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National Science Foundation
Grant Policy Manual
Table of Contents
I. Basic Information
II. NSF Awards
III. Grant Administration
IV. Financial Requirements and Payments
V. Grantee Standards
VI. Allowability of Costs
VII. Other Grant Requirements
VIII. Other Proposal and Award Considerations
IX. Reconsideration / Suspension and Termination / Disputes / Research Misconduct
Subject Index
PDF Version
 


NSF 02-151 July 2002
Chapter IV - Financial Requirements and Payments

This chapter covers general grant payment methods and policies and provides instructions for obtaining payments. Topics covered are:

400 BACKGROUND
410 STANDARDS FOR FINANCIAL MANAGEMENT
420 DEFINITIONS
430 PAYMENT REQUIREMENTS
440 CASH REFUNDS AND CREDITS TO NSF
450 GRANT FINANCIAL REPORTING REQUIREMENTS

400 BACKGROUND

The acceptance of a grant from NSF creates a legal duty on the part of the grantee organization to use the funds or property made available in accordance with the conditions of the grant. Payments may be made in advance of work performed or as a reimbursement for work performed and/or costs incurred by the grantee. However, payments may not be made in advance of a grant being signed by a grants official for the project period. NSF has a reversionary interest in the unused balance of advance payments in any funds improperly applied (whether or not received as an advance payment); and in property acquired through the grant, to which NSF specifically either retains title or reserves the right to require title transfer.

The provisions of this chapter cover all NSF awards (grants and cooperative agreements). Graduate fellowship agreements with domestic colleges and universities are included but individual fellowships and contracts are excluded. All categories of grantees (academic, non-academic, profit and non-profit) are covered by this chapter. The procedures in this chapter apply primarily to the comptroller's office or business office.

410 STANDARDS FOR FINANCIAL MANAGEMENT

NSF grantees are required to have financial management systems that meet the requirements of Section .21 of OMB Circular A-110.

420 DEFINITIONS

The following definitions are either not included elsewhere in the manual or are repeated in this section because of their special applicability to this chapter.

  1. AUTOMATED STANDARD APPLICATION FOR PAYMENTS (ASAP) is an electronic payments system operated by the Federal Reserve Bank of Richmond that can be utilized by Federal grantees to draw cash from multiple agencies in one transaction.

  2. BUSINESS OFFICER is the financial official of the grantee organization who has primary responsibility for the accountability for and reporting on NSF grant funds.

  3. CASH ON HAND includes NSF funds on deposit, imprest funds and undeposited Treasury checks.

  4. DISBURSEMENTS/OUTLAYS/EXPENDITURES are charges made to the project during a given period for:

    1. goods and other tangible property received;

    2. services performed by employees, subawardees, contractors and other payees; and

    3. amounts becoming owed for which no current services or performance is required.

  5. FASTLANE FINANCIAL ADMINISTRATION FUNCTIONS (Cash Request and Submit Federal Cash Transaction Report (FCTR)) are electronic systems for transmitting information to the NSF Division of Financial Management (DFM). They are electronic versions of the SF 270 (Cash Request) and the SF 272 (FCTR).

  6. A GRANTEE is the organization or other entity that receives a grant and assumes legal and financial responsibility and accountability both for the awarded funds and for the performance of the grant-supported activity. NSF grants are normally made to organizations rather than to individual PI/PD(s).

  7. NSF OBLIGATIONS are funds authorized by an NSF Grants Officer, in writing, for payment to a grantee.

  8. GRANTEE OBLIGATIONS are the amounts of orders placed, subawards issued, contracts awarded, services received and similar transactions during a given period that will require payment by the grant during the same or a future period.

  9. PAYMENTS are funds transferred from NSF to the grantee by direct deposit (Automated Clearing House (ACH) Vendor Express) and on some rare occasions by check.

  10. UNLIQUIDATED OBLIGATIONS, for financial reports prepared on a cash basis, represent the amount of obligations incurred by the grantees that have not been paid. For reports prepared on an accrued expenditure basis, unliquidated obligations represent the amount of obligations incurred by the grantee for which an outlay has not been recorded.

  11. UNOBLIGATED BALANCE is the portion of the funds authorized by the grant that has not been obligated by the grantee. It is determined by deducting outlays and unliquidated obligations from the cumulative funds authorized.

430 PAYMENT REQUIREMENTS

431 General

Federal grant and other programs involving advances to various organizations outside the Federal government constitute a significant portion of the Federal budget. Advances of cash from the U.S. Treasury to such organizations for the purpose of financing current operations under Federal programs have a substantial impact on Treasury financing costs and the level of the public debt. The purpose of this section is to prescribe the timing of such advances and the procedures to be observed to assure that cash withdrawals from the Treasury occur only when essential to meet the needs of a grantee for its actual disbursements.

432 Payment Policies

  1. Timing of Payments. Advances to a grantee shall be limited to the minimum amount needed and shall be timed to be in accordance with the actual, immediate cash requirements of the grantee in carrying out the purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to actual disbursements for direct program costs and the proportionate share of any allowable indirect costs.

  2. Payments to Subawardees. Cash advances made by primary grantees (those which receive advances directly from NSF) to others (subawardees) shall conform to the same standards of timing and amount as apply to advances by NSF to primary grantees, including the furnishing of reports of cash disbursements and balances.

  3. Withholding payments. NSF reserves the right, upon written notice, to withhold future payments after a specified date if the recipient:

    1. fails to comply with the conditions of an NSF grant, including the reporting requirements; or

    2. is indebted to the U.S. Government.

  4. Safeguarding Funds. In no case will NSF-furnished funds be commingled with the personal funds of, or be used for personal purposes by, any officer, employee, or agent of the grantee; nor will any of these funds be deposited in personal bank accounts for disbursement by personal check.

433 Request for Advance

  1. Grantees may receive payments from NSF in advance of cost incurred provided that the following conditions exist:

    1. funds for the project period have been obligated by a Grants Officer in the form of a signed grant;

    2. the grantee has established or demonstrated to NSF the willingness and ability to establish written procedures that will minimize the time elapsing between the transfer of funds from the U.S. Treasury and their disbursement by the grantee; and

    3. the grantee's financial management system meets the standards for fund control and accountability prescribed in Section .21 of OMB Circular A-110.

  2. The grantee's designated official (Accounting Officer, Business Officer, Treasurer, etc.) must submit their cash requests for payment by using either the ASAP or FastLane Cash Request systems. Grantees submit requests on a periodic basis (monthly, biweekly or other regular cycle) depending on their normal disbursement patterns. Such requests should be limited to the minimum amounts needed and be timed to meet the anticipated cash requirements for allowable charges to active NSF projects.

  3. Grantees shall maintain advances of NSF funds in interest bearing accounts as specified in GPM 443, "Interest Earned on Advance Payments."

434 Request for Reimbursements

When a grantee does not meet the conditions specified in GPM 433, "Request for Advance," or when otherwise considered appropriate by NSF, the grantee shall be required to finance its operations with its own working capital, and payments shall be made to reimburse the grantee for actual cash disbursements based on requests for reimbursement submitted to NSF. The NSF grant will specify if the grantee is required to use the SF 270, Request for Advance or Reimbursement. The amount requested as reimbursement will be reported on line 11i of the SF 270. The SF 270 is mailed to:

National Science Foundation
Division of Grants & Agreements
Room 480
4201 Wilson Blvd
Arlington, VA 22230

The SF 270 also may be faxed to 703.292.9142.

435 Working Capital Advance

In those cases where the reimbursement method described in GPM 434, "Request for Reimbursements," is not feasible, arrangements may be made whereby NSF projects are financed on a working capital advance basis. On this basis, funds may be advanced to the grantee to cover estimated disbursement needs for a given initial period. Thereafter, the grantee would be reimbursed for the amount of its actual cash disbursements. The amount of the initial advance shall be geared to the reimbursement cycle so that after the initial period, the advance approximately equals the average amount of the grantee's unreimbursed program disbursements. Under this method of payment, the NSF grant will specify if the grantee is required to use the SF 270. Section 12 of the SF270 will be used for the initial advance; thereafter, reimbursements will be requested on the SF 270, line 11i.

436 ACH Vendor Express

  1. The electronic funds transfer (EFT) system allows the Government to transfer funds electronically to a grantee's financial institution (bank) along with explanatory information about the payment. A grantee and its financial institution will determine how the grantee will be advised of the deposit and the explanatory information.

  2. Enrollment. When awarded a grant, new grantees will receive a copy of the SF 3881, ACH Vendor/Miscellaneous Payment Enrollment Form (see Exhibit IV-1). This form is required to implement the Vendor Express System and to notify NSF of any change or correction to the financial institution information. All grantees are required to file this form unless exempted by NSF.

  3. Requests for Payments. After enrollment in the Vendor Express System, funds may be requested from NSF, as needed, in any one of the following three formats:

    1. ASAP;

    2. FastLane Cash Request; or

    3. SF 270, Request for Advance or Reimbursement. (This format is only to be used when required by NSF.)

437 Use of Women-Owned and Minority-Owned Banks

Recipients of NSF grants are encouraged by the Federal government to use banks which are owned (at least 50 percent) by women or minority groups such as Asian, Black, Hispanic, Native Americans and Pacific Islanders. This action is consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises.

440 CASH REFUNDS AND CREDITS TO NSF

441 Final Unobligated Balance

NSF has a reversionary interest in the unobligated balance of a grant upon expiration or completion of the grant. Based on final disbursements reported on the FCTR, the final unobligated balance will be computed by NSF and reported in the "Unobligated Balance" column of the FCTR. (See GPM 452, "Final Disbursement Reporting.") The entry reduces the grantee's "Balance Authorized" as computed on line 15 of the FCTR. (Detailed instructions for submission of the FCTR are available on the FastLane website at https://www.fastlane.nsf.gov/jsp/homepage/bussoadmin.jsp.)

442 Erroneous Payments

Advances or reimbursements made in error must be refunded to the National Science Foundation if the erroneous payment creates an excess cash on hand condition or a negative "Balance Authorized" as computed on lines 6 and 15 of the FCTR. Excess funds should be promptly refunded electronically or by check. Contact the NSF Division of Financial Management at (703) 292-8280 for instruction for electronically refunding monies to NSF. Checks shall be mailed to NSF, Attn. Cashier, 4201 Wilson Boulevard, Arlington, VA 22230.

The only exception to the requirement for prompt refunding is when the funds involved will be disbursed within 30 calendar days. This exception for prompt refunding should not be construed as approval by NSF for a grantee to maintain excessive funds on hand.

443 Interest Earned on Advance Payments

Grantees shall maintain advances of NSF funds in interest bearing accounts, unless any of the following apply:

  1. the grantee receives less than $120,000 in Federal grants per year;

  2. the best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances; or

  3. The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.

Interest earned on NSF advances deposited in interest bearing accounts shall be remitted annually to the Department of Health and Human Services (DHHS), Payment Management System, P.O. Box 6021, Rockville, MD 20852 (telephone number: (301) 443-9247). Grantees are authorized to retain up to $250 per year for administrative expenses. Interest on advances earned shall be reported on line 9 of the FCTR.

The requirement to annually remit interest does not apply to grantees subject to the Cash Management Improvement Act (CMIA) and its implementing regulations (i.e., State agencies and instrumentalities). State universities and hospitals shall comply with the CMIA, as it pertains to interest. In accordance with Section .22 of OMB Circular A-110, if a grantee subject to CMIA uses its own funds to pay pre-award costs without prior written approval from NSF, it waives its right to recover the interest under CMIA.

444 Program Income

If, in accordance with the grant, program income is designated for credit to grant costs, it will be recovered by NSF by crediting costs otherwise chargeable against the grant on the FCTR. (See GPM 750, "Program Income.") In these cases, income in excess of the grant will be remitted to NSF electronically or by check payable to the National Science Foundation.

445 Other Cost Credits

Purchase discounts, rebates, allowances, credits resulting from overhead rate adjustments and other credits relating to any allowable cost received by or accruing to the grantee shall be credited against NSF grant costs if the grant has not been financially closed out. A grant is financially closed out when the final net disbursements have been reported on the FCTR. Credits of $300 or more shall be credited against NSF grant costs even if the grant has been closed out. See also GPM 617, "Publication, Documentation and Dissemination."

450 GRANT FINANCIAL REPORTING REQUIREMENTS

451 Quarterly Disbursement Reporting - Federal Cash Transactions Report (FCTR)

Shortly (usually within twelve days) after the end of each calendar quarter, NSF will create and make the FCTR available to grantees on FastLane. E-mail notices are sent to each grantee announcing the reports availability and its due date. Grantees are required to update, certify and submit the FCTR to NSF by the due date even if funds have not been drawn during the reporting period. Grantees certify to its truthfulness as stated in the Certification, Save and Submission page of the FCTR. The report elements are in compliance with the uniform Federal standards applicable to financial reporting by grantees.

Failure to submit the FCTR to NSF in a timely manner can result in one or more of the following actions:

  1. suspension of all future payments;

  2. closeout of expired awards based on previously reported disbursements;

  3. suspension of unexpired awards; and

  4. suspension of review and processing of new proposals.

Additional information on electronic submission of FCTRs and passwords for the FastLane Financial Administration functions may be obtained by calling the cognizant accountant at (703) 292-8280.

452 Final Disbursement Reporting

NSF does not require grantees to submit individual SF 269, Financial Status Reports, for purposes of final grant accountability. NSF procedures have been designed to extract the final financial data from the entries in the FCTR. This reporting is accomplished as follows:

  1. For any grant listed on the FCTR that expired prior to the beginning of the quarter covered by the FCTR, the grantee will enter the final disbursement amount in the "Net Disbursement Reporting Quarter" column.

  2. If there are valid unpaid obligations outstanding at the time final disbursements are due, the obligations must be charged against the NSF cash advance and reported in the "Net Disbursement Reporting Quarter" column as if they had actually been paid. If subsequent disbursements differ by $300 or more from the amount previously reported, the grantee must report the amount as an "Adjustments to Financially Closed Awards" and specify the reason for the adjustment under the remarks section of the FCTR. The Cost Analysis/Audit Resolution Branch, CPO may request additional documentation. Adjustments will not be approved for amounts less than $300.

  3. If by law, regulation, and/or accounting system limitations, valid unpaid obligations cannot be charged against the NSF advance and reported as disbursed in accordance with b. above, closeout by NSF will be deferred provided that:

    1. the grantee identifies grants with "unpaid obligations" in the Remarks section of the FCTR;

    2. the grantee submits the FCTR before the quarterly financial closeout procedure is run; and

    3. the appropriation that funds the grant has not lapsed as noted under Public Law 101-510.

  4. The final disbursement amount may not exceed the amount of the award.

  5. When the final disbursements have been recorded by NSF, the award will be financially closed and no additional disbursements shall be shown by the grantee in subsequent reports. When all final reporting requirements have been met, the award will be deleted from the FCTR. When this is done, the award will be shown in the next "Schedule of Awards Purged and Subsequent Adjustments During the Quarter," Part IV of the FCTR.

 

 
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