DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Exhibit II - State of lowa
LIST OF STATE CLEARANCE TIMES
(Rounded Dollar-Weighted Average Day of Clearance)

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

CFDA Program Name Recipient % Component Technique Rounded
days
10.551 Supplemental Department of 100.0 | Program Costs Actual Clearance, 1 Day
Nutrition Human Services ZBA - ACH
Assistance
Program
10.559 Summer Food Department of 98.0 Program Costs Pre-Issuance N/A
Service Program Education
for Children
Summer} Food Department of 1.0 Indirect Costs Indirect Cost Rates - | N/A
Service Program jucation
for Children Actual Base -
Monthly
Summer Food Department of 1.0 Administrative Costs | Pre-Issuance N/A
Service Program Education
for Children
17.225 Unemployment Towa Workforce 0.84 Administrative Costs | Actual N/A
F Insurance et Development - Non-Payroll Administrative Non-
Account and Payroll Costs -
Administrative Weekly
Costs
Unemployment Department of 0.11 Administrative Costs | Estimated N/A
insurance -- nspections an istrati
Federal Benefit Appeals Administrative
Account and Costs-Bi-weekly -
Administrative Monthly
Costs Adjustments
Unemployment Iowa Workforce 96.86 | Program Costs Pre-Issuance N/A
Insurance -- Development
Federal Benefit
Account and
Administrative
Costs
Unemployment fowa Workforce 1.91 Administrative Costs | Estimated N/A
Federal Benefit evelopment - Payroll Administrative
Account and Payroll Costs -
Administrative Estimated Base-Bi-
Costs weekly
Unemployment jowa Workforce 0.28 | Indirect Costs Indirect Cost Rates- | N/A
insurance -~ evelopment i A
Federal Benefit P Estimated Base-Bi-
Account and weekly-Quarterly
Administrative Adjustments,
Costs
17.225 Unemployment lowa Workforce 100.0 | Program Costs Post-Issuance N/A
Ss Insurance -- State Development
Benefit Account
20.205 Highway Planning Department of 83.0 | Contractor Payments | Reimbursement - N/A
and Construction Transportation ~ Advance ‘Advance
Construction Construction
Highway Planning Department of 4.0 City and County Pre-Issuance N/A
and Construction Transportation Pass-thru

Page 20 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

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:

Actual Administrative Non-Payroll Costs - Weekly

Actual Clearance, ZBA - ACH

Capitalization Grants for State Revolving Funds

Cost Allocation Plans - Administrative Costs- Bi-weekly

Cost Allocation Plans - Indirect Costs - Bi-weekly

Estimated Administrative Costs-Bi-weekly - Monthly Adjustments
Indirect Cost Rates - Actual Base - Monthly

Indirect Cost Rates - Actual Base - Quarterly

Reimbursement - Advance Construction

State Revolving Funds - Administrative/Tech Costs

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:

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)

Page 14 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Funding Technique Name

Description

Actual Clearance, ZBA - ACH

The State shall 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.

Post-Issuance

The State shall request funds such that they are deposited in a State account after the
State issues checks, but before the checks clear. The request shall be made in
accordance with the appropriate Federal agency cut-off time specified in Exhibit I.
The amount of the request shall be the amount of the disbursement. This funding
technique is not interest neutral.

Pre-Issuance

The State shall request funds such that they are deposited in a State account not more
than three business days prior to the day the State makes a disbursement. The request
shall be made in accordance with the appropriate Federal agency cut-off time
specified in Exhibit I. The amount of the request shall be the amount the State expects
to disburse. This funding technique is not interest neutral.

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

of funds to which the funding technique is app

lied in section 6.3.2 of this Agreement.

Funding Technique Name

Description

Indirect Cost Rates - Actual Base - Monthly

The State shall request funds once a month, such that they are deposited on the median
day of the month. The request shall be made in accordance with the appropriate
Federal agency cut-off time specified in Exhibit I. The amount of the request shall be
determined by applying the indirect cost rate to the appropriate cost base of the prior
month. This funding technique is interest neutral.

Indirect Cost Rates - Actual Base - Quarterly

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 I. The amount of the
request shall be determined by applying the indirect cost rate to the appropriate cost
base of the quarter. This funding technique is interest neutral.

6.2.3 The following are terms under which mi:
which the funding technique is applied in sectic

scellaneous funding techniques shall be implemented for all transfers of funds to
on 6.3.2 of this Agreement.

Funding Technique Name

Description

Capitalization Grants for State Revolving
Funds

The State shall request funds to minimize the time between the drawdown of funds
from Treasury and their deposit into the revolving fund. The timing of the drawdown
of Federal funds for deposit to the revolving fund is subject to the interest provisions
of 31 CFR Part 205, however there is an interest exemption for the interest the State
earns once the funds are deposited into the revolving fund. The request for funds
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 amount of the funds
to be used for immediate program purposes. The State will not incur an interest
liability for interest earned on revolving fund loans. 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.

Funding Technique Name

Description

Actual Administrative Non-Payroll Costs -
Weekly

The State shall request funds weekly such that they are deposited in a State account on
Tuesdays. 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 based on
the previous week's actual expenses. This funding technique is interest neutral.

Cost Allocation Plans - Administrative
Costs- Bi-weekly

The State shall request funds bi-weekly, such that they are deposited on the day of the
State's payday. The request shall be made in accordance with the appropriate Federal
agency cut-off time specified in Exhibit I. The amount of the request shall be the

Page 5 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Highway Planning Department of 13.0 | Contractor Payments | Post-Issuance N/A
and Construction Transportation - Non Advance
Construction
66.458 Capitalization Towa Finance 0.1 Indirects Indirect Cost Rates - | N/A
Grants for Clean Authority ‘Actual Base -
Water State
Revolving Funds Monthly
Capitalization Towa Finance 96.66 | Program Capitalization N/A
Grants for Clean Authority Grants for State
Water State . "
Revolving Funds Revolving Funds
Capitalization Department of 2.1 Administrative State Revolving N/A
Grants for Clean Natural Resources Funds -
Water State rs
Revolving Funds Administrative/Tech
‘osts
Capitalization Towa Finance 0.84 Administrative State Revolving N/A
Grants for Clean Authority Funds -
Water State er
Revolving Funds Qdministrtive/Tech
‘osts
Capitalization Department of 0.3. | Indirects Indirect Cost Rates - | N/A
Grants for Clean Natural Resources Actual Base -
Water State
Revolving Funds Monthly
66.468 Capitalization Towa Finance 0.74 Administrative State Revolving N/A
Grants for Authority Funds -
Drinking Water : ao
Revolving Fund Administrative/Tech
Costs
Capitalization Department of 2.1 Indirects Indirect Cost Rates - | N/A
Grants for Natural Resources 1 Base -
Drinking Water Actual Base
Revolving Fund Monthly
Capitalization Towa Finance 0.09 Indirects Indirect Cost Rates - | N/A
Se vate | Auton Actual Base
Revolving Fund Monthly
Capitalization lowa Finance 78.46 | Program Capitalization N/A
Grants for Authority Grants for State
Drinking Water . "
Revolving Fund Revolving Funds
Capitalization Department of 18.61 | Administrative/Tech | State Revolving N/A
Grants for Natural Resources Funds -
Drinking Water ran ive/Tech
Revolving Fund Administrative/Tee
‘osts
84.010 Title | Grants to Department of 1.0 Administrative Costs | Pre-Issuance N/A
Local Educational Education
Agencies
Title 1 Grants to Department of 98.0 | Program Costs Pre-Issuance N/A
Local Educational Education
Agencies
Title I Grants to Department of 1.0 Indirect Costs Indirect Cost Rates - | N/A
Local Educational Education Actual Base -
Agencies
Monthly
84.027 Special Education Department of 96.0 Program Costs Pre-Issuance N/A
-- Grants to States Education
Special Education Department of 3.0 Administrative Costs | Pre-Issuance N/A
-- Grants to States Education
Special Education Department of 1.0 Indirect Costs Indirect Cost Rates - | N/A
-- Grants to States Education Actual Base -
Monthly

Page 21 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Certification

Thereby 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.

8/1/2023
Date: ay

Printed Name: Nick Miller

Docusigned by:

Moe Mille

Certifying Signature:
Mying signatu TTT TASESCIATE

Title: Chief Operating officer

Page 23 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438
12.0 | AUTHORIZED SIGNATURES

Nick Miller
Chief Operating Officer State Accounting Enterprise Department of Administrative Services

Docusigned by:

Mok Muller 4, 8/1/2023

Signature: Date Signe

TO77 TABEGCSAEE

Date Submitted 8/1/2023

Sandra R. Paylor

Assistant Commissioner

Revenue Collections Management
Bureau of the Fiscal Service

U.S. Department of the Treasury

pocutigned by
Signature: [ sand af aylor 8/2/2023

Date Signed:

Page 18 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Average Day of Clearance: N/A

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

% of Funds Agency Receives: 98

Component: Program Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

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

% of Funds Agency Receives: |

Component: Indirect Costs

Technique: Indirect Cost Rates - Actual Base - Monthly
Average Day of Clearance: N/A

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

% of Funds Agency Receives: 96
Component: Program Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

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

% of Funds Agency Receives: 3
Component: Administrative Costs
Technique: Pre-Issuance

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: Department of Education

% of Funds Agency Receives: |

Component: Indirect Costs

Technique: Indirect Cost Rates - Actual Base - Monthly
Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: lowa Workforce Development

% of Funds Agency Receives: 2

Component: Administrative Costs

Technique: Post-Issuance

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: Department of Human Rights

% of Funds Agency Receives: 3

Component: Program Costs

Technique: Post-Issuance

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: Department of Human Services

% of Funds Agency Receives: 56

Component: Program Costs

Technique: Post-Issuance

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: lowa Workforce Development
% of Funds Agency Receives: 0

Page 10 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

6.3.1 The State shall apply the following funding techniques when requesting Federal funds for the component cash flows of the
programs listed in sections 4.2 and 4.3 of this Agreement.

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

10.551 Supplemental Nutrition Assistance Program
Recipient: Department of Human Services

% of Funds Agency Receives: 100

Component: Program Costs

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

10.559 Summer Food Service Program for Children
Recipient: Department of Education

% of Funds Agency Receives: 98

Component: Program Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

10.559 Summer Food Service Program for Children
Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Indirect Costs

Technique: Indirect Cost Rates - Actual Base - Monthly
Average Day of Clearance: N/A

10.559 Summer Food Service Program for Children
Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Administrative Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

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

Recipient: lowa Workforce Development

% of Funds Agency Receives: .84

Component: Administrative Costs - Non-Payroll

Technique: Actual Administrative Non-Payroll Costs - Weekly
Average Day of Clearance: N/A

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

Recipient: Department of Inspections and Appeals

% of Funds Agency Receives: .11

Component: Administrative Costs

Technique: Estimated Administrative Costs-Bi-weekly - Monthly
Adjustments

Average Day of Clearance: N/A

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

Recipient: lowa Workforce Development

% of Funds Agency Receives: 96.86

Component: Program Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

Page 7 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

prorated amount of administrative costs base on the most recent, certified, quarterly
cost allocation, with adjustments made to subsequent draws based on actual labor
distributions and recoveries, when applicable. This funding technique is interest
neutral.

Cost Allocation Plans - Indirect Costs - Bi-
weekly

The State shall request funds bi-weekly, such that they are deposited on the day of the
State's payday. The request shall be made in accordance with the appropriate Federal
agency cut-off time specified in Exhibit I. The amount of the request shall be the
prorated amount of indirect costs based on the most recent, certified, quarterly cost
allocation, with adjustments made to subsequent draws based on actual labor
distributions and recoveries, when applicable. This funding technique is interest
neutral.

Estimated Administrative Costs-Bi-weekly -
Monthly Adjustments.

The State shall request funds bi-weekly such that they are deposited in a State account
on the day the State's payroll is issued. The request shall be made in accordance with
the appropriate Federal agency cut-off time specified in Exhibit I. The amount of the
request shall be the prorated amount of administrative costs based on a combination of
26 allotments of the annual grant amount adjusted based on historical actual prorated
costs for the year. Monthly adjustments are made to subsequent draws based on the
actual labor distribution and recoveries when applicable. This funding technique is
interest neutral.

Estimated Administrative Payroll Costs -
Estimated Base-Bi-weekly

The State shall request funds bi-weekly for estimated payroll costs such that they are
deposited in a State account not more than three business days prior to the day the
State makes a payroll disbursement. The request shall be made in accordance with the
appropriate Federal agency cut-off time specified in Exhibit I. The amount of the
request shall be determined by applying a percentage of 75% to the appropriate cost
base occurring 4 weeks prior with adjustments made to subsequent draws based on
actual labor distributions and recoveries when applicable. This funding technique is
not interest neutral.

Indirect Cost Rates-Estimated Base-Bi-
weekly-Quarterly Adjustments

The State shall request funds bi-weekly in conjunction with the payroll request such
that they are deposited in a State account not more than three business days prior to
the day the State makes a payroll disbursement. The request shall be made in
accordance with the appropriate Federal agency cut-off time specified in Exhibit I.
The amount of the request shall be determined by applying the indirect cost rate to
75% of the appropriate cost base occurring 4 weeks prior with adjustments made to
subsequent draws based on actual labor distributions and recoveries when applicable.
A quarterly reconciliation will be completed to ensure programs are in compliance
with the indirect cost rate for the federal fiscal year. This funding technique is not
interest neutral.

Reimbursement - Advance Construction

The State shall request funds for contractor payments such that they are deposited by
ACH on the same day as requested and after the payments issued by the State have
cleared. Of the total number of contractor payments, approximately 82% are issued
electronically through ACH/EFT. Additionally, of the total contractor payments,
approximately 65% of the federal funds spent are associated with Advance
Construction projects. Those contractor payments that are associated with Advance
Construction projects are first supported with State funding and converted to Federal
funding at a later date. For Advance Construction projects, Federal funds are
requested at the time of conversion and the request shall be made in accordance with
the appropriate Federal agency cut-off time specified in Exhibit I. The amount of the
request shall be the amount of expenditures converted to Federal funds. This funding
technique is interest neutral.

State Revolving Funds - Administrative/Tech
Costs

The State shall request funds monthly for expenditures which were 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 normally occur by the second Friday
of the month following the ending of 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 request shall be for the actual expenditures incurred during the
prior month. This funding technique is interest neutral.

6.3 Application of Funding Techniques to Programs

Page 6 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Exhibit I - Funds Request and Receipt Times Schedule

State of Iowa

Federal Agency Payment Type | Request Cut-Off Time Receipt Window
Agriculture-FNS ‘ACH 11:59 PM I day
Agriculture-FNS Fedwire 3:45 PM Oday
Agriculture-FS ‘ACH 3:00 PM T day
Air National Guard ACH 12:00 PM 15 days
Army National Guard ACH 12:00 PM 15 days
Commerce-NOAA ACH 2:00 PM 1 day
Dept of Homeland Security (FEMA) Fedwire 2:00 PM 2 days
Dept of Homeland Security (ODP) ‘ACH 2:00 PM 2 days
Dept of Homeland Security (ODP) Fedwire 2:00 PM 2 days
EPA ACH 2:00 PM 2 days
EPA Fedwire 2:00 PM Oday
Education ACH 3:00 PM I day
Education Fedwire 2:00 PM Oday
Energy ACH 4:00 PM 1 day
Energy Fedwire 3:00 PM 0 day
HHS ‘ACH 3:00 PM I day
HHS Fedwire 3:00 PM 0 day
HUD ACH 3:30 PM 2 days
HUD Fedwire 3:00 PM 0 day
Interior-FWS ACH 11:59 PM 1 day
Interior-FWS Fedwire 5:45 PM 0 day
Interior-OSM ACH 3:00 PM 1 day
Interior-OSM Fedwire 1:00 PM 0 day
Justice ‘ACH 11:00 PM 6 days
Justice Fedwire 2:00 PM 2 days
Labor-Non-UTF ACH 3:00 PM T day
Labor-UTF ACH 3:00 PM I day
Labor-UTF Fedwire 3:00 PM Oday
National Science Foundation (NSF) ACH 8:00 PM I day
National Science Foundation (NSF) Fedwire 3:45 PM 0 day
Social Security Administration ACH 11:59 PM T day
Social Security Administration Fedwire 3:45 PM Oday
Transportation (FAA) ACH 2:00 PM I day
Transportation (FHWA) ACH 12:00 PM 3 days
Transportation (FHWA) Fedwire 12:00 PM Oday
Transportation (FTA) ‘ACH 2:00 PM T day
Veterans Administration ACH 12:00 PM 3 days

Page 19 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

66.458 Capitalization Grants for Clean Water State Revolving Funds
Recipient: Department of Natural Resources

% of Funds Agency Receives: 2.1

Component: Administrative

Technique: State Revolving Funds - Administrative/Tech Costs
Average Day of Clearance: N/A

66.458 Capitalization Grants for Clean Water State Revolving Funds
Recipient: Iowa Finance Authority

% of Funds Agency Receives: .84

Component: Administrative

Technique: State Revolving Funds - Administrative/Tech Costs
Average Day of Clearance: N/A

66.458 Capitalization Grants for Clean Water State Revolving Funds
Recipient: Department of Natural Resources

% of Funds Agency Receives: .3

Component: Indirects

Technique: Indirect Cost Rates - Actual Base - Monthly

Average Day of Clearance: N/A

66.468 Capitalization Grants for Drinking Water Revolving Fund
Recipient: Iowa Finance Authority

% of Funds Agency Receives: .74

Component: Administrative

Technique: State Revolving Funds - Administrative/Tech Costs
Average Day of Clearance: N/A

66.468 Capitalization Grants for Drinking Water Revolving Fund
Recipient: Department of Natural Resources

% of Funds Agency Receives: 2.1

Component: Indirects

Technique: Indirect Cost Rates - Actual Base - Monthly

Average Day of Clearance: N/A

66.468 Capitalization Grants for Drinking Water Revolving Fund
Recipient: lowa Finance Authority

% of Funds Agency Receives: .09

Component: Indirects

Technique: Indirect Cost Rates - Actual Base - Monthly

Average Day of Clearance: N/A

66.468 Capitalization Grants for Drinking Water Revolving Fund
Recipient: lowa Finance Authority

% of Funds Agency Receives: 78.46

Component: Program

Technique: Capitalization Grants for State Revolving Funds
Average Day of Clearance: N/A

66.468 Capitalization Grants for Drinking Water Revolving Fund
Recipient: Department of Natural Resources

% of Funds Agency Receives: 18.61

Component: Administrative/Tech

Technique: State Revolving Funds - Administrative/Tech Costs
Average Day of Clearance: N/A

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

% of Funds Agency Receives: |

Component: Administrative Costs

Technique: Pre-Issuance

Page 9 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Cash Management Improvement Act Agreement
between
The State of Iowa
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 lowa (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 Iowa shall be the Chief Operating Officer of the State Accounting Enterprise, lowa
Department of Administrative Services 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 07/01/2023 and shall remain in effect until 06/30/2024.

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 | of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

93.778 Medical Assistance Program
Recipient: Department of Human Services

% of Funds Agency Receives: 0

Component: Indirect Costs

Technique: Cost Allocation Plans - Indirect Costs - Bi-weekly
Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 2

Component: Administrative Costs

Technique: Cost Allocation Plans - Administrative Costs- Bi-weekly
Average Day of Clearance: N/A

93.778 Medical Assistance Program
Recipient: Department of Human Services
% of Funds Agency Receives: 98
Component: Program Costs

Technique: Post-Issuance

Average Day of Clearance: N/A

97.036 Disaster Grants - Public Assistance (Presidentially Declared
Disasters)

Recipient: Homeland Security & Emergency Management Division
% of Funds Agency Receives: 3

Component: Administrative Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

97.036 Disaster Grants - Public Assistance (Presidentially Declared
Disasters)

Recipient: Homeland Security & Emergency Management Division
% of Funds Agency Receives: 97

Component: Program Costs

Technique: Pre-Issuance

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

The Department of Human Services transfers administrative funds to the Department of Inspections and Appeals (DIA) through the
Department of Human Services Cost Allocation Plan. The administrative expense reimbursement transfer is less than 1% of the

program costs and will not be tracked. This is applicable for CFDA's, 93.558, 93.575, 93.767, and 93.778.

lowa Workforce Development passes through funds pertaining to indirect costs to the Department of Inspections and Appeals (DIA) for
CFDA 17.225F. The pass through of funds is less than 1% of the overall costs for this CFDA number and will not be tracked.

The Department of Natural Resources receives federal funds pertaining to indirect expenses for CFDA 66.458. The indirect expense
reimbursement transfers are less than 1% of the overall costs for this CFDA number and will not be tracked.

The Iowa Finance Authority receives federal funds pertaining to administrative and indirect expenses for CFDA 66.458. The
administrative and indirect expense reimbursement transfers are less than 1% of the overall costs for this CFDA number and will not be
tracked.

The lowa Finance Authority receives federal funds pertaining to indirect expenses for CFDA 66.468. The indirect expense
reimbursement transfers are less than 1% of the overall costs for this CFDA number and will not be tracked.

The Department of Inspections and Appeals receives federal funds directly from CMS pertaining to administrative expenditures for
CFDA 93.778. The administrative expense reimbursement transfers are 0.09% of the overall costs for this CFDA number and will not

Page 12 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Component: Program Costs
Technique: Post-
Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: Department of Human Services

% of Funds Agency Receives: 4

Component: Indirect C
Technique: Cost Allocation Plans - Indirect Cos
Average Day of Clearance: N/A

s - Bi-weekly

93.558 Temporary Assistance for Needy Families

Recipient: Department of Human Services

% of Funds Agency Receives: 35

Component: Administrative Costs

Technique: Cost Allocation Plans - Administrative Costs- Bi-weekly
Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant

Recipient: Department of Human Services

% of Funds Agency Receives: 7

Component: Indirect Costs

Technique: Cost Allocation Plans - Indirect Costs - Bi-weekly
Average Day of Clearance: N/A

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

% of Funds Agency Receives: 93

Component: Program

Technique: Post-Issuance

Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant

Recipient: Department of Human Services

% of Funds Agency Receives: 0

Component: Administrative Costs

Technique: Cost Allocation Plans - Administrative Costs- Bi-weekly
Average Day of Clearance: N/A

93.767 Children's Health Insurance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 3

Component: Administrative Costs

Technique: Cost Allocation Plans - Administrative Costs- Bi-weekly
Average Day of Clearance: N/A

93.767 Children's Health Insurance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 0

Component: Indirect Costs

Technique: Cost Allocation Plans - Indirect Costs - Bi-weekly
Average Day of Clearance: N/A

93.767 Children's Health Insurance Program
Recipient: Department of Human Services
% of Funds Agency Receives: 97
Component: Program Costs

Technique: Post-Issuance

Average Day of Clearance: N/A

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DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

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

Recipient: lowa Workforce Development

% of Funds Agency Receives: 1.91

Component: Administrative Costs - Payroll

Technique: Estimated Administrative Payroll Costs - Estimated Base-
Bi-weekly

Average Day of Clearance: N/A

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

Recipient: Iowa Workforce Development

% of Funds Agency Receives: .28

Component: Indirect Cost
Technique: Indirect Cost Rates-Estimated Base-Bi-weekly-Quarterly
Adjustments

Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account
Recipient: lowa Workforce Development

% of Funds Agency Receives: 100

Component: Program Costs

Technique: Post-Issuance

Average Day of Clearance: N/A

20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 83

Component: Contractor Payments - Advance Construction
Technique: Reimbursement - Advance Construction
Average Day of Clearance: N/A

20.205 Highway Planning and Construction
Recipient: Department of Transportation

% of Funds Agency Receives: 4
Component: City and County Pass-thru
Technique: Pre-Issuance

Average Day of Clearance: N/A

20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 13

Component: Contractor Payments - Non Advance Construction
Technique: Post-Issuance

Average Day of Clearance: N/A

66.458 Capitalization Grants for Clean Water State Revolving Funds
Recipient: lowa Finance Authority

% of Funds Agency Receives: .1

Component: Indirects

Technique: Indirect Cost Rates - Actual Base - Monthly

Average Day of Clearance: N/A

66.458 Capitalization Grants for Clean Water State Revolving Funds
Recipient: lowa Finance Authority

% of Funds Agency Receives: 96.66

Component: Program

Technique: Capitalization Grants for State Revolving Funds
Average Day of Clearance: N/A

Page 8 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

93.558 Temporary Towa Workforce 2.0 Administrative Costs | Post-Issuance N/A
Assistance for Development
Needy Families
Temporary Department of 3.0 Program Costs Post-Issuance N/A
Assistance for Human Rights
Needy Families
Temporary Department of 56.0 Program Costs Post-Issuance N/A
Assistance for Human Services
Needy Families
Temporary Towa Workforce 0.0 Program Costs Post-Issuance N/A
Assistance for Development
Needy Families
Temporary Department of 4.0 Indirect Costs Cost Allocation N/A
Assistance for Human Services Plans - Indirect
Needy Families .
Costs - Bi-weekly
Temporary Department of 35.0 Administrative Costs | Cost Allocation NA
Assistance for Human Services Plans -
Needy Families ae
Administrative
Costs- Bi-weekly
93.575 | Child Care and Pepartment of 7.0 | Indirect Costs Cost Allocation NIA
evelopment uman Services i
Block Grant Plans - Indirect
Costs - Bi-weekly
Child Care and Department of 93.0 | Program Post-Issuance N/A
Development Human Services
Block Grant
Child Care and Department of 0.0 Administrative Costs | Cost Allocation N/A
Development Human Services Plans -
Block Grant we
Administrative
Costs- Bi-weekly
93.767 Children's Health Department of 3.0 Administrative Costs | Cost Allocation NIA
Insurance Human Services Plans -
Program woe .
Administrative
Costs- Bi-weekly
Children's Health Pepartment of 0.0 Indirect Costs Cost Allocation N/A
insurance luman Services 5 irec
Program Plans - Indirect
Costs - Bi-weekly
Children's Health Department of 97.0 Program Costs Post-Issuance N/A
Insurance Human Services
Program
93.778 Medical Department of 0.0 Indirect Costs Cost Allocation N/A
ssistance luman Services 5 i
Program Plans - Indirect
Costs - Bi-weekly
Medical Department of 2.0 Administrative Costs | Cost Allocation N/A
Assistance Human Services Plans -
Program woe .
Administrative
Costs- Bi-weekl
Medical Department of 98.0 Program Costs Post-Issuance N/A
Assistance Human Services
Program
97.036 Disaster Grants - Homeland 3.0 Administrative Costs | Pre-Issuance N/A
Public Assistance Security &
{Presidentially Emergency
eclared Management
Disasters) Division
Disaster Grants - Homeland 97.0 | Program Costs Pre-Issuance N/A
Public Assistance Security &
(Presidentially Emergency
eclared Management
Disasters) Division

Page 22 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

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 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.

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DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

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.

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

fii 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:
With programs to which applicable interest neutral funding techniques are applied, 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.

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
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.

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DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Pre-Issuance Time + Clearance Time

IT = P Xr X (PI+CT) where

I = State's total interest liability for payroll portion of administrative component of program

P = Total annual expenditures of Federal funds for payroll _ portion of administrative component of program

r = Annualized rate equal to the average equivalent yields _ of 13-week Treasury bills auctioned during a State's
fiscal year divided by 365 days

PI= 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, as determined by the appropriate clearance _ pattern in Exhibit IT

9.0 REVERSE FLOW PROGRAMS

The State is not required to cover any reverse flow programs under the terms of this Agreement because the State does not
participate in the program.
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:
Treasurer of State---System Analysis, programming and testing

Administrative Services--System analysis, programming, report testing and validation, redemption
pattern reporting, validation and testing, annual report preparation.

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.

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DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

Homeland Security & Emergency Management Division
Towa Finance Authority
Towa Workforce Development

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:

Fiscal Agent CFDA Program Name.

Conduent State & Local Solutions, Inc 10.551 Supplemental Nutrition Assistance
Program

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

US Bank 17.2258 Unemployment Insurance -- State Benefit
Account

Wells Fargo ; lowa Finance Authority 66.458 Capitalization Grants for Clean Water
State Revolving Funds

Wells Fargo ; lowa Finance Authority 66.468 Capitalization Grants for Drinking Water
Revolving Fund

Conduent State & Local Solutions, Inc 93.558 Temporary Assistance for Needy Families

Tetra Tech Inc. 93.575 Child Care and Development Block Grant

6.0 FUNDING TECHNIQUES
6.1 General Terms

6.1.1 The State shall request Federal funds in accordance with the appropriate cut-off times shown in Exhibit I to ensure funds will
be received and credited to a State account by the times specified in the funding techniques. Exhibit I is incorporated by reference
herein.

6.1.2 The State shall schedule the receipt of Federal funds such that the funds are received and credited to a State account in
accordance with the clearance patterns specified in Exhibit II - List of State Clearance Patterns. Exhibit II is incorporated by
reference herein.

6.1.3 In instances where the receipt of funds is scheduled for a Saturday, the State shall request funds for deposit on Friday. In
instances where the receipt of funds is scheduled for a Sunday, the State shall request funds for deposit on Monday. In instances
where the receipt of Federal funds is scheduled for deposit on a day when the State is not open for business, the State shall request
funds for deposit the day following the scheduled day; in instances where the receipt of Federal funds is scheduled for deposit on a
day when the Federal Government is not open for business, the State shall request funds for deposit the day prior to the scheduled
day.

6.1.4 Estimates and Reconciliation of Estimates:

Where estimated expenditures are used to determine the amount of the drawdown, the State will indicate in the terms of the State
unique funding technique how the estimated amount is determined and when and how the State will reconcile the difference
between the estimate and the State's actual expenditures.

6.1.5 Supplemental Funding:
Unless otherwise defined by program rules, Supplemental Funding is the award of additional funds to provide for an increase in
costs due to unforeseen circumstances.

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

The State will comply with the following guidelines when requesting supplemental funding for the Medical Assistance Program
and associated administrative payments (CFDA 93.778):

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DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on the Single Audit for fiscal
year ending 06/30/2021.

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 $73,556,964.

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

CFDA Program Name

10.551 Supplemental Nutrition Assistance Program

10.559 Summer Food Service Program for Children

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

17.2258 Unemployment Insurance -- State Benefit Account

20.205 Highway Planning and Construction

66.458 Capitalization Grants for Clean Water State Revolving Funds

66.468 Capitalization Grants for Drinking Water Revolving Fund

84.010 Title I Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

93.558 Temporary Assistance for Needy Families

93.575 Child Care and Development Block Grant

93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

97.036 Disaster Grants - Public Assistance (Presidentially Declared
Disasters)

4.3 The following programs fall below the State's threshold but have been required to be covered by Fiscal Service in
accordance with the non-compliance provisions of Subpart B of 31 CFR Part 205:

There are currently no programs listed for Section 4.3.

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

CFDA Program Name Exclusion Reason
21.019 Coronavirus Relief Fund Federal Statute - Full Exemption
21.027 Coronavirus State and Local Fiscal Federal Statute - Full Exemption
Recovery Funds
84.268 Federal Direct Student Loan Non-State
97.050 Presidential Declared Disaster Assistance | Discontinued
to Individuals and Households - Other
Needs

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:

Department of Education

Department of Human Rights
Department of Human Services
Department of Inspections and Appeals
Department of Natural Resources
Department of Transportation

Page 2 of 23


DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

be tracked.

The Department of Human Services receives federal funds pertaining to indirect expenditures for CFDA 93.778. The indirect expense
reimbursement transfers are less than 1% of the overall costs for this CFDA number and will not be tracked.

7.0 CLEARANCE PATTERNS
7.1 The State shall develop separate clearance patterns for each of the following:
for the payroll portion of the administrative costs listed in Sections 4.2 and 4.3 of this Agreement.
7.2 The following shall develop the State's clearance patterns:
The Department of Administrative Services shall develop the State's clearance patterns in accordance with 31 CFR 205.22.
7.3 The sources of data the State shall use when developing its clearance patterns are as follows:
Actual warrant redemption from the records of the State Treasurer as well as the State's accounting system.
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 dollar-weighted average day of clearance:

To determine the number of days each check was outstanding (clearance time), the issue date shall be subtracted from the date the
check cleared the State's account.

To determine the percentage of the disbursement paid out each day following issuance, the amount of the checks that clear the
State's account each day shall be summed and then divided by the amount of the total disbursement.

For each day following issuance, the clearance time of the checks paid out that day shall be multiplied by the percentage of the total
disbursement those checks represent. This product is the clearance factor.

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

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

NONE

The State shall also adjust each clearance pattern to reflect:

NONE

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.

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DocuSign Envelope ID: 90692E66-5FAB-4B48-BFE8-4726E5D46438

8.6.2.2 Source of Data

Central Accounting System:

The time period from receipt of Federal funds to the date of debit, shall be determined from information captured in the
State's centralized accounting system administered by the Department of Administrative Services and the State's warrant
redemption administered by the State Treasurer.

8.6.2.3. Standards Applied

Statistical Sampling (Pre-Issuance):

To measure the time Federal funds are held in a State account prior to being disbursed, the State shall use statistical sampling. The
sample shall be randomly selected, and shall be of sufficient size to ensure, at a minimum, a 95% confidence interval no wider than 4
0.3 dollar-weighted days about the estimated mean,

For each check in the sample population, the State shall:

1 subtract the deposit date from the issuance date

2 multiply the difference of step 1 by the check amount

3 divide the product of step 2 by the total amount of funds drawn in the sample to determine the dollar-weighted pre-issuance time for
that check

The State shall then sum the dollar-weighted pre-issuance time for each check to arrive at the total dollar-weighted average pre-issuance
time to be used for calculating State interest liabilities.

8.6.2.4 Calculation Procedure

Pre-Issuance Time + Clearance Time:
I=Pxrx {PI+ CT}, where

I= 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 13-week Treasury bills auctioned during a State's fiscal year
divided by 365 days

PI = 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, as
determined by the appropriate clearance pattern in Exhibit IL

8.7.0 The State and the Secretary agree that WIC rebates are excluded from the interest provisions of this agreement if
they are retained and used for program purposes. In the event that the rebates are not used for program purposes,
then the provisions of Section 8.4 apply.

8.8.0 Calculation Procedure - State Payroll Costs.

The State is on a bi-weekly payroll system of payday being every other Friday. Consistent with the State's pre-
issuance requirements, the departments must have funds on hand by Tuesday to cover net pay, employer
contributions, and employee deductions.

Due to these administrative constraints, the State shall pay interest on direct cost payrolls for 4 days. The dollar-
weighted average clearance time for payroll clearance is calculated to be 3.76 calendar days. This calculation is
based on an analysis of the period of time from fund drawdown to warrant redemption or EFT payment and the
period of time the mandatory and discretionary deductions are held by a Centralized Payroll Trustee.

The State's interest liability for the payroll portion of all applicable administrative costs noted in 4.2 and 4.3 shall
be calculated by applying the following formula:

Page 16 of 23