In very limited circumstances, the cognizant state agency maintains the responsibility for requesting federal reimbursement for program spending. In those instances, the state agency must ensure that temporary loan authority has been granted which allows the use of state funds for federal program spending with the expectation that the federal reimbursement will be requested in a timely manner.

It is essential that state agencies understand the impact that disbursements have on the State’s checking account cash balance. When a disbursement is made, the cash in the checking account is decreased as soon as the related ACH is processed or the check is cashed by the recipient and clears the bank. Until such time reimbursement is received from the federal government, state funds are being used to fund those disbursements. The state not only loses out on the opportunity to earn interest on those funds, but those funds are not available to fund other state payments.

Once an agency requests reimbursement, the agency should enter a Direct Journal Payment in the SFS. Once the funds are received by the State, OSC BSAO posts the deposit. OSC BSAO will monitor agency drawdown activity, looking at the frequency and amounts drawn down as compared to the amounts expended. If the drawdown frequency is not timely or the amounts insufficient to fully cover disbursements, OSC BSAO will discuss with the agency any actions that can be taken to improve the cash management of their grants.

OSC BSAO recognizes that different federal agencies impose different guidelines and requirements on the reimbursement of their grants. This will be taken into consideration when determining whether agencies have the ability to improve the cash management of their grants.

Since the SFS does not calculate agency drawdown amounts for non-onboarded agencies, agencies will need to continue to calculate amounts using their internal procedures. Agencies have access to various standard SFS reports to assist in the calculation. The reports can be found by navigating to Menu > Grants > Interactive Reports.

Federal grant questions should be directed to the OSC Bureau of State Accounting Operations, Federal Payment Management Team, at [email protected].

Guide to Financial Operations

REV. 06/01/2023