Cash Management Improvement Act Agreement

between

The State of South Carolina

and

The Secretary of the Treasury,

United States Department of the Treasury

The Secretary of the Treasury, United States Department of the Treasury (hereafter 'Secretary'), and State of South

Carolina (hereafter 'State'), in order to implement Section 5 of the Cash Management Improvement Act of 1990, as

amended (hereafter 'Act'), agree as follows:

1.0 AGENTS OF THE AGREEMENT

1.1 The Authorized Official(s) for the State of South Carolina shall be the State Treasurer in all matters concerning this

Agreement.

1.2 The Assistant Commissioner, Revenue Collections Management, Bureau of the Fiscal Service (Fiscal Service), U.S.

Department of the Treasury, shall act as the Secretary's representative in all matters concerning this Agreement.

2.0 AUTHORITY

2.1 The authority for this Agreement is the Cash Management Improvement Act of 1990 (Public Law 101-453), as

amended by the Cash Management Improvement Act of 1992 (Public Law 102-589), codified at 31 U.S.C. 6501 and 31

U.S.C. 6503.

2.2 The regulations codified at 31 CFR Part 205 shall apply to all matters pertaining to this Agreement, and are

incorporated herein by reference. In the event of any inconsistency between this Agreement and 31 CFR Part 205, the

regulations shall govern.

3.0 DURATION, AMENDING, TERMINATING, AND MISCELLANEOUS PROVISIONS

3.1 This Agreement shall take effect on 07/01/2018 and shall remain in effect until 06/30/2019.

3.2 This Agreement may be amended at any time by written, mutual consent of the State and the Fiscal Service. This

Agreement shall be amended annually to incorporate new programs that qualify as major Federal assistance programs

and remove programs that no longer qualify as major Federal assistance programs. A State must notify the Fiscal Service

in writing within 30 days of the time the State becomes aware of a change that involves additions or deletions of programs

subject to Subpart A, changes in funding techniques, and/or changes in clearance patterns. The notification must include

a proposed amendment for review by the Fiscal Service.

3.3 Notwithstanding section 3.2, in the event of Federal or State non-compliance with Subpart B of 31 CFR, Part 205, the

Fiscal Service may amend this Agreement at any time to incorporate additional programs and the entities that administer

those programs.

3.4 This Agreement may be terminated by either party with 30 days written notice. If this Agreement is terminated, the

Fiscal Service will prescribe the funding techniques, clearance patterns, and methods for calculating interest liabilities to

be used by the State.

Page 1 of 21
4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on the most recent State

Wide Single Audit information for fiscal year ending 06/30/2017.

All major Federal assistance programs shall be covered by this Agreement, unless otherwise specified in section 4.4 of

this Agreement.

4.2 The State's threshold for major Federal assistance programs is $57,501,839.

The following programs meet or exceed the threshold and are not excluded in Section 4.4:

10.551 Supplemental Nutrition Assistance Program

10.555 National School Lunch Program

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children

14.195 Section 8 Housing

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs

17.225S Unemployment Insurance -- State Benefit Account

20.205 Highway Planning and Construction

84.010 Title I Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States

93.268 Immunization Grants

93.558 Temporary Assistance for Needy Families

93.575 Child Care and Development Block Grant

93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters)

4.3 The following programs fall below the State's threshold but have been required to be covered by Fiscal Service in

accordance with the non-compliance provisions of Subpart B of 31 CFR Part 205:

There are currently no programs listed for Section 4.3.

4.4 The following programs exceed the State's threshold but have been excluded from coverage for the reason indicated:

There are currently no programs listed for Section 4.4.

4.5 Total expenditure of Federal financial assistance for all programs was $9,583,639,805

5.0 ENTITIES COVERED

5.1 State agencies and instrumentalities that meet the definition of a State per 31 CFR Part 205, shall be subject to the

terms of this Agreement. The following is a list of such entities that administer funds under the programs listed in Section

4.0 of this Agreement:

Adjutant General

Department of Employment and Workforce

Department of Health & Environmental Control

Department of Health & Human Services

Page 2 of 21
Department of Social Services

Department of Transportation

State Department of Education

State Housing Authority

Vocational Rehabilitation

5.2 Entities that meet the definition of a Fiscal Agent per 31 CFR Part 205 shall be subject to the terms of this Agreement.

The following is a list of Fiscal Agents that administer funds under the programs listed in the Section 4.0 of this

Agreement:

COVANSYS 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children

Xerox State & Local Solutions, INC 10.551 Supplemental Nutrition Assistance Program

6.0 FUNDING TECHNIQUES

6.1 General Terms

6.1.1 The State shall request Federal funds in accordance with the appropriate cut-off times shown in Exhibit I to ensure

funds will be received and credited to a State account by the times specified in the funding techniques. Exhibit I is

incorporated by reference herein.

6.1.2 The State shall schedule the receipt of Federal funds such that the funds are received and credited to a State

account in accordance with the clearance patterns specified in Exhibit II - List of State Clearance Patterns. Exhibit II is

incorporated by reference herein.

6.1.3 In instances where the receipt of funds is scheduled for a Saturday, the State shall request funds for deposit on

Friday. In instances where the receipt of funds is scheduled for a Sunday, the State shall request funds for deposit on

Monday. In instances where the receipt of Federal funds is scheduled for deposit on a day when the State is not open for

business, the State shall request funds for deposit the day following the scheduled day; in instances where the receipt of

Federal funds is scheduled for deposit on a day when the Federal Government is not open for business, the State shall

request funds for deposit the day prior to the scheduled day.

6.1.4 Estimates and Reconciliation of Estimates:

Where estimated expenditures are used to determine the amount of the drawdown, the State will indicate in the terms of

the State unique funding technique how the estimated amount is determined and when and how the State will reconcile

the difference between the estimate and the State's actual expenditures.

6.1.5 Supplemental Funding:

Unless otherwise defined by program rules, Supplemental Funding is the award of additional funds to provide for an

increase in costs due to unforeseen circumstances.

The State will comply with all Federal program agency policies and procedures for requesting supplemental grant funding.

The State will comply with the following guidelines when requesting supplemental funding for the Medical Assistance

Program and associated administrative payments (CFDA 93.778):

The State must submit a revised Medicaid Program Budget Report (CMS-37) to request supplemental funding. The CMS

guidelines and instructions for completing the CMS-37 are provided in Section 2600F of the State Medicaid Manual

(SMM). The CMS/CO must receive the revised Form CMS-37 through the Medicaid Budget Expenditure

Page 3 of 21
System/Children's Budget Expenditure System (MBES/CBES) no later than 10 calendar days before the end of the

quarter for which the supplemental grant award is being requested.

Additional guidance on this policy is available from the respective CMS Regional Office, U.S. Department of Health &

Human Services.

The State will comply with the following guidelines when requesting supplemental funding for TANF (CFDA 93.558),

CCDF (CFDA 93.575), CSE (93.563), and the FC/AA (CFDA 93.658 and CFDA 93.659) programs administered by the

U.S. Department of Human Services, Administration for Children and Families (HHS/ACF):

a. Timing of the Request

A State should initiate its request for supplemental funding during a quarter as soon as it becomes aware of the fact that a

shortfall does/will exist. For the TANF and CCDF grants, supplemental funding requests (estimates) may be submitted by

a State, for consideration by ACF, up through and including the 15th day of the third month of the first, second or third

quarter of any fiscal year. Since TANF and CCDF are block grant programs, all unawarded portions of the annual

allotment will automatically be issued at the beginning of the fourth quarter. Therefore, supplemental funding requests will

not be available during the fourth quarter for these programs. For the CSE and FC/AA programs, supplemental funding

requests may be submitted by a state, for consideration by ACF, up through and including the 15th day of the third month

of any quarter of a fiscal year.

b. Justification for the Request

The request for a supplemental funding for any of the above mentioned programs should contain a justification clearly

documenting the need for the additional funding authority during the current quarter. This documentation should be in the

form of State accounting records or similar documents that will show the actual expenditures through the most recent

month for which such data are available, as well as the State's most accurate projection of its anticipated expenditures

during the remaining month(s) of the quarter. For either the TANF or the CCDF program, the State's justification should

also include an explanation of the activities requiring the obligation and/or expenditure of amounts that exceed the normal

quarterly grant award restrictions and why these activities could not have been delayed until the next quarter.

c. Form Submittal

Supplemental funding requests should be made by completing the appropriate ACF quarterly report of expenditures and

estimates applicable to the particular program for which the grant award request is being made.

d. Approval Process

Upon receipt of the state's request for additional funding authority for a quarter, the ACF Regional Office will promptly

review the supporting documentation. If the request is properly justified, so long as ACF has adequate funding

availability, the State's request will be expedited and supplemental funding will be issued within 5 days of ACF receiving

the request. The State will be notified by the Regional Office when the supplemental award has been transmitted to the

Payment Management System (PMS) and when it may initiate drawdowns against the supplemental funding.

Additional guidance on this policy is provided in the U.S. Department of Health & Human Services, Administration for

Children and Families, letter (May 19, 2004) to State Administrators from the Deputy Assistant Secretary for

Administration.

6.2 Description of Funding Techniques

Page 4 of 21
6.2.1 The following are terms under which standard funding techniques shall be implemented for all transfers of funds to

which the funding technique is applied in section 6.3.2 of this Agreement.

Actual Clearance, ZBA - Same Day Payment

The State shall request funds the same day it pays out funds, in accordance with the appropriate Federal agency cut-off

time specified in Exhibit I. A Federal agency will deposit funds in a State account the same day as requested. The amount

of the request shall be for the amount of funds that clear the State's account that day. This funding technique is interest

neutral.

Payment Schedule - Bi-Weekly

The State shall request funds such that they are deposited in a State account on the median business day of the biweekly period. The request shall be made in accordance with the appropriate Federal agency cut-off time specified in

Exhibit I. The amount of the request shall be a prorated share of the lesser of (1) the annual grant divided by 26, or (2) the

total amount of Federal funds expected to be paid out for program purposes during the year divided by 26. This funding

technique is interest neutral.

Payment Schedule - Monthly

The State shall request funds such that they are deposited in a State account on the median business day of the month.

The request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit I. The

amount of the request shall be a prorated share of the lesser of (1) the annual grant divided by 12, or (2) the total amount

of Federal funds expected to be paid out for program purposes during the year divided by 12. This funding technique is

interest neutral.

Pre-Issuance

The State shall request funds such that they are deposited in a State account not more than three business days prior to

the day the State makes a disbursement. The request shall be made in accordance with the appropriate Federal agency

cut-off time specified in Exhibit I. The amount of the request shall be the amount the State expects to disburse. This

funding technique is not interest neutral.

6.2.2 The following are terms under which funding techniques for administrative costs shall be implemented for all

transfers of funds to which the funding technique is applied in section 6.3.2 of this Agreement.

There are no funding techniques listed in Section 6.2.2

6.2.3 The following are terms under which miscellaneous funding techniques shall be implemented for all transfers of

funds to which the funding technique is applied in section 6.3.2 of this Agreement.

There are no funding techniques listed in Section 6.2.3

6.2.4 The following are terms under which State unique funding techniques shall be implemented for all transfers of funds

to which the funding technique is applied in section 6.3.2 of this Agreement.

Monthly Draws-Prior Month Activity

The State shall request funds once a month, such that they are deposited on the median day of the month. The request

shall be made in accordance with the appropriate Federal agency cut-off times. The amount of the request for a given

months activity shall be the actual direct costs. This funding technique is interest neutral.

Page 5 of 21
Monthly Draws-Prior Month Activity (indirect costs)

The State shall request funds once a month, such that they are deposited on the median day of the month. The request

shall be made in accordance with the appropriate Federal agency cut-off times. The amount of the request for a given

months activity shall be based on the monthly allocation of indirect costs. These costs shall be reconciled on a quarterly

basis. This funding technique is interest neutral.

Non Central Draw Indirect Cost Rate-Monthly

The State shall request funds once a month, such that they are deposited on the median day of the month. The request

shall be made in accordance with the appropriate Federal agency cut-off times. The amount of the request shall be

calculated by applying the indirect cost rate to the appropriate cost base of the prior month. This funding technique is

interest neutral.

6.3 Application of Funding Techniques to Programs

6.3.1 The State shall apply the following funding techniques when requesting Federal funds for the component cash flows

of the programs listed in sections 4.2 and 4.3 of this Agreement.

6.3.2 Programs

Below are programs listed in Section 4.2 and Section 4.3.

10.551 Supplemental Nutrition Assistance Program

Recipient: Department of Social Services

% of Funds Agency Receives: 100.00

Component: Direct Assistance Payments

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

10.555 National School Lunch Program

Recipient: State Department of Education

% of Funds Agency Receives: 100.00

Component: Payments to Local Education Agencies (LEAs), State Agencies, and Other Entities

Technique: Pre-Issuance

Average Day of Clearance: N/A

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children

Recipient: Department of Health & Environmental Control

% of Funds Agency Receives: 3.00

Component: Indirect Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Environmental Control

% of Funds Agency Receives: 24.00

Component: Payroll

Technique: Pre-Issuance

Page 6 of 21
Average Day of Clearance: N/A

Recipient: Department of Health & Environmental Control

% of Funds Agency Receives: 73.00

Component: Direct Payments to Clients

Technique: Pre-Issuance

Average Day of Clearance: N/A

14.195 Section 8 Housing

Recipient: State Housing Authority

% of Funds Agency Receives: 100.00

Component: Request for Payments from Vendors

Technique: Pre-Issuance

Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs

Recipient: Department of Employment and Workforce

% of Funds Agency Receives: 75.74

Component: Direct Payments to Beneficiaries

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Department of Employment and Workforce

% of Funds Agency Receives: 0.25

Component: Indirect Costs

Technique: Non Central Draw Indirect Cost Rate-Monthly

Average Day of Clearance: N/A

Recipient: Department of Employment and Workforce

% of Funds Agency Receives: 16.81

Component: Payroll

Technique: Payment Schedule - Bi-Weekly

Average Day of Clearance: N/A

Recipient: Department of Employment and Workforce

% of Funds Agency Receives: 7.20

Component: Direct Costs

Technique: Payment Schedule - Monthly

Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account

Recipient: Department of Employment and Workforce

% of Funds Agency Receives: 100.00

Component: Direct payments to beneficiaries

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Page 7 of 21
20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 5.00

Component: Payroll

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Transportation

% of Funds Agency Receives: 95.00

Component: Construction and Direct Payments

Technique: Pre-Issuance

Average Day of Clearance: N/A

84.010 Title I Grants to Local Educational Agencies

Recipient: State Department of Education

% of Funds Agency Receives: 98.00

Component: Payments to Local Education Agencies

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: State Department of Education

% of Funds Agency Receives: 1.00

Component: Direct Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: State Department of Education

% of Funds Agency Receives: 1.00

Component: Payroll

Technique: Pre-Issuance

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: State Department of Education

% of Funds Agency Receives: 1.00

Component: Direct Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: State Department of Education

% of Funds Agency Receives: 98.00

Component: Payments to Local Education Agencies (LEA's)

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: State Department of Education

Page 8 of 21
% of Funds Agency Receives: 1.00

Component: Payroll

Technique: Pre-Issuance

Average Day of Clearance: N/A

84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States

Recipient: Vocational Rehabilitation

% of Funds Agency Receives: 9.00

Component: Indirect Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Vocational Rehabilitation

% of Funds Agency Receives: 53.00

Component: Payroll

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Vocational Rehabilitation

% of Funds Agency Receives: 38.00

Component: Direct Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

93.268 Immunization Grants

Recipient: Department of Health & Environmental Control

% of Funds Agency Receives: 12.00

Component: Indirect Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Environmental Control

% of Funds Agency Receives: 81.00

Component: Payroll and Administration Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Environmental Control

% of Funds Agency Receives: 7.00

Component: Direct Payments

Technique: Pre-Issuance

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families

Recipient: Department of Social Services

% of Funds Agency Receives: 4.00

Page 9 of 21
Component: Payroll

Technique: Monthly Draws-Prior Month Activity

Average Day of Clearance: N/A

Recipient: Department of Social Services

% of Funds Agency Receives: 33.00

Component: Direct Assistance Payments to Clients

Technique: Monthly Draws-Prior Month Activity

Average Day of Clearance: N/A

Recipient: Department of Social Services

% of Funds Agency Receives: 15.00

Component: Direct Costs

Technique: Monthly Draws-Prior Month Activity

Average Day of Clearance: N/A

Recipient: Department of Social Services

% of Funds Agency Receives: 48.00

Component: Indirect Costs

Technique: Monthly Draws-Prior Month Activity (indirect costs)

Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant

Recipient: Department of Social Services

% of Funds Agency Receives: 18.00

Component: Direct Costs

Technique: Monthly Draws-Prior Month Activity

Average Day of Clearance: N/A

Recipient: Department of Social Services

% of Funds Agency Receives: 17.00

Component: Payroll

Technique: Monthly Draws-Prior Month Activity

Average Day of Clearance: N/A

Recipient: Department of Social Services

% of Funds Agency Receives: 61.00

Component: Direct Assistance

Technique: Monthly Draws-Prior Month Activity

Average Day of Clearance: N/A

Recipient: Department of Social Services

% of Funds Agency Receives: 4.00

Component: Indirect Costs

Technique: Monthly Draws-Prior Month Activity (indirect costs)

Average Day of Clearance: N/A

Page 10 of 21
93.767 Children's Health Insurance Program

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 2.00

Component: Indirect Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 95.00

Component: Direct Assistance Payments

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 3.00

Component: Salaries and Other Direct Expenses

Technique: Pre-Issuance

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 1.00

Component: Indirect Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 2.00

Component: Administrative costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 96.00

Component: Assistance Payments

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Health & Human Services

% of Funds Agency Receives: 1.00

Component: Payroll

Technique: Pre-Issuance

Average Day of Clearance: N/A

97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters)

Recipient: Adjutant General

Page 11 of 21
% of Funds Agency Receives: 94.90

Component: Payments for awarded project expenditures

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Adjutant General

% of Funds Agency Receives: 0.60

Component: Payroll

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Adjutant General

% of Funds Agency Receives: 4.50

Component: Administrative Costs

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

No agencies are exempt from coverage on the basis of materiality.

6.3.4 If the South Carolina Department of Transportation does not request funds at least weekly for CFDA 20.205, a

federal interest liability may not accrue per 31 CFR Part 205.16(a). The funding technique for CFDA 20.205 is Preisssuance but the State will not claim an interest liability when the state does not request funds at least weekly.

7.0 CLEARANCE PATTERNS

7.1 The State shall develop separate clearance patterns for each of the following:

Payroll Expenses, Contingent Expenses, and Direct Benefits.

7.2 The following shall develop the State's clearance patterns:

The State Treasurer's Office Cash Management, Information Technology, Accounting and Financial Reporting divisions

have developed the State's clearance patterns in section 7.1.

7.3 The sources of data the State shall use when developing its clearance patterns are as follows:

Financial information from the South Carolina Enterprise Information System (SCEIS) and actual bank data shall be used

for payroll, contingent and direct benefit expenditures. The South Carolina Department of Employment and Workforce

shall provide information/develop clearance patterns for the Unemployment Insurance programs. The South Carolina

Department of Health and Human Services shall provide information/develop clearance patterns for the Medical

Assistance Program, (CFDA 93.778). The state excludes transfers between funds (Journal Vouchers and Cash Transfers)

and transfers between agencies in the same fund (Inter Departmental Transfers). These transfers occur on the same

day.

7.4 The State shall use the following methodology when developing its clearance patterns:

Page 12 of 21
When developing each clearance pattern, the State shall track at least 99% of the funds disbursed, from issuance to

clearance, for a period of at least three months.

7.5 The State shall identify for each check or warrant (hereafter, check) in the population: (1) the date the check was

released for payment; (2) the date the check was debited from the State's account, and, (3) the amount of the check.

7.6 The State shall use the following method to calculate the dollar-weighted average day of clearance:

To determine the number of days each check was outstanding (clearance time), the issue date shall be subtracted from

the date the check cleared the State's account.

To determine the percentage of the disbursement paid out each day following issuance, the amount of the checks that

clear the State's account each day shall be summed and then divided by the amount of the total disbursement.

For each day following issuance, the clearance time of the checks paid out that day shall be multiplied by the percentage

of the total disbursement those checks represent. This product is the clearance factor.

The dollar-weighted average day of clearance for the disbursement shall be determined by summing the clearance factor

of each day following the disbursement.

7.7 The State shall adjust each clearance pattern to reflect the dollar-weighted proportion of funds paid out by EFT/Direct

payroll, with the following exceptions:

No exceptions.

The State shall also adjust each clearance pattern to reflect:

the contingent checks issued to the Department of Health and Human Services to fund the checks/EFTs issued to

recipients on the Medicaid Bank Account. The State will pay one day of interest on the average daily cash balance of

CFDA 93.778, as determined by SCEIS, for the one day that the contingent checks used to fund the Medicaid Bank

Account are actually outstanding. The State will calculate the interest liability for CFDA 93.778 using the actual check

clearing patterns of the checks issued on the Medicaid Bank Account.

7.8 Each of the State's clearance patterns is calculated in calendar days.

7.9 An authorized State official shall certify that each clearance pattern developed by the State accurately corresponds to

the clearance activity of the programs to which it is applied. This certification shall be provided to the Fiscal Service prior

to the effective date of the Agreement. The State shall recertify its clearance patterns at least every five years.

7.10 The State shall follow the procedures of 31 CFR 205 if it has actual or constructive knowledge, at any time, that a

clearance pattern does not correspond to a program's clearance activity.

8.0 INTEREST CALCULATION METHODOLOGY

8.1 General Terms

8.1.1 The State and the Secretary agree that no interest liabilities will be incurred for transfers of funds made in

accordance with the procedures specified in section 6 of this Agreement where the following funding techniques are

applied:

Page 13 of 21
Actual Clearance, ZBA - Same Day Payment

Monthly Draws-Prior Month Activity

Monthly Draws-Prior Month Activity (indirect costs)

Non Central Draw Indirect Cost Rate-Monthly

Payment Schedule - Bi-Weekly

Payment Schedule - Monthly

8.1.2 The State shall maintain information on disbursements and receipts of funds to verify the implementation of any

funding technique and document interest liabilities.

For each disbursement, the State shall be able to identify:

(1) amount of the issuance

(2) date of issuance

(3) date Federal funds are received and credited to a State account

(4) amount of Federal funds received

(5) date funds were requested

8.2 Federal Interest Liabilities

8.2.1 A Federal interest liability shall accrue from the day the State pays out its own funds for program purposes to the

day Federal funds are credited to a State account. With regard to funds transferred out of the Federal Highway Trust

Fund, if a State does not bill at least weekly for current project costs, the Federal interest liability shall not accrue prior to

the day the State submits a request for funds.

8.2.2 The State shall use the following method to calculate Federal interest liabilities:

The State shall track the actual cash activity for each Federal program by its own account. A negative cash balance at

the close of business indicates that the State has paid out its own funds for program purposes in the absence of

supporting Federal funds. A Federal interest liability shall be calculated by applying the annualized rate equal to the

average equivalent yields of 13-week Treasury bills auctioned during the State's fiscal year to a program's negative cash

balance. This Federal interest liability shall be offset by the amount of interest that is earned while the check is

outstanding for the calculated average number of days that a check is outstanding.

8.3 The Unemployment Trust Fund

8.3.1 The State shall use the following method to calculate State interest liabilities on funds withdrawn from the several

accounts in the Unemployment Trust Fund:

There are no interest earnings on funds withdrawn from the State account, the fund is interest-neutral. For transfers UTF

that do not follow the technique specified in section 6.2 and result in a positive balance of funds in a State account, the

States liability for interest on funds withdrawn from its account in the UTF shall consist of the actual interest earnings of

the benefit payment account on the pro-rata share less the related banking costs attributed to such funds.

8.4 Refund Liabilities

8.4.1 The State shall be liable for interest on refunds from the date the refund is credited to a State account until the date

the refund is debited from the State account for program purposes. The State shall apply a $50,000 refund transaction

threshold below which the State shall not incur or calculate interest liabilities on refunds. A transaction is defined as a

single deposit.

Page 14 of 21
8.4.2 For each refund, the State shall maintain information identifying:

(1) date a refund is credited to a State account

(2) date of the subsequent deposit of Federal funds against which the refund is offset

(3) amount of the refund

8.4.3 The State shall use the following methodology to calculate interest liabilities on refunds:

With programs to which applicable interest neutral funding techniques shall be applied, the State shall determine the

actual amount of refunds received during the State fiscal year for each program using the information in its standard

Federal financial status reports. For each program, the State shall estimate the number of days that refunds are held prior

to being offset against a subsequent deposit of Federal funds. This shall be calculated as the average number of days

between drawdown deposits, which is determined by dividing the total number of drawdowns into 365, and assuming that

all refunds are received at the midpoint of the average number of days between drawdowns.

With programs to which applicable non-interest neutral funding techniques shall be applied, the State shall also calculate

the time refunds are in a State account by comparing the date the refund is offset against a subsequent deposit of Federal

funds and the date the refund is paid out for program purposes. This period will be measured for each program in

accordance with the State method for calculating interest under pre-issuance funding, and will be applied independently to

the amount of refunds under each program to calculate the interest on refunds.

8.5 Exemptions

8.5.1 Where more than one State agency is a recipient of Federal funds under a program, a particular State agency's

funding may be excluded from interest calculation procedures if the State agency receives an amount of funds less than 5

% of the State's threshold for major Federal assistance programs. Notwithstanding this potential exemption, however, in

no case shall less than 90% of a program's total funding be subject to interest calculation procedures.

Proration of calculations: If less than total program funding is subject to interest calculation procedures, the resulting

interest liability calculations shall be prorated to 100% of program funding.

8.6 State Interest Liabilities

8.6.1 The State shall be liable for interest on Federal funds from the date Federal funds are credited to a State account

until the date those funds are paid out for program purposes.

8.6.2 The State shall use the following method to calculate State interest liabilities on Federal funds:

8.6.2.1 Measuring Time Funds Are Held

To determine the total time Federal funds are held, the State shall measure the time between the date Federal funds are

receipted into the State's central accounting system and the date those funds are expended from the State's account.

8.6.2.2 Source of Data

The time period from the total time Federal funds are held shall be determined from information captured by the State's

Statewide Accounting and Reporting System.

8.6.2.3 Standards Applied

Page 15 of 21
Census (Average Daily Balance):

The average daily cash balance of Federal Funds in the program's account reflects the actual activity of each draw from

the date of deposit to the date of issuance or clearance, whichever is pertinent.

8.6.2.4 Calculation Procedure

I = ADB x R, where

I = State's total interest liability

ADB = Average Daily Balance of cash in a program's account, measured from deposit to clearance

R = Annualized rate equal to the average equivalent yields of 13-week Treasury bills auctioned during a State's fiscal year

9.0 REVERSE FLOW PROGRAMS

The State is not required to cover any reverse flow programs under the terms of this Agreement because the program

falls below the State's threshold.

10.0 INTEREST CALCULATION COSTS

10.1 As set forth in 31 CFR 205.27, interest calculation costs are defined as those costs necessary for the actual

calculation of interest, including the cost of developing and maintaining clearance patterns in support of the interest

calculations. Interest calculation costs do not include expenses for normal disbursing services, such as processing of

checks or maintaining records for accounting and reconciliation of cash balances, or expenses for upgrading or

modernizing accounting systems. Interest calculation costs in excess of $50,000 in any year are not eligible for

reimbursement, unless the State provides justification with the annual report.

10.2 The State expects to incur the following types of interest calculation costs:

The costs of calculating interest, including the cost of developing and maintaining clearance patterns in support of interest

calculations.

10.3 The State shall submit all claims for reimbursement of interest calculation costs with its Annual Report in accordance

with 31 CFR 205.

11.0 NON-COMPLIANCE

11.1 The provisions of 31 CFR Part 205.29 and 31 CFR Part 205.30 shall apply in cases of non-compliance with the

terms of this Agreement.

Page 16 of 21
12.0 AUTHORIZED SIGNATURES

Curtis M. Loftis, Jr.

South Carolina State Treasurer

Signature:________________________________________Date Signed:_______________

Date Submitted 06/28/2018

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management

Bureau of the Fiscal Service

U.S. Department of the Treasury

Signature:________________________________________Date Signed:_______________

Page 17 of 21

Curtis M. Loftis, Jr. (Jun 29, 2018) Curtis M. Loftis, Jr.

Jun 29, 2018

Corvelli A. McDaniel (Jul 5, 2018)

Corvelli A. McDaniel

Jul 5, 2018
Exhibit I - Funds Request and Receipt Times Schedule

State of South Carolina

Federal Agency Payment Type Request Cut-Off Time Receipt Window

Agriculture-FNS ACH 11:59 PM 1 day

Agriculture-FNS Fedwire 5:45 PM 0 day

Agriculture-FS ACH 3:00 PM 1 day

Air National Guard ACH 12:00 PM 15 days

Army National Guard ACH 12:00 PM 15 days

Commerce-NOAA ACH 2:00 PM 1 day

Dept of Homeland Security (FEMA) Fedwire 2:00 PM 2 days

Dept of Homeland Security (ODP) ACH 2:00 PM 2 days

Dept of Homeland Security (ODP) Fedwire 2:00 PM 2 days

EPA ACH 2:00 PM 2 days

EPA Fedwire 2:00 PM 0 day

Education ACH 3:00 PM 1 day

Education Fedwire 2:00 PM 0 day

Energy ACH 4:00 PM 1 day

Energy Fedwire 3:00 PM 0 day

HHS ACH 6:30 PM 1 day

HHS Fedwire 3:00 PM 0 day

HUD ACH 5:30 PM 2 days

HUD Fedwire 3:00 PM 0 day

Interior-FWS ACH 11:59 PM 1 day

Interior-FWS Fedwire 5:45 PM 0 day

Interior-OSM ACH 3:00 PM 1 day

Interior-OSM Fedwire 1:00 PM 0 day

Justice ACH 11:00 PM 6 days

Justice Fedwire 2:00 PM 2 days

Labor-Non-UTF ACH 3:00 PM 1 day

Labor-UTF ACH 3:00 PM 1 day

Labor-UTF Fedwire 3:00 PM 0 day

National Science Foundation (NSF) ACH 8:00 PM 1 day

National Science Foundation (NSF) Fedwire 5:45 PM 0 day

Social Security Administration ACH 11:59 PM 1 day

Social Security Administration Fedwire 5:45 PM 0 day

Transportation (FAA) ACH 2:00 PM 1 day

Transportation (FHWA) ACH 12:00 PM 3 days

Transportation (FHWA) Fedwire 12:00 PM 0 day

Transportation (FTA) ACH 2:00 PM 1 day

Veterans Administration ACH 12:00 PM 3 days

Page 18 of 21
Exhibit II - State of South Carolina

LIST OF STATE CLEARANCE TIMES

(Rounded Dollar-Weighted Average Day of Clearance)

Clearance Times Where the Timing of A Draw Down Is Based on A Clearance

Pattern

CFDA Program Name Recipient % Component Technique Round

ed

days

10.551 Supplemental Nutrition

Assistance Program

Department of Social

Services

100.

00

Direct Assistance

Payments

Actual Clearance, ZBA -

Same Day Payment

0 Days

10.555 National School Lunch

Program

State Department of

Education

100.

00

Payments to Local

Education Agencies

(LEAs), State Agencies,

and Other Entities

Pre-Issuance N/A

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Department of Health &

Environmental Control

3.00 Indirect Costs Pre-Issuance N/A

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Department of Health &

Environmental Control

24.0

0

Payroll Pre-Issuance N/A

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Department of Health &

Environmental Control

73.0

0

Direct Payments to

Clients

Pre-Issuance N/A

14.195 Section 8 Housing State Housing Authority 100.

00

Request for Payments

from Vendors

Pre-Issuance N/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of

Employment and

Workforce

75.7

4

Direct Payments to

Beneficiaries

Actual Clearance, ZBA -

Same Day Payment

0 Days

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of

Employment and

Workforce

7.20 Direct Costs Payment Schedule -

Monthly

N/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of

Employment and

Workforce

16.8

1

Payroll Payment Schedule - BiWeeklyN/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of

Employment and

Workforce

0.25 Indirect Costs Non Central Draw

Indirect Cost RateMonthly

N/A

17.225S Unemployment Insurance

-- State Benefit Account

Department of

Employment and

Workforce

100.

00

Direct payments to

beneficiaries

Actual Clearance, ZBA -

Same Day Payment

0 Days

20.205 Highway Planning and

Construction

Department of

Transportation

5.00 Payroll Pre-Issuance N/A

20.205 Highway Planning and

Construction

Department of

Transportation

95.0

0

Construction and Direct

Payments

Pre-Issuance N/A

84.010 Title I Grants to Local

Educational Agencies

State Department of

Education

98.0

0

Payments to Local

Education Agencies

Pre-Issuance N/A

84.010 Title I Grants to Local

Educational Agencies

State Department of

Education

1.00 Direct Costs Pre-Issuance N/A

84.010 Title I Grants to Local

Educational Agencies

State Department of

Education

1.00 Payroll Pre-Issuance N/A

Page 19 of 21
CFDA Program Name Recipient % Component Technique Round

ed

days

84.027 Special Education --

Grants to States

State Department of

Education

98.0

0

Payments to Local

Education Agencies

(LEA's)

Pre-Issuance N/A

84.027 Special Education --

Grants to States

State Department of

Education

1.00 Payroll Pre-Issuance N/A

84.027 Special Education --

Grants to States

State Department of

Education

1.00 Direct Costs Pre-Issuance N/A

84.126 Rehabilitation Services --

Vocational Rehabilitation

Grants to States

Vocational Rehabilitation 9.00 Indirect Costs Pre-Issuance N/A

84.126 Rehabilitation Services --

Vocational Rehabilitation

Grants to States

Vocational Rehabilitation 53.0

0

Payroll Pre-Issuance N/A

84.126 Rehabilitation Services --

Vocational Rehabilitation

Grants to States

Vocational Rehabilitation 38.0

0

Direct Costs Pre-Issuance N/A

93.268 Immunization Grants Department of Health &

Environmental Control

81.0

0

Payroll and

Administration Costs

Pre-Issuance N/A

93.268 Immunization Grants Department of Health &

Environmental Control

7.00 Direct Payments Pre-Issuance N/A

93.268 Immunization Grants Department of Health &

Environmental Control

12.0

0

Indirect Costs Pre-Issuance N/A

93.558 Temporary Assistance for

Needy Families

Department of Social

Services

4.00 Payroll Monthly Draws-Prior

Month Activity

N/A

93.558 Temporary Assistance for

Needy Families

Department of Social

Services

33.0

0

Direct Assistance

Payments to Clients

Monthly Draws-Prior

Month Activity

N/A

93.558 Temporary Assistance for

Needy Families

Department of Social

Services

15.0

0

Direct Costs Monthly Draws-Prior

Month Activity

N/A

93.558 Temporary Assistance for

Needy Families

Department of Social

Services

48.0

0

Indirect Costs Monthly Draws-Prior

Month Activity (indirect

costs)

N/A

93.575 Child Care and

Development Block Grant

Department of Social

Services

18.0

0

Direct Costs Monthly Draws-Prior

Month Activity

N/A

93.575 Child Care and

Development Block Grant

Department of Social

Services

17.0

0

Payroll Monthly Draws-Prior

Month Activity

N/A

93.575 Child Care and

Development Block Grant

Department of Social

Services

61.0

0

Direct Assistance Monthly Draws-Prior

Month Activity

N/A

93.575 Child Care and

Development Block Grant

Department of Social

Services

4.00 Indirect Costs Monthly Draws-Prior

Month Activity (indirect

costs)

N/A

93.767 Children's Health

Insurance Program

Department of Health &

Human Services

95.0

0

Direct Assistance

Payments

Pre-Issuance N/A

93.767 Children's Health

Insurance Program

Department of Health &

Human Services

3.00 Salaries and Other Direct

Expenses

Pre-Issuance N/A

93.767 Children's Health

Insurance Program

Department of Health &

Human Services

2.00 Indirect Costs Pre-Issuance N/A

93.778 Medical Assistance

Program

Department of Health &

Human Services

1.00 Indirect Costs Pre-Issuance N/A

93.778 Medical Assistance

Program

Department of Health &

Human Services

2.00 Administrative costs Pre-Issuance N/A

93.778 Medical Assistance

Program

Department of Health &

Human Services

96.0

0

Assistance Payments Pre-Issuance N/A

93.778 Medical Assistance

Program

Department of Health &

Human Services

1.00 Payroll Pre-Issuance N/A

97.036 Disaster Grants - Public

Assistance (Presidentially

Declared Disasters)

Adjutant General 94.9

0

Payments for awarded

project expenditures

Actual Clearance, ZBA -

Same Day Payment

0 Days

97.036 Disaster Grants - Public

Assistance (Presidentially

Declared Disasters)

Adjutant General 0.60 Payroll Actual Clearance, ZBA -

Same Day Payment

0 Days

Page 20 of 21
________________________________________________________________________________________________________

I hereby certify that an authorized State official has certified at least every five years that the "Rounded Days of Clearance" listed in

Exhibit 2 of this Treasury-State Agreement:

1. Have been prepared in accordance with the standards provided in 31 CFR 205.20;

2. Accurately represent the flow of Federal funds under the Federal assistance programs to which they apply;

3. Reflect seasonal or other periodic variations in the clearance activities; and,

4. Are auditable.

Date: ___________________________________________________________

Printed Name: ____________________________________________________

Certifying Signature: _______________________________________________

Title: ___________________________________________________________

CFDA Program Name Recipient % Component Technique Round

ed

days

97.036 Disaster Grants - Public

Assistance (Presidentially

Declared Disasters)

Adjutant General 4.50 Administrative Costs Actual Clearance, ZBA -

Same Day Payment

0 Days

Page 21 of 21

Curtis M. Loftis, Jr. (Jun 29, 2018) Curtis M. Loftis, Jr.

State Treasurer Jun 29, 2018 Curtis M. Loftis, Jr.