Cash Management – General

Metropolitan Nashville Public Schools (MNPS) will comply with applicable methods and procedures for payment that minimize the time elapsing between the transfer of funds and disbursement, in accordance with the Cash Management Improvement Act at 31 CFR Part 205.

Generally, MNPS will receive payment from the Grantor on a reimbursement basis. However, if MNPS receives an advance in federal grant funds, it will remit interest earned on the advanced payments deposited into interest-bearing accounts annually to the granting agency.  MNPS may retain interest amounts up to $500 per year for administrative expenses.

According to guidance from the U.S. Department of Education (USDE), when calculating the interest earned on USDE grant funds, in any situation where the State draws from the G5 system in advance of the recipient using non-federal funds to pay vendors and/or employees, the only events and dates that are relevant are: 1) the date on which the federal grant funds are drawn down by the State; and 2) the date on which those funds are disbursed by MNPS.  Any interest earned on those funds while on-deposit in the recipient’s bank account after drawdown and before disbursal must be included in the interest earned calculation, as required by the Education Department General Administrative Regulations (EDGAR). 

I)      Reimbursements

MNPS will initially charge federal grant expenditures to nonfederal funds.

The Federal Programs and Grants Fiscal Analysts will request quarterly reimbursements for actual expenditures incurred in the state ePlan system using the procedures described in FMp 2.143.  The Staff Accountant in the Business Services department will track and record grant revenue and receivables using the procedures described in FMp 2.143. All reimbursements are based on actual disbursements, not on obligations.

Consistent with State and federal requirements, MNPS will maintain source documentation supporting the federal expenditures (invoices, time sheets, payroll stubs, etc.) and will make such documentation available for review upon request.

Reimbursements of actual expenditures do not require interest calculations.

 II)     Advances

To the extent MNPS receives advance payments of federal grant funds, MNPS will strive to expend the federal funds on allowable expenditures within 72 hours of receipt.

MNPS will hold federal advance payments in interest-bearing accounts, unless an allowable exception applies. MNPS will calculate interest earned on cash balances after 72 hours of receipt of advance payments.