On occasion, the federal awarding agency may issue a Notice of Grant Award before the award authorization is entered in the Federal Payment Management System (PMS). Meanwhile, state payments must be made.

State agencies should contact the federal awarding agency to report the delay in posting the award authorization. If agencies are unable to contact the awarding agency, then contact your Account Representative to inform them that the award is not available.

After all avenues of resolution have been exhausted, it may be necessary to make mandated payments from state funds. A CMIA federal interest liability will accrue when it is demonstrated that the state paid out its own funds for federal program purposes prior to receiving federal funds. The federal interest liability on a transaction will generally be based on the difference in whole days between the average date of check clearance for the disbursement and the date the related federal funds are deposited in a state account.

With federal-state matching programs, interest will be calculated on the federal portion of the disbursement. Federal interest liabilities will also be calculated for any eligible federal program that is funded on a reimbursable basis.

To support state claims for federal interest liabilities, each agency shall maintain a report for each federal program subject to CMIA, as follows:

• The amount of the disbursement for which the state paid out its own funds (as recorded on a voucher);
• The date of the check issuance for the disbursement (as recorded in either the Daily Revenue Journal (NYGL0400) or the daily Payee List (NYAP0495);
• The date federal funds are requested (provided by OSC);
• The date federal funds are received and deposited in a state account (provided by OSC);
• The federal percentage of the disbursement; and
• The basis for the federal interest liability (late federal appropriations, late setup of federal award authorization appropriated by Congress, quarterly shortfall, deferral, prior years claim, etc.).

To support a federal interest liability claim over $5,000, the state must provide the following documentation to the U.S. Treasury:

• Amount of funds requested;
• Date the funds were requested;
• Date the funds were paid out for federal assistance program purposes;
• Date the funds were received by the state; and
• Date of award

The state and the Secretary of the U.S. Department of the Treasury have agreed that no interest liability will be incurred or calculated for indirect costs, with one exception. If the state requests federal funds in accordance with approved procedures and the federal funds are NOT made available to the state, the Federal Government will incur an interest liability. The federal interest liability will accrue from the date the state requests funds to the date federal funds are credited to a state account.

Guide to Financial Operations

REV. 03/19/2012