The total sum of the State liabilities will be the combined values of paragraph (1) and paragraph (6).
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 shalll not incur or calculate interest liabilities on refunds. A transaction is defined as a
single deposit.

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 using the Reimbursement funding technique, the State interest liability shall be based on the difference in
whole days between the date the refund is deposited in a State account and the date the refund is offset against a
subsequent deposit of Federal funds, except for Highway Planning and Construction (CFDA No. 20.205), where interest
will be calculated using the Composite Clearance technique.

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 programm 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
received and credited to a State's account and the date those funds are debited from the State's account.

8.6.2.2 Source of Data

The time period from the date an expenditure is posted in the State's central accounting system to the date the
disbursement is debited to the State's bank account shall be determined from information provided by the State Treasurer.

8.6.2.3 Standards Applied

Page 20 of 29


Component: Payroll
Technique: Payroll
Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 100.00

Component: Payments to Local Agencies/ Payments to Beneficiaries/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 2.00

Component: Indirect Costs (Costs Allocation Plan)

Technique: Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost
Allocation Plan))

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 0.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 98.00

Component: Payments to Local Agencies/ Payments to Service Providers/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

96.001 Social Security -- Disability Insurance
Recipient: Department of Labor and Industry
% of Funds Agency Receives: 59.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Labor and industry

% of Funds Agency Receives: 41.00

Component: Operating Costs/Vendor Payments/Payments to Beneficiaries/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

96.006 Supplemental Security Income
Recipient: Individual State SSI Recipients
% of Funds Agency Receives: 100.00

Page 14 of 29


42.0 AUTHORIZED SIGNATURES

Anna Maria KiehI
Chief Accounting Officer
Commonwealth of Pennsylvania

Date Signed: 6-1 q-2al a

Signature:

Date Submitted 04/30/2018

Corvelli A. McDaniel
Assistant Commissioner
Revenue Collections Management

Bureau of the Fiscal Service
A, PLanadd Date Signed: 4fale

Page 24 of 29


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 recelving
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.

6.1.6 With several programs subject to the Act, the primary State agency administering a program will subgrant portions of
the program to secondary State agencies. As costs in support of the program are incurred, the secondary agency
charges the primary agency, which in turn draws down Federal funds.

In all such cases, the secondary agency shall charge the primary agency no earlier than the day transactions post to the
accounts of the secondary agency. The procedures governing the request for funds from the primary agency, and the
payment of such requests, shall be in accordance with the agreement between the primary and secondary agencies.
Secondary agency transactions may include actual expenditures and/or estimates of current program activity. The
primary agency shail apply the indicated funding technique.

6.2 Description of Funding Techniques

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.

There are no funding techniques listed in Section 6.2.1

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.

Page 5 of 29


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

|=Pxrx {Pl + CT}, where
| = State's total interest liability
P = Total annual expenditures of Federal funds for program or component cash flow of program

r= Annualized rate equal to the average equivalent yields of 413-week Treasury bills auctioned during a State's fiscal year
divided by 365 days

Pl = Dollar-weighted average number of days Federal funds are held by State prior to issuance

CT = Dollar-weighted average number of days Federal funds are held by State between issuance and clearance of
checks.

9.0 REVERSE FLOW PROGRAMS

9.1 The Federal government makes payments on behalf of the State for the Supplemental Security Income (SSI)
program.

9.2 Definitions

State Supplementary Payment (SSP): Monthly payment made by the State to the Social Security Administration (SSA), as
a voluntary supplement to monthly SS! payments made by the SSA to the State’ s SSI beneficiaries.

SSI/SSP: The monthly SSI payment made by the SSA to beneficiaries, which combines both Federal SSI program funds
and SSP funds.

SSV/SSP Transfer Date: The dollar-weighted average day of clearance of the regularly issued monthly SSI/SSP checks
issued by the SSA, adjusted to reflect three payment variations.

Due Date: The day on which States are required to deposit funds to the SSA.

Deposit Date: The day on which State funds are deposited to the SSA.

9.3 Funding Technique

The State and the Federal government will apply the following funding technique to the SSI program:

Component: State Supplementary Payment

Technique: SSI Funding Technique

Description: In accordance with Public Law 106-170, the State shall deposit funds to the SSA no later than the business

Page 21 of 29


417.225F Unemployment Insurance | Department of Labor and |0.00 |Administration - Direct | Modified Post-Issuance
-- Federal Benefit Industry Administrative Costs Funding (CFDA No.
Account and 17.225 Direct
Administrative Costs Administrative Costs)
47.225F |Unemployment Insurance| Department of Labor and |5.00 |Administration - Payroll |Modified Weekly Draws |N/A
-- Federal Benefit Industry (CFDA No. 17.225
Account and Payroll)
Administrative Costs
47.225F |Unemployment Insurance | Department of Labor and |0.00 |Administration - Indirect _|Modified Monthly Draws |N/A
-- Federal Benefit Industry Costs - Internal Cost Plan|(CFDA No. 17.225
Account and Indirect Costs - Internal
Administrative Costs Cost Plan)
17.225F |Unemployment Insurance | Department of Labor and |95.0 |Benefit Payments (FECA, Dally rust Fund Draw |N/A
-- Federal Benefit Industry 0 UCX, etc.) (CFDA No. 17,225)
Account and
Administrative Costs
47.2258 |Unemployment Insurance| Department of Labor and |100, |Benefit Payments Daily Trust Fund Draw = |N/A
|-- State Benefit Account |Industry 00 ‘Commonwealth (CFDA No. 17.225)
count)
20.205 -|Highway Planning and Department of 400. |Payroll/Construction/Non- | Modified Composite N/A
Construction Transportation 00 |Personnel Services Costs|Clearance (CFDA No.
20,205 Highway Planning
and Gonstruction)
84.010 | Title | Grants to Local Department of Education |100. |Payments to Local Reimbursement N/A
Educational Agencies 00 |Agencies/Vendor
Payments/Operating
Costs/Indirect Costs
84.010 | Title | Grants to Local Department of Education |0.00 |Payrolt Payroll N/A
Educational Agencies
84.027 |Special Education -- Department of Education |98.0 |Payments to Local Reimbursement N/A
Grants to States 0 Agencies/Vendor
Payments/Operating
Costs/indirect Costs
84.027 |Special Education -- Department of Education |2.00 |Payrolt Payroll NIA
Grants to States
84.126 |Rehabilitation Services -- | Department of Labor and |57.0 |Vendor Reimbursement NIA
Vocational Rehabilitation | Industry 0 Payments/Operating
Grants to States Costs/Indirect Costs
84.126 | Rehabilitation Services - {Department of Labor and |43.0 [Payroll Payroll NIA
Vocational Rehabilitation | Industry 0
Grants to States
93.558 Fomporary Assistance for| Department of Human 8.00 |Indirect Costs (Cost Modified Monthly Draws |N/A
Needy Families Services Allocation Plan (CFDA Nos. 10.561,
93.558, 93.563, 93.658,
93.659, 93.778 Indirect
Costs (Cost Allocation
Plan))
93.558 | Temporary Assistance for | Department of Human 92.0 |Payments fo Local Reimbursement N/A
Needy Families Services 0 Agencies/Payments to
Beneficiaries/Vendor
Payments/Operating
Costs
93.558 | Temporary Assistance for | Department of Human 0.00 | Payroll Payroll NIA
Needy Families Services
93.563 | Child Support Department of Human 11.0 |Indirect Costs (Cost Modified Monthly Draws |N/A
Enforcement Services 0 Allocation Plan) CFDA Nos. 10.561,
13.558, 93,563, 93.658,
93.659, 93,778 Indirect
Costs (Cost Allocation
Plan))
93.563 | Child Support Department of Human 89.0 |Payments to Local Reimbursement NIA
Enforcement Services 0 Agencies/Vendor
Payments/Operating
Costs

Page 27 of 29



Date until (2) the day State funds are credited to the SSA.

SSA shall calculate Federal and State interest liabilities on the variance between (1) the amount of the monthly State
payment, which is an estimate, and (2) the actual monthly outlays for program purposes made by the SSA on behalf of
the State. The monthly State payment includes the cumulative balance brought forward from the previous month. For
each month of the State's fiscal year, SSA will compare the amount of the State payment to the amount of the actual
outlays made on behalf of the State. To the extent the State payment (including the estimated cumulative balance) is
greater than actual outlays, a Federal interest liability will accrue. To the extent the State payment (including estimated
cumulative balance) is less than actual outlays, a State interest liability will be calculated. In either case, the interest
liability will be calculated based on the difference in whole days from (1) the day the monthly State payment was
deposited to a Federal account to (2) the day a subsequent monthly State payment is deposited to a Federal account.

Any overpayment that results in a cumulative balance does not constitute an early deposit as defined in Public Law 106-
170, Section 410, Schedule for SSI Supplementation Agreements.

9.6 Refunds

Pursuant to 31 CFR 205.25 (c)(3), the State or the Federal government will not incur interest liabilities on refunds under
the Supplemental Security Income Program as States are credited with the refunds in advance, before SSA collects the
funds.

40.0 INTEREST CALCULATION COSTS

40.1 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:

(4) System analysts' time to prepare detail specifications for programming and testing programs.
(2) Programmer's time to write required programs.
(3) Computer time to analyze bank clearance tapes, process check clearance data, and process interest programs.

(4) User analysts’ time to identify payment data criteria for developing check clearance patterns, review check clearance
data to establish check clearance patterns and drawdown delay periods, and analyze interest calculation reports.

40.3 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

41.1 The provisions of 31 CFR Part 205.29 and 31 CFR Part 205.30 shail apply in cases of non-compliance with the
terms of this Agreement.

Page 23 of 29


In the event the funds are not received by the state in accordance with Exhibit | timelines, the state shall be entitled to
calculate a federal interest liability from the date the federal agency should have submitted the funds according to Exhibit !
timelines until the date the funds are actually received by the state.

8.2.3 Except for Unemployment Insurance (CFDA No. 47.225), where a Federal agency funds multiple grants under a
single payment system, the State shall net positive and negative grant drawdown amounts and request funds for the net
positive balance. If within a Letter of Credit having a net positive balance a drawdown cannot be made against a grant
because of an insufficient grant balance, the State shall calculate interest due from the Federal Government on that grant.
Where the result of netting is a negative amount, a draw will not be made. The State shall calculate interest due to the
Federal Government for positive balances in the cash book for the Administrative Fund and on positive bank balances in
the Benefit Payment Fund for the Federal share portion. Both interest calculations shall be included on the Annual
Report, when applicable.

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:

Federal and State Funds are Not Interest Neutral:
The State shall use the following methodology to calculate State interest liabilities on funds withdrawn from the several

accounts in the UTF under the Unemployment Insurance program.

Based on statements provided by its financial institution, or other appropriate source, the State shail determine the actual
interest earnings and the related banking costs attributable to funds withdrawn from its account in the UTF.

At the end of the State's fiscal year, the State shall calculate the percentage of its total unemployment compensation
expenditures for (1) funds withdrawn from the State account in the UTF, or the State %, and (2) funds withdrawn from the
Federal Employees Compensation Account (FECA) and the Extended Unemployment Compensation Account (EUCA)
and any other accounts of Federal funds in the UTF, or the Federal %.

The State shall calculate the actual interest earnings and the related banking costs attributable to funds withdrawn from
the State account in the UTF by multiplying the State % by the amount of the actual interest earnings and the related
banking costs of the account as a whole. The State's liability for interest on funds withdrawn from its account in the UTF
shall consist of the actual interest eamings attributable to such funds less the related banking costs attributed to such
funds.

The State shall determine the average daily cash balance of its unemployment compensation benefit payment account for
its fiscal year. The State shall calculate the average daily cash balance of Federal funds by multiplying the Federal % by
the average daily cash balance of the benefit payment account on the whole. The State's liability for interest on funds
withdrawn from the FECA and EUCA (and any other benefit accounts of Federal funds in the UTF from which the State
draws funds) shall be the average daily cash balance of Federal funds multiplied by the annualized rate equal to the
average equivalent yields of 13-week Treasury bills auctioned during the State's fiscal year.

8.3.2 The State shall use the following method to calculate State interest liabilities for the administrative costs of the
Unemployment Insurance (UI) program (CFDA No. 17.225).

The State shall calculate interest for the predisbursement period based on the following:

Page 18 of 29


Average Day of Clearance: N/A

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 5.00

Component: Administration - Payroll

Technique: Modified Weekly Draws (CFDA No. 17.225 Payroll)
Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account
Recipient: Department of Labor and Industry

% of Funds Agency Receives: 100.00

Component: Benefit Payments (Commonwealth Account)
Technique: Daily Trust Fund Draw (CFDA No. 17.225)
Average Day of Clearance: N/A

20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 100.00

Component: Payroll/Construction/Non-Personnel Services Costs

Technique: Modified Composite Clearance (CFDA No. 20.205 Highway Planning and Construction)
Average Day of Clearance: N/A

84.010 Title | Grants to Local Educational Agencies
Recipient: Department of Education

% of Funds Agency Receives: 0.00

Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Education

% of Funds Agency Receives: 100.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States
Recipient: Department of Education

% of Funds Agency Receives: 2.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Education
% of Funds Agency Receives: 98.00
Component: Payments to Local Agencies/Vendor Payments/Operating Costs/Indirect Costs

Page 10 of 29



Modified Weekly Draws (CFDA No. 17.225 Payroll)

The State shall request funds weekly for deposit on the day of payday, alternatively on the State's biweekly payday and
on the supplementary departmental payday. The request shall be made in accordance with the appropriate Federal
agency cut-off time specified in Exhibit |. The amount requested will be based on the amount of direct expenditures
identified to the program from the most recent report, The requested amount may be adjusted for available cash on hand.
This account will be reconciled monthly. This funding technique is interest neutral.

Modified ZBA - Supplemental Nutrition Assistance Program

Through its contractor, the State will request funds via the Automated Clearing House as a same day cash drawdown for
Electronic Benefit Transfers directly to the account of the third party administrator. The request shall be made in
accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The drawdown of funds shall be the
same day as retailers are paid for transactions made at the electronic point of sale machines. Funds will always be drawn
on the same day that settlement funds are paid out. This funding technique is interest neutral.

Payroll

The State shall request funds for deposit on the day of payday based on the State's biweekly paydays and on the
supplementary departmental paydays. The request shall be made in accordance with the appropriate Federal agency cut-
off time specified in Exhibit |. The amount of the request shall be for the amount of the disbursement. This funding
technique is interest neutral.

Reimbursement

The State shall schedule the receipt of Federal funds such that the funds are received and credited to a State bank
account on or after the date the funds have been disbursed from the State's funds, in most instances. The request shall
be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit I. The ammount of the request
shail be for the amount of the disbursement. 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.

40.551 Supplemental Nutrition Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 100.00

Component: Payments to Beneficiaries

Technique: Modified ZBA - Supplemental Nutrition Assistance Program
Average Day of Clearance: N/A

10.553 School Breakfast Program
Recipient: Department of Education
% of Funds Agency Receives: 0.00

Page 7 of 29


Daily Trust Fund Draw (CFDA No, 17.225)

The State shall draw down funds on a daily basis. The request shall be made in accordance with the appropriate Federal
agency cut-off time specified in Exhibit |. The amount of each day's State UC draw will be based on actual expenditures
that appear on the Daily Disbursement Report (DDR). This amount may be adjusted for any unusual circumstances that
may arise. The draw amount for the Federal accounts (FECA, UCX, etc.) will be based on actual expenditures that
appear on the DDR. This draw amount will then be adjusted to reflect any corresponding residual balances in the grant
order group status report in SAP. This funding technique is interest neutral.

Modified Composite Clearance (CFDA No. 20.205 Highway Planning and Construction)

The State shall establish an average day of clearance date for all expenditures. The average day clearance for this TSA
is 23 days. To this date, the State shall deduct two days, representing the adoption of mid-week (Wednesday) average
date for all postings during the week. The result will be the composite clearance date for drawing down Federal funds.
This funding technique is interest neutral.

Modified Monthly Draws (CFDA No. 10.557 Indirect Costs)

The State shall draw down funds for indirect costs once a month for the prior month. The request shall be made in
accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of the drawdown will be
based on the application of the indirect cost rate to the appropriate direct costs of the prior month. This funding
technique is interest neutral.

Modified Monthly Draws (CFDA No. 17.225 Indirect Costs - Internal Cost Plan}

The Commonwealth shall request funds for the indirect costs of each month, no earlier than the end of that month. The
request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit I. The amount of
funds requested will be based on the actual costs in the financial statements for that month, distributed in accordance with
the Department's approved cost plan. This funding technique is interest neutral.

Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost Allocation
Plan))

The State shall draw down funds for indirect costs (Cost Allocation Plan) once a month for the prior month. The request
shall be made in accordance with the appropriate Federal Agency cut-off time specified in Exhibit 1. The amount of the
drawdown will be based on the application of the cost allocation plan to the prior month's actual costs, except for certain
programs wherein the first month's request shall be based on an estimate of costs for the preceding 12 months and shall
be reconciled monthly. This funding technique is interest neutral.

Modified Post-Issuance Funding (CFDA No. 17.225 Direct Administrative Costs)

The State shall request funds weekly based on the negative balance of Direct Administrative Federal funds. The request
shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of each
drawdown shall be the amount of direct expenditures Identified to a program from the most recent daily reports. The draw
may be adjusted for available State or Federal cash on hand. This funding technique is not interest neutral.

Modified Reverse Flow (CFDA No. 96.006)
The State pays in funds to the Federal government that are used in conjunction with Federal funds for payments to

individual SS! beneficiaries. This funding technique is not interest neutral.

Page 6 of 29


(1) The State shall review the State cash ledger book balances to determine if overall fund ledger balances (except the
State fund ledger) are positive, thereby noting that Federal funds are on hand at the time of check issuance. If a positive
amount exists, a State liability exists. The principal amount of the State liability will be the positive balance for all fund
ledgers (except the State funds ledger) times the percentage relationship that the expenses of the applicable program are
to all fund ledgers expenses for that year. The interest rate factor will be in accordance with the Act. The time factor will
be for each day that a positive balance exists.

The State shall calculate interest for the postdisbursement period based on the following data:

(2) Average daily float. The average value of a day of float time (checks issued to checks cleared), which is the average
daily expenses calculated from the total annual amount of administrative costs of the applicable program.

(3) Check clearance time. The average number of float days (checks issued through checks cleared).

(4) Number of days State funds support float. The average number of days that State funds are avallable to support
average daily float after the checks are issued. This is calculated by the following steps:

(4A) The average daily amount of State cash maintained in the State cash ledger will be multiplied by the percentage
relationship that the expenses of the applicable program are to all fund ledgers expenses for that year. The result will be
the average daily amount of State cash that is utilized to support average daily float.

(4B) To determine the number of days that State funds support the float, the result of the calculation in paragraph (4A)
above will be divided by the average daily float value in paragraph (2) until the full amount of paragraph (4A) is used.
Example: Total amount of State funding utilized to support float is $300. Average daily float value is $50. The number of
days State cash can support the float is six (6).

(5) Average days between draws. The average number of days between drawdowns for the applicable program. The
number of days between draws will be calculated by taking the total number of draws during the year and dividing them
Into 365 days.

(6) A State interest liability for the postdisbursement period exists when:

(6A) State funds used to support the float time from paragraph (4) above are not available to support the entire average
float time from paragraph (3). The State shall determine this by subtracting the number of days in paragraph (3) from the
number of days in paragraph (4). If the amount is a negative number of days, then a State liability exists. The principal
amount for the State liability will be the average value of a day of float times the number of days State funds did not
support the float. The interest rate factor will be in accordance with the Act. The time factor for this catculation is 365

days.

(6B) The average number of days between draws from paragraph (5) is less than the average number of float days from
paragraph (3). The State shall determine this by subtracting the number of float days in paragraph (3) from the average
number of days between draws in paragraph (5). If the amount is a negative number of days, then a State liability exists.
The principal amount for the State liability will be the average value of a day of float times the number of days that funds
were drawn before the end of the float. The interest rate factor will be in accordance with the Act. The time factor for this
calculation is the number of days equivalent to the number of draws the State made during the year.

Page 19 of 29


Technique: Payroll
Average Day of Clearance: N/A

Recipient: Department of Education

% of Funds Agency Receives: 100.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 88.00

Component: Indirect Costs (Cost Allocation Plan)

Technique: Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost
Allocation Plan))

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 0.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 12.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
Recipient: Department of Labor and Industry

% of Funds Agency Receives: 95.00

Component: Benefit Payments (FECA, UCX, etc.)

Technique: Daily Trust Fund Draw (CFDA No. 17.225)

Average Day of Clearance: N/A

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 0.00

Component: Administration - Indirect Costs - Internal Cost Plan

Technique: Modified Monthly Draws (CFDA No. 17.225 Indirect Costs - Internal Cost Plan)
Average Day of Clearance: N/A

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 0.00

Component: Administration - Direct Administrative Costs

Technique: Modified Post-Issuance Funding (CFDA No. 17,225 Direct Administrative Costs)

Page 9 of 29


Exhibit | - Funds Request and Receipt Times Schedule

Commonwealth of Pennsylvania

sderal Agency

Agriculture-FNS_ ACH 41:59 PM. day
Agriculture-FNS: Fedwire 5:45 PM 0 day
Agriculture-FS ACH 3:00 PM dday
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 Q day
Education ACH 3:00 PM. 4 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 1day
HHS Fedwire 3:00 PM QO day
HUD ACH 5:30 PM 2 days
HUD Fedwire 3:00 PM 0 day
Interior-FWS ACH 11:59 PM Aday
Interior-FWS: Fedwire 5:45 PM 0 day
Interior-OSM. ACH 3:00 PM 1day
Interior-OSM Fedwire 4:00 PM 0 day
Justice ACH 11:00 PM 6 days
Justice Fedwire 2:00 PM. 2 days
Labor-Non-UTF ACH 3:00 PM 4 day
Labor-UTF ACH 3:00 PM iday
Labor-UTF Fedwire 3:00 PM (0 day
National Science Foundation (NSF) ACH 8:00 PM 4 day
National Science Foundation (NSF) Fedwire 5:45 PM. iO day
Social Security Administration ACH 11:59 PM 4 day
Social Security Administration Fedwire 5:45 PM 0 day
‘Transportation (FAA) ACH. 2:00 PM. 41 day
Transportation (FHWA) ACH 12:00 PM 3 days
‘Transportation (FHWA) Fedwire 12:00 PM 10 day
Transportation (FTA) ACH. 2:00 PM. 4 day
Veterans Administration [ACH 12:00 PM. 3 days

Page 25 of 29


Cash Management Improvement Act Agreement
between
The Commonwealth of Pennsylvania
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 Commonwealth of
Pennsylvania (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 Commonwealth of Pennsylvania shall be the Chief Accounting Officer, Office of the
Budget in all matters concerning this Agreement.

4.2 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

2.4 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 entitles 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 29



Component: Payroll
Technique: Payroll
Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 89.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.568 Low-Income Home Energy Assistance .
Recipient: Department of Human Services

% of Funds Agency Receives: 6.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 94.00

Component: Payments to Local Agencies/Payments to Beneficiaries/Vendor Payments/Operating Costs/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant
Recipient: Department of Human Services

% of Funds Agency Receives: 4.00

Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 96.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund
Recipient: Department of Human Services

% of Funds Agency Receives: 0.00

Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 100.00
Component: Payments to Local Agencies/Vendor Payments/Indirect Costs

Page 12 of 29


Technique: Reimbursement
Average Day of Clearance: N/A

84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States
Recipient: Department of Labor and Industry

% of Funds Agency Receives: 43.00

Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Labor and industry

% of Funds Agency Receives: 57.00

Component: Vendor Payments/Operating Costs/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families

Recipient: Department of Human Services

% of Funds Agency Receives: 8.00

Component: Indirect Costs (Cost Allocation Plan)

Technique: Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93,778 Indirect Costs (Cost
Allocation Plan))

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 0.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 92.00

Component: Payments to Local Agencies/Payments to Beneficiaries/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.563 Child Support Enforcement

Recipient: Department of Human Services

% of Funds Agency Receives: 11.00

Component: Indirect Costs (Cost Allocation Plan)

Technique: Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost
Allocation Plan))

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 0.00

Page 11 of 29


Component: Payroll
Technique: Payroll
Average Day of Clearance: N/A

Recipient: Department of Education

% of Funds Agency Receives: 100.00

Component: Payments to Educational Agencies/Vendor Payments/Operating Costs/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

10.555 National School Lunch Program
Recipient: Department of Education

% of Funds Agency Receives: 0.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Education

% of Funds Agency Receives: 100.00

Component: Payments to Educational Agencies/Vendor Payments/Operating Costs/Indirect Costs
Technique: Reimbursement

Average Day of Clearance: N/A

40.557 Special Supplemental Nutrition Program for Women, Infants, and Children
Recipient: Department of Health

% of Funds Agency Receives: 1.00

Component: indirect Costs

Technique: Modified Monthly Draws (CFDA No, 10.557 Indirect Costs)

Average Day of Clearance: N/A

Recipient: Department of Health

% of Funds Agency Receives: 3.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Health

% of Funds Agency Receives: 96.00

Component: Payments to Beneficiaries/Payments to Local Agencies/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

40.558 Child and Adult Care Food Program
Recipient: Department of Education

% of Funds Agency Receives: 0.00
Component: Payroll

Page 8 of 29


day preceding the date on which the SSA Commissioner pays monthly benefits, or with respect to monthly benefits paid
for the month that is the last month of the State’ s fiscal year, the fifth business day following such date.

9.4 Clearance Pattern

The SSI/SSP Transfer Date is determined by adjusting the dollar weighted average day of clearance for regularly issued
monthly SSV/SSP checks, as determined by the Federal Reserve Bank's Survey of Float on US Government Checks, with
the three payment variations below, to reflect the proportion of SSI/SSP payments made to beneficiaries as follows:

By check on days later in a month: To calculate this adjustment, SSA will determine the nationwide percentage of total
SSI/SSP payments made to beneficiaries by check on days later in a month, using full data from the most recent Federal
fiscal year. The average day of clearance for regularly issued monthly SSI/SSP checks shall be dollar-weighted for
SSI/SSP payments made to beneficiaries by check on days later in the month, which are assumed to be issued on the
11th business day of the month.

By direct deposit on the regularly designated day of the month for delivery of SSI/SSP payments: To calculate this
adjustment, SSA will determine the nationwide percentage of total SSI/SSP payments made to beneficiaries by direct
deposit on the regularly designated day of the month for delivery of SS/SSP payments, using full data from the most
recent Federal fiscal year. The average day of clearance for regularly issued monthly SSI/SSP checks shall be dollar-
weighted with the average day of clearance for SSi/SSP payments made to beneficiaries by direct deposit on the regularly
designated day of the month for delivery of SSI/SSP payments to beneficiaries.

By direct deposit on days later in a month: To calculate this adjustment, SSA will determine the nationwide percentage of
total SSI/SSP payments made to beneficiaries by direct deposit on days later in a month, using full data from the most
recent Federal fiscal year. The average day of clearance for regularly issued monthly SSI/SSP checks shall be dollar-
weighted with the average day of clearance for SS/SSP payments made to beneficiaries by direct deposit on days later in
amonth, which are assumed to be issued on the 11th business day of the month.

9.5 Interest Calculations

The Federal Government shall use the following methods to calculate and document Federal and State interest liabilities
for SSI.

To calculate the interest liability, SSA shall record the Deposit Date of each monthly SSP payment and compare it to the
SSI/SSP Transfer Date for each month. The liability for interest will be based on the following:

Payments received before the Due Date: The interest liability provisions of the CMIA do not apply to payments paid by a
State before the Due Date, pursuant to Public Law 106-170. All payments received prior to the Due Date will be deemed
as received on the Due Date, for the purposes of calculating interest.

Payments received on the Due Date: A Federal interest liability should be computed from (1) the Due Date to (2) the day
SSA pays out the State funds for program purposes (SSI/SSP Transfer Date).

Payments received after the Due Date but on or before the SSI/SSP Transfer Date: Interest liability provisions of the
CMIA do not apply.

Payments received after the SSi/SSP Transfer Date: A State interest liability will accrue from (1) the SSI/SSP Transfer

Page 22 of 29


se au : ie oe
‘Child Support Department of Human 0.00 |Payroll Payroll NIA
Enforcement Services
93.568 |Low-Income Home Department of Human [94.0 | Payments to Local Reimbursement NIA
Energy Assistance Services ti) |Agencies/Payments to
Beneficiaries/Vendor
Payments/Operating
Costs/Indirect Costs
93.568 |Low-Income Home Department of Human 6.00 |Payroll Payroll NIA
Energy Assistance Services
93.575 |Child Care and Department of Human 96.0 |Payments to Local Reimbursement NIA
Development Block Grant} Services it} Agencies/Vendor
Payments/Operating
Costs
93.575 —|Child Care and Department of Human 4.00 |Payroll Payroll NIA
Development Block Grant| Services
93,596 |Child Care Mandatory Department of Human 100, |Payments to Local Reimbursement N/A
and Matching Funds of |Services 00 |Agencies/Vendor
the Child Care and Payments/indirect Costs
Development Fund
93.596  |Child Care Mandatory Department of Human 0.00 | Payroll Payroll NIA
and Matching Funds of |Services
the Child Care and
Development Fund
93.658 | Foster Care -- Title |V-E_ | Department of Human 1.00 |Indirect Costs (Cost Modified Monthly Draws |N/A
Services Allocation Plan) ‘CFDA Nos. 10.561,
.558, 93.563, 93.658,
93.659, 93.778 Indirect
Costs (Cost Allocation
Plan))
93.658 |Foster Care -- Title |V-E_|Department of Human —_|99.0 |Payments to Local Reimbursement NIA
Services 0 Agencies/Vendor
Payments/Operating
Costs
93.658 |Foster Care —Title IV-E |Department of Human —_}0.00 {Payroll Payroll NIA
Services
93.659 | Adoption Assistance Department of Human 5,00 |Indirect Costs (Cost Modified Monthly Draws {N/A
Services Allocation Plan} (CFDA Nos. 10.561,
3.558, 93,563, 93.658,
93.659, 93.778 Indirect
Costs (Cost Allocation
Plan))
93.659 |Adoption Assistance Department of Human 95.0 |Payments to Local Reimbursement NIA
Services 0 Agencles/Vendor
Payments/Operating
Costs
93.659 | Adoption Assistance Department of Human [0.00 | Payroll Payroll N/A
Services
93.767 |Children's Health Department of Human 100. |Payments to Local Reimbursement N/A
Insurance Program Services 00 |Agencies/ Payments to
Beneficiaries/Vendor
Payments/Operating
Costs
93.767 {Children's Health Department of Human 0.00 |Payroll Payroll N/A
Insurance Program Services
93.778 {Medical Assistance Department of Human 2.00 jIndirect Costs (Costs Modified Monthly Draws |N/A
Program Services Allocation Plan) (CFDA Nos. 10.561,
93.558, 93.563, 93.658,
93.659, 93.778 Indirect
Costs (Cost Allocation
Plan))
93.778 |Medical Assistance Department of Human 98.0 |Payments to Local Reimbursement NIA
Program Services 0 Agencies/ Payments to
Service Providers/Vendor
Payments/Operating
Cosis

Page 28 of 29



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
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

Page 4 of 29


Component: State Supplementary Payment

Technique: Modified Reverse Flow (CFDA No. 96.006)
Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:
None.

6.3.4 The percentage of funds an agency receives included in 6.3.2 are estimates and may fluctuate throughout the term
of this Agreement. A zero represents less than 1 percent of the percentage of funds an agency receives.

6.3.5 The funding technique for 96.006, Supplemental Security Income, is Reverse Flow Program. This techique is
discussed in section 9 of this agreement.

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

The State shall develop clearance patterns for each program that uses a delay of draw by measuring the dollar-weighted
number of days between the day expenditures are sent to Treasury for payment and the day the related checks clear.

Each program is examined to determine the appropriation(s) supporting it (Federal financial assistance to the State is
reappropriated by the legislature).

The relevant appropriation(s), an integral element of the voucher transmittals (VTs) used by Commonwealth agencies to
request payment, control(s) the selection of VTs for the check clearance research.

All checks associated with the selected VTs during a fiscal year are examined.
7.2 The following shall develop the State's clearance patterns:

The data is assembled by the State Treasurer and forwarded to the Office of the Budget, Comptroller Operations, which
creates and runs the computer program that measures clearance activity and computes the clearance patterns.

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

(1) electronic files provided by the State's financial institutions indicating the dates checks cleared, and (2) electronic files
provided by the State Treasurer indicating unique identifying numbers and the related check issuance dates.

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

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 doflar-weighted average day of clearance:

Page 15 of 29


Daily Trust Fund Draw (CFDA No. 17.225)

Modified Composite Clearance (CFDA No. 20.205 Highway Planning and Construction)

Modified Monthly Draws (CFDA No. 10.557 Indirect Costs)

Modified Monthly Draws (CFDA No. 17.225 Indirect Costs - internal Cost Plan)

Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost Allocation
Plan))

Modified Weekly Draws (CFDA No. 17.225 Payroll)

Modified ZBA - Supplemental Nutrition Assistance Program

Payroll

Reimbursement

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

8.1.3 The term “date of issuance" in section 8.1.2 shall refer to the expenditure posting date.

8.1.4 The State shall maintain records of clearings and drawdowns to verify the implementation of the Dally Trust Fund
Draw and the Working Capital Advance funding techniques. The State shall document, for each day, the amount of funds
that clear State accounts and the amount of Federal funds deposited to State accounts.

8.1.5 Where the State administers a Federal program through restricted receipt accounts, which require Federal funds to
be on hand prior to generating program payments, the State will calculate the amount of interest due the Federal
Government for the period beginning on the date Federal funds are deposited to a State bank account and ending on the
date funds are paid out for program purposes, except for Highway Planning and Construction (CFDA No. 20.205), where
interest will be calculated as follows:

For program payments made via ACH the State will calculate the amount of interest due the Federal Government for the
period beginning on the date Federal funds are deposited to a State bank account and ending on the date funds are paid

out for program purposes.

For program payments made via the State Treasury check the State will calculate the amount of interest due the Federal
Government for the period beginning on the date Federal funds are deposited to a State bank account and ending on the
date funds are paid out for program purposes using the average clearance technique.

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 shali 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:

Page 17 of 29


Department of Education
Department of Health

Department of Human Services
Department of Labor and Industry
Department of Transportation
Individual State SSI Recipients

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:

Citibank 10.551 Supplemental Nutrition Assistance Program

Wells Fargo 10.553 School Breakfast Program

Wells Fargo 10.555 National Schoo! Lunch Program

Wells Fargo 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
Wells Fargo 10.558 Child and Adult Care Food Program

Wells Fargo 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
Wells Fargo 17.225F Unemployment Insurance —- Federal Benefit Account and Administrative Costs
Wells Fargo 17.225S Unemployment Insurance -- State Benefit Account

Wells Fargo 20.205 Highway Planning and Construction

Wells Fargo 84.010 Title | Grants to Local Educational Agencies

Wells Fargo 84.027 Special Education -- Grants to States

Wells Fargo 84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States

Wells Fargo 93.558 Temporary Assistance for Needy Families

Wells Fargo 93.563 Child Support Enforcement

Wells Fargo 93.568 Low-Income Home Energy Assistance

Wells Fargo 93.575 Child Care and Development Block Grant

Wells Fargo 93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund
Wells Fargo 93.658 Foster Care -- Title IV-E

Wells Fargo 93.659 Adoption Assistance

Wells Fargo 93.767 Children's Health Insurance Program

Wells Fargo 93.778 Medical Assistance Program

Wells Fargo 96.001 Social Security -- Disability Insurance

Wells Fargo 96.006 Supplemental Security Income

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 | to ensure
funds will be received and credited to a State account by the times specified in the funding techniques. Exhibit | 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 ll - 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

Page 3 of 29


Exhibit If - Commonwealth of Pennsylvania
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

Modified ZBA -

10.551 Supplemental Nutrition |Department of Human 100. }Payments to N/A

Assistance Program Services 00 |Beneficiaries Supplemental Nutrition
Assistance Program,

10.553 | School Breakfast Department of Education |100. |Payments to Educational |Reimbursement N/A

Program 00 |Agencies/Vendor
Payments/Operating
Costs/Indirect Costs

10.553 {School Breakfast Department of Education |0.00 | Payroll Payroll NIA
Program

10.555 [National School Lunch Department of Education |100. /Payments to Educational |Reimbursement NIA
Program 00  jAgencies/Vendor

Payments/Operating
Costs/Indirect Costs

10.555 [National School Lunch Department of Education }0.00 |Payrolt Payroll NIA
Program.

10.557 |Special Supplemental Department of Health 1.00 |Indirect Costs Modified Monthly Draws |N/A
Nutrition Program for (CFDA No, 10.557
‘Women, Infants, and indirect Costs)

Children

10.557 |Special Supplemental Department of Health 96.0 |Payments to Reimbursement NIA
Nutrition Program for 0 Beneficiaries/Payments
‘Women, Infants, and to Local Agencies/Vendor|
Children Paymen (Operating

10.557 | Special Supplemental Department of Health 3.00 Covell Payroll NIA
Nutrition Program for
Women, Infants, and
Children

10,558 | Child and Adult Care Department of Education |100. |Payments to Local Reimbursement N/A
Food Program 00 |Agencies/Vendor

Payments/Operating
Costs/Indirect Costs

10.558 {Child and Adult Care Department of Education |0.00 |Payroll Payroll N/A
Food Program.

10.561 {State Administrative Department of Human —_[88.0 |Indirect Costs (Cost Modified Monthly Draws |N/A
Matching Grants for the Services 0 Allocation Plan; (CFDA Nos. 10.564,
Supplemental Nutrition 93.558, 93.563, 93.658,
Assistance Program 93.659, 93.778 Indirect

Costs (Cost Allocation
Plan))

10.561 State Administrative Department of Human. 12.0 |Payments to Local Reimbursement N/A
Matching Grants for the Services lO Agencies/Vendor
Supplemental Nutrition Payments/Operating

ssistance Program Costs

10.561 |State Administrative Department of Human 0.00 {Payroll Payroll NIA

Matching Grants for the |Services

Supplemental Nutrition

Assistance Program

Page 26 of 29



4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on the State's published
Single Audit 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 $95,835,550.
The following programs meet or exceed the threshold and are not excluded in Section 4.4:

40.551 Supplemental Nutrition Assistance Program

10.553 School Breakfast Program

10.555 National School Lunch Program

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
40.558 Child and Adult Care Food Program

140.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
147.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
17.225S Unemployment Insurance -- State Benefit Account

20.205 Highway Planning and Construction

84.010 Title | Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States

93.558 Temporary Assistance for Needy Families

93.563 Child Support Enforcement

93.568 Low-Income Home Energy Assistance

93.575 Child Care and Development Block Grant

93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund
93.658 Foster Care - Title IV-E

93.659 Adoption Assistance

93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

96.001 Social Security - Disability Insurance

96.006 Supplemental Security Income

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.

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:

Page 2 of 29


93.778 |Medicai Assistance Department of Human 0.00 {Payroll Payroll NIA
Program Services
96.001 Social Security ~ Department of Labor and {41.0 |Operating Costs/Vendor |Reimbursement N/A
Disability Insurance Industry Payments/Payments to
Beneficiaries/Indirect
Costs
96.001 |Social Security —- Department of Labor and |59.0 |Payroll Payroll N/A
Disability Insurance Industry 0
96.006 {Supplemental Security [Individual State SSI 100. /State Supplementary Modified Reverse Flow |N/A
Income. Recipients (00__ {Payment (CFDA No. 96.006)

| 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:

G.~1%-20e1 §

Printed Name: _ Anna Maria Kieht

Certifying Signature: a: |

Title:

Chief Accounting Officer

Page 29 of 29



Technique: Reimbursement
Average Day of Clearance: N/A

93.658 Foster Care -- Title IV-E

Recipient: Department of Human Services

% of Funds Agency Receives: 1.00

Component: indirect Costs (Cost Allocation Plan)

Technique: Modified Monthly Draws (CFDA Nos. 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost
Allocation Pian))

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 0.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 99.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.659 Adoption Assistance

Recipient: Department of Human Services

% of Funds Agency Receives: 5.00

Component: Indirect Costs (Cost Allocation Plan)

Technique: Modified Monthly Draws (CFDA Nos, 10.561, 93.558, 93.563, 93.658, 93.659, 93.778 Indirect Costs (Cost
Allocation Plan))

Average Day of Clearance: N/A

Recipient: Department of Human Services
% of Funds Agency Receives: 0.00
Component: Payroll

Technique: Payroll

Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 95.00

Component: Payments to Local Agencies/Vendor Payments/Operating Costs
Technique: Reimbursement

Average Day of Clearance: N/A

93.767 Children's Health Insurance Program
Recipient: Department of Human Services
% of Funds Agency Receives: 0.00

Page 13 of 29


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.

7.6.1 The term “issue date" or "issuance" used in section 7.6 shall refer to the date at which the expenditure was sent to
the State Treasurer for payment.

7.7 The State shall adjust each clearance pattern to reflect the doliar-weighted proportion of funds paid out by EFT/Direct
payroll, with the following exceptions:

In those instances where an expenditure is paid via EFT/Direct payroll, the check clearance pattern is determined by
using the date the expenditure is sent to the State Treasurer for payment to the date the funds clear the bank.

The State shall also adjust each clearance pattern to reflect:

The clearance date of each check is compared to the related date the expenditure was sent to the State Treasurer for
payment to determine the actual number of days between these two events.

The clearance time of each voucher transmittal is individually calculated and a dollar-weighted average day of clearance
is calculated. This clearance time is then applied to all voucher transmittals that are part of the clearance pattern.

The clearance time of each check in the study is dollar-weighted to produce the dollar-weighted average day of clearance
after expenditure posting.

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 16 of 29