Changing Grant Payment Procedures (7000.120)

Illinois Department of Human Services

Division of Developmental Disabilities

Information Bulletin

DD.19.005

Purpose:

Beginning in Fiscal Year 2020, the Division will begin moving towards making grant payments in accordance with Administrative Code (Title 44, Subtitle F, Chapter I, Part 7000.120).

Applicability:

ISC monthly payments for PUNS, PAS, & Bogard; Voucher Respite Grants, Group Respite Grants, Dental Grants, Epilepsy Grants, Latino Outreach Grant, Family Advocate Grant, Autism Grant - Hope School, Autism Grant - St. Mary's, Equip for Equality Grant, Best Buddies Grant, Lifespan Grant

Background:

AUTHORITY: Implementing and authorized by the Grant Accountability and Transparency Act [30 ILCS 708].

SOURCE: Adopted at 39 Ill. Reg. 10777, effective July 24, 2015; former Part repealed at 42 Ill. Reg. 18913 and new Part adopted at 42 Ill. Reg. 18916, effective October 5, 2018.

Process:

    1. Reimbursement. Reimbursement is the preferred method.  When the reimbursement method is used, the State awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the State awarding agency or pass-through entity reasonably believes the request to be improper. However, in Fiscal Year 2020 if the awardee requests to receive advance and reconcile payments the payments will be authorized, unless the State awarding agency sets a specific condition per UR section 200.207 (Specific conditions).
      1. Advance payments must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the awardee in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the awardee for direct program or project costs and the proportionate share of any allowable indirect costs. The awardee entity must make timely payment to contractors in accordance with the contract provisions.
      2. The awardee must submit a yearly spending plan to the Department prior to the first payment of the grant. The yearly spending plan must be based on known expenses or historical spending patterns. The Department will make the initial advance payment based on the amount projected in the spending plan. Subsequent payments will be issued based on the previous month's expenditures documented in the Expenditure Documentation Forms (EDFs) provided by the Department. Subsequent payments may need to be adjusted to account for shortages/overages from the initial projection.
      3. The final payment from the Department under this Agreement shall be made upon the Department's determination that all requirements under this Agreement have been completed, which determination shall not be unreasonably withheld. Such final payment will be subject to adjustment after the completion of a review of the Provider's records as provided in the Agreement.
        • In future fiscal years, the awardee may be required to meet the requirements in subsection (b)(1) of 2 CFR 200 to qualify for advance and reconcile payments. When implemented awardees will be required to provide and maintain documentation that demonstrates their willingness to maintain both:
          1. written procedures that minimize the time elapsing between the transfer of funds and disbursement by the awardee; and
          2. financial management systems that meet the standards for fund control and accountability as established in UR section 200.302.
    2. Working Capital Advances. If the awardee entity cannot meet the criteria for advance payments as stated in subsection (b)(1) and the State awarding agency or pass-through entity has determined that reimbursement is not feasible because the awardee lacks sufficient working capital, the State awarding agency or pass-through entity may provide cash on a working capital advance basis. Under a working capital advance, the State awarding agency or pass-through entity must advance cash payments to the awardee to cover its estimated disbursement needs for an initial period, generally geared to the awardee's disbursing cycle. This would include initial start-up cost and normal monthly grant expense not to exceed two months of monthly grant expenses. Thereafter, the State awarding agency or pass-through entity must reimburse the awardee for its actual cash disbursements.
      1. A working capital advance requires the State awarding agency or pass-through entity to provide timely advance payments to awardees to meet the awardee's actual cash disbursements.
      2. A working capital advance must not be used if the reason for the working capital advance is the unwillingness or inability of the State awarding agency or pass-through entity to provide timely advance payments to the awardee to meet the awardee's actual cash disbursements.
      3. State agencies must implement written policies and procedures for each grant payment method utilized by the agency: advance payments, reimbursements and working capital advances. The policies and procedures must be approved by State agency staff responsible for federal and State cash drawdowns and reporting.
      4. Standards governing the use of banks and other institutions as depositories of advance payments under awards are as follows:
        1. Advance payments of federal funds must be deposited and maintained in insured accounts whenever possible.
        2. The awardee must maintain advance payments of federal awards in interest-bearing accounts, unless the following apply:
          1. The awardee 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 more than $500 per year.
      5. Parameters Regarding Interest Earned
        1. Interest earned by the awardee up to $500 per year may be retained by the awardee for administrative expense.
        2. Interest earned by the awardee more than $500 per year on federal advance payments deposited in interest-bearing accounts must be returned to the State awarding agency in accordance with UR section 200.305(9).
    3. Payment Withholding
      1. Unless otherwise required by State statute, payments for allowable costs shall not be withheld at any time during the period of performance unless the conditions of Section 7000.80 apply, the awardee is determined to be "not qualified" in accordance with Section 7000.320, or one or more of the following conditions exists:
        1. The awardee has failed to comply with the project objectives, State statutes or regulations, or the Grant Agreement; or
        2. The awardee is delinquent in a debt to the State of Illinois (see the Illinois State Collection Act of 1986). Under these conditions, the agency may, upon reasonable notice, inform the awardee that the awardee shall not make payments for obligations incurred after a specified date until the delinquency is corrected or the indebtedness to the State is liquidated.
      2. If the grant is suspended and payment is withheld because of the awardee's failure to comply with the Grant Agreement, payment must be released to the awardee upon subsequent compliance. Refer to Section 7000.80 for the Grantee Compliance Enforcement System and the Illinois Stop Payment List.
      3. Payments will not be made to an awardee for amounts to be paid to contractors that the awardee retains to assure satisfactory completion of work. Payments will be made when the awardee disburses the withheld funds to the contractors or to escrow accounts established to assure satisfactory completion of work. 

  2.  Effective Date:

Immediately