12.0 AUTHORIZED SIGNATURES

Andrew Pallito
Commissioner of Finance and Management

Signature:

Date Signed: G/2,.3 /V6

Date Submitted 06/09/2016

Corvelli A. McDaniet

Assistant Commissioner

Revenue Collections Management
Bureau of the Fiscal Service

US. Departmenbor the Treasury
Craven! M4)
Signature: ype Ne 1!) uh
7

Date Signed: B/) (ib

Page 20 of 24


7.6 The State shalt 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 shail 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:

All Accounts - An adjustment is not necessary since the State includes all payments in its clearance pattern calculations,
including those paid electronically.

The State shall also adjust each clearance pattern to reflect:
na
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 208 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:

Actual Clearance, ZBA - ACH

Actual Clearance, ZBA - Same Day Payment

Average Clearance

Bi-Weekly Actual

Bi-Weekly Estimate

Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Indirect Costs - Quarterly Estimate

Payment Schedule-Quarterly Estimates-Other

Page 14 of 24


E S SS 2 2 da

93.778 |Medical Assistance AHS-Agency of Human = 0.44 |Buy-in Actual Clearance, ZBA- |1 Day
Program. Services ACH

93.778 |Medical Assistance AHS-Agency of Human = [2.17 payments to Providers- [Actual Clearance, ZBA- |1 Day
Program Services EF ACH

96.006 {Supplemental Security |AHS-Agency of Human = |100. |SSI Reverse Flow Program - |6 Days
Income Services 00 SSI (CFDA 96.006)

97.036 {Disaster Grants - Public |AOT-Agency of 83.1 |Payments to Providers & |Prior Month's Actual N/A
Assistance (Presidentially | Transportation 6 Grantees
Declared Disasters)

97.036 Disaster Grants - Public |AOT-Agency of 2.18 |Indirects and Prior Month's Actual N/A
Assistance (Presidentially | Transportation Administrative Costs.
Declared Disasters)

97.036 [Disaster Grants - Public |DPS-Department of 0.75 |Indirects and Prior Month's Actual NIA
Assistance (Presidentially | Public Safety Administrative Costs
Declared Disasters)

97.036 |Disaster Grants - Public |DPS-Department of 13.9 |Payments to Providers & |Prior Month's Actual NIA
Assistance (Presidentially | Public Safety 41 Grantees
Declared Disasters)

| 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:

6fa3 Le

Printed Name:

Certifying Signature:

Title:

Andrew Pallito

ve

Commissioner, Vermont Department of Finance and Management

Page 24 of 24


Actual Clearance, ZBA - ACH

The State shal! request funds such that they are deposited by ACH in a State account on the settlement date of payments
issued by the State. 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 for the amount of funds that clear the State's account on the settlement
date. This funding technique is interest neutral.

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 !. 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.

Average Clearance

The State shall request funds such that they are deposited by ACH on the dollar-weighted average day of clearance for
the disbursement, in accordance with the clearance pattern specified in Exhibit Il. The request shall be made in
accordance with the appropriate Federal agency cut-off time specified in Exhibit 1. The amount of the request shall be for
the exact amount of that disbursement. This funding technique is 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.

Cost Allocation Plans - Estimated Allocation - Bi-Weekly

The State shall request funds at bi-weekly intervals, such that they are deposited on the dollar-weighted average day of
clearance for payroll payments, as specified in the appropriate clearance pattern in Exhibit Il. The request shall be made
in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of the request for each
bi-weekly period shall be an estimate based on the cost allocation of the prior quarter. This funding technique is interest
neutral.

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.

Reverse Flow Program - SSI (CFDA 96.006)

In accordance with the terms in Section 9.0 of this Agreement, the Federal Government makes payments on behalf of the
State for the Supplemental Security Income (SSI) program, CFDA No. 96.006. This funding technique is interest neutral.

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.

Bi-Weekly Actual

The State will request funds bi-weekly based on the actual expenditures incurred during the previous two week period.
The request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The
amount of each request shall equal the total actual expenditures posted during the State's bi-weekly billing cycle. Since
expenditures using this funding technique are incurred in both the payroll and vendor bank accounts, the State will not
apply a clearance pattern to this funding technique and agrees that no federal interest liability will result, provided that
federal funds are available and deposited in accordance with the cut-off times specified in Exhibit |. This funding

Page 5 of 24


Exhibit | - Funds Request and Receipt Times Schedule

State of Vermont ©

Agriculture-FNS

ACH

14:59 PM.

Agriculture-FNS Fedwire 5:45 PM 0 day
|Agriculture-FS ACH 3:00 PM. 1 day
Air.National Guard. ACH 12:00 PM 18 days
Army National Guard [ACH 12:00 PM 415 days
Commerce-NOAA ACH 2:00 PM 1 day
Dept of Homeland Security (FEMA) Fedwire 2:00 PM 0 day
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 4 day
Education Fedwire 2:00 PM. O day
Energy ACH 4:00 PM. dday
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 14:59 PM. 1 day
Interior-FWS Fedwire 5:45 PM Q day
Interior-OSM. ACH 3:00 PM. 1 day
Interior-OSM Fedwire 5:45 PM QO day
Justice ACH 11:00 PM 6 days
Justice Fedwire 2:00 PM. 2 days
Labor-Non-UTF ACH 3:00 PM i day
Labor-UTF ACH 3:00 PM 4 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 41:59 PM 4 day
Social Security Administration Fedwire 5:45 PM (0 day
Transportation (FAA) ACH 2:00 PM. 4 day
Transportation (FHWA) ACH 12:00 PM 3 days
Transportation (FHWA) Fedwire 12:00 PM 0 day
Transportation (FTA) ACH 2:00 PM. 4 day
Veterans Administration ACH 12:00 PM 3 days

Page 21 of 24



20.509 {Public Transportation for |AOT-Agency of 3.91 |Direct Administrative Prior Month's Actual NIA
Nonurbanized Areas Transportation Costs and Payroll :
20.509 |Public Transportation for |AOT-Agency of _|96.0 |Grantees Prior Month's Actual N/A
Nonurbanized Areas Transportation 9
84.010 | Title 1 Grants to Local AOE-Agency of 0.30 [Indirect Administrative Bi-Weekly Actual N/A
Educational Agencies Education Costs
84.010 —_|Title | Grants to Local |AOE-Agency of 97.6 |Grantees Bi-Weekly Actual NIA
Educational Agencies Education 7
84.010 {Title I Grants to Local |AOE-Agency of 2.03 | Direct Administrative Bi-Weekly Actual NIA
Educational Agencies Education ‘Costs
84.027 |Special Education -- JAOE-Agency of 1.91 |Indirect Administrative Bi-Weekly Actual N/A
Grants to States. Education Costs
84.027 | Special Education -- |AOE-Agency of 10.3 |Direct Administrative Bi-Weekly Actual NIA
Grants to States Education 6 Costs
84.027 | Special Education — |AOE-Agency of 87.7 |Grantees Bi-Weekly Actual NIA
Grants to States Education 3
84.126 |Rehabilitation Services -- |AHS-Agency of Human |59.3 {Administrative Costs Cost Allocation Pians-_ |N/A
Vocational Rehabilitation |Services 4 Estimated Allocation - Bi-
Grants to States Weekly
84.126  |Rehabilitation Services -- |AHS-Agency of Human 40.6 |Payments to Weekly Billing Cycle 1 Day
Vocational Rehabilitation |Services 6 Providers/Clients/Grantee
Grants to'States Ss
93.525 | State Planning and |AHS-Agency of Human 0.99 | Indirect Administrative indirect Costs - Quarterly |N/A
Establishment Grants for |Services Costs Estimate
the Affordable Care Act
{ACA)s Exchanges
93.525 {State Planning and AHS-Agency of Human {99.0 | Direct Administrative Bi-Weekly Estimate NIA
Establishment Grants for )Services 1 Costs
the Affordable Care Act
(ACA)s Exchanges
93.558 |Temporary Assistance for;AHS-Agency of Human |10.2 | Transfer to SSBG Cost Allocation Plans- |N/A
Needy Families Services 9 Estimated Allocation - Bi-
Weekly
93.558 }Temporary Assistance for|AHS-Agency of Human 52.6 |Administration Costs Cost Allocation Plans- |N/A
Needy Families Services 3 Estimated Allocation - Bi-
Weekly
93.558 |Temporary Assistance for |AHS-Agency of Human |0.53 | Transfer to CCDF- Cost Allocation Plans- |N/A
Needy Families Services Administrative Costs Estimated Allocation - Bi-
Weekly
93.558 |Temporary Assistance for|AHS-Agency of Human 11.6 |TANF/CCDF Bi-Weekly |Average Clearance 3 Days
Needy Families Services 4 Payments
93.558 |Temporary Assistance for|AHS-Agency of Human |11.0 | TANF/CCDF Weekly Average Clearance 3 Days
Needy Families Services 7 Payments
93.558 {Temporary Assistance for |AHS-Agency of Human |13.9 {TANF Semi-Monthly Average Clearance 3 Days
Needy Families Services 3 Benefit Payments
93.568 |Low-Income Home AHS-Agency of Human = [8.51 |Administrative Costs Cost Allocation Plans- |N/A
Energy Assistance Services Estimated Allocation - Bi-
Weekly
93.568 jLow-Income Home . |AHS-Agency of Human [60.0 |Payments to Providers [Actual Clearance, ZBA- |1 Day
Energy Assistance Services 5 and Clients ACH
93.568 |Low-Income Home |AHS-Agency of Human [22.4 | Daily Payments to Bi-Weekly Actual NIA
Energy Assistance Services 4 Providers/Clients/Grantee
Ss
93.568 jLow-Income Home AHS-Agency of Human (9.00 |EBT Bi-Weekly Actual NIA
Energy Assistance. Services
93.778 |Medical Assistance AHS-Agency of Human |2.74 | Administrative Costs Cost Allocation Plans - NIA
Program ‘Services. Estimated Allocation - Bi-
Weekly
93.778 {Medical Assistance |AHS-Agency of Human {94.6 {Payments to Public Actual Clearance, ZBA- |1 Day
Program Services 5 Managed-Care ACH
‘Organization

Page 23 of 24



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
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 SSV/SSP Transfer Date is determined by adjusting the dollar weighted average day of clearance for regularly issued
monthly SSI/SSP checks, as determined by the Federal Réserve 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 totat
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 SSI/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 SSI/SSP payments made to beneficiaries by direct deposit on days later in
a month, which are.assumed to be issued on the 11th business day of the month.

9.5 Interest Calculations

The Federal Government shail 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). :

Page 18 of 24


Average Day of Clearance: N/A

Recipient: AOE-Agency of Education
% of Funds Agency Receives: 87.73
Component: Grantees

Technique: Bi-Weekly Actual
Average Day of Clearance: N/A

Recipient: AOE-Agency of Education

% of Funds Agency Receives: 1.91
Component: Indirect Administrative Costs
Technique: Bi-Weekly Actual

Average Day of Clearance: N/A

84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States
Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 59.34

Component: Administrative Costs

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 40.66

Component: Payments to Providers/Clients/Grantees
Technique: Weekly Billing Cycle

Average Day of Clearance: 1 Day

93.525 State Planning and Establishment Grants for the Affordable Care Act (ACA)s Exchanges

Recipient: AHS-Agency of Human Services
% of Funds Agency Receives: 99.01
Component: Direct Administrative Costs
Technique: Bi-Weekly Estimate

Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 0.99
Component: Indirect Administrative Costs
Technique: Indirect Costs’- Quarterly Estimate
Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 13.93

Component: TANF Semi-Monthly Benefit Payments
Technique: Average Clearance

Average Day of Clearance: 3 Days

Page 10 of 24


6.3.2 Programs
Below are programs listed in Section 4.2 and Section 4.3.

10.551 Supplemental Nutrition Assistance Program
Recipient: AHS-Agency of Human Services

% of Funds ‘Agency Receives: 77.04

Component: EBT

Technique: Actual Clearance, ZBA - Same Day Payment
Average Day of Clearance: 0 Days

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 14.80

Component: Bi-Weekly Payments to Providers/Clients/Grantees
Technique: Average Clearance

Average Day of Clearance: 3 Days

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 8.16

Component: Monthly Payments to Providers/Clients/Grantees
Technique: Average Clearance

Average Day of Clearance: 3 Days

10.555 National School Lunch Program
Recipient: AOE-Agency of Education
% of Funds Agency Receives: 100.00
Component: Grantees

Technique: Bi-Weekly Actual

Average Day of Clearance: N/A

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 27.98

Component: Administrative Costs

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly

Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services
% of Funds Agency Receives: 72.02
Component: Payments to Providers
Technique: Weekly Billing Cycle

Average Day of Clearance: 1 Day

12.401 National Guard Military Operations and Maintenance (O&M) Projects
Recipient: Mil-Department of Military
% of Funds Agency Receives: 100.00

Page 7 of 24


technique is interest neutral.
Bi-Weekly Estimate

The State will request funds bi-weekly based on the estimated federal share of actual expenditures incurred during the
previous two week period. The request shall be made in accordance with the appropriate Federal agency cut-off time
specified in Exhibit |. The amount of each request shall equal the total actual expenditures posted during the State's bi-
weekly billing cycle after applying an estimated federal share percentage. The estimated federal share will be reconciled
to actual as soon as possible after the quarterly cost allocation is completed. This funding technique is interest neutral.

Indirect Costs - Quarterly Estimate

The State shall request funds once a quarter, such that they are deposited on the median day of the quarter. 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 an estimate based on the cost allocation of the prior quarter and shall be reconciled to actual costs after
the quarterly cost allocation is completed. This funding technique is interest neutral.

Payment Schedule-Quarterly Estimates-Other

Funds will be requested weekly for deposit on the median day of each week. The request shall be made in accordance
with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of the drawdown shall be based on
quarterly estimates and shall be requested in equal weekly amounts throughout the quarter for deposit on the median day
of each week. Estimates will be reconciled to actual costs approximately 45 days after the end of the quarter. This
funding technique is interest neutral.

Payment Schedule-Quarterly Estimates-Payroll Cycle

Funds will be requested bi-weekly to coincide with the States payroll cycle. The request shall be made in accordance with
the appropriate Federal agency cut-off time specified in Exhibit |. The amount of the drawdown shall be based on
quarterly estimates and shall be requested in equal amounts each pay period during the quarter to coincide with the
State's bi-weekly payroll cycle. Estimates will be reconciled to actual costs approximately 45 days after the end of the
quarter. This funding technique is interest neutral.

Prior Month's Actual

Funds will be requested monthly for expenditures incurred in the prior month. Expenditures will be determined as soon as
possible subsequent to the close of each month and a request for funds will occur as soon as possible thereafter. The
request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of
the request shail be for the actual expenditures incurred in the prior month. This funding technique is not interest neutral.

Weekly Billing Cycle

Funds will be requested weekly for expenditures incurred during the States seven day billing cycle. The request shall be
made in accordance with the appropriate Federal agency cut-off specified in Exhibit |. The amount of the request shall be
the actual sum of expenditures that have been posted during the States billing cycle. This funding technique is not
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.

Page 6 of 24


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
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.

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:

Actual staff costs associated with the maintenance of clearance patterns and calculations of Federal/State interest
liabilities.

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 19 of 24



Technique: Weekly Billing Cycle
Average Day of Clearance: 6 Days

Recipient: AOT-Agency of Transportation

% of Funds Agency Receives: 81.17
Component: Payments to Providers & Grantees
Technique: Weekly Billing Cycle

Average Day of Clearance: 6 Days

20.509 Public Transportation for Nonurbanized Areas
Recipient: AOT-Agency of Transportation

% of Funds Agency Receives: 3.91

Component: Direct Administrative Costs and Payroll
Technique: Prior Month's Actual

Average Day of Clearance: N/A

Recipient: AOT-Agency of Transportation
% of Funds Agency Receives: 96.09
Component: Grantees

Technique: Prior Month's Actual
Average Day of Clearance: N/A

84.010 Title | Grants to Local Educational Agencies
Recipient: AOE-Agency of Education

% of Funds Agency Receives: 2.03

Component: Direct Administrative Costs

. Technique: Bi-Weekly Actual

Average Day of Clearance: N/A

Recipient: AOE-Agency of Education
% of Funds Agency, Receives: 97.67
Component: Grantees

Technique: Bi-Weekly Actual
Average Day of Clearance: N/A

Recipient: AOE-Agency of Education

% of Funds Agency Receives: 0.30
Component: Indirect Administrative Costs
Technique: Bi-Weekly Actual

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States
Recipient: AOE-Agency of Education

% of Funds Agency Receives: 10.36
Component: Direct Administrative Costs
Technique: Bi-Weekly Actual

Page 9 of 24


Cash Management Improvement Act Agreement
between
The State of Vermont
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 Vermont
(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 Vermont shall be the the Commissioner of Finance and Management 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 07/01/2016 and shall remain in effect until terminated.

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 24



Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 8.51

Component: Administrative Costs

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Average Day of Clearance: N/A

93.778 Medical Assistance Program
Recipient: AHS-Agency.of Human Services
% of Funds Agency Receives: 0.44
Component: Buy-in

Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: AHS-Agency of Human Services
% of Funds Agency Receives: 2.17
Component: Payments to Providers-EFT
Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 94.65

Component: Payments to Public Managed-Care Organization
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 2.74

Component: Administrative Costs

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Average Day of Clearance: N/A

96.006 Supplemental Security Income

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 100.00

Component: SSI

Technique: Reverse Fiow Program - SSI (CFDA 96.006)
Average Day of Clearance: 6 Days

97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters)
Recipient: DPS-Department of Public Safety

% of Funds Agency Receives: 0.75

Component: Indirects and Administrative Costs

Technique: Prior Month's Actual

Average Day of Clearance: N/A

Page 12 of 24


Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 11.64
Component: TANF/CCDF Bi-Weekly Payments
Technique: Average Clearance

Average Day of Clearance: 3 Days

Recipient: AHS-Agency of Human Services
% of Funds Agency Receives: 11.07
Component: TANF/CCDF Weekly Payments
Technique: Average Clearance

Average Day of Clearance: 3 Days

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 52.63

Component: Administration Costs

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 0.53

Component: Transfer to CCDF-Administrative Costs

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 10.20

Component: Transfer to SSBG

Technique: Cost Allocation Plans - Estimated Allocation - Bi-Weekly
Average Day of Clearance: N/A

93.568 Low-Income Home Energy Assistance
Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 60.05
Component: Payments to Providers and Clients
Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: AHS-Agency of Human Services

% of Funds Agency Receives: 22.44

Component: Daily Payments to Providers/Clients/Grantees
Technique: Bi-Weekly Actual

Average Day of Clearance: N/A

Recipient: AHS-Agency of Human Services
‘% of Funds Agency Receives: 9.00
Component: EBT

Technique: Bi-Weekly Actual

Page 11 of 24



Component: Direct Administrative Costs
Technique: Prior Month's Actual
Average Day of Clearance: N/A

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

% of Funds Agency Receives: 49.31

Component: Unemployment Insurance - Federal Electronic Funds

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: DOL-Department of Labor

% of Funds Agency Receives: 39.99

Component: Unemployment Insurance - Federal Funds Checks
Technique: Average Clearance

Average Day of Clearance: 8 Days

Recipient: DOL-Department of Labor

% of Funds Agency Receives: 2.03

Component: Unemployment Insurance - Administration - Other
Technique: Payment Schedule-Quarterly Estimates-Other
Average Day of Clearance: N/A .

Recipient: DOL-Department of Labor

% of Funds Agency Receives: 8.67

Component: Unemployment Insurance - Administration - Payroll
Technique: Payment Schedule-Quarterly Estimates-Payroll Cycle
Average Day of Clearance: N/A

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

% of Funds Agency Receives: 55.22

Component: Unemployment Insurance-State Electronic Funds
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: DOL-Department of Labor

% of Funds Agency Receives: 44.78

Component: Unemployment Insurance-State Funds-Checks
Technique: Average Clearance

Average Day of Clearance: 8 Days

20.205 Highway Planning and Construction
Recipient: AOT-Agency of Transportation

% of Funds Agency Receives: 18.83

Component: Direct Administrative Costs and Payroll!

Page 8 of 24


Exhibit Il - State of Vermont
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

‘Supplemental Nutrition —|AHS-Agency of Human Monthly Payments to Average Clearance
Assistance Program Services Providers/Clients/Grantee
s
10.551 |Supplemental Nutrition |AHS-Agency of Human {14.8 |Bi-Weekly Payments to |Average Clearance 3 Days
Assistance Program Services 0 Providers/Clients/Grantée |
s
10.551 |Supplemental Nutrition |AHS-Agency of Human {77.0 |EBT Actual Clearance, ZBA- |0 Days
Assistance Program Services 4 Same Day Payment
10.555 |National School Lunch | AOE-Agency of 100. |Grantees Bi-Weekly Actual INIA
Program Education 00
10.657 |Special Supplemental AHS-Agency of Human = |27.9 [Administrative Costs Cost Allocation Plans - |N/A
Nutrition Program for Services 8 Estimated Allocation - Bi-
‘Women, infants, and Weekly
‘Children,
10.557 |Special Supplemental AHS-Agency of Human |72.0 |Payments to Providers | Weekly Billing Cycle 1 Day
Nutrition Program for Services 2
Women, infants, and
Children
12.401 Nationa! Guard Military | Mil-Department of Military |100. |Direct Administrative Prior Month's Actual NIA
Operations and 00 |Costs
Maintenance (O&M)
Projects
17.225F |Unemployment Insurance |DOL-Department of 39.9 |Unemployment insurance | Average Clearance 8 Days
-- Federal Benefit Labor 9 ~ Federal Funds Checks .
Account and
Administrative Costs
17.225F |Unemployment Insurance | DOL-Department of 149.3 |Unempioyment Insurance |Actual Clearance, ZBA- |1 Day
-- Federal Benefit Labor 4 - Federal Electronic CH
Account and Funds
Administrative Costs
17.225F |Unemployment Insurance |DOL-Department of 8.67 |Unemployment Insurance |Payment Schedule- N/A
|-- Federal Benefit Labor - Administration - Payroll | Quarterly Estimates-
Account and Payroll Cycle
Administrative Costs
17.225F |Unemployment Insurance |DOL-Department of 2.03 |Unemployment Insurance | Payment Schedule- NIA
|-- Federal Benefit Labor - Administration - Other | Quarterly Estimates-
Account and ‘Other
Administrative Costs
17.2258 |Unemployment Insurance |DOL-Department of 44.7 |Unemployment Average Clearance 8 Days
|-- State Benefit Account |Labor 8 Insurance-State Funds-
Checks.
17.2258 |Unemployment Insurance |DOL-Department of 56.2 |Unemployment Actual Clearance, ZBA- |1 Day
-- State Benefit Account |Labor 2 Insurance-State ACH
Electronic Funds
20.205 = |Highway Planning and =| AOT-Agency of 18.8 |Direct Administrative Weekly Billing Cycle 6 Days
Construction ‘Transportation 3 Costs and Payroll
20.205 Highway Planning and = | AOT-Agency of 81.1 |Payments to Providers & |Weekly Billing Cycle 6 Days
‘Construction ‘Transportation 7 Grantees

Page 22 of 24


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

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.

Page 4 of 24


Payment Schedule-Quarterly Estimates-Payroll Cycle
Reverse Flow Program - SS} (CFDA 96.006)

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:

Actual Activity:

For all transactions where the State pays out its own funds for program purposes prior to receiving Federal funds, the
State shall track each payment from the date it is paid out of a State account to the date Federal funds are subsequently
credited to a State account to cover that outlay, The Federal interest liability on each payment shall be based on the
difference in whole days between the two events. With Federal-State matching programs, interest shall be calculated on
the Federal percentage of the disbursement.

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:

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 shall 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 earnings attributable to such funds less the related banking costs attributed to such
funds.

Page 15 of 24



Deposit to Clearance:
To determine the total time Federal funds are held, the State shall measure the time between the date Federal funds are
received and credit to a State's account and the date those funds are debited from the State's account.

8.6.2.2 Source of Data

Clearance Patterns:
The time period from issuance of funds to the date funds are debited from the State's account shall be determined by the
appropriate clearance pattern specified in Exhibit ll.

8.6.2.3 Standards Applied

The State does not utilize statistical sampling. 100% of all disbursement type transactions and related Federal
drawdowns are used to compute the State and Federal interest liabilities.

8.6.2.4 Calculation Procedure

Average Daily Balance:
|= 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

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 SSI 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.

SSI/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:

Page 17 of 24



DPS-Department of Public Safety
Mil-Department of Military

§.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:

HP Enterprise Services, LLC 93.778 Medical Assistance Program

Xerox State & Local Solutions, Inc. 10.551 Supplemental Nutrition Assistance Program
Xerox State & Local Solutions, Inc. 93.558 Temporary Assistance for Needy Families
Xerox State & Local Solutions, Inc. 93.568 Low-Income Home Energy Assistance

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 | 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 pattems specified in Exhibit Il - List of State Clearance Patterns. Exhibit Il 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
System/Children's Budget Expenditure System (MBES/CBES) no later than 10 calendar days before the end of the

Page 3 of 24


4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on federal funds :
expended as reported in the State's Single Audit Report for fiscal year ending 06/30/2015.

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 $12,559,759.
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
12.401 National Guard Military Operations and Maintenance (O&M) Projects

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

20.205 Highway Planning and Construction

20.509 Public Transportation for Nonurbanized Areas

84.010 Title | Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

84.126 Rehabilitation Services -- Vocational Rehabilitation Grants to States

93.525 State Planning and Establishment Grants for the Affordable Care Act (ACA)s Exchanges
93.558 Temporary Assistance for Needy Families

93.568 Low-Income Home Energy Assistance

93.778 Medical Assistance Program

96.006 Supplemental Security Income

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.

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:

AHS-Agency of Human Services
AOE-Agency of Education
AOT-Agency of Transportation
DOL-Department of Labor

Page 2 of 24


Recipient: AOT-Agency of Transportation

% of Funds Agency Receives: 2.18
Component: Indirects and Administrative Costs
Technique: Prior Month's Actuat

Average Day of Clearance: N/A

Recipient: DPS-Department of Public Safety

% of Funds Agency Receives: 13.91
Component: Payments to Providers & Grantees
Technique: Prior Month's Actual

Average Day of Clearance: N/A

Recipient: AOT-Agency of Transportation

% of Funds Agency Receives: 83.16

Component: Payments to Providers & Grantees
Technique: Prior Month's Actual

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

None

7.0 CLEARANCE PATTERNS

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

Vendor Account

Payroll Account

AHS-PATH Account

Unemployment Insurance Benefits Account

Federal Highway Planning & Construction Program (Vendor Account)

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

The State of Vermont-Department of Finance and Management

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

Vendor account-State's central accounting system
Unemployment Insurance Benefits Account-Department of Labor bank records
All other accounts-Bank files from the State Treasurer's Office

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.

Page 13 of 24



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.

8.4 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.

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:

The State shall apply refunds of Federal program funds to the next program disbursement and thus reduce the next
Federal program drawdown by the amount of refunds received pertaining to that program. Refunds over $50,000.00 shall
be tracked in the following manner:

Average Clearance Pattern - Refunds shall be tracked from the date they are deposited to the State's account to the date
they are paid out for program purposes for potential State interest liabilities.

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

Page 16 of 24