Chapter 2 – Fiscal Management

22040.13 Payments

• Provisions for payment shall be clearly defined in the contract.

• Advance Payments During Contracts

  • Advance payments are allowed only to communitybased, private, non-profit agencies, and to public agencies. If an advance payment is essential for the effective implementation of a program and funds are available, an advance may be granted. The program and or contractor may request that the contract be written to allow advance payment.

• Determining Need

  • Program and contract staff shall jointly determine the need for advance payment based upon a review of the contractor’s most recent financial statements, budget, and audit report by an independent accountant or other comparable financial information.

  • The determination shall be based on the following factors:

    • The percentage of the contractor’s total operating budget to be funded by the contract.

    • The extent to which the contractor is dependent upon voluntary contributions from individuals.

    • The extent to which the contractor receives financial support from other governmental organizations, private commercial firms, and fundraising organizations, such as United Way.

    • The ability of the contractor to repay the advance from other income.

• Proof of Non-Profit Corporation Status

  • The contract with a communitybased, private, nonprofit agency shall provide that the agency submit proof of nonprofit corporate status to the Department before advance payment is made.

  • This proof shall be reviewed by the CMBSee Office of Business Services (OBS) staff and be retained in the contract file.

• Granting Advance Payments

  • Advance payments to a community-based, private, non-profit agency may be granted by the Department for contracts of $400,000 or less; for contracts over $400,000, an advance may be granted only with prior DOFDepartment Of Finance approval.

  • Advance payments may also be granted to any “Public Agency” and shall be repaid in accordance with the provisions of the contract.

  • “Public Agency” includes any State or federal agency, county, city, or public district of the State of California.

• Fidelity Bond

  • The contract shall include a requirement that the agency and its representatives who, in any way, handle financial transactions related to the receipt or disbursement of funds provided by the contract shall be covered by a fidelity bond equal to at least 50 percent of the total amount of the contract.