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B-215237 1 (1984-11-20)

handle is hein.gao/gaobadmaf0001 and id is 1 raw text is: THE COMPTROLLER MUNNNAL G( OECIION op THE N O aTATE8 v4 7 WASHINGTON. O.C. 2054U FILE: B-215237 DATE: November 20, 1984 MATTER OF: Agency for International Development - Interest Earned by Subgrantees on Advanced Funding DIGEST: 1. Advances in excess of immediate cash needs to a subgrantee of an assistance award are not ex- penditures for grant purposes, and, under the terms of the agreement, interest earned on these funds prior to their expenditure for allowable costs must be paid to AID unless exempt under 31 U.S.C. S 6503(a). 2. Interest earned by subgrantees on loans made as part of authorized program efforts is program income and can be used to further program objectives. This decision is in response to a request from a certifying officer in the Office of Financial Management of the Agency for International Development (AID). The certi- fying officer requests that we decide (1) whether sub- grantees can retain interest earned on advances from A.T. International, a primary recipient of an assistance award from AID, and (2) whether subgrantees who earn interest on loans made as part of the assistance program may retain this interest which according to the cooperative agreement is to be added to a revolving fund for further loans or program costs. We conclude that under the terms of the cooperative agreement with A.T. International interest earned by a sub- grantee on assistance funds prior to their expenditure for allowable costs are payable to AID. The interest must be deposited in the U.S. Treasury as a miscellaneous receipt. Interest earned by subgrantees on loans made under program authority is program income. According to the certifying officer, AID has negotiated a new cooperative agreement (a form of financial assistance) with A.T. International under 22 U.S.C. S 2395. The purpose of the cooperative agreement is to strengthen A.T. Interna- tional's capacity to help develop appropriate technologies in developing countries. The program is to be carried out 030S'77

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