A. Processes

Funds are paid upon submission of the Funds Report and Request Form CF-98-2 or equivalent. Award Recipients are encouraged to request funds at the time of the semi-annual submission, but may request funds as needed.

B. Standards

Standards governing the use of banks and other institutions as depositories of funds advanced under Awards are:

• Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible; and
• in accordance with Section 215.22 of Part 215 of Title 2 of the Code of Federal Regulations (CFR) [formerly OMB Circular A-110 Section 22], Award Recipients shall maintain advances in interest-bearing accounts and any interest earned on Federal advances shall be remitted annually in accordance with Article XIII of both the General Observer and Postdoctoral Fellowhsip Terms and Conditions; and
• up to $250 per year in interest earned may be retained by the Award Recipient for administrative expenses.

C. Advances

Funds may be advanced for the anticipated expenditure of project costs provided Award Recipients maintain or demonstrate the willingness to maintain:

• Written procedures that minimize the time elapsing between the transfer of funds and disbursement by the Award Recipient; and
• Financial management systems that meet the standards for fund control and accountability as established in Parts 215, 220 and 230 of Title 2 of the CFR [formerly the OMB Circulars].

Advance payments for up to a 90-day period may be requested.

Whenever possible, advances shall be consolidated to cover anticipated cash needs for all Awards made by SAO to the Award Recipient.

D. Reimbursement

Reimbursement is the preferred method of payment when the requirements for advances cannot be met. When the reimbursement method of payment is used, SAO will make payment within 30 days after receipt of the billing, unless the billing is improper.

E. Working Capital

If an Award Recipient cannot meet the criteria for advance payments and SAO has determined that reimbursement is not feasible because the Recipient lacks sufficient working capital, SAO may provide cash on a working capital advance basis. Under this procedure, SAO will advance cash to the Award Recipient to cover its estimated disbursement needs for an initial period. Thereafter, SAO will reimburse the Recipient for its actual cash disbursements.

F. Recourse for Non-Compliance

Unless otherwise required by law, statute or contractual agreement, SAO will not withhold payments for proper charges made by Award Recipients at any time during the project period unless:

• the Recipient has failed to comply with the project objectives, the Terms and Conditions of the Award, including the reporting requirements; or
• the Recipient is delinquent in a debt to the United States, as defined in the OMB Circular A-129.