Exhibit II - State of Maryland
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 {Maryland Department of | 100. |Payments to Actual Clearance, ZBA -
Assistance Program Human Resources 00 __ {Beneficiaries Same Day Payment
10.553 |Schoo! Breakfast Maryland State 100, |Direct & indirect Costs Cost Allocation Plans- — |N/A
Program Department of Education |00 Monthly
40.555 |Nationai School Lunch | Maryland State 400, |Direct and Indirect Costs {Cost Allocation Plans- |N/A
Program Department of Education |00 Monthly
10.557 |Special Supplemental Maryland Department of |71.0 |Benefit Payments Actual Clearance, ZBA- |1 Day
Nutrition Program for Health and Mental 0 ACH
Women, Infants, and Hygiene
Children
10.557 | Special Supplemental Maryland Department of |29.0 [Administrative Costs Drawdowns at Fixed 1 Day
Nutrition Program for Health and Mental 0 Intervals - Monthly
Women, Infants, and Hygiene (modified)
Children
10.558 |Child and Adult Care Maryland State. 400. |Direct & Indirect Costs {Cost Allocation Plans- |N/A
Food Program Department of Education |00 Monthly
10.561 State Administrative Maryland Department of {39.0 |Administrative Costs- Drawdowns at Fixed 1 Day
Matching Grants for the |Human Resources 0 Non-Payroll & Vendor Intervals - Monthly
‘Supplemental Nutrition Payments (modified)
Assistance Program
10.561 |State Administrative Maryland Department of |61.0 |Payroll Average Clearance - 1 Day
Matching Grants for the {Human Resources 0 Modified
Supplemental Nutrition
Assistance Program
14.195 |Section 8 Housing Maryland Department of |100. |Housing Assistance Actual Clearance, ZBA- |1 Day
Housing and Community |00 —|Payments through ACH
Development Annual Contribution
Contract
17.225F |Unemployment insurance |Marytand Department of | 15.0 GRANTS TO Average Clearance 8 Days
-- Federal Benefit Labor, Licensing and 0 SUBRECIPIENTS-
Account and Regulation (Information Tech.
Administrative Costs peer Center, ICON,
17.225F |Unemployment Insurance |Maryland Department of |7.00 INDIRECT COSTS- Drawdowns at Fixed 1 Day
|. Federal Benefit Labor, Licensing and ITSC, ICON, Intervals - Monthly
Account and Regulation Inemployment. (modified)
Administrative Costs. Insurance, EUC & REA)
47.225F |Unemployment insurance |Maryland Department of |17.0 NON PERSONNEL Drawdowns at Fixed 4 Day
-- Federal Benefit Labor, Licensing and 0 SERVICES-(ITSC, ICON, |Intervals - Monthly
Account and Regulation Unemployment Insur, (modified)
Administrative Costs EUC & REA)
47.225F |Unemployment Insurance|Maryland Department of {61.0 PAYROLL-(ITSC, Average Clearance - 4 Day
- Federal Benefit Labor, Licensing and tt ICON,Unemployment Modified
Account and Regulation Insur, EUC & REA)
Administrative Costs
47.2258 |Unemployment insurance |Maryland Department of |100. |State Benefit Payments- |Actual Clearance, ZBA 0 Days
-- State Benefit Account |Labor, Licensing and 00 | Debit Card Same Day Payment -
Regulation Debit Cards.
20.205 Highway Planning and = /Maryland Department of /10.0 Payments to Sub- Actual Clearance, ZBA- |1 Day
Construction Transportation 0 Recipients (ACH

Page 20 of 22



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 at this time.

The State shall also adjust each clearance pattern to reflect:

No exceptions at this time.

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

7.9 An authorized State official shall certify that each clearance pattern developed by the State accurately corresponds to
the clearance activity of the programs to which it is applied. This certification shall be provided to the Fiscal Service prior
to the effective date of the Agreement. The State shall recertify its clearance patterns at least every five years.

7.10 The State shall follow the procedures of 31 CFR 205 if it has actual or constructive knowledge, at any time, that a
clearance pattern does not correspond to a program's clearance activity.

8.0 INTEREST CALCULATION METHODOLOGY
8.1 General Terms

8.1.1 The State and the Secretary agree that no interest liabilities will be incurred for transfers of funds made in
accordance with the procedures specified in section 6 of this Agreement where the following funding techniques are
applied:

Actual Clearance, ZBA - ACH

Actual Clearance, ZBA - Same Day Payment

Actual Clearance, ZBA Same Day Payment - Debit Cards
Average Clearance

Average Clearance - Modified

Cost Allocation Plans - Monthly

Drawdowns at Fixed Intervals - Monthly (modified)
Drawdowns at Fixed Intervals - Quarterly

Fixed Administrative Allowances-Bl-Weekly Payroll (modified)-Dollar Weighted
Payment Schedule

Weekly Billing

Weekly Draws.

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:

(4) 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

Page 14 of 22



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 shall be made in accordance with the appropriate Federal agency cut-off time specified
in Exhibit |. The amount of the request shall be for the amount of 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 shail request funds the same day it pays out funds, in accordance with the appropriate Federal agency cut-off
time specified in Exhibit 1. A Federal agency will deposit funds in a State account the same day as requested. The amount
of the request shall be for the amount of funds that clear the State's account that day. This funding technique is interest
neutral.

Average Clearance

The State shall request funds such that they are deposited by ACH on the dollar-weighted average day of clearance for
the disbursement, in accordance with the clearance pattern specified in Exhibit I. 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 exact amount of that disbursement. This funding technique is interest neutral.

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

Cost Allocation Plans - Monthly

The State shall request funds once a month, such that they are deposited on the median day of the month, to fund activity
of the prior month. The request shall be made in accordance with the appropriate Federal agency cut-off time specified in
Exhibit |. The amount of the request for a given month's activity shall be based on actual costs distributed in accordance
with the State's approved cost allocation plan. This funding technique is interest neutral.

6.2.3 The following are terms under which miscellaneous funding techniques shall be implemented for ali 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 Same Day Payment - Debit Cards

The State shall request funds such that they are deposited by Federal Wire in a State account on the settlement date of
the payments issued by the State. The State shall make the payment via Federal Wire on the same day to the bank. The
bank will fund the cards on the same day. The funds loaded to the Debit Cards will be available for use by claimants on
the same day. 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 funds that clear the State 's account on the settlement

Page 5 of 22



20.205 =| Highway Planning and Maryland Department of |90.0 |Construction/Consultant |Weekly Billing NIA
Construction Transportation 0 Costs/Payroll/Sub-
Recipients
20.507 | Federal Transit Capital _|Maryland Department of |99.0 | Vendor Payments Average Clearance 9 Days
and Operating Assistance | Transportation oO
Formula Grants
20.507 | Federal Transit Capital {Maryland Department of |1.00 |Administrative Costs Drawdowns at Fixed N/A
and Operating Assistance| Transportation Intervals - Quarterly
Formula Grants
84.010 | Title | Grants to Local Maryland State ‘93.0 | Payments to Local Average Clearance 8 Days
Educational Agencies Department of Education |O Education
Agencies/Service
Providers
84.010 {Title | Grants to Local Maryland State 6.00 |Indirect and other Costs |Cost Allocation Plans- {|N/A
Educational Agencies Department of Education Monthly.
84.010 | Title | Grants to Local Maryland State. 1.00 {Payroll Average Clearance - 1 Day
Educational Agencies Department of Education Modified
84.027 |Special Education -- Maryland State. 98.0 {Payments to Local Average Clearance 8 Days
Grants to States Department of Education |0 Education
Agencies/Service
Providers.
84.027 |Special Education — Maryland State 1.00 |indirect and Other Costs |Cost Allocation Plans- |N/A
Grants to States Department of Education Monthly
84.027 {Special Education — Maryland State 1.00 |Payrolt Average Clearance - 1 Day
Grants to States Department of Education Modified
84.395 |State Fiscal Stabilization | Maryland State 50.0 |InDirect and Other Costs |Cost Allocation Plans- |N/A
Fund (SFSF) - Race-to- {Department of Education |0 ~ PARCC ‘Monthly
the-Top Incentive Grants,
Recovery Act,
84.395 |State Fiscal Stabilization |Maryland State 50.0 [Payments to Local Average Clearance - 8 Days
Fund (SFSF) - Race-to- |Department of Education |0 Education Modified
'the-Top incentive Grants, Agencies/Service
Recovery Act Providers,
93.558 | Temporary Assistance for|Maryland Department of |48.0 |Payments to Actual Clearance, ZBA- |0 Days
Needy Families Human Resources i) Beneficiaries Same Day Payment
93.558 |Temporary Assistance for|Maryland Department of |7.00 |Administrative Costs-Non |Drawdowns at Fixed 1 Day
Needy Families Human Resources Payroll Intervals - Monthly
(modified)
93.558 |Temporary Assistance for|Maryland Department of {3.00 |Emergency Payments to |Payment Schedule 1 Day
Needy Families Human Resources Beneficiaries
93.558 |Temporary Assistance for|Maryland Department of |42.0 |Payroll Average Clearance ~ 1 Day
Needy Families Human Resources } Modified
93.563 | Child Support Maryland Department of |61.0 |Administrative Costs Drawdowns at Fixed 4 Day
Enforcement Human Resources 0 (Non-Payroll) and Vendor | Intervals - Monthly
Payments (modified)
93.563 {Child Support Maryland Department of {39.0 jPayroll Average Clearance - 1 Day
Enforcement Human Resources 0 Modified
93.568 |Low-Income Home Maryland Department of |99.0 |Administrative costs - Drawdowns at Fixed 1 Day
Energy Assistance Human Resources o (non-payroll) and vendor | Intervals - Monthly
payments (modified)
93.568 |Low-Income Home Maryland Department of |1.00 |Payroll Average Clearance - 1 Day
Energy Assistance Human Resources Modified
93.767 {Children's Health Maryland Department of }90.0 {Provider payments (Non- |Average Clearance 6 Days
Insurance Program Health and Mental 0 Voucher only, processed
Hygiene through MMIS)
93.767 |Children's Health Maryland Department of |5.00 |Voucher Only- Weekly Draws. NIA
Insurance Program Health and Mental Disproportionate Share
Hygiene Payments & Benefit
Payments including
(Local Public, Non Public
and Lead Agencies)

Page 21 of 22



12.0 AUTHORIZED SIGNATURES.

Bernadette Benik
Chief Deputy Treasurer

Date Signed: 7 li sh \ w&

Date Submitted 06/27/2016

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management
Bureau of the Fiscal Service

U.S. Department of the Tredsury

Signature:

Date Signed: Whe [le

Page 18 of 22



84.010 Title | Grants to Local Educational Agencies

Recipient: Maryland State Department of Education

% of Funds Agency Receives: 93.00

Component: Payments to Local Education Agencies/Service Providers
Technique: Average Clearance

Average Day of Clearance: 8 Days

Recipient: Maryland State Department of Education
% of Funds Agency Receives: 1.00

Component: Payroll

Technique: Average Clearance - Modified

Average Day of Clearance: 1 Day

Recipient: Maryland State Department of Education
% of Funds Agency Receives; 6.00

Component: Indirect and other Costs

Technique: Cost Allocation Plans - Monthly
Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: Maryland State Department of Education

% of Funds Agency Receives: 98.00

Component: Payments to Local Education Agencies/Service Providers
Technique: Average Clearance

Average Day of Clearance: 8 Days

Recipient: Maryland State Department of Education
% of Funds Agency Receives: 1.00

Component: Payroll

Technique: Average Clearance - Modified

Average Day of Clearance: 1 Day

Recipient: Maryland State Department of Education
% of Funds Agency Receives: 1.00

Component: Indirect and Other Costs

Technique: Cost Allocation Plans - Monthly
Average Day of Clearance: N/A

84,395 State Fiscal Stabilization Fund (SFSF) - Race-to-the-Top Incentive Grants, Recovery Act
Recipient: Maryland State Department of Education

% of Funds Agency Receives: 50.00

Component: Payments to Local Education Agencies/Service Providers

Technique: Average Clearance - Modified

Average Day of Clearance: 8 Days

Recipient: Maryland State Department of Education

Page 10 of 22


amount will be based on the amount calculated as due by the Program, since the last request for such funds.

The Provider Payments (Non-Voucher only, not processed through MMIS) will be based on cash expenditures reflected in
the State of Maryland's Financial Management Information System (FMIS), since the last request for such funds.

This technique is considered to be interest neutral and, based on the information available, matches as closely as
possible the draw of Federal funds with the time they are paid out for program purposes, in accordance with the clearance
pattern specified in Exhibit Il (MMIS). The request shall be made in accordance with the appropriate Federal agency cut-
off time specified in Exhibit |. This funding technique is interest neutral.

6.3 Application of Funding Techniques to Programs

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

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

40.551 Supplemental Nutrition Assistance Program
Recipient: Maryland Department of Human Resources
% of Funds Agency Receives: 100.00

Component: Payments to Beneficiaries

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

10.553 School Breakfast Program

Recipient: Maryland State Department of Education
% of Funds Agency Receives: 100.00

Component: Direct & Indirect Costs

Technique: Cost Allocation Plans - Monthly
Average Day of Clearance: N/A

10.555 National School Lunch Program

Recipient: Maryland State Department of Education
% of Funds Agency Receives: 100.00

Component: Direct and Indirect Costs

Technique: Cost Allocation Plans - Monthly
Average Day of Clearance: N/A

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

% of Funds Agency Receives: 71.00

Component: Benefit Payments

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Page 7 of 22



date. This funding technique is interest neutral.
Average Clearance ~ Modified

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 Average Clearance Payroll specified in Exhibit Il. The Payroll
clearance pattern will be applied to an estimate of the actual payroll cost based on the most recent cost allocation
distribution. This estimate will be reconciled to actual costs approximately 30-50 days after the end of the quarter. The
request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. This funding
technique is interest neutral.

Drawdowns at Fixed intervals - Monthly (modified)

The State shall request funds once a month, such that they are deposited on the day of the month specified for each
component. The request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit
|. The amount of the request shall be based on the most recent monthly expenditure data available based on either actual
or estimated costs; whichever is applicable to the component. If necessary, adjustments will be made when actual grant
costs are known, approximately 30-50 days after the end of each quarter. This funding technique is interest neutral.

Drawdowns at Fixed Intervals - Quarterly

The State shall request funds once a quarter, such that they are deposited on the 30th day of the month following the end
of the quarter. The request shall be made in accordance with the appropriate Federal agency cut-off time specified in
Exhibit |. The amount of the request shall be based on the actual costs allocated to the program for the quarter. This
funding technique is interest neutral.

Fixed Administrative Allowances-Bl-Weekly Payroll (modified)-Dollar Weighted

The request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |.
Reconciliation will occur within 60 days of the end of each quarter. The State shall request 1/6 or 4/7 of the quarterly
award, based on the number of pay periods within the quarter. This funding technique is interest neutral.

Payment Schedule

The request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The State
shall draw down 1/12 of the total annual expected expenditures (based on actual expenditures of the prior fiscal year or
the current budget) on the median day of the month. An adjusting draw will be made when actual expenditures are known,
approximately 30-50 days after the end of the quarter. For Demonstration Projects, where actual expenditures are not
available until 30 days after the end of the quarter, an adjusting draw will occur within 45 days after the quarter's end.

This funding technique is interest neutral.

Weekly Billing

The State shall request funds weekly for the program. The amount shall be for all eligible costs that have been recorded
since the last request for funds. The request shall be made in accordance with the appropriate Federal agency cut-off
time specified in Exhibit |. This funding technique is interest neutral.

Weekly Draws

The State shall request funds once a week. The Voucher Only amount requested will be based on expenditures incurred
and recorded in the State of Maryland's Medicaid Management Information System (MMIS). The Disproportionate Share

Page 6 of 22



Exhibit | - Funds Request and Receipt Times Schedule

State of Maryland

Agriculture-FNS ACH 11:59 PM 4 day
|Agriculture-FNS. Fedwire 5:45 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 4 day
Dept of Homeland Security (FEMA) Fedwire 2:00 PM 0 day
Dept of Homeland Security (ODP) ACH 2:00 PM. 2days
Dept of Homeland Security (ODP) Fedwire 2:00 PM 2 days
EPA ACH 2:00 PM [2 days
EPA Fedwire 2:00 PM 0 day
Education ACH 3:00 PM 41 day,
Education Fedwire 2:00 PM 0 day
Energy ACH 4:00 PM. 1 day
Energy Fedwire. 3:00 PM O day
HHS ACH 6:30 PM 1 day
HHS Fedwire 3:00 PM ‘O_day
HUD ACH 5:30 PM 2 days
HUD Fedwire 3:00 PM 0 day
Interior-FWS ACH 44:59 PM 4 day
Interior-FWS. Fedwire 5:45 PM Q day
interior-OSM ACH 3:00 PM. 4 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. 1day
Labor-UTF. ACH 3:00 PM 4 day
Labor-UTF Fedwire 3:00 PM 0 day
National Science Foundation (NSF) ACH 8:00 PM A day
National Science Foundation (NSF) Fedwire 5:45 PM lO day
Social Security Administration ACH 41:59 PM. 4 day
Social Security Administration Fedwire 5:45 PM 0 day
Transportation (FAA) ACH 2:00 PM 1 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 19 of 22



Recipient: Maryland Department of Labor, Licensing and Regulation
% of Funds Agency Receives: 7.00

Component: INDIRECT COSTS-(ITSC, [CON, Unemployment Insurance, EUC & REA)

Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

Recipient: Maryland Department of Labor, Licensing and Regulation
% of Funds Agency Receives: 17.00

Component: NON PERSONNEL SERVICES-(ITSC, ICON, Unemployment Insur, EUC & REA)

Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

17.225S Unemployment Insurance -- State Benefit Account
Recipient: Maryland Department of Labor, Licensing and Regulation
% of Funds Agency Receives: 100.00

Component: State Benefit Payments-Debit Card

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

20.205 Highway Planning and Construction
Recipient: Maryland Department of Transportation
% of Funds Agency Receives: 10.00

Component: Payments to.Sub-Recipients
Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: Maryland Department of Transportation

% of Funds Agency Receives: 90.00

Component: Construction/Consultant Costs/Payroll/Sub-Recipients
Technique: Weekly Billing

Average Day of Clearance: N/A

20.507 Federal Transit Capital and Operating Assistance Formula Grants
Recipient: Maryland Department of Transportation

% of Funds Agency Receives: 99.00

Component: Vendor Payments

Technique: Average Clearance

Average Day of Clearance: 9 Days

Recipient: Maryland Department of Transportation
% of Funds Agency Receives: 1.00

Component: Administrative Costs

Technique: Drawdowns at Fixed Intervals - Quarterly
Average Day of Clearance: N/A

Page 9 of 22


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

4.0 AGENTS OF THE AGREEMENT

1.1 The Authorized Official(s) for the State of Maryland shall be the Chief Deputy Treasurer for the State Treasurer of
Maryland in all matters concerning this Agreement.

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

2.0 AUTHORITY

2.1 The authority for this Agreement is the Cash Management Improvement Act of 1990 (Public Law 101-453), as
amended by the Cash Management Improvement Act of 1992 (Public Law 102-589), codified at 31 U.S.C. 6501 and 31
U.S.C. 6503.

2.2 The regulations codified at 31 CFR Part 205 shall apply to all matters pertaining to this Agreement, and are
incorporated herein by reference. In the event of any inconsistency between this Agreement and 31 CFR Part 205, the
regulations shall govern. :

3.0 DURATION, AMENDING, TERMINATING, AND MISCELLANEOUS PROVISIONS
3.1 This Agreement shall take effect on 07/01/2016 and shall remain in effect until 06/30/2017.

3.2 This Agreement may be amended at any time by written, mutual consent of the State and the Fiscal Service. This
Agreement shall be amended annually to incorporate new programs that qualify as major Federal assistance programs
and remove programs that no longer qualify as major Federal assistance programs. A State must notify the Fiscal Service
in writing within 30 days of the time the State becomes aware of a change that involves additions or deletions of programs
subject to Subpart A, changes in funding techniques, and/or changes in clearance patterns. The notification must include
a proposed amendment for review by the Fiscal Service.

3.3 Notwithstanding section 3.2, in the event of Federal or State non-compliance with Subpart B of 31 CFR, Part 205, the
Fiscal Service may amend this Agreement at any time to incorporate additional programs and the entities that administer

those programs.

3.4 This Agreement may be terminated by either party with 30 days' written notice. If this Agreement is terminated, the
Fiscal Service will prescribe the funding techniques, clearance patterns, and methods for calculating interest liabilities to
be used by the State.

Page 1 of 22



Component: Payroll
Technique: Average Clearance - Modified
Average Day of Clearance: 1 Day

Recipient: Maryland Department of Human Resources

% of Funds Agency Receives: 99.00

Component: Administrative costs - (non-payroll) and vendor payments
Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

93.767 Children's Health insurance Program

Recipient: Maryland Department of Health and Mental Hygiene

% of Funds Agency Receives: 90.00

Component: Provider payments (Non-Voucher only, processed through MMIS)
Technique: Average Clearance

Average Day of Clearance: 6 Days

Recipient: Maryland Department of Health and Mental Hygiene

% of Funds Agency Receives: 5.00

Component: Administrative Cost

Technique: Fixed Administrative Allowances-Bl-Weekly Payroll (modified)-Dollar Weighted
Average Day of Clearance: 1 Day

Recipient: Maryland Department of Health and Mental Hygiene

% of Funds Agency Receives: 5.00

Component: Voucher Only-Disproportionate Share Payments & Benefit Payments including (Local Public, Non Public and
Lead Agencies)

Technique: Weekly Draws

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Maryland Department of Health and Mental Hygiene

% of Funds Agency Receives: 76.00

Component: Provider payments (Non-Voucher only, processed through MMIS)
Technique: Average Clearance

Average Day of Clearance: 6 Days

Recipient: Maryland Department of Health and Mental Hygiene

% of Funds Agency Receives: 5.00

Component: Administrative Costs

Technique: Fixed Administrative Allowances-Bl-Weekly Payroll (modified)-Dollar Weighted
Average Day of Clearance: N/A

Recipient: Maryland Department of Health and Mental Hygiene
% of Funds Agency Receives: 2.00
Component: Provider payments (Non-Voucher only, not processed through MMIS)

Page 12 of 22


% of Funds Agency Receives: 50.00
Component: InDirect and Other Costs - PARCC
Technique: Cost Allocation Plans - Monthly
Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: Maryland Department of Human Resources
% of Funds Agency Receives: 48.00

Component: Payments to Beneficiaries

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

Recipient: Maryland Department of Human Resources
% of Funds Agency Receives: 42.00

Component: Payroll

Technique: Average Clearance - Modified

Average Day of Clearance: 1 Day

Recipient: Maryland Department of Human Resources

% of Funds Agency Receives: 7.00

Component: Administrative Costs-Non Payroll

Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

Recipient: Maryland Department of Human Resources
% of Funds Agency Receives: 3.00

Component: Emergency Payments to Beneficiaries
Technique: Payment Schedule

Average Day of Clearance: 1 Day

93.563 Child Support Enforcement

Recipient: Maryland Department of Human Resources
% of Funds Agency Receives: 39.00

Component: Payroll

Technique: Average Clearance - Modified

Average Day of Clearance: 1 Day

Recipient: Maryland Department of Human Resources

% of Funds Agency Receives: 61.00

Component: Administrative Costs (Non-Payroll) and Vendor Payments
Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

93.568 Low-Income Home Energy Assistance
Recipient: Maryland Department of Human Resources
% of Funds Agency Receives: 1.00

Page 11 of 22


Recipient: Maryland Department of Health and Mental Hygiene
% of Funds Agency Receives: 29.00

Component: Administrative Costs

Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

10.558 Child and Adult Care Food Program
Recipient: Maryland State Department of Education
% of Funds Agency Receives: 100.00

Component: Direct & Indirect Costs

Technique: Cost Allocation Plans - Monthly
Average Day of Clearance: N/A

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
Recipient: Maryland Department of Human Resources

% of Funds Agency Receives: 61.00

Component: Payroll

Technique: Average Clearance - Modified

Average Day of Clearance: 1 Day

Recipient: Maryland Department of Human Resources

% of Funds Agency Receives: 39.00 ~

Component: Administrative Costs-Non-Payroll & Vendor Payments
Technique: Drawdowns at Fixed Intervals - Monthly (modified)
Average Day of Clearance: 1 Day

14.195 Section 8 Housing

Recipient: Maryland Department of Housing and Community Development

% of Funds Agency Receives: 100.00

Component: Housing Assistance Payments through Annual Contribution Contract
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
Recipient: Maryland Department of Labor, Licensing and Regulation

% of Funds Agency Receives: 15.00

Component: GRANTS TO SUBRECIPIENTS-(Information Tech. Support Center, ICON, Ul)
Technique: Average Clearance

Average Day of Clearance: 8 Days

Recipient: Maryland Department of Labor, Licensing and Regulation

% of Funds Agency Receives: 61.00 .
Component: PAYROLL-(ITSC, ICON,Unemployment Insur, EUC & REA)
Technique: Average Clearance - Modified

Average Day of Clearance: 1 Day

Page 8 of 22


Children's Health

Maryland Department of

oe
Fixed Administrative

Program

Health and Mental
Hygiene

Insurance Program Heaith and Mental Allowances-Bl-Weekly
Hygiene Payroll (modified)-Dollar
Weighted
93.778 |Medical Assistance Maryland Department of |76.0 {Provider payments (Non- |Average Clearance 6 Days
Program Health and Mental 0 Voucher only, processed
Hygiene through MMIS)
93.778 |Medical Assistance Maryland Department of |2.00 |Provider payments (Non- | Weekly Draws N/A
Program Health and Mental ‘Voucher only, not
Hygiene processed through
MMIS)
93.778 | Medical Assistance Maryland Department of {17.0 |Voucher Only- Weekly Draws NIA
Program Health and Mental 0 Disproportionate Share
Hygiene Payments & Benefit
Payments including
(Local Public, Non Public
and Lead Agencies)
93.778 |Medical Assistance Maryland Department of |5.00 [Administrative Costs Fixed Administrative NIA

Allowances-Bl-Week)
Payroll (modified)-Dollar

Weighted

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

Exhibit 2 of this Treasury-State Agreement:

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

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

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

4. Are auditable.

Date:

Printed Name:

Certifying Signature:

Title:

Bernadette Ben

Chat Deruty Treasurer

Page 22 of 22



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.

Page 4 of 22


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 dogs 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:

When the Funding Technique is properly used, there should be no interest earnings on funds withdrawn from the State
account, as the State has implemented Actual Clearance, ZBA Same Day Payment - Debit Cards, an interest-neutral
funding technique, for such transfers. For transfers UTF that do not follow the technique specified in section 6.2 and result
in a positive balance of funds in a State account, the 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 pro-rata share less the related
banking costs attributed to such funds.

8.4 Refund Liabilities

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

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.

Page 15 of 22



10.3 The State shall submit all claims for reimbursement of interest caiculation 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 17 of 22



Maryland Department of Health and Mental Hygiene

Maryland Department of Housing and Community Development
Maryland Department of Human Resources

Maryland Department of Labor, Licensing and Regulation
Maryland Department of Transportation

Maryland State Department of Education

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:

Bank of America 17.225S Unemployment Insurance -- State Benefit Account
Solutran, Inc 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
Xerox State & Local Solutions 10.551 Supplemental Nutrition Assistance Program

6.0 FUNDING TECHNIQUES
6.1 General Terms

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

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

6.1.4 Estimates and Reconciliation of Estimates:

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

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

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

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

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

Page 3 of 22



4.0 PROGRAMS COVERED.

4.1 The State's threshold and its major Federal assistance programs shall be determined based on the expenditures
recorded in the State's Single Audit for fiscal year ending 06/30/2015.

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

4.2 The State's threshold for major Federal assistance programs is $60,000,000.
The following programs meet or exceed the threshold and are not excluded in Section 4.4:

10.551 Supplemental Nutrition Assistance Program

10.553 School Breakfast Program

10.555 National School Lunch Program

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

10.558 Child and Adult Care Food Program

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
14.195 Section 8 Housing

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
17,225S Unemployment Insurance -- State Benefit Account

20.205 Highway Planning and Construction

20.507 Federal Transit Capital and Operating Assistance Formula Grants

84.010 Title | Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

84.395 State Fiscal Stabilization Fund (SFSF) - Race-to-the-Top Incentive Grants, Recovery Act
93.558 Temporary Assistance for Needy Families

93.563 Child Support Enforcement

93.568 Low-Income Home Energy Assistance

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:

84.038 Federal Perkins Loan Program -- Federal Capital Contributions --- Exclusion:Non-State
84.063 Federal Pell Grant Program --- Exclusion:Non-State
84.268 Federal Direct Student Loan --- Exclusion:Non-State

5.0 ENTITIES COVERED

5.1 State agencies and instrumentalities that meet the definition of a State per 31 CFR Part 205, shall be subject to the
terms of this Agreement. The following is a list of such entities that administer funds under the programs listed in Section
4.0 of this Agreement:

Page 2 of 22



Technique: Weekly Draws
Average Day of Clearance: N/A

Recipient: Maryland Department of Health and Mental Hygiene

% of Funds Agency Receives: 17.00

Component: Voucher Only-Disproportionate Share Payments & Benefit Payments including (Local Public, Non Public and
Lead Agencies)

Technique: Weekly Draws

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

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

7.0 CLEARANCE PATTERNS

7.1 The State shall develop separate clearance patterns for each of the following:
Vendor Payments and Payroll

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

The State Treasurer's Office

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

The files maintained by the State Treasurer's Office which indicate the date each vendor check, payroll check, or ACH
payment was disbursed, and data obtained from the State's disbursement bank indicating when each vendor check or
payroll check cleared the bank

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 Stale 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 13 of 22



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 credit to a State's account and the date those funds are debited from the State's account.

8.6.2.2 Source of Data

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 clearance of State funds shall be determined by the appropriate clearance pattern, depending on the funding
technique.

8.6.2.4 Calculation Procedure

The basic formula for calculating interest liabilities shall be: 1/365 times the annualized 13-week Treasury Bill rate times
the number of whole days as determined above, times the dollar amount of the transaction.

9,0 REVERSE FLOW PROGRAMS

The State is not required to cover any reverse flow programs under the terms of this Agreement because the program
falls below the State's threshold.

10.0 INTEREST CALCULATION COSTS

10.1 As set forth in 31 CFR 205.27, interest calculation costs are defined as those costs necessary for the actual
calculation of interest, including the cost of developing and maintaining clearance patterns in support of the interest
calculations. Interest calculation costs do not include expenses for normal disbursing services, such as processing of
checks or maintaining records for accounting and reconciliation of cash balances, or expenses for upgrading or
modernizing accounting systems. Interest calculation costs in excess of $50,000 in any year are not eligible for
reimbursement, unless the State provides justification with the annual report.

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

Actual bank costs incurred to obtain check paid information where the data was not previously provided; direct agency
costs to develop and maintain clearance pattern data; determine interest calculation data in compliance with CMIA; direct
computer programming costs to develop and maintain clearance pattern data; and determine interest calculation data to
comply with CMIA.

Page 16 of 22