Jerome Joint School District No. 261

FINANCIAL MANAGEMENT   7450

Federal Cash Management

All Responsible District employees shall comply with applicable methods and procedures for payment that minimize the time elapsing between the District’s receipt of federal funds and their disbursement by the District, as required by and in accordance with the Cash Management Improvement Act of 1990.  Generally, the District receives payment of federal funds from the State Department of Education on a reimbursement basis.  

The District shall make payments to contractors in a timely manner and in accordance with the provisions of the contract.

According to guidance from the U.S. Department of Education (USDE), when calculating the interest earned on USDE grant funds, regardless of the date of obligation, interest is calculated from the date that the federal funds are drawn down from the G6 system until the date on which those funds are disbursed by the District. 

The District shall be able to account for all federal funds received, obligated, and expended.

Payment Methods

1. Reimbursements: The District shall initially charge federal grant expenditures to nonfederal funds.

   1. The District grant accountant or business manager shall request reimbursement for actual expenditures incurred under the federal grants monthly.  All reimbursements are based on actual disbursements, not on obligations.  Reimbursement requests shall be submitted on a District form to the State Department of Education.

   2. The Superintendent or their designee shall promulgate a procedure specifying any further requirements.

   3. Consistent with state and federal requirements, the District shall maintain source documentation supporting the federal expenditures; such as invoices, time sheets, and payroll stubs; and will make such documentation available for the State Department of Education to review upon request. 

   4. Reimbursements of actual expenditures do not require interest calculations.

2. Advances:  To the extent the District receives advance payments of federal grant funds; the District shall strive to expend the federal funds on allowable expenditures as expeditiously as possible.  Specifically, the District shall attempt to expend all drawdowns of federal funds within 72 hours of receipt. Any federal funds provided in advance of their use shall be deposited and maintained in insured accounts whenever possible.

   1. The District shall hold federal advance payments in interest-bearing accounts, unless an allowable exception applies. The District shall begin to calculate interest earned on cash balances once funds are deposited into the District’s account.

   2. Interest shall be calculated quarterly.  Total federal grant cash balances shall be calculated on cash balances per grant and applying the District’s average interest rate.  Within 30 days of the end of the quarter, the District shall remit interest earned.  The District may retain up to $500 of interest earned per year for administrative expenses. 

   3. The Superintendent or their designee shall promulgate a procedure specifying the process for remitting interest.

Legal Reference: Description:

2 CFR § 200.305 Payment

31 CFR § 205         Rules and Procedures for Efficient Federal-State Funds Transfers

31 U.S.C. § 6503         Intergovernmental financing (Cash Management Improvement Act of 1990)

Policy History:

Adopted on:   07/26/2016

Revised on:   06/25/2019

Revised on: 05/28/2024

Revised on: 05/26/2026