Interest Earned on Federal Funds by Subgrantees
Federal Education Department General Administrative Regulations (EDGAR) specify steps that must be taken by grantees (the State) and subgrantees (local agencies receiving grants through the State) when interest is earned on federal cash advances. This advisory is provided to ensure that subgrantees are aware of these requirements and take appropriate steps to be in compliance.
Part 80 of EDGAR establishes uniform administrative requirements for State and local governments including school districts. Section 80.21 (i) states …[G]rantees and subgrantees shall promptly, but at least quarterly, remit interest earned on advances to the Federal agency. The grantee or subgrantee may keep interest amounts up to $100 per year for administrative expenses.
Part 74 of EDGAR establishes the uniform administrative requirements for institutions of higher education, hospitals and other non-profit organizations. The requirements in Section 74.22(l) are similar to those in Part 80, with the provision that these agencies may retain up to $250 per year for administrative expenses.
Interest exceeding the $100 or $250 allowable for administrative expenses must be returned to the federal government through the State. It cannot be retained to offset any direct or indirect program costs.
Please contact Grants Finance at grantsweb@mail.nysed.gov for instructions regarding remittance or if you have questions. Please specify ‘Federal Interest’ in the subject line of the e-mail.
Links to EDGAR: Full text / Part 80 / Part 74 
Issued 9/9/09