulations.  While the reimbursement system is already in place for some programs/grants, it has not been in place for all programs, in particular those for which automatic payments were made each month.  This change will NOT impact distribution of state funds.

Automatic payments will cease for all federal grants effective July 1, 2011.  The Department will require each sub grantee to submit a request for reimbursement through a new online Federal Grant Reimbursement System.  Reimbursement requests may be submitted as often as twice a month.  The program manager will review and approve the request, or contact you for additional information, and forward the request to the Department of Administrative and Financial Services for payment.

Before any reimbursement can be made, all cash on hand for federal grants must be returned and cash balances must be zero.  When submitting the cash management report for the period ending June 30, 2011 (due by July 15, 2011), return any cash on hand to Karen Knyff-Crockett, Department of Administrative and Financial Services, 74 State House Station, Augusta ME 04333-0074.  Neither the State nor the Grantees may hold cash for more than 72 hours.  If a report is received showing a cash balance in federal funds no payments to you can be made until a report is submitted showing a zero balance.  You will also be notified of being out of compliance with federal regulations.

There will be four prerecorded webinars posted on the reimbursement website beginning Friday, June 17th explaining the reimbursement system process and introducing the new online Federal Grant Reimbursement System.  Information about the reimbursement process, the webinar series, recordings of the webinars and Frequently Asked Questions will be posted on the Department’s website.

While this transition to a reimbursement system may present challenges, Department staff is committed to making the process as smooth as possible.

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