GRANTS
1.0 GENERAL INFORMATION - FEDERAL AND OTHER GRANTS APPROPRIATIONS
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.
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2.0 UNRESTRICTED GRANTS
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.
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3.0 RESTRICTED FEDERAL GRANTS AND CONTRACTS
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.
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- 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.
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- 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.
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- The major differences in accounting stem from different methods of financing:
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- a. Advance Funding by Federal Government (paragraph 3.2)
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- b. Federal Receivables (paragraph 3.4)
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- c. Letter of Credit (paragraph 3.5)
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- 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.
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- The procedures required are as follows:
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- a. Request a Grant Appropriation code (SID) from Accounting Services.
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- 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.
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- b. Deposit Federal Funds (99300)
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- Use Revenue Object 99300, Federal Grants-Restricted, and provide full coding on the
deposit slip.
- Accounting Services will appropriate the amount deposited as unencumbered.
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- c. Process Encumbrances and Expenditures
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- 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.
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- The procedures required are as follows:
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- a. Request a Grant Appropriation (SID) code from Accounting Services.
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- 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.
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- b. Secure Office of Policy and Management approval for receivable.
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- Prepare a "Grant Award Report" (EXHIBIT 8-2), and forward to OPM along
with the grant award (or other written commitment) for their approval.
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- 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.
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- The grantor commitment must be in a "form acceptable to the Comptroller" (Sec.
3-39a).
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- c. Process Encumbrances and Expenditures
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- 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).
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- 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.
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- The procedures required are as follows:
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- a. Request a Grant Appropriation (SID) code from Accounting Services.
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- 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.
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- b. Send the original copy of the Letter of Credit and one copy of the Grant Award to the
State Treasurer.
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- c. Secure an Appropriation and Allotment
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- 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.
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- 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.
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- d. Process Encumbrances and Expenditures
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- 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.
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- 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.
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- Drawdowns against the Letter of Credit can be interpreted as an Electronic Fund
Transfer using the Automated Clearing House (ACH).
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- Consequently, letter of credit (ACH) drawdowns can be accomplished in a variety of ways:
computer, fax machine, courier mail, telephone, or U.S. Mail.
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- 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:
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- a. Record a separate entry for each program for which funds are requested.
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- b. Use revenue object 95400, Federal - Receivables - Letter of Credit.
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- c. Do not include any other receipts on these deposit slips.
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- d. Record the date of anticipated receipt (deposit) on the small white portion of the
CO-39.
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- Note: For assistance with Fund, SID, Revenue Object information, please call the
Office of the State Comptroller, Accounting Services Division, 702-3381.
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- 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).
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4.0 OTHER THAN FEDERAL GRANTS - RESTRICTED
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:
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- a. The SID assigned will be in the 300 series.
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- 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.
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- These grants will follow the same procedures as outlined in paragraph 3.4 for Federal
Receivables with two exceptions:
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- a. The SID will be in the 300 series.
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- b. Deposits must be coded to revenue 95220, Receivables - Other Than Federal.
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5.0 TRANSFERS OF GRANTS BETWEEN STATE AGENCIES
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).
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- Grants between agencies will normally be evidenced by the same documents or items as any
grant:
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- - Grant Award
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- - Program and Fiscal Reports
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- - Return of Unexpended Balances
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- - 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.
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- 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.
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- 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. |
Revenue
Object |
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. |
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- Funds will be credited to the UNENCUMBERED BALANCE - no reallotments will be required of
the receiving agency.
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- * See paragraph 5.4 following page.
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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.
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- The following procedures apply:
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- Receiving Agency should request an appropriation account number (SID) by memorandum to Accounting
Services. The memorandum should indicate the grantor agency and the source of funding.
Copies of the memorandum should be sent to State Treasurer and the Office of Policy and
Management (OPM).
- Once an acknowledgment and the assigned SID coding is received from Accounting Services,
the transfer may be made.
- The transfer is made by Transfer List in the same manner as other grant transfers
(expenditure object 05340, revenue object 99360, document type "GT").
- Once the grant is appropriated and allotted in the 1169 Fund by the transfer,
commitments and expenditures may be made in the normal manner.
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6.0 CLOSING OUT GRANTS
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).
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- 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.
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7.0 REQUESTING GRANT APPROPRIATION CODES (SID)
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.
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- a. Submit a separate request for each grant or program in duplicate.
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- b. The name of the grant or program, because of computer space allocation, is limited to
60 characters, including spaces.
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- 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.
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- 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.
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- 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.
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- 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.
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8.0 FISCAL YEAR END PROCEDURES - GRANTS
- Restricted grant accounts do not lapse at the end of the fiscal year.
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- On the appropriation account, the unallotted, unencumbered, and unliquidated
encumbrances balances will be continued into the next fiscal year.
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- 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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