Exhibit | - Funds Request and Receipt Times Schedule
State of Utah

41:59 PM

1 day

|Agriculture-FNS

|Agriculture-FNS. Fedwire §:45 PM. 0_day
Agriculture-FS ACH 3:00 PM. ‘4 day
Air National Guard ACH 42:00 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 10 day
Education ACH 3:00 PM. 4 day
Education _ Fedwire 2:00 PM. 0 day
Energy ACH 4:00 PM 4 day
Energy Fedwire 3:00 PM 0 day
HHS ACH. 6:30 PM. 4 day
HHS: Fedwire 3:00 PM 0 day
HUD ACH ‘5:30 PM 2 days
HUD. Fedwire 3:00 PM 0 day
Interior-FWS ACH 11:59 PM 1 day
Interior-FWS. Fedwire 5:45 PM 0 day
{nterior-OSM ACH 3:00. PM. 1 day
Interior-OSM Fedwire 4:00 PM 0 day
Justice ACH 41:00 PM 6 days
Justice Fedwire 2:00 PM 2 days
Labor-Non-UTF ACH 3:00 PM. 1 day
Labor-UTF ACH 3:00 PM 1 day
Labor-UTF Fedwire 3:00 PM. OQ 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 1 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 20 of 23



Average Day of Clearance: 6 Days

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:

Check clearance patterns are developed for all situations in which state warrants are issued; these include payments to:
beneficiaries, vendors providing services, payroll, and administrative costs. The techniques listed here apply to all
covered programs listed in Section 4.2. In order to simplify the process, hold costs down, keep time required to a
minimum, and use data and methods currently available to the State, the average clearance method and not the
estimated clearance method was selected. (Limitations in the State's central accounting system, and other limitations In
our banks’ warrant processing and recording systems, also narrowed the viable choices.) Dollar-weighted, average day of
clearance patterns were developed using a 100% sample based on data from at least three consecutive months for
individual programs or groups of programs having similar clearance characteristics. The development of general
clearance patterns for payroll and general state warrants is described in Section 6.2.4, Administration Costs.

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

The Division of Finance, Department of Administrative Services, for the State of Utah shall develop the State's clearance
patterns.

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

The State shall use Excel spreadsheets to calculate its clearance patterns. Warrant Issuance data is extracted from the
State's general accounting system. Clearance dates are provided to the State by the State's warrant processing banks.

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.

Page 14 of 23



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.

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 shail 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 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.

Ayerage 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 |. The amount of the request shail 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.

There are no funding techniques listed in Section 6.2.2

6.2.3 The following are terms under which miscellaneous funding techniques shall be implemented for ail transfers of
funds to which the funding technique is applied in section 6.3.2 of this Agreement.

There are no funding techniques listed In Section 6.2.3

6.2.4 The following are terms under which State unique funding techniques shall be implemented for all transfers of funds
to which the funding technique is applied in section 6.3.2 of this Agreement.

Actual Clearance (ZBA)--ACH (modified)

Page 5 of 23



Exhibit Il - State of Utah

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 Department of Workforce |100. |Benefit-Electronic benefit|Actual Clearance, ZBA - |0 Days
Assistance Program Services 00 | transfer (EBT) ‘Same Day Payment
10.595 | National School Lunch ‘State Board of Education |98.0 |Vendor--Funds Actual Clearance, ZBA- |1 Day
Program 0 distributed by wire ACH
transfer
10.55 | National School Lunch State Board of Education {2.00 |Vendor--Funds USBE Composite 6 Days
Program. distributed by means Average Clearance
other than wire transfer
19.557 |Special Supplemental Department of Health 71.0 |Benefit--Funds distributed | Actual Clearance (ZBA)-- }1 Day
Nutrition Program for 0 by wire transfer to WIC ACH (modified)
‘Women, Infants, and voucher processing bank
Children
10.557 |Special Supplemental Department of Health 29.0 {Administration Funds Administration Costs 5 Days
Nutrition Program for 0
Women, Infants, and
. Children
10,558 | Child and Adult Care State Board of Education |72.0 |Vendor--Funds Actual Clearance, ZBA- |1 Day
Food Program oO distributed by wire ACH
transfer
10,858 | Child and Adult Care State Board of Education }28.0 |Vendor--Funds USBE Composite 6 Days
Food Program 0 distributed by means Average Clearance
other than wire transfer
12.401 |National Guard Military | Utah National Guard 100. |All Funds Reimbursable Funding NIA
Operations and 90
Maintenance (O&M)
Projects
17.225F |Unemployment Insyrance Department of Workforce {49.0 |Benefit EFT Actual Clearance, ZBA- |1 Day
-- Federal Benefit Services 0 ACH
Account and
- Administrative Costs
17.225F |Unemployment Insurance |Department of Workforce |51,0 [ADMINISTRATION Administration Costs 5 Days
-- Federal Benefit Services 0 FUNDS
Account and
Administrative Costs
47.2258 {Unemployment Insurance |Department of Workforce |100. {Benefit EFT Actual Clearance, ZBA- |1 Day
~ State Benefit Account_|Services 00 ACH
20.205 |Highway Planning and =| Department of 100. All Funds Highway P&C Technique |5 Days
: Construction Transportation 00.
84.010 | Title | Grants to Local State Board of Education |99.0 |Vendor--Funds Actual Clearance, ZBA- |1 Day
Educational Agencies 0 distributed by wire ACH
transfer.
84.010 | Title | Grants to Local State Board of Education |1.00 |Vendor & Admin.--Funds |USBE Composite 6 Days
Educational Agencies distributed by means Average Clearance
- other than wire transfer
84,027 |Special Education -- State Board of Education |98,0 |Vendor--Funds Actual Clearance, ZBA- |1 Day
Grants to States 0 istibuted by wire ACH
ransfer

Page 21 of 23



4. Are auditable.

, ot
| |

Date: lg ei

\ h n g ll A
Printed Name: HOAK KelOngad

A
Certifying Signature:
py typdye Divtelon of Ca, Le

Title: i! isto br Narice.

Page 23 of 23



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:

Costs incurred in compiling and analyzing data related to interest calculation and in preparing the State's Annual Report to
Fiscal Service are considered Interest Calculation Costs.

40.3 The State shall submit all claims for reimbursement of interest calculation costs with its Annual Report in accordance
with 31 CFR 205,

11,0 NON-COMPLIANCE

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 18 of 23



Technique: Administration Costs
Average Day of Clearance: 5 Days

140.558 Child and Adult Care Food Program

Recipient: State Board of Education

% of Funds Agency Receives: 72.00

Component: Vendor--Funds distributed by wire transfer
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: State Board of Education

% of Funds Agency Receives: 28.00

Component: Vendor--Funds distributed by means other than wire transfer
Technique: USBE Composite Average Clearance

Average Day of Clearance: 6 Days

42.401 National Guard Military Operations and Maintenance (O&M) Projects
Recipient: Utah National Guard

% of Funds Agency Receives: 100.00

Component: All Funds

Technique: Reimbursable Funding

Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
Recipient: Department of Workforce Services

% of Funds Agency Receives: 49.00

Component: Benefit EFT

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Workforce Services
% of Funds Agency Receives: 51.00
Component: ADMINISTRATION FUNDS,
Technique: Administration Costs

Average Day of Clearance: 5 Days

47.2258 Unemployment Insurance -- State Benefit Account
Recipient: Department of Workforce Services

% of Funds Agency Receives: 100.00

Component: Benefit EFT

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

20.205 Highway Planning and Construction

Page 10 of 23



interest liability if handled in either manner.

(3) Administrative Costs other than Payroll. Most State agencies have the ability to run weekly reports which classify all
expenditures for the previous week. These reports include amounts paid out by warrants, as well as allocated costs from
journal entries, and funds moved by inter-agency transfers. Many cost allocations are done quarterly, with adjustments
being made, if necessary. These weekly reports separate the State and Federal portions of each expenditure and
summarize them by individual program. These reports are usually run on Monday or Tuesday, then checked and verified
the following day. Based on a large sample (more than 81,000 checks), these expenditures (excluding payroll) are
outstanding five dollar-weighted business days. Warrants are issued daily. By assigning Wednesday as the middle of the
week and assyming an equivalent amount of administration expenditures are paid prior to, and after Wednesday, these
expenditures should have cleared the bank by the following Wednesday (the average day of clearance). Federal funds
may be requested as early as the Tuesday following the previous weeks disbursements to be received on the next
business day, usually Wednesday. Some State agencies are not able to meet cutoff times to request Federal funds on
Tuesday. These agencies shall request Federal funds on Wednesday to be received the next business day, usually
Thursday. Many times the payroll amount is requested together with these other administrative costs. Neither the State
nor the Federal Government shall incur an interest liability on administration funds if these procedures are followed, The
request shall be made in accordance with cut-off times in Exhibit |. This funding technique is interest neutral.

Highway P&C Technique

After accounting transactions are posted to the State's general ledger and cost accounting system, those transactions
affecting this program are loaded into another computer program called the Federal Bill, In the Federal Bill, ail costs are
segregated by a project number. Within the Federal Bill, data related to each project are stored. When the Federal Bill is
run, it accumulates all new transactions since the last time the Federal Bill was run. These transactions may include
journal entries, adjustments, payroll items, electronic funds transferred, or checks issued, as well as project and contract
amendments. If the payroll, a batch of checks, or some other item does not post to the general ledger accounting system
properly in time to be transferred to the Federal Bill, then those items must wait until the next time the Federal Bill is run.

The Federal Bill is run weekly. The Federal Bill allocates the transactions to each project. The Federal Bill then
determines the amount that is billable to the Federal Government as well as the status of other expenditure items. The
amount billed to the Federal Government may be more or less than the amount of new transactions entered for the
current run. Some costs may be nonparticipating, other costs may only be partially participating. Some costs may not be
billable because contract amendments have not been completed and authorized yet. Some previously unbillable amounts
accumulated in the Federal Bill may become billable and are released due to contract amendments being posted, etc.
After the Federal Bill is printed and checked for accuracy it is then submitted to the Federal Highway Administration in Salt
Lake City. Federal funds are requested to be received by the next business day. As long as a Federal Bill and request for
reimbursement are not presented to the Federal Highway Administration more often than once each calendar week, and
as long as the State receives the Federal funds no later than the next day after it is requested, neither the State nor the
Federal Government shall incur an interest liability. If Federal funds are not received by the business day after they are
requested, the Federal Government shall incur an interest liability from the business day following the date Federal funds
were requested until the date Federal funds are received in the State's bank account. The request shall be made in
accordance with cut-off times in Exhibit |. This funding technique is Interest neutral.

inter-agency transfers (IAT)

In most cases in Utah, the State agency which draws down Federal funds is the major user or disburser of the money. In
situations where funds are transferred to a second State agency using an IAT, the second agency is usually requesting
reimbursement for money it has already paid out as a service provider. The second agency may have paid out the money

Page 7 of 23



This program is handled as a zero balance account program between the State and its WIC voucher processing bank, but
not between the State and the Federal Government, due to the State not being able to meet Federal Reserve cut-off
times. These techniques shall be defined as a modified zero-balance method and neither the State nor the Federal
Government shall incur an interest liability if these procedures are followed. The request shail be made in accordance with
cut-off times in Exhibit I, The banking system clears the WIC vouchers through the Federal Reserve Bank clearing house
and debits the processing bank for the total amount of the vouchers. The voucher processor faxes the amount of today s
clearings less the previoys day's rejects to the State Department of Health (DOH). After receiving notification from DOH
and approval from the State Division of Finance, the State Treasurer's office then wires the exact amount to the
processing bank, thus maintaining a zero balance for the day at the processing bank. While this is happening, DOH
requests a draw from the U.S, Department of Agriculture's letter of credit to reimburse the State Treasurer. Money is
received by electronic funds transfer on the next business day. This funding technique is interest neutral.

Administration Costs

(1) Estimates. This paragraph applies to the following programs: CFDA # 10.561 State Admin. Matching Grants for
SNAP, CFDA # 17.225 Unemployment Insurance, CFDA # 93,558 Temporary Assistance for Needy Families, CFDA #
93.575 Discretionary Fund of the Child Care Development Fund, and CFDA # 93.596 Mandatory & Matching Funds of
the Child Care Reyelopment Fund. The Department of Workforce Services uses a fully cost allocated accounting system
with a combination of both Random Moment Time Sampling (RMTS) and Direct Labor time charging. The combination of
koth RMTS and direct labor factors makes development of a weekly cost allocation excessively cumbersome or
sufficiently inadequate to arrive at a meaningful weekly allocation of costs. The most reasonable method to derive a
projected weekly cost is a forecast-based estimate. For each grant, a forecast is calculated in an Excel spreadsheet
known as the Expense Revenue Forecast. A component of this analysis is an estimate of projected Federal Share of
expenditures for the applicable quarter. The Projected Federal Share of each CMIA grant is extracted from the quarterly
forecast and divided by 13 to arrive at a weekly estimate. The weekly estimates are then reviewed to verify that based on
existing facts they are reasonable and adequate. To the fullest extent possible, the estimates are left unchanged during
the quarter. However, occasionally the facts supporting the forecast will change due to changes in RMTS strikes, direct
labor or other mitigating factors. Should a significant change in facts occur, the estimate is revised to assure that
excessive, ynsupportable draws are not made from any CMIA grant. The revision is always completed using the same
method as the original estimate. Once the Cost Allocation is completed for each quarter, the Department of Workforce
Services updates the Expense Revenue Database. The Expense Revenue Database is then compared and reconciled to
the forecast used to calculate the estimate. As soon as practical, each CMIA grant is then adjusted to bring draws into
reconciliation with actual expenditures, returning or drawing funds as necessary. No Federal or State interest liabilities will
be assessed on adjustments to estimates.

(2) Payroll. Employee salary and benefits make up the largest portion of alt administrative costs, comprising
approximately 70-85% of the total. Payday is every other Friday. More than 99% of the payroll is paid out by direct
deposit and is posted to each individual employee 's bank account early Friday morning. The majority of the remainder of
the payroll is hand delivered to each employee Friday morning on a State payroll warrant. A few warrants are mailed so
that the employee will receive it on Friday. The warrants carry Friday's date, but are actually printed late Tuesday night
before payday. Payroll warrants are outstanding 5.54 dollar-weighted business days. Thus, combining the direct deposit
amounts with the amounts paid by warrant, overall payroll costs clear the bank in approximately 0.02 business days.
Consequently, the Federal government is not out of pocket as long as Federal funds are not received before Saturday.
Agencies may request Federal funds on Friday to be received the next business day, usually Monday. Payroll costs may
also be requested together with other administrative costs as described in (3) below. The State acknowledges this will
delay the receipt of Federal funds to cover payroll costs, but some State agencies do not have the necessary accounting
figures by Friday to request the proper amount on Friday. Neither the State nor the Federal government shall incur an

Page 6 of 23



12.0 AUTHORIZED SIGNATURES

John Reidhead, CPA

Director, Division of Finance

Department of Administrative Services 4
State of Utah

Signature:
Date Submitted 02/21/2017

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management
Bureau of the Fiscal Service

Date Signed:_¢7 ZL ot

U.S. Departm of the Treagury
Signature: 4 A ‘ tuéfjomo

Date Signed: b/g L. 19

Page 19 of 23



6.2.5 The following program funding technique is not included in section 6.2.4.

Rebates

Utah usually receives monthly rebate checks from the infant formula suppliers and prescription drug companies
participating in this program. Although it is not known when these checks will be received, when they are received, the
next drawdown(s) is(are) immediately reduced by the amount of the rebate. The WIC rebates are exempt from CMIA
interest liabilities as long as any interest earned by the State (until the rebate amount is completely offset in succeeding

drawdowns) is used for program purposes. This funding technique Is interest neutral.
6.3 Application of Funding Techniques to Programs

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

of the programs listed in sectigns 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 Workforce Services

% of Funds Agency Receives: 100.00

Component: Benefit-Electronic benefit transfer (EBT)
Technique: Actual Clearance, ZBA - Same Day Payment
Average Day of Clearance: 0 Days

40.555 National Schgol Lunch Program

Recipient: State Board of Education

% of Funds Agency Receives: 98.00

Component: Vendor--Funds distributed by wire transfer
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: State Board of Education

% of Funds Agency Receives: 2.00

Component: Vendor--Funds distributed by means other than wire transfer
Technique: USBE Composite Average Clearance

Average Day of Clearance: 6 Days

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
Recipient: Department of Heaith

% of Funds Agency Receives: 71.00

Gomponent: Benefit--Funds distributed by wire transfer to WIC voucher processing bank
Technique: Actual Clearance (ZBA)--AGH (modified)

Average Day of Clearance: 1 Day

Recipient: Department of Health
% of Funds Agency Receives: 29.00
Component: Administration Funds

Page 9 of 23



Cash Management Improvement Act Agreement
between
The State of Utah
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 Utah
(hereafter 'State’), in order to implement Section 5 of the Cash Management Improvement Act of 1990, as amended
(hereafter 'Act'), agree as follows:

1.9 AGENTS OF THE AGREEMENT

1.1 The Authorized Official(s) for the State of Utah shall be the Director of the Division of Finance, Department of
Administrative Services, in all matters concerning this Agreement.

4.2 The Assistant Commissioner, Revenue Collections Management, Bureau of the Fiscal Service (Fiscal Service), U.S.
Department of the Treasury, shall act as the Secretary's representative in all matters concerning this Agreement.

1.3 The purpose of the Act is to encourage the development of efficient cash management systems and to ensure equity
in the transfer of funds from Federal agencies to States and ultimately to program recipients. The computation and
payment of interest is not the objective of the Act. The interest provisions are intended to make the terms under which
funds are transferred more equitable and to provide an incentive for better cash management.

The purpose of this Agreement is to set forth the terms and conditions which shall govern the transfer of funds between
agencies of the Federal Government and the State in order to comply with the purpose of the Act as stated above. This
Agreement also outlines how the State shall track and report the flow of these Federal funds for the programs described
herein.

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 206, the
regulations shall govern.

3.0 DURATION, AMENDING, TERMINATING, AND MISCELLANEOUS PROVISIONS
3.1 This Agreement shall take effect on 07/01/2017 and shall remain in effect until 06/30/2018.

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

Page 1 of 23



% of Funds Agency Receives: 13.00
Component: Inter-Agency Transfers
Technique: Inter-agency transfers (IAT)
Average Day of Clearance: 0 Days

93.575 Child Gare and Development Block Grant

Recipient: Department of Workforce Services

% of Funds Agency Receives: 1.00

Component: Benefit--Funds distributed by electronic benefit transfer (EBT)
Technique: Actyal Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Department of Workforce Services
% of Funds Agency Receives: 98,00
Component: ADMINISTRATION FUNDS
Technique: Administration Costs

Average Day of Clearance: 5 Days

Recipient: Department of Workforce Services

% of Funds Agency Receives: 1.00

Component: Benefit-Funds distributed by FINET Tow-party warrant
Technique: Average Clearance

Average Day of Clearance: 5 Days

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

% of Funds Agency Receives: 86.00

Component: Benefit--Funds distributed by electronic benefit transfer (EBT)

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Department of Workforce Services
% of Funds Agency Receives: 1.00
Component: ADMINISTRATION FUNDS.
Technique: Administration Costs

Average Day of Clearance: 5 Days

Recipient: Department of Workforce Services

% of Funds Agency Receives: 13.00

Component: Benefit--Funds distributed by FINET Two-party warrant
Technique: Average Clearance

Average Day of Clearance: 5 Days

93.658 Foster Care -- Title 1V-E
Recipient: Department of Human Services
% of Funds Agency Receives: 62.00

Page 12 of 23



Recipient: Department of Transportation
% of Funds Agency Receives: 100.00
Component: All Funds

Technique: Highway P&C Technique
Average Day of Clearance: § Days

84,010 Title | Grants to Local Educational Agencies
Recipient: State Board of Education

% of Funds Agency Receives: 99.00

Component: Vendor--Funds distributed by wire transfer
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: State Board of Education

% of Funds Agency Receives: 1.00

Component: Vendor & Admin,--Funds distributed by means other than wire transfer
Technique: USBE Composite Average Clearance

Average Day of Clearance: 6 Days

84,027 Special Education -- Grants to States
Recipient: State Board of Education

% of Funds Agency Receives: 98.00

Component: Vendor--Funds distributed by wire transfer
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: State Board of Education

% of Funds Agency Receives: 2.00

Component: Vendor & Admin.--Funds distributed by means other than wire transfer
Technique: USBE Composite Average Clearance

Average Day of Clearance: 6 Days

93.558 Temporary Assistance for Needy Families

Recipient: Department of Workforce Services

% of Funds Agency Receives: 42.00

Component: Benefit-Funds distributed by electronic benefits transfers (EBT
Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Department of Workforce Services
% of Funds Agency Receives: 45.00
Component: ADMINISTRATION FUNDS
Technique: Administration Costs

Average Day of Clearance: 5 Days

Recipient: Department of Workforce Services

Page 11 of 23



ina previoys month, or perhaps several months earlier. Since this is a small portion of their total agency funding, the
transfer request is usually not done until after month-end accounting reports are received. This is also the reason why the
drawdown of Federal funds for these [ATs may be combined with any other drawdown request already being made. The
first agency does not know money for the Federal program has been paid out by the second agency until the IAT transfer
request is actually received. Since this represents such a smail portion of total expenditures, the cost to track these funds
in lieu of the benefits is clearly not within the spirit of efficient cash management practices. No Federal or State interest
liabilities will be assessed on funds transferred between State agencies using IATs, except a Federal interest liability may
be assessed if Federal funds are not credited to a State account within the receipt window specified in Exhibit |. This
funding technique is interest neutral.

Modified Average Clearance

Warrants are issued dally. By assigning Wednesday as the middie of the week and assuming an equivalent amount of
expenditures are paid prior to, and after Wednesday, the day of issuance is defined as Wednesday for ail warrants issued
during each weekly Monday through Friday period. The State shail 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 |.
This funding technique is interest neutral.

Reimbursable Funding

This technique is only used for programs connected with the Army and Air National Guard. Disbursements for these
programs are done through the use of general state warrants which have a clearance pattern of five business days.
According to Exhibit |, the Army and Air National Guard needs 15 business days to respond to a request for funds.
Consequently, the State would always be out of pocket for at least nine business days. In order for these programs to be
accounted for in a simplified manner, the following procedures will be used. Funds shall only be drawn down after month-
end accounting reports are received and checked, usually during the second week of the month following the actual
expenditures. Since all warrants would have cleared the state's bank before a request for funds is presented to the
Federal Government, the Federal Government shall incur an interest liability on requested funds beginning one business
day after the request for funds is submitted until funds are deposited in a State account. This funding technique is not
interest neutral.

USBE Composite Average Clearance

Funds transferred to other State divisions, such as youth corrections, Deaf & Blind School, Utah State Hospital, Utah
State Developmental Center, etc. are transferred monthly by inter-agency transfer forms as requested. Other outside
service providers are paid by State warrant on a daily basis. These warrants are part of a composite check clearing
pattern which encompasses most of the programs operated by the State Board of Education. As specified in Exhibit I,
these checks clear the bank in six dollar-weighted business days. Internal accounting reports are run on a periodic basis
(usually weekly) which classify all expenditures since the previous report. These reports include amounts paid out by
warrants, as well as allocated costs from journal entries, and funds moved by inter-agency transfers. A midpoint date for
expenditures in the current report is determined by dividing in half the time period covered by the report. If the time period
covers an even number of days, the day following the time period midpoint will be the midpoint date. Assuming an
equivalent amount of expenditures are paid prior to, and after the midpoint date, Federal funds to cover these
expenditures shall be requested such that they are deposited in the State's account on the average date of clearance of
the warrants included in the report, The average date of clearance is the sixth business day after the midpoint date. The
request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. This funding
technique is interest neutral.

Page 8 of 23



84.027 |Special Education — State Board of Education |2.00 |Vendor & Admin.-Funds |USBE Composite 6 Days
Grants to States distributed by means Average Clearance
other than wire transfer
93.558 | Temporary Assistance for Department of Workforce |42.0 |Benefit-Funds distributed} Actual Clearance, ZBA- |0 Days
Needy Families Services 0 by electronic benefits Same Day Payment
— transfers (EBT
93.558 | Temporary Assistance for {Department of Workforce | 13,0 Inter-Agency Transfers | Inter-agency transfers ‘0 Days
Needy Families Services Q (IAT)
93.558 |Temporary Assistance for| Department of Workforce |45,0 |ADMINISTRATION Administration Costs 5 Days
Needy Families Services it} FUNDS
93.575 |Child Care and Department of Workforce |1.00 |Benefit--Funds distributed| Actual Clearance, ZBA- |0 Days
Development Block Grant |Services by electronic benefit Same Day Payment
. . transfer (EBT)
93.575 |Child Care and ‘Department of Workforce |1.00 |Benefit--Funds distributed | Average Clearance 5 Days
Development Block Grant |Services by FINET Tow-party
warrant
99.575 |Child Care and Department of Workforce |98.0 [ADMINISTRATION Administration Costs [5 Days
Development Block Grant| Services OQ |FUNDS
93.596 |Child Care Mandatory Department of Workforce |86.0 |Benefit--Funds distributed |Actual Clearance, ZBA - |0 Days
and Matching Funds of | |Services 0 by electronic benefit Same Day Payment
the Child Care and transfer (EBT)
Development Fund
93.596 | Child Care Mandatory Department of Workforce |13.0 |Benefit--Funds distributed|Average Clearance 5 Days
and Matching Funds of [Services 0 by FINET Two-party
the Child Care and warrant
Development Fund
93.596 | Child Care Mandatory Department of Workforce |1.00 [ADMINISTRATION Administration Costs 5 Days
and Matching Funds of | Services FUNDS
the Child Care and
Development Fund
93.658 | Foster Care -- Title IV-E_|Department of Human 38.0 |Vendor--Portion Average Clearance 5 Days
Services 0 distrubuted by CAPS.
warrant
93.658 {Foster Care -- Title V-E |Department of Human 62.0 [ADMINISTRATION Administration Costs 5 Days
Services 0 FUNDS
93.767 | Children’s Health Department of Health 87.0 |Benefit EFT Actual Clearance, ZBA- }1 Day
Insurance Program } ACH
93.767 jChildren's Health Department of Health 9.00 |ADMINISTRATION Administration Costs § Days
Insurance Program FUNDS
93,767 {Children's Heaith Department of Health 4.00 |Vendor--Funds Modified Average 5 Days
Insurance Program distributed by general Clearance
State warrant
93.778 Medical Assistance Department of Health 94.0 |Benefit EFT Actual Clearance, ZBA- |1 Day
Program. 0 ACH
93.778 |Medical Assistance Department of Health 5,00 |ADMINISTRATION Administration Costs 5 Days
Program FUNDS
93.778 |Medical Assistance Department of Health 4.00 |Vendor--Portion: Modified Average 6 Days
Program cistributed by MEDICAID |Clearance
warranl

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

Exhibit 2 of this Treasury-State Agreement:

4. 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,

Page 22 of 23



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

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

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

The State must submit a revised Medicaid Program Budget Report (CMS-37) to request supplemental funding. The CMS
guidelines and instructions for completing the CMS-37 are provided in Section 2600F of the State Medicaid Manual
(SMM). The CMS/CO must receive the revised Form CMS-37 through the Medicaid Budget Expenditure
System/Children's Budget Expenditure System (MBES/CBES) no later than 10 calendar days before the end of the
quarter for which the supplemental grant award is being requested,

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

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

Page 4 of 23



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

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

No exceptions.

The State shall also adjust each clearance pattern to reflect:

No adjustments.

7.8 Each of the State's clearance patterns is calculated in business 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 206 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 (modified)
Actual Clearance, ZBA - ACH

Actual Clearance, ZBA - Same Day Payment
Administration Costs

Average Clearance

Highway P&C Technique

Inter-agency transfers (IAT)

Modified Average Clearance

USBE Composite Average Clearance

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

Page 15 of 23



(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
ng case shall less than 90% of a program's total funding be subject to interest calculation procedures.

Proration of calculations: If less than total program funding is subject to interest calculation procedures, the resulting
interest liability calculations shall be prorated to 100% of program funding.

8.6 State Interest Liabilities

8.6.1 The State shall be liable for interest on Federal funds from the date Federal funds are credited to a State account
until the date those funds are paid out for program purposes.

8.6.2 The State shall use the following method to calculate State interest liabilities on Federal funds:
8.6.2.1 Measuring Time Funds Are Held

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

8.6.2.2 Source of Data

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 Il.

8.6.2.3 Standards Applied

The average daily cash balance of Federal Funds in the program's account reflects the actual activity of each draw from
the date of deposit to the date of issuance or clearance, whichever is pertinent.

8.6.2.4 Calculation Procedure

1 = ADB x R, where

| = 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

Page 17 of 23



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 Health

Department of Human Services
Department of Transportation
Department of Workforce Services
State Board of Education

Utah National Guard

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:

There are currently no fiscal agencies listed for Section 5.2.

5.3 The State shall submit an annual report to the Bureau of the Fiscal Service by December 31st for the State’ s most
recently completed fiscal year. The format of the annual report will be prescribed by the Fiscal Service. Part of this report
will include the amount claimed by the State for reimbursement of direct costs necessary for development and
maintenance of clearance patterns and calculations of interest liabilities.

The Director of the Division of Finance shall certify all reports, clearance patterns, and calculations for accuracy and
compliance with this Agreement.

6.0 FUNDING TECHNIQUES
6.1 General Terms

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

6.1.2 The State shall schedule the receipt of Federal funds such that the funds are received and credited to a State
account in accordance with the clearance patterns specified in Exhibit 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 shal! 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.

Page 3 of 23



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.

4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on the State's Single
Audit Report for fiscal year ending 06/30/2016.

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 $22,482,815.
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
10.558 Child and Adult Care Food Program

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

84.010 Title | 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

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

93.767 Children's Health Insurance Program

93,778 Medical Assistance Program

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

Page 2 of 23



Component: ADMINISTRATION FUNDS
Technique: Administration Costs
Average Day of Clearance: 5 Days

Recipient: Department of Human Services

% of Funds Agency Receives: 38.00

Component: Vendor--Portion distrubuted by CAPS warrant
Technique: Average Clearance

Average Day of Clearance: 5 Days

93.767 Children's Health Insurance Program
Recipient: Department of Health

% of Funds Agency Receives: 87.00
Gomponent: Benefit EFT

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

Recipient: Department of Health

% of Funds Agency Receives: 9.00
Component: ADMINISTRATION FUNDS
Technique: Administration Costs
Average Day of Clearance: 5 Days

Recipient; Department of Health

% of Funds Agency Receives: 4.00

Component: Vendor--Funds distributed by general State warrant
Technique: Modified Average Clearance

Average Day of Clearance: 5 Days

93.778 Medical Assistance Program
Recipient: Department of Health

% of Funds Agency Receives: 94.00
Component: Benefit EFT

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

Recipient: Department of Health

% of Funds Agency Receives: 5.00
Component: ADMINISTRATION FUNDS
Technique: Administration Costs
Average Day of Clearance: 5 Days

Recipient: Department of Health

% of Funds Agency Receives: 1.00

Component: Vendor--Portion distributed by MEDICAID warrant
Technique: Modified Average Clearance

Page 13 of 23



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:

Federal Funds Interest Neutral, State Funds not:
The State shall use the following methodology to calculate State interest liabilities on funds withdrawn from the State
account in the UTF under the Unemployment Insurance program.

Based on statements provided by its financial institution (or other appropriate sources), 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 actyal interest earnings of the benefit payment account on the whole constitute the actual interest earnings
attributable to funds withdrawn from the State account in the UTF, since the State shall apply an appropriate interest
neutral funding technique, to funds withdrawn from the FECA and EUCA and any other benefit accounts of Federal funds
in the UTF from which the State draws.

The State shall calculate the related banking costs attributable to funds withdrawn from the State account in the UTF by
multiplying the State % by the amount of the related banking costs of the benefit payment 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 of
the benefit payment account on the whole less the related banking costs attributed to such funds.

8.4 Refund Liabilities

8.4.1 The State shall be liable for interest on refunds from the date the refund is credited to a State account until the date
the refund is debited from the State account for program purposes. The State shall apply a $50,000 refund transaction
threshold below which the State shall not incur or calculate interest liabilities on refunds. A transaction is defined as a
single deposit.

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

Page 16 of 23