(a) Purpose. This section provides the rules to ensure States do not claim Federal financial participation (FFP) for replacement checks under titles I, VI-A, X, XIV, XVI (AABD) except under the circumstances specified in paragraph (c) of this section.

(b) Definitions. As used in this section—

Check means a check or warrant that the State or local agency uses to make a payment.

Replacement check means a check issued by the State or local agency to replace an earlier check.

(c) Claiming of FFP for replacement checks. The State agency may not claim FFP for the amount of a replacement check unless:

(1) It makes no claim for FFP for the earlier check;

(2) The earlier check has been cancelled (voided) and FFP refunded, where claimed, pursuant to 45 CFR 201.67(d); or

(3) The earlier check has been cashed and FFP has been refunded.

The State agency shall report the amount of the refund of FFP for the earlier check on the Quarterly Statement of Expenditures for the quarter no later than the quarter in which the replacement check is issued.

[53 FR 24269, June 28, 1988]