Chapter III - Financial Requirements and Payments
The acceptance of an award from NSF creates a legal duty on the part of the awardee organization to use the funds or property made available in accordance with the conditions of the award. Payments may be made in advance of work performed or as a reimbursement for work performed and/or costs incurred by the awardee. However, payments may not be made in advance of an award being signed by a Grants and Agreements Officer 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 award, to which NSF specifically either retains title or reserves the right to require title transfer.
The provisions of this chapter cover all NSF assistance 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 awardees (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.
The following definitions are either not included elsewhere in the Guide or are repeated in this section because of their special applicability to this chapter.
BUSINESS OFFICER - the financial official of the awardee organization who has primary responsibility for the accountability for and reporting on NSF award funds.
CASH ON HAND - an organization’s cash position relative to the funds received from NSF minus the costs incurred for the award.
DISBURSEMENTS/OUTLAYS/EXPENDITURES - charges made to the project during a given period for:
FINANCIAL FUNCTIONS - NSF systems and services used by awardees to transmit financial information to NSF. Awardees must access Financial Functions through Research.gov. Research.gov is NSF’s modernization of FastLane and provides access to a menu of services in one location. The primary Financial Functions used by awardees are:
a. Goods and other tangible property received;
b. Services performed by employees, subawardees, contractors and other payees.
- Award Cash Management $ervice (ACM$) - NSF’s award payment process under which awardee institutions provide award level detail at the time of the payment request. ACM$ has replaced the reporting of expenditures on the FFR and the Cash Request Function.
- Federal Financial Report History - electronic version of the standard “Federal Financial Report”. Used by awardees prior to ACM$ implementation to report the financial activity of NSF awards on a quarterly basis.
- Grantee EFT Update Function - used by awardees to provide NSF with their banking information. (See AAG Chapter III.C.6)
NSF's awardees, except for some Special Payment awardees, AAG Chapter III.C.4, and some foreign awardees, are required to request payments electronically through the Award Cash Management Service (ACM$) When ACM$ was implemented NSF discontinued payments under the "cash pooling" method where awardee institutions requested funds on a lump sum basis to cover the cash requirements for their awards. Under ACM$ awardees must provide award level detail at the time of the payment request.
Certain Special Payment awardees and foreign awardees without access to a U.S. bank are required to request funds by submitting a "Request for Advance or Reimbursement Form", (SF 270) (see AAG Exhibit III-1), to NSF either through mail, email or by fax.
The purpose of this section is to prescribe the timing of advances and the procedures to be observed to assure that cash payments occur only when essential to meet the needs of an awardee for its actual disbursements.
a. Timing of Payments. When completing a payment request awardees must certify that all disbursements have been made or will be made within 3 days of the receipt of the payment for the purposes and conditions of the awards.
b. Payments to Subawardees. Payments made by primary awardees (those which receive payments directly from NSF) to others (subawardees) shall conform to the same standards of timing and amount as apply to payments by NSF to primary awardees, including the furnishing of reports of cash disbursements and balances.
c. Withholding payments. NSF reserves the right, upon written notice, to withhold future payments after a specified date if the recipient:
(i) Fails to comply with the conditions of an NSF award , including the reporting requirements; or
(ii) Is indebted to the U.S. Government.
d. 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 awardee; nor will any of these funds be deposited in personal bank accounts for disbursement by personal check.
a. Awardees may receive payments from NSF in advance of cost incurred provided that the following conditions exist:
(i) Funds for the project period have been obligated by a Grants and Agreements Officer in the form of a signed grant;
(ii) The awardee 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 awardee; and
(iii) The awardee’s financial management system meets the standards for fund control and accountability prescribed in Section .21 of OMB Circular A-110. (2 CFR §215.21)
b. The awardees’ designated official (Accounting Officer, Business Officer, Treasurer, etc.) must submit their cash requests for payment by using the ACM$. Awardees submit requests on a periodic basis (weekly, biweekly monthly, or other regular cycle) depending on their normal disbursement patterns. Such requests should be limited to the minimum amounts needed and be timed to meet the anticipated cash requirements for allowable charges to active NSF projects.
c. Awardees shall maintain advances of NSF funds in interest bearing accounts as specified in AAG Chapter III.D.3.
When awardees do not meet the conditions specified in AAG Chapter III.C.3, or when otherwise considered appropriate, NSF may restrict their capability to request funds through ACM$ or they may be required to request funds by using a Request for Advance or Reimbursement (SF 270) form. For a copy of the form see AAG Exhibit III-1. The cognizant NSF Grants and Agreements Officer is responsible for establishing the documentation requirements for special payment awardees. Documentation may be submitted by email, by fax to 703-292-9142, or through the mail to:
National Science Foundation
Division of Grants & Agreements
4201 Wilson Blvd
Arlington, VA 22230
In those cases where the reimbursement method described in AAG Chapter III.C.4 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 awardee to cover estimated disbursement needs for a given initial period. Thereafter, the awardee 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 awardees’ unreimbursed program disbursements.
Grantee Electronic Funds Transfer (EFT) Update is a Financial Function used by awardees to provide NSF with their electronic banking information. This service enables NSF to transfer funds electronically to an awardees’ bank account by using the banking information provided by the awardee. All NSF awardees, with the exception of certain non-U.S. awardees noted in paragraph C.1.above, must provide banking information through Grantee EFT Update in order to request and/or receive payments.
Effective October 1, 2014, the System for Award Management (SAM) will be the NSF system of record for organizational financial information. Banking information contained within FastLane will not be used after September 30, 2014.
Once a grant is awarded, failure to maintain current and complete financial information within SAM could prevent the awardee from receiving funds.
Recipients of NSF awards 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.
NSF has a reversionary interest in the unobligated balance of an award upon expiration or completion of the award. Based on final payment amounts submitted through ACM$, the final unobligated balance will be computed by NSF and deobligated from the award amount.
Advances or reimbursements made in error must be refunded to the National Science Foundation. Excess funds should be promptly refunded electronically or by check. Electronic remittances should be submitted through Pay.gov at https://pay.gov/paygov/forms/formInstance.html?agencyFormId=10506005. Checks shall be mailed to NSF, Attn. Cashier, 4201 Wilson Boulevard, Arlington, VA 22230. Contact the NSF Division of Financial Management at (703) 292-8280 for additional information.
The only exception to the requirement for prompt refunding is when the funds involved will be disbursed immediately. This exception for prompt refunding should not be construed as approval by NSF for an awardee to maintain excessive funds on hand.
Awardees shall maintain advances of NSF funds in interest bearing accounts, unless any of the following apply:
a. The awardee receives less than $120,000 in Federal awards per year;
b. 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
c. 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). Awardees are authorized to retain up to $250 per year for administrative expenses.
The requirement to annually remit interest does not apply to awardees 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 (2 CFR §215.22) if an awardee 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.
a. If, in accordance with the award terms and conditions, program income is designated for standard (additive) treatment, efforts should be made to avoid having unexpended program income remaining at award expiration. Program Income earned during the project period should be expended prior to requesting reimbursement against the award. In the event an awardee has unexpended program income remaining at award expiration, it will be remitted to NSF by crediting costs otherwise chargeable against the award. If it is not possible to record the credit via the electronic system, the excess program income will be remitted to NSF electronically or by check payable to the National Science Foundation. (See paragraph D.2 above for further information.)
If, in accordance with the award terms and conditions program income is designated for deductive treatment, it will be remitted to NSF by crediting costs otherwise chargeable against the award. Program Income in excess of the award will be remitted to NSF electronically or by check payable to the National Science Foundation.
b. Program Income Reporting Requirements. On an annual basis, awardee institutions will be required to submit a Program Income Reporting Worksheet to NSF in order to report program income earned/expended for any of their awards during the previous twelve months or to validate that they did not earn/expend program income for any of their awards during the applicable period.
The Program Income Reporting Worksheet will be made available to awardees through Research.gov. Awardees will be required to report the award number, amount of program income earned, amount of program income expended, and the amount of unexpended program income remaining as of the report date. Awardees that have no program income to report will be able to validate that status by an email response. NSF will establish a reporting/response deadline of 45 days after the announcement of Program Income Report availability.
Failure to report program income or to validate that no program income was earned/expended could result suspension of future award payments.
c. See AAG Chapter VI.F for additional information regarding Program Income.
Purchase discounts, rebates, allowances, credits resulting from overhead rate adjustments and other credits relating to any allowable cost received by or accruing to the awardee shall be credited against NSF award costs if the award has not been financially closed out. Credits of $1.00 or more shall be credited against NSF award costs even if the award has been closed out. See also AAG Chapter V.B.7.
NSF does not require awardees to submit Federal Financial Reports (FFR’s) for each award for purposes of final award accountability. NSF procedures have been designed to extract the final financial data from the entries in ACM$. This is accomplished as follows:
For any award listed on the ACM$ Payments screen, the awardee will enter the final payment amount in the Payment Amount Requested column.
a. If final disbursements change by $1.00 or more from the amount at award financial closeout, the awardee should submit an "Adjustment to a Financially Closed Award" through the ACM$ payment process.
b. NSF financially closes awards three months after the award expiration date and the award is removed from the ACM$ payment screen for active awards.
c. Awardees have the option of using ACM$ to designate awards for financial closeout prior to the scheduled close out date. Awardees can complete that action by selecting the Final Flag on the ACM$ payment screen. That action will financially close the award upon posting of the ACM$ transaction to the NSF financial accounting system.