Dear County and District Superintendents, County and District Chief Business Officials,
and Charter School Administrators:
The California Department of Education (CDE) is issuing this letter to remind local educational agency (LEA) fiscal officials of the federal administrative requirements for remitting interest earned on advances of federal program funds.
Title 34, Code of Federal Regulations (CFR) – Education, Part 80, Section 80.21, requires grantees and sub-grantees to remit interest earned on advances to the federal agency. The grantee or sub-grantee may keep interest amounts up to $100 per year for administrative expenses.
LEAs should remit to the CDE only the interest earned on federal program advances administered by the CDE; interest earned on non-CDE administered program advances should be calculated separately and remitted to the Federal Treasury via the appropriate state or federal agency. In addition, LEAs should only calculate interest on the cash balances of federal program advances; the cash balances of federal reimbursement programs and school food service funds should be omitted in calculating federal interest due to the Federal Treasury.
To assist LEAs in complying with the federal administrative requirements for interest earned on federal program advances, please see the CDE’s guidelines for calculating and remitting interest at
http://www.cde.ca.gov/ar/rr/interestearnedltr2.asp [Note, the preceding Web address is no longer valid and has been replaced by http://www.cde.ca.gov/fg/ac/co/intfedfunds-calculating.asp].
If you have any questions or need assistance regarding the federal administrative requirements for interest earned on federal program advances, please contact Teresa Palomino, Cash Management Analyst, by phone at 916-319-0698, or by e-mail at firstname.lastname@example.org.
Kevin W. Chan, Director
Audits and Investigations Division