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Cash Management Improvement Act Agreement

between

The State of Tennessee

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 Tennessee (hereafter 

'State'), in order to implement Section 5 of the Cash Management Improvement Act of 1990, as amended (hereafter 'Act'), agree 

as follows:

1.0 AGENTS OF THE AGREEMENT 

1.1 The Authorized Official(s) for the State of Tennessee shall be the Chief of Accounts of the Department of Finance and 

Administration 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 07/01/2021 and shall remain in effect until 06/30/2022.

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.

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4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on Federal funds expended 

reported in the State's Single Audit Report for fiscal year ending 06/30/2020.

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:

CFDA Program Name

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

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 I Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

84.425 Education Stabilization Fund

93.558 Temporary Assistance for Needy Families

93.575 Child Care and Development Block Grant

93.659 Adoption Assistance

93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

97.036 Disaster Grants - Public Assistance (Presidentially Declared 

Disasters)

4.3 The following programs fall below the State's threshold but have been required to be covered by Fiscal Service in 

accordance with the non-compliance provisions of Subpart B of 31 CFR Part 205:

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There are currently no programs listed for Section 4.3.

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

CFDA Program Name Exclusion Reason

14.195 Section 8 Housing Non-State

84.063 Federal Pell Grant Program Non-State

84.268 Federal Direct Student Loan Non-State

93.268 Immunization Grants Non-Cash

93.568 Low-Income Home Energy Assistance Non-State

4.5.0 Total Federal assistance reported in the Schedule of Expenditures of Federal Awards for fiscal year 2020 exceeded 

$10,000,000,000. According to CFR 31 Part 205.5 Table A, the State's threshold for major Federal assistance 

programs is $60,000,000.

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:

Bureau of TennCare

Department of Children's Services

Department of Education

Department of Health

Department of Human Services

Department of Labor and Workforce Development

Department of Military

Department of Transportation

5.2 Entities that meet the definition of a Fiscal Agent per 31 CFR Part 205 shall be subject to the terms of this Agreement. The 

following is a list of Fiscal Agents that administer funds under the programs listed in the Section 4.0 of this Agreement:

Fiscal Agent CFDA Program Name

Xerox State & Local Solutions, Inc., DBA 

Conduent Inc.

10.551 Supplemental Nutrition Assistance 

Program

Conduent State & Local Solutions, Inc. ; 

Solutran, Inc.

10.557 Special Supplemental Nutrition Program 

for Women, Infants, and Children

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Xerox State & Local Solutions, Inc., DBA 

Conduent Inc.

93.558 Temporary Assistance for Needy Families

6.0 FUNDING TECHNIQUES

6.1 General Terms

6.1.1 The State shall request Federal funds in accordance with the appropriate cut-off times shown in Exhibit I to ensure funds will 

be received and credited to a State account by the times specified in the funding techniques. Exhibit I is incorporated by reference 

herein.

6.1.2 The State shall schedule the receipt of Federal funds such that the funds are received and credited to a State account in 

accordance with the clearance patterns specified in Exhibit II - List of State Clearance Patterns. Exhibit II is incorporated by 

reference herein.

6.1.3 In instances where the receipt of funds is scheduled for a Saturday, the State shall request funds for deposit on Friday. In 

instances where the receipt of funds is scheduled for a Sunday, the State shall request funds for deposit on Monday. In instances 

where the receipt of Federal funds is scheduled for deposit on a day when the State is not open for business, the State shall request 

funds for deposit the day following the scheduled day; in instances where the receipt of Federal funds is scheduled for deposit on a 

day when the Federal Government is not open for business, the State shall request funds for deposit the day prior to the scheduled 

day.

6.1.4 Estimates and Reconciliation of Estimates:

Where estimated expenditures are used to determine the amount of the drawdown, the State will indicate in the terms of the State 

unique funding technique how the estimated amount is determined and when and how the State will reconcile the difference 

between the estimate and the State's actual expenditures.

6.1.5 Supplemental Funding:

Unless otherwise defined by program rules, Supplemental Funding is the award of additional funds to provide for an increase in 

costs due to unforeseen circumstances.

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

The State will comply with the following guidelines when requesting supplemental funding for the Medical Assistance Program 

and associated administrative payments (CFDA 93.778):

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

and instructions for completing the CMS-37 are provided in Section 2600F of the State Medicaid Manual (SMM). The CMS/CO must 

receive the revised Form CMS-37 through the Medicaid Budget Expenditure System/Children's Budget Expenditure System 

(MBES/CBES) no later than 10 calendar days before the end of the quarter for which the supplemental grant award is being 

requested.

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

Services.

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

(CFDA 93.575), CSE (93.563), and the FC/AA (CFDA 93.658 and CFDA 93.659) programs administered by the

U.S. Department of Human Services, Administration for Children and Families (HHS/ACF):

a. Timing of the Request

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A State should initiate its request for supplemental funding during a quarter as soon as it becomes aware of the fact that a shortfall 

does/will exist. For the TANF and CCDF grants, supplemental funding requests (estimates) may be submitted by a State, for 

consideration by ACF, up through and including the 15th day of the third month of the first, second or third quarter of any fiscal year. 

Since TANF and CCDF are block grant programs, all unawarded portions of the annual allotment will automatically be issued at the 

beginning of the fourth quarter. Therefore, supplemental funding requests will not be available during the fourth quarter for these 

programs. For the CSE and FC/AA programs, supplemental funding requests may be submitted by a state, for consideration by ACF, 

up through and including the 15th day of the third month of any quarter of a fiscal year.

b. Justification for the Request

The request for a supplemental funding for any of the above-mentioned programs should contain a justification clearly documenting 

the need for the additional funding authority during the current quarter. This documentation should be in the form of State accounting 

records or similar documents that will show the actual expenditures through the most recent month for which such data are available, 

as well as the State's most accurate projection of its anticipated expenditures during the remaining month(s) of the quarter. For either 

the TANF or the CCDF program, the State's justification should also include an explanation of the activities requiring the obligation 

and/or expenditure of amounts that exceed the normal quarterly grant award restrictions and why these activities could not have been 

delayed until the next quarter.

c. Form Submittal

Supplemental funding requests should be made by completing the appropriate ACF quarterly report of expenditures and estimates

applicable to the particular program for which the grant award request is being made.

d. Approval Process

Upon receipt of the state's request for additional funding authority for a quarter, the ACF Regional Office will promptly review the 

supporting documentation. If the request is properly justified, so long as ACF has adequate funding availability, the State's request 

will be expedited and supplemental funding will be issued within 5 days of ACF receiving the request. The State will be notified by 

the Regional Office when the supplemental award has been transmitted to the Payment Management System (PMS) and when it 

may initiate drawdowns against the supplemental funding.

Additional guidance on this policy is provided in the U.S. Department of Health & Human Services, Administration for Children 

and Families, letter (May 19, 2004) to State Administrators from the Deputy Assistant Secretary for Administration.

6.2 Description of Funding Techniques

6.2.1 The following are terms under which standard funding techniques shall be implemented for all transfers of funds to which the 

funding technique is applied in section 6.3.2 of this Agreement.

There are currently no funding techniques listed in Section 6.2.1.

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

of funds to which the funding technique is applied in section 6.3.2 of this Agreement.

There are currently no funding techniques listed in Section 6.2.2.

6.2.3 The following are terms under which miscellaneous funding techniques shall be implemented for all transfers of funds to 

which the funding technique is applied in section 6.3.2 of this Agreement.

There are currently 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.

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Funding Technique Name Description

Cost Allocation Plan - Administrative and 

Indirect Cost

The State shall request daily the Federal share of administrative and/or indirect costs 

such that funds are deposited with the Modified Post Issuance drawdown. The request 

for funds shall be made in accordance with the appropriate request cut-off time 

specified in Exhibit I. The State shall request the appropriate Federal share of the 

administrative and/or indirect costs based on actual costs incurred distributed in 

accordance with allocation statistics of a prior period. Allocations (i.e. the actual 

allocation statistics used for the drawdowns) will be developed based on the most 

recent quarterly statistical information (staffing patterns, expenditure information, 

etc.) available at October 1st and April 1st each year. The final allocation of costs 

shall be made based on the agency's Federally approved Public Assistance Cost 

Allocation Plan. In the event that a cost allocation plan has been submitted but not yet 

approved, the final allocations shall be based on the agency's proposed cost allocation 

plan until such approval is obtained. Final adjustments shall be made within 60 days 

of the end of a quarter. This funding technique is interest neutral.

Edison Indirect Costs Federal funds equal to amounts billed on the Grants Invoice shall be requested on the 

billing report date of the Edison Billing Worksheet and shall be received on the next 

Federal Reserve business day. The request for funds shall be made in accordance with 

the appropriate request cut-off time specified in Exhibit I. The State shall request the 

appropriate Federal share of the indirect costs based on the agency's Federally 

approved indirect cost rate plan, public assistance cost allocation plan, or other 

methodologies. This funding technique is interest neutral.

Edison Military Modified Post Issuance 

(Modified)

Monthly the Federal share shall be received by wire transfer two Federal Reserve 

business days after the request is made. The request for funds shall be made in 

accordance with the appropriate request cut-off time specified in Exhibit I. The State 

shall request the appropriate Federal share of warrants, Automated Clearinghouse 

(ACH) payments, electronic funds transfer (EFT) payments, and journals processed 

and billed to the program through the grant invoicing module of the Edison ERP 

System. The State shall also request the appropriate Federal share of the indirect costs 

based on the agency's Federally approved indirect cost rate plan or other 

methodologies. This funding technique is interest neutral.

Edison Modified Post Issuance Federal funds equal to the amounts billed on the Grants Invoice shall be requested on 

the billing report date of the Edison Billing Worksheet and shall be received in 

accordance with the receipt window as specified in Exhibit I. The request for funds 

shall be made in accordance with the appropriate request cut-off time specified in 

Exhibit I. The State shall request the appropriate Federal share of warrants, Automated 

Clearinghouse (ACH) payments, electronic funds transfer (EFT) payments, and 

journals processed and billed to the program through the grant invoicing module of the 

Edison ERP System. This funding technique is interest neutral.

Edison Transportation Modified Post 

Issuance (Modified)

The weekly request shall be the sum of the billable Federal share of the payments 

issued in the series of disbursements. The request shall be made two Federal Reserve 

business days after the bill date and shall be received by wire transfer the same 

Federal Reserve business day. The request for funds shall be made in accordance with 

the appropriate request cut-off time specified in Exhibit I. The State shall request the 

appropriate Federal share of warrants, Automated Clearinghouse (ACH) payments, 

electronic funds transfer (EFT) payments, and journals processed and billed to the 

program through the grant invoicing module of the Edison ERP System. This funding 

technique is interest neutral.

Edison Unemployment Insurance Modified 

Post Issuance

Federal funds equal to the amounts billed on the Grants Invoice shall be requested on 

the billing report date of the Edison Billing Worksheet and shall be received by wire 

transfer on the same Federal Reserve business day. The request for funds shall be 

made in accordance with the appropriate request cut off time specified in Exhibit I. 

The State shall request the appropriate Federal share of warrants, Automated 

Clearinghouse (ACH) payments, electronic funds transfer (EFT) payments, and 

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journals processed and billed to the program through the grant invoicing module of the 

Edison ERP System. This funding technique is interest neutral.

Modified Zero Balance Accounting Payment from the Federal Government shall be received the next Federal Reserve 

business day. The request for funds shall be made in accordance with the appropriate 

request cut-off time specified in Exhibit I. The State shall request funds equal to actual 

voucher presentments and approved, cleared WIC transactions net of vendor reclaims 

and infant formula adjustments the same day funds are expended. No request of 

Federal funds should be made if rebate funds are available to offset presentments. This 

funding technique is interest neutral.

Zero Balance Accounting - Same Day 

Payment (Modified)

A Federal agency will deposit the funds by wire transfer the same day as requested. 

The request for funds shall be made in accordance with the appropriate request cut-off 

time specified in Exhibit I. The State shall request funds equal to actual recipient 

draws the same day funds are expended. 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.

10.551 Supplemental Nutrition Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 100

Component: Electronic Benefit Transfer (EBT) Client Benefit 

Payments

Technique: Zero Balance Accounting - Same Day Payment (Modified)

Average Day of Clearance: N/A

10.553 School Breakfast Program

Recipient: Department of Education

% of Funds Agency Receives: 100

Component: All Costs - Meal Reimbursement for Local Education 

Agencies, Correctional Institutions, and Children in State Custody

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

10.555 National School Lunch Program

Recipient: Department of Education

% of Funds Agency Receives: 100

Component: All Costs - Meal Reimbursement for Local Education 

Agencies, Correctional Institutions, and Children in State Custody

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

10.557 Special Supplemental Nutrition Program for Women, Infants, 

and Children

Recipient: Department of Health

% of Funds Agency Receives: 53

Component: Vouchers and Approved, Cleared WIC Transactions

Technique: Modified Zero Balance Accounting

Average Day of Clearance: N/A

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10.557 Special Supplemental Nutrition Program for Women, Infants, 

and Children

Recipient: Department of Health

% of Funds Agency Receives: 41

Component: Administrative and Payroll Costs

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

10.557 Special Supplemental Nutrition Program for Women, Infants, 

and Children

Recipient: Department of Health

% of Funds Agency Receives: 6

Component: Indirect Costs

Technique: Edison Indirect Costs

Average Day of Clearance: N/A

10.558 Child and Adult Care Food Program

Recipient: Department of Human Services

% of Funds Agency Receives: 100

Component: Provider Claims

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

10.561 State Administrative Matching Grants for the Supplemental 

Nutrition Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 3

Component: All Except Indirect and Administrative Costs

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

10.561 State Administrative Matching Grants for the Supplemental 

Nutrition Assistance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 97

Component: Indirect and Administrative Costs

Technique: Cost Allocation Plan - Administrative and Indirect Cost

Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and 

Administrative Costs

Recipient: Department of Labor and Workforce Development

% of Funds Agency Receives: 1

Component: Unemployment Insurance Administrative Costs

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and 

Administrative Costs

Recipient: Department of Labor and Workforce Development

% of Funds Agency Receives: 99

Component: Benefit Payments

Technique: Edison Unemployment Insurance Modified Post Issuance

Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account

Recipient: Department of Labor and Workforce Development

% of Funds Agency Receives: 100

Component: Benefit Payments

Technique: Edison Unemployment Insurance Modified Post Issuance

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Average Day of Clearance: N/A

20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 100

Component: All Project Cost Updates

Technique: Edison Transportation Modified Post Issuance (Modified)

Average Day of Clearance: N/A

84.010 Title I Grants to Local Educational Agencies

Recipient: Department of Education

% of Funds Agency Receives: 99

Component: Local Education Agencies and Vendor Payments

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

84.010 Title I Grants to Local Educational Agencies

Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Indirect and Administrative Costs

Technique: Edison Indirect Costs

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: Department of Education

% of Funds Agency Receives: 99

Component: Local Education Agencies and Vendor Payments Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Indirect and Administrative Costs

Technique: Edison Indirect Costs

Average Day of Clearance: N/A

84.425 Education Stabilization Fund

Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Indirect and Administrative Costs

Technique: Edison Indirect Costs

Average Day of Clearance: N/A

84.425 Education Stabilization Fund

Recipient: Department of Education

% of Funds Agency Receives: 99

Component: Local Education Agencies and Vendor Payments

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families

Recipient: Department of Human Services

% of Funds Agency Receives: 50

Component: Continuing Benefit and Retroactive Payments

Technique: Zero Balance Accounting - Same Day Payment (Modified)

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families

Recipient: Department of Human Services

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% of Funds Agency Receives: 4

Component: Indirect and Administrative Costs

Technique: Cost Allocation Plan - Administrative and Indirect Cost

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families

Recipient: Department of Human Services

% of Funds Agency Receives: 46

Component: All except Continuing Benefit and Retroactive Payments 

and Indirect and Administrative Costs

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant

Recipient: Department of Human Services

% of Funds Agency Receives: 95

Component: All Except Indirect and Administrative Costs

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant

Recipient: Department of Human Services

% of Funds Agency Receives: 5

Component: Indirect and Administrative Costs

Technique: Cost Allocation Plan - Administrative and Indirect Cost

Average Day of Clearance: N/A

93.659 Adoption Assistance

Recipient: Department of Children's Services

% of Funds Agency Receives: 94

Component: Maintenance Assistance Payments

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

93.659 Adoption Assistance

Recipient: Department of Children's Services

% of Funds Agency Receives: 4

Component: Training

Technique: Edison Indirect Costs

Average Day of Clearance: N/A

93.659 Adoption Assistance

Recipient: Department of Children's Services

% of Funds Agency Receives: 2

Component: Administrative Costs

Technique: Edison Indirect Costs

Average Day of Clearance: N/A

93.767 Children's Health Insurance Program

Recipient: Bureau of TennCare

% of Funds Agency Receives: 100

Component: Medical and Dental Payments

Technique: Edison Modified Post Issuance

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Bureau of TennCare

% of Funds Agency Receives: 100

Component: All Medical Assistance Payments

Technique: Edison Modified Post Issuance

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Average Day of Clearance: N/A

97.036 Disaster Grants - Public Assistance (Presidentially Declared 

Disasters)

Recipient: Department of Military

% of Funds Agency Receives: 2

Component: Allowable Indirect and Administrative Costs

Technique: Edison Military Modified Post Issuance (Modified)

Average Day of Clearance: N/A

97.036 Disaster Grants - Public Assistance (Presidentially Declared 

Disasters)

Recipient: Department of Military

% of Funds Agency Receives: 98

Component: All Except Indirect and Administrative Costs

Technique: Edison Military Modified Post Issuance (Modified)

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

Department of Environment and Conservation 20.205 Highway Planning and Construction

6.4.0 The State establishes a minimum draw criterion of $5,000 for each program identified in the Agreement. For 

example, the State is not required to make fund requests until accumulated expenditures for a particular program are 

equal to or exceed $5,000.

7.0 CLEARANCE PATTERNS

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

There are currently no program components listed in Section 7.1.

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

Tennessee Department of Treasury

Tennessee Department of Finance and Administration

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

State Treasurer's Accounts Reconciliation Package (ARP) system

State's central accounting system (Edison)

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.

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To determine the percentage of the disbursement paid out each day following issuance, the amount of the checks that clear the

State's account each day shall be summed and then divided by the amount of the total disbursement.

For each day following issuance, the clearance time of the checks paid out that day shall be multiplied by the percentage of the total 

disbursement those checks represent. This product is the clearance factor.

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

following the disbursement.

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

with the following exceptions:

No exceptions.

The State shall also adjust each clearance pattern to reflect:

Not applicable.

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.

7.11.0 Under this agreement, in Section 7.4, "99% of the funds disbursed, from issuance to clearance" refers to and is 

equal to "99% of the funds clearing and net of cancellations". The tracking period shall be at least three 

consecutive months.

7.12.0 In Section 7.5 (1) the date the check was released" refers to and is equal to "the date the check was issued"."

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:

Cost Allocation Plan - Administrative and Indirect Cost

Edison Indirect Costs

Edison Military Modified Post Issuance (Modified)

Edison Modified Post Issuance

Edison Transportation Modified Post Issuance (Modified)

Edison Unemployment Insurance Modified Post Issuance

Modified Zero Balance Accounting

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Zero Balance Accounting - Same Day Payment (Modified)

8.1.2 The State shall maintain information on disbursements and receipts of funds to verify the implementation of any funding 

technique and document interest liabilities.

For each disbursement, the State shall be able to identify:

(1) amount of the issuance

(2) date of issuance

(3) date Federal funds are received and credited to a State account

(4) amount of Federal funds received

(5) date funds were requested

8.2 Federal Interest Liabilities

8.2.1 A Federal interest liability shall accrue from the day the State pays out its own funds for program purposes to the day Federal 

funds are credited to a State account. With regard to funds transferred out of the Federal Highway Trust Fund, if a State does not bill 

at least weekly for current project costs, the Federal interest liability shall not accrue prior to the day the State submits a request for 

funds.

8.2.2 The State shall use the following method to calculate Federal interest liabilities:

For the following funding techniques:

Cost Allocation Plan - Administrative and Indirect Cost

Edison Indirect Costs

Modified Zero Balance Accounting

Zero Balance Accounting - Same Day Payment

Edison Military Modified Post Issuance

Edison Modified Post Issuance

Edison Transportation Modified Post Issuance

Edison Unemployment Insurance Modified Post Issuance

A Federal interest liability shall accrue from the day that the State should have received funds based on the specified funding technique 

to the day Federal funds are credited to a State account.

A State interest liability shall accrue from the day Federal funds are credited to a State account to the day the State should have received 

funds based on the specified funding technique.

With Federal-State matching programs and programs that require maintenance of effort, interest shall be calculated on the Federal 

percentage of the disbursement.

8.3 The Unemployment Trust Fund

8.3.1 The State shall use the following method to calculate State interest liabilities on funds withdrawn from the several accounts 

in the Unemployment Trust Fund:

The State has implemented the zero balance accounting-same day payment funding technique for funds withdrawn from the State and 

Federal accounts with the Unemployment Trust Fund (UTF). This funding technique is interest neutral so when properly applied, no 

interest is incurred of calculated. For transfers of funds that do not follow the technique resulting in a positive balance, the State shall 

calculate interest as follows:

Interest Liability - State Unemployment Account

On a monthly basis, the State's Treasury Department publishes a State Pooled Investment Fund Average Earnings Rate as well as an 

Administrative Fee Rate. Actual interest earnings and banking cost are determined by applying these rates to the average daily cash 

balance of the unemployment compensation benefit payment account.

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At the end of the 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 percent, 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 percent.

The State shall calculate the actual interest earnings and the related banking costs attributable to funds withdrawn from the State 

account in the Unemployment Trust Fund (UTF) by multiplying the amount of the actual interest earnings and related banking costs of 

the account as a whole by the State percent. The State's liability for interest on funds withdrawn from its account in the UTF shall 

consist of the actual interest earnings attributable to such funds less the related banking costs.

Interest Liability - Federal Unemployment Accounts

The interest liability is calculated by multiplying the net daily balance (as defined in 8.6.2.4) by the annualized rate equal to the average 

equivalent yields of the 13-week Treasury bills auctioned during the fiscal year.

8.4 Refund Liabilities

8.4.1 The State shall be liable for interest on refunds from the date the refund is credited to a State account until the date the refund 

is debited from the State account for program purposes. The State shall apply a $50,000 refund transaction threshold below which 

the State shall not incur or calculate interest liabilities on refunds. A transaction is defined as a single deposit.

8.4.2 For each refund, the State shall maintain information identifying:

(1) date a refund is credited to a State account

(2) date of the subsequent deposit of Federal funds against which the refund is offset

(3) amount of the refund

8.4.3 The State shall use the following methodology to calculate interest liabilities on refunds:

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, or otherwise refunded to the Federal government.

8.5 Exemptions

8.5.1 Where more than one State agency is a recipient of Federal funds under a program, a particular State agency's funding may be 

excluded from interest calculation procedures if the State agency receives an amount of funds less than 5

% of the State's threshold for major Federal assistance programs. Notwithstanding this potential exemption, however, in no case 

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

Proration of calculations: If less than total program funding is subject to interest calculation procedures, the resulting interest 

liability calculations shall be prorated to 100% of program funding.

8.6 State Interest Liabilities

8.6.1 The State shall be liable for interest on Federal funds from the date Federal funds are credited to a State account until the 

date those funds are paid out for program purposes.

8.6.2 The State shall use the following method to calculate State interest liabilities on Federal funds:

8.6.2.1 Measuring Time Funds Are Held

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 compliance date those funds are used for program purposes. This time is measure in whole days.

8.6.2.2 Source of Data

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All time periods shall be determined from information captured in the Edison ERP System, Accounts Reconciliation 

Package (ARP), and information supplied by State agencies from agency-specific reporting systems or mechanisms.

8.6.2.3 Standards Applied

The net daily cash balance of Federal funds in the program's account reflects the actual activity based on each day's net cash 

transactions. The amount of funds received for a given day is assumed to be for that compliance date's net expenditures.

8.6.2.4 Calculation Procedure

Interest liability for each program shall be calculated by applying the following formula:

Net Daily Balance

I = NDB X R where

I = State or Federal Government's total interest liability

NDB = Net Daily Balance of cash in a program's account

R = Annualized rate equal to the average equivalent yields of 13-week Treasury

bills auctioned during the State's fiscal year.

The interest liability calculations shall be based on whole days.

8.7.0 In addition, for each disbursement, the State shall be able to identify the Federal funding percentage and the date of 

clearance.

8.8.0 Under this agreement the day the State pays out its own funds for program purposes" refers to and is equal to "the 

compliance date"."

8.9.0 The State shall make daily inquiries in the appropriate Federal payment system to determine funds availability and 

request funds, if available. If Federal funds are not available, inquiries will be made daily in the system until funds 

are available and can be requested.

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:

Interest calculation, Computer programming time, Preparation of annual report.

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10.3 The State shall submit all claims for reimbursement of interest calculation costs with its Annual Report in accordance with 31 

CFR 205.

10.4.

0

The interest calculation costs claimed for reimbursement are recorded as direct charges to a CMIA Direct Cost task 

profile ID in the Edison ERP System or allocated to the task profile ID through the Edison ERP System Human 

Capital Management (HCM) and the Department of Finance and Administration Office of Cash Management cost 

allocation plan, which is prepared in accordance with OMB Uniform Administrative Requirements, Cost Principles, 

and Audit Requirements.

11.0 NON-COMPLIANCE

11.1 The provisions of 31 CFR Part 205.29 and 31 CFR Part 205.30 shall apply in cases of non-compliance with the terms of 

this Agreement.

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12.0 AUTHORIZED SIGNATURES

Mike Corricelli

Chief of Accounts Department of Finance and Administration State of Tennessee

Signature: Date Signed:

Date Submitted 6/22/2021

Sandra R. Paylor

Acting Assistant Commissioner

Revenue Collections Management

Bureau of the Fiscal Service

U.S. Department of the Treasury

Signature: Date Signed:

DocuSign Envelope ID: 262155AD-C5F1-42DC-8DCD-5E10AA028524

7/6/2021

7/11/2021
Page 18 of 23

Exhibit I - Funds Request and Receipt Times Schedule

State of Tennessee

Federal Agency Payment Type Request Cut-Off Time Receipt Window

Agriculture-FNS ACH 11:59 PM 1 day

Agriculture-FNS Fedwire 5:45 PM 0 day

Agriculture-FS ACH 3:00 PM 1 day

Air National Guard ACH 12:00 PM 15 days

Army National Guard ACH 12:00 PM 15 days

Commerce-NOAA ACH 2:00 PM 1 day

Dept of Homeland Security (FEMA) Fedwire 2:00 PM 2 days

Dept of Homeland Security (ODP) ACH 2:00 PM 2 days

Dept of Homeland Security (ODP) Fedwire 2:00 PM 2 days

EPA ACH 2:00 PM 2 days

EPA Fedwire 2:00 PM 0 day

Education ACH 3:00 PM 1 day

Education Fedwire 2:00 PM 0 day

Energy ACH 4:00 PM 1 day

Energy Fedwire 3:00 PM 0 day

HHS ACH 5:00 PM 1 day

HHS Fedwire 3:00 PM 0 day

HUD ACH 5:30 PM 2 days

HUD Fedwire 3:00 PM 0 day

Interior-FWS ACH 11:59 PM 1 day

Interior-FWS Fedwire 5:45 PM 0 day

Interior-OSM ACH 3:00 PM 1 day

Interior-OSM Fedwire 1:00 PM 0 day

Justice ACH 11:00 PM 6 days

Justice Fedwire 2:00 PM 2 days

Labor-Non-UTF ACH 3:00 PM 1 day

Labor-UTF ACH 3:00 PM 1 day

Labor-UTF Fedwire 3:00 PM 0 day

National Science Foundation (NSF) ACH 8:00 PM 1 day

National Science Foundation (NSF) Fedwire 5:45 PM 0 day

Social Security Administration ACH 11:59 PM 1 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 1 day

Veterans Administration ACH 12:00 PM 3 days

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Exhibit II - State of Tennessee

LIST OF STATE CLEARANCE TIMES

(Rounded Dollar-Weighted Average Day of Clearance)

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

CFDA Program Name Recipient % Component Technique Rounded 

days

10.551 Supplemental 

Nutrition 

Assistance 

Program

Department of 

Human Services

100.0 Electronic Benefit 

Transfer (EBT) 

Client Benefit 

Payments

Zero Balance 

Accounting - Same 

Day Payment 

(Modified)

N/A

10.553 School Breakfast 

Program

Department of 

Education

100.0 All Costs - Meal 

Reimbursement for 

Local Education 

Agencies, 

Correctional 

Institutions, and 

Children in State 

Custody

Edison Modified 

Post Issuance

N/A

10.555 National School 

Lunch Program

Department of 

Education

100.0 All Costs - Meal 

Reimbursement for 

Local Education 

Agencies, 

Correctional 

Institutions, and 

Children in State 

Custody

Edison Modified 

Post Issuance

N/A

10.557 Special 

Supplemental 

Nutrition Program 

for Women, 

Infants, and 

Children

Department of 

Health

53.0 Vouchers and 

Approved, Cleared 

WIC Transactions

Modified Zero 

Balance Accounting

N/A

Special 

Supplemental 

Nutrition Program 

for Women, 

Infants, and 

Children

Department of 

Health

41.0 Administrative and 

Payroll Costs

Edison Modified 

Post Issuance

N/A

Special 

Supplemental 

Nutrition Program

for Women, 

Infants, and 

Children

Department of 

Health

6.0 Indirect Costs Edison Indirect 

Costs

N/A

10.558 Child and Adult 

Care Food 

Program

Department of 

Human Services

100.0 Provider Claims Edison Modified 

Post Issuance

N/A

10.561 State 

Administrative 

Matching Grants 

for the 

Supplemental 

Nutrition 

Assistance 

Program

Department of 

Human Services

3.0 All Except Indirect 

and Administrative 

Costs

Edison Modified 

Post Issuance

N/A

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State 

Administrative 

Matching Grants 

for the 

Supplemental 

Nutrition 

Assistance 

Program

Department of 

Human Services

97.0 Indirect and 

Administrative Costs

Cost Allocation Plan 

- Administrative and 

Indirect Cost

N/A

17.225

F

Unemployment 

Insurance --

Federal Benefit 

Account and 

Administrative 

Costs

Department of 

Labor and 

Workforce 

Development

1.0 Unemployment 

Insurance 

Administrative Costs

Edison Modified 

Post Issuance

N/A

Unemployment 

Insurance --

Federal Benefit 

Account and 

Administrative 

Costs

Department of 

Labor and 

Workforce 

Development

99.0 Benefit Payments Edison 

Unemployment 

Insurance Modified 

Post Issuance

N/A

17.225

S

Unemployment 

Insurance -- State 

Benefit Account

Department of 

Labor and 

Workforce 

Development

100.0 Benefit Payments Edison 

Unemployment 

Insurance Modified 

Post Issuance

N/A

20.205 Highway Planning 

and Construction

Department of 

Transportation

100.0 All Project Cost 

Updates

Edison 

Transportation 

Modified Post 

Issuance (Modified)

N/A

84.010 Title I Grants to 

Local Educational 

Agencies

Department of 

Education

99.0 Local Education 

Agencies and Vendor 

Payments

Edison Modified 

Post Issuance

N/A

Title I Grants to 

Local Educational 

Agencies

Department of 

Education

1.0 Indirect and 

Administrative Costs

Edison Indirect 

Costs

N/A

84.027 Special Education 

-- Grants to States

Department of 

Education

99.0 Local Education 

Agencies and Vendor 

Payments

Edison Modified 

Post Issuance

N/A

Special Education 

-- Grants to States

Department of 

Education

1.0 Indirect and 

Administrative Costs

Edison Indirect 

Costs

N/A

84.425 Education 

Stabilization Fund

Department of 

Education

1.0 Indirect and 

Administrative Costs

Edison Indirect 

Costs

N/A

Education 

Stabilization Fund

Department of 

Education

99.0 Local Education 

Agencies and Vendor 

Payments

Edison Modified 

Post Issuance

N/A

93.558 Temporary 

Assistance for 

Needy Families

Department of 

Human Services

50.0 Continuing Benefit 

and Retroactive 

Payments

Zero Balance 

Accounting - Same 

Day Payment 

(Modified)

N/A

Temporary 

Assistance for 

Needy Families

Department of 

Human Services

4.0 Indirect and 

Administrative Costs

Cost Allocation Plan 

- Administrative and 

Indirect Cost

N/A

Temporary 

Assistance for 

Needy Families

Department of 

Human Services

46.0 All except 

Continuing Benefit 

and Retroactive 

Payments and 

Edison Modified 

Post Issuance

N/A

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Indirect and 

Administrative Costs

93.575 Child Care and 

Development 

Block Grant

Department of 

Human Services

95.0 All Except Indirect 

and Administrative 

Costs

Edison Modified 

Post Issuance

N/A

Child Care and 

Development 

Block Grant

Department of 

Human Services

5.0 Indirect and 

Administrative Costs

Cost Allocation Plan 

- Administrative and 

Indirect Cost

N/A

93.659 Adoption 

Assistance

Department of 

Children's 

Services

94.0 Maintenance 

Assistance Payments

Edison Modified 

Post Issuance

N/A

Adoption 

Assistance

Department of 

Children's 

Services

4.0 Training Edison Indirect 

Costs

N/A

Adoption 

Assistance

Department of 

Children's 

Services

2.0 Administrative Costs Edison Indirect 

Costs

N/A

93.767 Children's Health 

Insurance 

Program

Bureau of 

TennCare

100.0 Medical and Dental 

Payments

Edison Modified 

Post Issuance

N/A

93.778 Medical 

Assistance 

Program

Bureau of 

TennCare

100.0 All Medical 

Assistance Payments

Edison Modified 

Post Issuance

N/A

97.036 Disaster Grants -

Public Assistance 

(Presidentially 

Declared 

Disasters)

Department of 

Military

2.0 Allowable Indirect 

and Administrative 

Costs

Edison Military 

Modified Post 

Issuance (Modified)

N/A

Disaster Grants -

Public Assistance 

(Presidentially 

Declared 

Disasters)

Department of 

Military

98.0 All Except Indirect 

and Administrative 

Costs

Edison Military 

Modified Post 

Issuance (Modified)

N/A

Certification

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:

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: 

DocuSign Envelope ID: 262155AD-C5F1-42DC-8DCD-5E10AA028524

7/6/2021

Mike Corricelli
Page 22 of 23

Title: 

DocuSign Envelope ID: 262155AD-C5F1-42DC-8DCD-5E10AA028524

Chief of Accounts
Page 23 of 23

DocuSign Envelope ID: 262155AD-C5F1-42DC-8DCD-5E10AA028524