November 21, 2018 at 12:56:32 ET
(The following was excerpted from a recent article in the Federal Grants Management Handbook.) The Environmental Protection Agency (EPA), in a recent policy announcement, emphasized that recipients of EPA financial assistance, other than states, must enroll in the federal Automated Standard Application for Payments (ASAP) system and disburse substantially all federal funds within five business days of drawing down these funds, or request an exception.
As required in EPA’s General Terms and Conditions for new awards, as well as for supplemental and incremental funding actions made on or after Oct. 1, 2018, EPA award recipients must participate in ASAP, an electronic payment and information system through which grant recipients receiving federal funds on a continuing basis may draw from accounts preauthorized by their funding agencies. Federal agencies establish and maintain accounts in ASAP to control the flow of funds to grant recipients. More than 95 percent of EPA financial assistance recipients are currently enrolled in ASAP.
Regulations in the Office of Management and Budget’s uniform guidance at §200.305(b) also require that recipients minimize the time elapsing between drawing down federal funds and disbursing the funds for allowable expenditures. However, EPA noted that “there have been misunderstandings about this requirement in the context of audits and other reviews.” Because “actions to recover funds that were not disbursed in a timely manner can adversely impact recipients,” EPA’s General Terms and Conditions sets a five-business-day disbursement standard for recipients other than states. This disbursement timeframe is actually longer than the three-day disbursement timeframe generally followed (although not specified in the uniform guidance) in the grants community.
EPA further explained that recipients may not retain more than 5 percent of the amount drawn down, or $1,000, whichever is less, five business days after the drawdown. A recipient that draws down funds greater than the allowed amount must contact EPA’s Las Vegas Financial Office (LVFCemail@example.com) for instructions on whether to return the funds to the agency.
EPA noted that these requirements do not apply to no-cost actions, direct stipend payments to fellows under 40 C.F.R. §40.200(b) or to recipients exempt from electronic funds transfer payment requirements under 31 C.F.R. §208.4.
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