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<br />0002H <br /> <br />ATT HMENT A <br />Circular No. A-I02 <br /> <br />UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS-IN-AID <br />TO STATE AND LOCAL GOVERNMENTS <br /> <br />CASH DEPOSITORIES <br /> <br />1. Except for situations described in 2., 3., and 4., below, <br />no grant program shall: <br /> <br />a. Require physical segregation of cash depositories <br />for Federal grant funds which are provided to a State or <br />local government. <br /> <br />b. Establish any eligiblity requirements for cash deposi- <br />tories, in which Federal grant funds are deposited by State <br />or local governments. <br /> <br />2. A separate bank account may be used when payments under <br />letter of credit are made on a "checks-paid" basis in accordance <br />with agreements entered into by a grantee, the Federal Govern- <br />ment, and the banking institutions involved. <br /> <br />3. Any moneys advanced to the State or local governments <br />which are determined to be "public moneys" (owned by the <br />Federal Government) must be deposited in a bank with FDIC <br />insurance coverage and the balances exceeding the FDIC <br />coverage must be collaterally secure, as provided for in <br />12 U.S.C. 265. <br /> <br />4. Consistent with the national goal of expanding the <br />opportunities for minority business enterprises, State and <br />local governments shall be encouraged to use minority banks. <br />