Page 28

26 1. Financial Reporting Requirements Once a grant is awarded, and all appropriate documents are signed by the IRS Director, Stakeholder Partnerships, Education and Communication (SPEC), Taxpayer Services Division, and the responsible official for the grant recipient organization, a request will be sent to the Department of Health and Human Services, Payment Management Services to establish electronic access to funds. This process generally takes 3-4 weeks. You must maintain advances of federal grant funds in accounts of a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance exceeding the FDIC coverage must be collaterally secured. Accounts must also bear interest unless: i. you receive less than $250,000.00 in federal awards per year; or ii. the best reasonably available interest-bearing account would not be expected to earn interest in excess of $500.00 per year on federal cash balances; or iii. the depository would require an average or minimum balance so high that an interest-bearing account would not be feasible, given the grant recipient’s expected federal and nonfederal cash resources. a. You may retain up to $500 in interest earned each year for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS). b. Any changes to the above procedures must be approved in writing by the IRS Grant Program Office. c. No more than 30% of the grant funds awarded may be expended for administrative expenses. All proposed administrative costs must be shown on the appropriate lines of Form 8653, TCE Program Application Plan. d. Unexpended grant amounts must be returned to the Internal Revenue Service. (Refer to Publication 4883, Grant Programs Resource Guide, for more information). Improper expenditure of grant funds will result in a debt to the federal government and the federal government is generally obligated to charge interest on any amount not repaid timely. See 31 CFR 901.9. e. During the grant cycle, you are required to submit Semi-Annual/Annual and Final Narrative reports to give us specific information about the methods and procedures used to implement your program. Refer to Semi-Annual/Annual Report Requirements section of this publication for more information. The expenses shown under the Allowable/Unallowable Expenses section of this publication are allowable costs provided they are ordinary and necessary and, in total, do not exceed the amount of the total award specified in the Cooperative Agreement. Changes to the budget activities between categories may be made without pre-approval when a change is 10% or less of the total award. Approval of changes greater than 10% must be requested in advance in writing and approval received before the change may be made. The maximum award amount does not change. f. Withdrawals. An application may be withdrawn at any time during the application process or prior to the time the grant money is awarded. If an accepted grant recipient finds it necessary to withdraw from the TCE Program, the grant recipient organization must return any unexpended monies to the IRS in 15 days and submit a letter of withdrawal from the program. ALL WITHDRAWALS MUST BE MADE IN WRITING. Site Management