(a) Payment methods shall 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 shall
be consistent with Treasury-State CMIA agreements or default procedures
codified at 31 CFR part 205.
(b) Recipients are to be paid in advance, provided they maintain or
demonstrate the willingness to maintain:
(1) Written procedures that minimize the time elapsing between the
transfer of funds and disbursement by the recipient, and
(2) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 95.21.
Cash advances to a recipient organization shall 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 shall 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 shall be consolidated to cover
anticipated cash needs for all awards made by DOL 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 are authorized to submit requests for advances
monthly when electronic fund transfers are not used.
(d) Requests for Treasury check advance payment shall be submitted
on SF-270, ``Request for Advance or Reimbursement,'' or other forms as
may be authorized by OMB. This form is not to be used when Treasury
check advance payments are made to the recipient automatically through
the use of a predetermined payment schedule or if precluded by special
DOL instructions for electronic funds transfer.
(e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. DOL 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, DOL shall make payment
within 30 days after receipt of the billing, unless the billing is
improper.
(2) Recipients are authorized to submit requests for reimbursement
monthly when electronic funds transfers are not used.
(f) If a recipient cannot meet the criteria for advance payments and
DOL has determined that reimbursement is not feasible because the
recipient lacks sufficient working capital, DOL may provide cash on a
working capital advance basis. Under this procedure, DOL shall advance
cash to the recipient to cover its estimated disbursement needs for an
initial period generally geared to the awardee's disbursing cycle.
Thereafter, DOL shall reimburse the recipient for its actual cash
disbursements. The working capital advance method of payment shall 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 shall 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, DOL shall not withhold
payments for proper charges made by recipients at any time during the
project period unless paragraphs (h)(1) or (h)(2) of this section apply.
(1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal 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, DOL may, upon reasonable
notice, inform the recipient that payments shall not be made for
obligations incurred after a specified date until the 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, DOL shall 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 Federal funds shall 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
shall be encouraged to use women-owned and minority-owned banks (a bank
which is owned at least 50 percent by women or minority group members).
(k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless paragraph (k)(1), (k)(2), or (k)(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.
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 who
do not have this capability should use a check.
(l) For those entities where CMIA and its implementing regulations
do not apply, interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, 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
shall 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 DOL, it waives its right to
recover the interest under CMIA.
(m) Except as noted elsewhere in this part, only the following forms
shall be authorized for the recipients in requesting advances and
reimbursements. DOL shall not require more than an original and two
copies of these forms.
(1) SF-270, Request for Advance or Reimbursement. The SF-270 is the
standard form for all nonconstruction programs when electronic funds
transfer or predetermined advance methods are not used. DOL, however,
has the option of using this form for construction programs in lieu of
the SF-271, ``Outlay Report and Request for Reimbursement for
Construction Programs.''
(2) SF-271, Outlay Report and Request for Reimbursement for
Construction Programs. The SF-271 is the standard form to be used for
requesting reimbursement for construction programs. However, DOL may
substitute the SF-270 when DOL determines that it provides adequate
information to meet Federal needs.
