HHS grant payments may be made by one of several advance payment methods, including SMARTLINK II/ACH, CASHLINE/ACH, or cash request, or by cash request on a reimbursement basis, as specified in the Notice of Award (Notice of Award (Notice of Award(NoA)) and as described in this section.
Payments under grants generally are made as advance payments. Except as indicated in this section, grant payments are made by the PMS, operated by HHS's DPM, in accordance with Department of the Treasury and OMB requirements, as implemented by 45 CFR 74.22 and 92.21. These requirements are intended to minimize the time elapsing between the transfer of funds from the Federal government and disbursement by a recipient. Therefore, although the grant may be financed by advance payments, the intent is that recipients draw funds as needed.
Federal funds advanced to the recipient should be fully disbursed (checks written, signed, and issued to the payees) by the close of business the next work day after receipt of the funds. The potential for excessive Federal cash on hand exists each time a recipient does not disburse Federal funds timely. The recipient is responsible for determining when the Federal funds have been deposited into its bank account for each drawdown, ensuring that the funds are fully disbursed by the close of business the next work day after they are received, and immediately returning undisbursed Federal cash on hand to PMS. An OPDIV may use reimbursement as the method of payment, in lieu of advance payment, if cash management requirements are not met. Advances made by recipients to subrecipients and contractors under grants must conform to substantially the same standards of timing and amount that govern advances to the recipient.
Operational guidance for recipients is contained in the DHHS Manual for Recipients Financed under the Payment Management System. Inquiries regarding payments should be directed to DPM at the address shown in Part III. Operating Division (OPDIV) make payments under awards to foreign or international organizations, if those organizations do not have a U.S. bank account, and awards to agencies of the Federal government.
The SMARTLINK II/ACH method of advance payment makes direct deposit of funds to a recipient's bank account and requires recipients to have Internet access to submit a request for funds to PMS. SMARTLINK II/ACH provides funds the day following the request with direct deposit using the ACH process of the Federal Reserve Bank (Richmond, Virginia).
The CASHLINE/ACH method of advance payment provides for direct deposit of funds to the recipient's bank account using a touch-tone telephone to dial directly to a "voice-response" computer located at PMS. CASHLINE/ACH makes funds available the day following the request with direct deposit using the Federal Reserve Bank's ACH process.
Recipients not eligible for an unrestricted advance of funds by SMARTLINK II/ACH or CASHLINE/ACH must submit a cash request as specified in the Notice of Award (NoA). Cash requests usually are submitted monthly using SF 270, Request for Advance or Reimbursement.
The cash request may be on either an advance or reimbursement basis, as specified by the awarding office. Cash requests are used when a recipient's cash management must be closely monitored (for example, recipients whose financial management systems do not meet the standards specified in 45 CFR 74.21 or 92.20) or under programs where reimbursement financing is appropriate.
A recipient also may be converted from an unrestricted advance payment method to a cash request basis if, during post-award administration, the GMO determines that the recipient is not complying with the cash management requirements or other requirements of the award, including the submission of complete and timely reports.
If the cash request is for an advance payment, the recipient may request funds monthly on the basis of expected disbursements during the succeeding month and the amount of Federal funds already on hand. A request for reimbursement may be submitted more often, if authorized. For timely receipt of cash, a recipient must submit the request through the awarding office early enough for it to be forwarded to PMS at least 2 weeks before the cash is needed. PMS makes payment electronically through the ACH process upon receipt of the approved payment request from the awarding office.
Payment. HHS Grants Policy Statement. DHHS/ACF/OHS. 2007. English.
Last Reviewed: September 2010
Last Updated: November 13, 2014