False. One of the primary purposes of a subrecipient’s cash management system is to minimize the time between receipt of CDBG funds and their disbursement; therefore, if the subrecipient’s system is working efficiently, there shouldn’t be any interest income generated on cash advances. In fact, 24 CFR 570.500(a)(2) makes explicit that the definition of program income does not include interest earned on the investment of the initial proceeds of a grant advance, including funds advanced from a grantee to a subrecipient, and any such funds must be promptly remitted to the U.S. Treasury. Moreover, 570.500(b) makes it clear that cash balances held in a revolving fund must be held in an interest-bearing account and that any interest earned on funds held in such an account will be considered to be interest income generated on a cash advance and must be remitted to the Treasury at least annually.
Appears in 6 contracts
Samples: Sub Recipient Agreement, Sub Recipient Agreement, Sub Recipient Agreement
