d) For all eligible expenditures, IEMA-OHS will pay grantees by the advance payment method, reimbursement method, or working capital advance method may either reimburse a grantee for eligible expenditures or advance funds to a grantee for eligible expenditures, but only upon the grantee's submission of an accepted bid, invoice, or other official document showing the exact cost of the expenditure. For the reimbursement method, the grantee shall provide documentation (i.e., receipt) that the exact cost of the expenditure was paid to the vendor. Grantees shall submit all bids, invoices, or other official documents showing the exact cost of an expenditure in the format and method prescribed in the grant agreement or as otherwise directed by IEMA-OHS. Invoices must include only allowable incurred costs that have been paid by the grantee.

1. 1) Advance Payment Method. For the advance payment method, the grantee shall submit a request as indicated in the NOFO and include the information in subsection (d)(1)(A). Approval and administration of advance payments shall be governed by subsections (d)(1)(B) through (G).

   1. A) An Advance Payment Request Cash Budget Template (Cash Budget). Cash budgets must be signed by either the Chief Executive Officer (or equivalent) or Chief Financial Officer (or equivalent) for the grantee. The executive's signature certifies that their entity complies with the requirements set forth in 2 CFR 200.302 (Financial Management) and 44 Ill. Adm. Code 7000.120(b)(i)(A) (Advance Payments). The cash budget must demonstrate the estimated monthly cash requirements for each month of the grant performance period.
   2. B) If advance payment is requested, prior to approval, IEMA-OHS will perform or secure an assessment to ensure compliance with the specific language of GATA and any rules adopted pursuant to GATA. If the assessment does not ensure compliance with GATA and the rules promulgated thereunder, then IEMA-OHS may deny the request for advance payment. Any grantee that has a high risk category as a result of the internal control questionnaire required by GATA shall not be approved for advance payment.
   3. C) Upon approval by IEMA-OHS, advance payments shall be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the grantee in carrying out the purpose of the approved project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the grantee for project costs. Additionally, the grantee must make timely payments to contractors.
   4. D) Upon approval for advance payment, an initial payment will be processed in an amount equal to the first three months' cash requirements as reflected in the submitted advance payment cash budget.
   5. E) Subsequent advance payments will be made quarterly based on the invoices submitted to IEMA-OHS and will be adjusted up or down, based on a comparison of actual cumulative expenditures to cumulative advance payments, to date.
   6. F) Grantees that do not expend all advance payment amounts by the end of the grant performance period or that are unable to demonstrate that all incurred costs were necessary, reasonable, allowable, or allocable as approved in their respective grant budget, shall return the funds within 45 days or be subject to grant funds recovery.

2. 2) Reimbursement Method. Grantees will be paid via the reimbursement method or when they do not meet the requirements of subsection (d)(1), upon a grantee's request to use the reimbursement method of payment, or as stipulated in a specific condition. Grantees that have specific conditions noted in their grant agreement for any of the following items shall be paid using the reimbursement method:

   1. A) Fiscal and administrative high risk (weak internal controls);
   2. B) Having a history of failure to comply with general or specific terms and conditions of the grant agreement or any other grants issued by the State of Illinois;
   3. C) Failure to meet expected performance goals as described in 2 CFR 200.211 or their project deliverables as stated in their applicable grant agreement; or
   4. D) Otherwise not financially or programmatically responsible.
3. 3) Working Capital Advance Method. If the grantee cannot meet the requirements of the advance payment method provided in subsection (d)(1) and IEMA-OHS has determined that reimbursement is not feasible because the grantee lacks sufficient working capital, IEMA-OHS may provide funding on a working capital advance basis. Under the working capital advance method, IEMA-OHS shall advance payments to the grantee to cover its estimated disbursement needs for initial start-up costs and up to two months of program expenses, not to exceed 25% of the total award amount. The grantee during the application process shall demonstrate a need for the advance funds to commence a project. The remaining grant funds shall be paid through the reimbursement method after the grantee presents sufficient supporting documentation of expenditures for eligible activities. The working capital advance method shall not be used if the reason for the working capital advance is the unwillingness or inability of IEMA-OHS to provide timely advance payments to the grantee to meet the grantee's actual cash disbursements.

AGENCY NOTE: Nothing in these rules shall exempt a grantee from complying with applicable procurement requirements.