Interest

Under HAVA (254(b)(1)(d)) and the Uniform Guidance §200.305(b)(7)(ii) / §200.332(a)(2,3), HAVA grantee requirements are passed through to subgrantees. Where subgrants are disbursed as advanced payments, the subgrantee is required to place their funds in an interest-bearing account and report any interest earned and expended to the grantee. The HAVA grantee must report subgrant interest earned and expended on their FFR as part of the cumulative amounts reported on lines 10p (Total Federal interest earned) and 10q (Federal interest expenditures) on the EAC custom FFR. Subaward interest activities should be detailed in the subgrant narrative section of the progress report. 

Additional regulatory considerations such as 2 CFR 200.305(b)(8) may be applied to subgrantees. More specifically, the non-federal entity (subawardees) must maintain advance payments in interest-bearing accounts unless certain circumstances are applicable. Circumstances per 200.305(b)(8) include: the entity receives less than $250,000 in federal awards per year, an interest-bearing account is not expected to earn interest in excess of $500 per year on federal cash balances, or other enumerated conditions. Interest earned up to $500 per year may be retained for administrative expenses. 

If one of the above-mentioned circumstances apply to the subgrantees who receive an advance payment of HAVA grant funds, then that subgrantee is not required to deposit that payment in an interest-bearing account. Be advised that if they do not meet the criteria of 2 CFR 200.305(b)(8), all awarded HAVA funds must be kept an interest-bearing account and monitored then reported as such. 

Interest earned on the federal share is reported in the Federal Interest section of the FFR on lines 10. p - r. We must track interest generated on federal funds separately, so we have dedicated the following lines:
10p. Total Federal interest earned
10q. Federal interest expenditures
10r. Remaining Federal interest to be expended (line p minus q)

Interest earned from depositing cash to meet match requirements is reported on lines 12a-12b of the FFR. We must track interest earned from state match separately, and have dedicated the following lines:
12a. State Interest Earned
12b. State Interest Expended

True program income is reported as part of the Recipient Share on Line 10(l) using the additive method identified in line 10. Program income earned from the state match is reported in lines 12c and 12d.

See also “What is net program income and how is it reported on the Federal Financial Report (FFR)?”

Interest earned on state matching funds should be included in Line 12a in the State Interest Earned section. State Interest Expended will be reported on line 12b. It is likely that only a state’s 251 and Election Security grants have state match which earns interest as that match must be deposited in the Election Fund with the federal funds. This scenario would apply to those states that use cash as a way to meet their match requirements. Under Section 101 Election Improvement, any state match cash provided does not have to be deposited in the interest-bearing Election Fund.