Requests for Advance Payment

The Office of Naval Research (ONR) follows the advanced billing payment procedures outlined in Office of Management and Budget (OMB) Circular A-110 for grants and cooperative agreements. While there is flexibility in A-110, there are guidelines that must not be exceeded. The guidance from ONR is that recipients should bill as frequently as possible. Billings should be submitted on a monthly basis.

According to A-110, "Cash advances to a recipient organization shall be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project." The circular also states that advances should be very close to the actual costs incurred and disbursed by the recipient, and not for the sole purposes of "keeping up with expenditure rates." If research is not being conducted or expenses not being incurred, advance billing should not be requested. Advance payments are also subject to 31 CFR part 205. Advance payment requests via treasury checks should be submitted on a SF270, Request for Advance or Reimbursement. The SF270 should not be used when there is a predetermined payment schedule.

When recipients do receive payments from advance billing, they need to maintain these funds in interest bearing accounts unless, according to OMB A-110:

  • The recipient receives less than $120,000 in federal awards per year.
  • The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on federal cash balances.
  • The depository would require an average or minimum balance so high that it would not be feasible within the expected federal and non-federal cash resources.

Interest earned and deposited in these interest bearing accounts shall be remitted on an annual basis to:

Department of Health and Human Services
Payment Management System
Rockville, MD 20852

Interest earned up to $250 may be retained by the recipient. OMB A-110 Subpart C - Financial and Program Management paragraphs 20 and 21 of OMB Circular A-110 deal with the recipient’s financial management systems. These paragraphs detail the requirements for an acceptable cash management system. For additional information, please see Remitting Interest on Advances.

If the requirements in paragraph OMB Circular A-110 Subpart B, 22, paragraph (b) cannot be met, then the preferred method for payment is reimbursement. According to OMB Circular A-110, payments under the reimbursement method should be received by the recipient within 30 days after receipt of billing unless the voucher was prepared improperly. The reimbursement method of billing shall be used at least monthly, unless electronic funds transfers are being used. Requests for payments by the reimbursement method shall also be submitted on an SF270, Request for Advance or Reimbursement. Recipients are encouraged to use advance billing but must be careful to:

  • Carefully follow all and abide by the guidance established in OMB Circular A-110.
  • Adhere to their own cash payments systems and guidelines.
  • Adhere to any state requirements if applicable

Occasionally, when manually prepared vouchers are submitted to ONR, they may be submitted with incorrect or missing information which slows ONR's processing and, ultimately, actual remittance from the payment center. Some of the most common problems are:

  • Incorrect information (voucher or award number)
  • Incorrect or missing "performance period" information
  • No certification
  • Incorrect or non-sequential voucher numbering
  • Improper designation (partial vs. final reimbursement vs. advance)

All recipients are also strongly urged to participate in the ONR Electronic Data Interchange (EDI)/Electronics Funds Transfer (EFT) program. Advantages of EDI/EFT include:

  • EDI/EFT vouchers are paid within seven days.
  • Vouchers are almost always paid on the first try.
  • There is a lower overall cost since it is not necessary to copy, sort, mail or file.
  • The voucher is not manually touched after it leaves the system, which means fewer errors.

The EDI/EFT program also helps increase expenditure rates. Recently ONR, and other agencies have been experiencing problems with low expenditure rates. Defense agencies that exhibit low expenditure rates are subject to decreases in funding.

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