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35 <br />Q. Reserve Accounts (WIC 10441) <br />1. All contractors are encouraged to develop and maintain a reserve within the <br />Child Development Fund. This reserve is derived from earned, but <br />unexpended contract funds. Reserve account funds are state funds the <br />contractor holds in reserve as deferred revenue until they are p roperly spent <br />or returned to the CDSS. <br />a. C2AP, C3AP, CAPP, CMAP, CFCC contractors may retain a reserve <br />balance of up to eight percent (8%) of the maximum allowable <br />administration and support costs for the aggregate sum of all alternative <br />payment contracts or one thousand dollars ($1,000), whichever is greater. <br />b. CCTR, CHAN, and CMIG contractors may retain a reserve balance equal <br />to fifteen percent (15%) of the sum of the maximum reimbursable amounts <br />of all contracts to which the contractor is a party, or two thousand dollars <br />($2,000), whichever is greater. <br />c. CRRP contractors may retain a reserve balance not to exceed three <br />percent (3%) of the contract maximum reimbursable amount. This reserve <br />is derived from unexpended contract funds. <br />2. The following criteria must be followed when establishing and using any <br />reserve account: <br />a. Each agency wishing to establish a reserve shall submit a letter of intent <br />no later than July 20 following the close of the fiscal year for which the <br />reserve will be established. The letter of intent must be on the form <br />provided by CDFS and signed by the executive director (or authorized <br />designee for public agencies). <br />b. Each reserve must be maintained in an interest-bearing account and the <br />amount of interest earned will be included in the reserve balance. <br />c. Reserve monies can only be used for expenses that are allowable <br />reimbursable expenses. Transfers from one reserve account type (or <br />category) to another are not allowable. However, transfers to a current- <br />year contract in the same reserve category are allowable and shall be <br />reported as restricted program income on that contract’s attendance and <br />fiscal report. <br />d. Reserve monies are generated from current year contracts, therefore, the <br />transferable amount generated during the contract period will not be <br />available until July 1 of the subsequent fiscal year.