Under HAVA (254(b)(1)(d)) and the Uniform Guidance §200.305(b)(7)(ii) / §200.332(a)(2,3), HAVA grantee requirements are passed through to subgrantees. Where subgrants are disbursed as advanced payments, the subgrantee is required to place their funds in an interest-bearing account and report any interest earned and expended to the grantee. The HAVA grantee must report subgrant interest earned and expended on their FFR as part of the cumulative amounts reported on lines 10p (Total Federal interest earned) and 10q (Federal interest expenditures) on the EAC custom FFR. Subaward interest activities should be detailed in the subgrant narrative section of the progress report. 

Additional regulatory considerations such as 2 CFR 200.305(b)(8) may be applied. More specifically, the non-federal entity (subawardees) must maintain advance payments in interest-bearing accounts unless certain circumstances are applicable. Circumstances per 200.305(b)(8) include: the entity receives less than $250,000 in federal awards per year, an interest-bearing account is not expected to earn interest in excess of $500 per year on federal cash balances, or other enumerated conditions. Interest earned up to $500 per year may be retained for administrative expenses. 

If one of the above mentioned circumstances apply to the subgrantees who receive an advance payment of HAVA grant funds, then that subgrantee is not required to deposit that payment in an interest-bearing account. Be advised that if they do not meet the criteria of 2 CFR 200.305(b)(8), all awarded HAVA funds must be kept an interest-bearing account and monitored then reported as such.