(a) Except as provided in paragraph (h)(2) of this section, JTPA
grant payments shall be made to the Governor in accordance with the Cash
Management Improvement Act of 1990 (31 U.S.C. 6501, et seq.), Department
of Treasury regulations at 31 CFR part 205, and the State Agreement
entered into with the Department of the Treasury.
(b) Basic standard. Except as provided in paragraphs (d) and (e) of
this section, each recipient and subrecipient shall be paid in advance,
provided it demonstrates the willingness and ability to limit advanced
funds to the actual immediate disbursement needs in carrying out the
JTPA program.
(c) Advance payments. To the maximum extent feasible, each
subrecipient shall be provided advance payments via electronic funds
transfer, following the procedures of the awarding agency.
(d) Reimbursement. (1) Reimbursement is the preferred method when
the requirements in paragraph (b) of this section are not met.
(i) Each recipient shall submit requests for reimbursement in
accordance with the provisions at 31 CFR part 205.
(ii) Each subrecipient shall submit requests for reimbursement in
accordance with requirements established by the awarding agency.
(2) Each subrecipient shall be paid as promptly as possible after
receipt of a proper request for reimbursement.
(e) Working capital advance payments. If a subrecipient cannot meet
the criteria for advance payments described in paragraph (b) of this
section, and the awarding agency has determined that reimbursement is
not feasible because the subrecipient lacks sufficient working capital,
the awarding agency may provide cash on a working capital advance
payment basis. Under this procedure, the awarding agency shall advance
cash to the subrecipient to cover its estimated disbursement needs for
an initial period, generally geared to the subrecipient's disbursing
cycle. In no event may such an advance exceed 20 percent of the award
amount. Thereafter, the awarding agency shall reimburse the subrecipient
for its actual cash disbursements. The working capital advance method of
payment shall not be used by recipients or subrecipients if the reason
for using such method is the unwillingness or inability of the recipient
or subrecipient to provide timely advances to the subrecipient to meet
the subrecipient's actual cash disbursements.
(f) Effect of program income, refunds, and audit recoveries on
payment. Each recipient and subrecipient shall disburse cash received as
a result of program income, rebates, refunds, contract settlements,
audit recoveries, and interest earned on such funds before requesting
additional cash payments.
(g) Cash depositories. (1) Consistent with the national goal of
expanding the opportunities for minority business enterprises, each
recipient and subrecipient is encouraged to use minority-owned banks (a
bank which is at least 50 percent owned by minority group members).
Additional information may be obtained from the Minority Business
Development Agency, Department of Commerce, Washington, DC 20230.
(2) A recipient or subrecipient shall not be required to maintain a
separate bank account but shall separately account for Federal funds on
deposit.
(h) Interest earned on advances. (1) An interest liability shall
accrue on advance payments between Federal agencies and State
governments, as provided by the Cash Management Improvement Act (31
U.S.C. 6501, et seq.) and implementing regulations at 31 CFR part 205.
(2) Each recipient and subrecipient shall account for interest
earned on advances of Federal funds as program income, as provided at
Sec. 627.450 of this part, Program income.
