1.1 Statutory Reference: Sections 3-39a, 4-28, 4-29, 4-31, 4-31a, and 13a-166. 

1.2 Fringe Benefits and Indirect Costs

Restricted Federal and Other Than Federal appropriations should be charged with their appropriate share of fringe benefits and indirect costs.
Procedures for determining and applying overhead and fringe benefit rates are contained in the Comptroller's Indirect Cost and Fringe Benefit Recovery Procedures Manual.
Questions and requests for assistance should be addressed to the Cost Accounting Unit of the Comptroller.


2.1 Federal Grants - Unrestricted

Federal grants, whether to reimburse the State for specific expenditures that were made from budgeted General Fund appropriations or to encourage specific programs or projects, become General Fund revenue unless there is specific statutory authority to the contrary.
All such grants received are to be deposited to the General Fund and coded to the appropriate revenue object in the 50000 series. The receipt of funds whether by check or via letter-of-credit has no effect on the coding or accounting for these unrestricted grants.

2.2 Grants - Other than Federal Unrestricted

All grants from private sources received without restriction become General Fund revenue unless there is specific statutory authority to the contrary. This is true whether the sums are to promote special activities or for the general benefit of the State. All such grants received are to be deposited in the General Fund to Revenue Object 59090.


3.1 General Information

Restricted grants are those whose use is limited by the Federal Government to a particular purpose or specific project.
When received, restricted grant funds are appropriated and allotted by OPM, and then may be expended by the receiving agency for the purpose of the grant or contract.
In order to insure accurate reporting of federal grant expenditures by the Comptroller, and to facilitate compliance with the federal Single Audit Act and the Federal Cash Management Improvement Act, separate appropriation (SID) accounts must be maintained for each federal grant or federal program. Federal programs are identified by the Catalog or Federal Domestic Assistance (CFDA) number assigned to each grant award. Multiple year grants do not, however, require a separate account for each year, these may continue to be commingled in a single account.
It is the responsibility of the receiving agency to comply with all grant terms and conditions and to file any necessary program or fiscal reports.
The major differences in accounting stem from different methods of financing:
a. Advance Funding by Federal Government (paragraph 3.2)
b. Federal Receivables (paragraph 3.4)
c. Letter of Credit (paragraph 3.5)
d. Transferred from another State agency (paragraph 5.0)

3.2 Advance Funding by Federal Government

For many grants the Federal Government advances funds on a monthly, quarterly, or annual basis to finance the grant activities.
The procedures required are as follows:
a. Request a Grant Appropriation code (SID) from Accounting Services.
The SID will be in either the 400 or 500 series (there is no accounting distinction). See Paragraph 7.0 for instructions. Each SID should contain only one federal program as identified by the CFDA number.
b. Deposit Federal Funds (99300)
Use Revenue Object 99300, Federal Grants-Restricted, and provide full coding on the deposit slip.
Accounting Services will appropriate the amount deposited as unencumbered.
c. Process Encumbrances and Expenditures
Once deposited, grant funds may be encumbered and expended in the same manner as other appropriations.

3.3 Grant Receipts Deposited as Refunds

Agencies should not deposit grant receipts as refunds (9909). This understates State grant receipts and expenditures. Accounting Services will periodically review deposits against grant accounts and correct the coding retroactively for deposits which are not true refunds

3.4 Federal Receivables

In those instances where the Federal Grant or contract provides for reimbursement after expenditure, or in other circumstances where the advance funding procedures (paragraph 3.2) are deemed impractical, sections 3-39a and 13a-166 of the General Statues provide for the establishment and allotment of appropriations prior to receipt of Federal funds.
The procedures required are as follows:
a. Request a Grant Appropriation (SID) code from Accounting Services.
The SID will be in either the 400 or 500 series (there is no accounting distinction). See paragraph 7.0 for instructions. Each SID should contain only one federal program as identified by the CFDA number.
b. Secure Office of Policy and Management approval for receivable.
Prepare a "Grant Award Report" (EXHIBIT 8-2), and forward to OPM along with the grant award (or other written commitment) for their approval.
If approved by OPM, the Grant Award Report and grant award will be forwarded to Accounting Services where the award will be appropriated and allotted.
The grantor commitment must be in a "form acceptable to the Comptroller" (Sec. 3-39a).
c. Process Encumbrances and Expenditures
Once an award is allotted, encumbrances and expenditures may be processed in the normal manner.

3.4.1 Deposit of Receipts Against Receivables (95120)

Agencies should request reimbursement by the Federal Government for expenditures as frequently as allowable. When funds are actually received by the agency they will be deposited and coded to revenue object 95120 - Federal Receivables. Code the deposit slip through special identification SID).
The Comptroller monitors collections versus expenditures on receivables and will contract any agency which appears to be lax in securing Federal reimbursement.

3.4.2 Receivable Record

Upon approval of a receivable, agencies should establish a receivable record to which can be posted both deposits and expenditures (this may be a monthly summary entry). This record will indicate both the remaining receivable (original receivable less cumulative deposits) and the amount of the receivable which is currently collectible (cumulative expenditures less cumulative deposits).

3.5 Letter of Credit Grants

Federal Grants for which payment is to be received by means of the "Letter of Credit" procedures are necessary to comply with the Federal requirements regarding the timing of cash withdrawals via the Letter of Credit.
The procedures required are as follows:
a. Request a Grant Appropriation (SID) code from Accounting Services.
The SID will be in the 800 series for Block Grants and the 900 series for other letter of credit grants. See paragraph 7.0 for instructions. The grant title and appropriation code (through SID) should be placed on all "Grant Awards" and "Letters of Credit" processed under the following paragraphs. Each SID should contain only one federal program as identified by the CFDA number.
b. Send the original copy of the Letter of Credit and one copy of the Grant Award to the State Treasurer.
c. Secure an Appropriation and Allotment
Send two copies of the Grant Award and/or Letter of Credit to the Office of Policy and Management (Budget and Management Division) along with an Allotment Request (B-107). The agency must request an allotment for the entire grant. The Office of Policy and Management (if acceptable to them) will approve the grant award and process the B-107.
When approved, the B-107 will be forwarded to Accounting Services along with the approved grant award and/or Letter of Credit. Accounting Services will establish an appropriation, allotment and a grants receivable for the amount of the award.
d. Process Encumbrances and Expenditures
Once the allotment is posted, encumbrances and expenditures may be processed in the usual manner.

3.5.1 Drawdowns Against the Letter of Credit (95400)

Federal programs subject to the Cash Management Improvement Act of 1990 (CMIA) have funding techniques set by the Treasury-State Agreement. The funding technique described in that agreement defines when the drawdown is to take place. All drawdowns for CMIA covered programs must be in compliance with the funding technique outlined in the agreement to avoid payment of interest to the Federal Government. If there is any question regarding compliance with CMIA please call OSC's Cost Accounting Unit at 702-3364.
Programs below the State's threshold are not subject to the interest provisions of CMIA and are not included in the Treasury-State Agreement. Under CMIA regulations, cash advances for these programs are limited to the actual, immediate cash requirements of the State.
Drawdowns against the Letter of Credit can be interpreted as an Electronic Fund Transfer using the Automated Clearing House (ACH).
Consequently, letter of credit (ACH) drawdowns can be accomplished in a variety of ways: computer, fax machine, courier mail, telephone, or U.S. Mail.
From the State Treasurer's point of view, an agency's drawdown request to the Federal Government and a CO-39, Deposit Slip to the State Treasurer should go out at the same time: in addition, the CO-39 to the State Treasury should be structured or included the following:
a. Record a separate entry for each program for which funds are requested.
b. Use revenue object 95400, Federal - Receivables - Letter of Credit.
c. Do not include any other receipts on these deposit slips.
d. Record the date of anticipated receipt (deposit) on the small white portion of the CO-39.
Note: For assistance with Fund, SID, Revenue Object information, please call the Office of the State Comptroller, Accounting Services Division, 702-3381.
For assistance with Bank information, please call the Office of the Treasurer, Cash Management Division, 702-3130.

3.5.2 Receivable Record

Upon approval of a Letter of Credit receivable, the agency should establish a receivable record to which deposits and expenditures (this may be a monthly summary entry) are posted. This record will then indicate the remaining receivables (original letter of credit award less cumulative drawdowns) and verify that total deposits always equal or exceed total expenditures.

3.6 Federal Letter of Credit - Exceptions to Procedures

3.6.1 Payment by Check

On certain "Letter of Credit" awards, payment is made by the Federal Government by the issuance of a check. In these cases, a deposit slip, Form CO-39, cannot be prepared at the same time a payment voucher on letter of credit is prepared, but will be prepared upon the receipt of the Federal Government's check. In this situation, the agency should request a special identification code in the 400 or 500 series and follow procedures for Federal Receivables (paragraph 3.4).


4.1 General information

This section covers gifts, donations, grants, and contracts restricted to a particular purpose or project from sources other than the Federal Government.
It also covers restricted accounts funded by receipts, the use of which is limited, by law or otherwise, to a particular purpose, and where use of a Special Fund is not required.

4.2 Procedures for other Than Federal Restricted Grants

The procedures for other than Federal restricted grants or accounts are identical to those outlined in paragraph 3.2 for Federal Grants with two exceptions:
a. The SID assigned will be in the 300 series.
b. Deposits should be coded to revenue object 99200, Grants - Other Than Federal - Restricted.

4.3 Other Than Federal Receivables

When necessary, and subject to the approval of the Office of Policy and Management and acceptance by the Comptrollers, receivables may be established for non-Federal grants in the same manner as for Federal grants.
These grants will follow the same procedures as outlined in paragraph 3.4 for Federal Receivables with two exceptions:
a. The SID will be in the 300 series.
b. Deposits must be coded to revenue 95220, Receivables - Other Than Federal.


5.1 Definition

Transfers of grants refer to the giving of a grant to another state agency or between two appropriations of a single agency similar to giving a grant to an outside agency. This involves the passing of authority to make expenditures as contrasted with the payment to another for goods and services (Purchase and Sale) or an inter-agency rearrangement of expenditures (corrections or temporary financing).
Grants between agencies will normally be evidenced by the same documents or items as any grant:
- Grant Award
- Program and Fiscal Reports
- Return of Unexpended Balances
- etc.

5.2 Transfer Procedures

Transfer of grants between agencies are usually accomplished by transfer list. An exception is for certain letter of credit grant transfers which require that an Allotment or Appropriation Adjustment Request (B-107) be used. See paragraph 5.4 for a discussion of letter of credit grant transfers.
The Transfer Invoice (CO-608) should clearly indicate the nature of the transaction, e.g., "Transfer of Federal grant for ...". If the correct revenue codings are used, the receiving appropriations will be increased in the unencumbered balance and no reallotment will be required. The Transfer Certificate should reference Doc Type "GT", see transfer section.

5.3 Expenditure and Revenue Coding for Grants Transfers

The grantor (giving) agency should code the expenditure portion of Transfer Invoice to expense object 05340, Transfers of Grants Between Agencies, EXCEPT when the grant is from a 600 SID in the General Fund in which case object 07020 should be used.
The revenue object will depend on the appropriations or funds involved:
99250 Grants - Other than Federal - Restricted - Transferred from Another State Agency's 300.
99260 Grants - Other than Federal - Restricted - Transferred from Another State Agency's Budgeted Appropriation (which may properly give grants). Other Expenses (002) may NOT give grants.
99350 Federal Grants - Restricted - Transferred from Another State Agency.
99360 Federal and Other Grants - Restricted - Transferred from Any Other Fund to the General Fund.


Expenditure Must Be From Revenue Must Be To
99250  General Fund - Any 300 General Fund
Any 300
99260  General Fund - Any Budgeted Grant Appropriation (only those which may properly give grants). Other Expenses (002) may NOT give grants. General Fund
Any 300
99350 General Fund - Any 400, 500, 800* or 900* General Fund
Any 400 or 500
99360 Other Than General Fund (except 7000 Funds - Use 99200 or 99300) General Fund
Any 300, 400 or 500  or 1169 Fund any SID
99360  General Fund - any 400, 500, 800, 900) Any Higher Education operating or research fund.
Funds will be credited to the UNENCUMBERED BALANCE - no reallotments will be required of the receiving agency.
* See paragraph 5.4 following page.

5.4 Transfers of Letter of Credit Grants

Revenue object 99350 may only be used to transfer to a 400 or 500 appropriation. The grantor agency must treat this as an expenditure and drawdown cash to cover the amount and reduce the receivable. If the drawdown of cash will not be made until the grantee (receiving) agency incurs an expenditure, the grantee agency must utilize an 800 or 900 appropriation and the transfer of the grant must be by Allotment, B-107. The agencies will then need to establish procedures whereby the grantor is notified of impending expenditures and can draw down sufficient cash prior to the transaction The grantor will code the deposit slip to the grantee's appropriation account (using revenue object 95400).

5.5 Grants Financed From State Tax Exempt Bonds

To enable the State Treasurer to comply with PA88-258 and the Federal Tax Reform Act of 1986, all inter-agency and intra-agency grant transfers that are financed by State of Connecticut Tax-Exempt Bonds (i.e. from the fund giving the grant) are credited to the "Inter-Agency/Intra-Agency Grants - Tax-Exempt Proceeds Fund" (Fund No. 1169). These grants are not to be credited to the General Fund grant accounts or any other fund.
The following procedures apply:


6.1 General information

Grants, whether Federal or Other Than Federal, must comply with restrictions imposed by the grantor. Within these restrictions the agency should monitor these grants so that they may be terminated when the goals of the grant have been accomplished or the time limits of the grant have expired. These grants are continuing appropriations and remaining balances will remain on the State's books until positive action is taken by the agency concerned.

6.2 Lapsing of Balances

If the terms of the grant permit, the remaining balance in a complete grant should be lapsed. This is accomplished by sending a memorandum to the Accounting Services Division stating that the grant has been terminated and the balance of $ __ may be lapsed into the resources of the General Fund.

6.3 Return of Funds to Grantor

If the terms of the grant do not permit the lapsing of balances, then any remaining balance in the grant should be returned to the grantor or otherwise dispose of in accordance with the grant (some Federal grants permit balances in a terminated grant to be transferred to another Federal grant).
Returns are made by processing a payment list payable to the grantor for the balance to be returned. The expenditure should be coded to major/miner 04020, Grants Funds Returned.

6.4 Cancellation of Receivables

If any balance remains on a grant receivable at the end of the grant, a Request for Established or Adjustment of Receivables should be processed canceling the remainder of the receivable.

6.5 Cancellation of Appropriation Code (SID)

Grant appropriation accounts which have all zero balances and no activity for two fiscal years are deleted from the accounting system at the end of the second year by Accounting Services.


7.1 General Information

All requests for a special identification code will be in writing on a reproduction of the form shown as Exhibit 8-1. The following specific instructions apply.
a. Submit a separate request for each grant or program in duplicate.
b. The name of the grant or program, because of computer space allocation, is limited to 60 characters, including spaces.
c. The description of the program should be as brief as possible. We desire only as much information as necessary to determine the correct code to be assigned.
d. All requests for Federal Awards must include the Catalog of Federal Domestic Assistance Number. This is a five digit code (XX.XXX) which should appear on the grant award. Each SID should contain only one federal program.
e. If the source of funding is another state agency you must enter that agency's coding. The "another state agency" may be your own agency where you are a "prime" grantor making grants to other state agencies as well as to yourself.
Your request with the assigned code (s) will be returned.

7.2 Multiple Year Grants

It is not a requirement that each year of a multiple-year award be assigned a separated SID. Agencies should separate grant years internally on their own records or through function/activity coding whenever possible, resulting in less work and increase flexibility for all concerned.



Restricted grant accounts do not lapse at the end of the fiscal year.
On the appropriation account, the unallotted, unencumbered, and unliquidated encumbrances balances will be continued into the next fiscal year.
An exception are grant accounts in the 350-359 SID range. These accounts receive their funding from lapsing appropriations that are not authorized to give grants and consequently will lapse at year-end.

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