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Cash Management Improvement Act Agreement

between

The State of Alabama

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 Alabama (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 Alabama shall be the State Comptroller 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 10/01/2021 and shall remain in effect until 09/30/2022.

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.

4.0 PROGRAMS COVERED

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4.1 The State's threshold and its major Federal assistance programs shall be determined based on the amounts of Federal 

financial assistance received and disbursed by the State, excluding Federal funds received and disbursed by institutions of 

higher education, hospitals, and non-profit organizations, as reviewed in the Single Audit for fiscal year ending 09/30/2020.

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 $89,968,552.

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

10.555 National School Lunch Program

10.557 Special Supplemental Nutrition Program for Women, Infants, and 

Children

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

93.575 Child Care and Development Block Grant

93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

97.050 Presidential Declared Disaster Assistance to Individuals and 

Households - Other Needs

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

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

There are currently no programs listed for Section 4.3.

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

CFDA Program Name Exclusion Reason

21.019 Coronavirus Relief Fund 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:

Alabama Medicaid Agency

Department of Education

Department of Finance

Department of Human Resources

Department of Labor

Department of Public Health

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

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Xerox 10.551 Supplemental Nutrition Assistance 

Program

United Community Bank 10.557 Special Supplemental Nutrition Program 

for Women, Infants, and Children

HP Corporation 93.778 Medical 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 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):

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a. Timing of the Request

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

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

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

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

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

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

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

b. Justification for the Request

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

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

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

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

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

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

delayed until the next quarter.

c. Form Submittal

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

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

d. Approval Process

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

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

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

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

may initiate drawdowns against the supplemental funding.

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

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

6.2 Description of Funding Techniques

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

funding technique is applied in section 6.3.2 of this Agreement.

Funding Technique Name Description

Actual Clearance, ZBA - Same Day Payment The State shall request funds the same day it pays out funds, in accordance with the 

appropriate Federal agency cut-off time specified in Exhibit I. 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.

Pre-Issuance The State shall request funds such that they are deposited in a State account not more 

than three business days prior to the day the State makes a disbursement. The request 

shall be made in accordance with the appropriate Federal agency cut-off time 

specified in Exhibit I. The amount of the request shall be the amount the State expects 

to disburse. This funding technique is not interest neutral.

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

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

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Funding Technique Name Description

Actual Costs - Estimated Allocation -

Monthly

The State shall request funds once a month, such that they are deposited on the median 

day of the month, to fund the activity of the prior month. The request shall be made in 

accordance with the appropriate Federal agency cut-off time specified in Exhibit I. 

The amount of the request shall be an estimate based on the actual costs of the month 

distributed to the program according to the allocation of costs for the preceding six 

months. This funding technique is interest neutral.

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

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

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.

Funding Technique Name Description

Highway Composite (Average Clearance) The Alabama Department of Transportation (ALDOT) will use an average clearance 

methodology described as follows: Using department files, ALDOT will capture 

federally participating expenditure data. The dollar amounts of the expenditures will 

not be reduced by the State share of funding. The clearance time is the difference 

between the disbursement redemption date and the expenditure posting date. A 

weighted clearance time is calculated by multiplying the clearance time by a 

weighting factor. The weighting factor is the federally participating expenditure 

amount divided by the total of all federally participating expenditure amounts of the 

disbursements redeemed in the reporting period. The average clearance time is the 

sum of the weighted clearance times. All uncleared disbursements will have a 

clearance time of three hundred sixty-five (365) days. All employee disbursements 

paid via payroll direct deposit will have a weighted clearance time of zero (0). Any 

disbursements with All requests for funds will be in accordance with the appropriate 

Federal agency cut-off time specified. ALDOT will use a weekly billing process for 

requesting Federal funds based on the federally participating expenditures posted 

during the billing cycle with one Federal deposit on the date of average clearance. 

Any refunds and program income received will be credited against the next billing 

cycle. Funds received by ALDOT for rentals of property and/or sale of property 

acquired with Federal program funds are considered to be program income. This 

funding technique is interest neutral.

Scheduled Draws Funding The State will draw Federal funds for administrative costs-payroll, administrative 

costs-other, and indirect costs on a prorata basis to coincide with the semi-monthly 

payroll cycle (24 times per year) in accordance with 31 CFR 205.18(a). The prorata 

amount of direct and indirect costs included in the drawdown will be based on the 

immediate cash needs to cover projected direct and indirect cost expenditures 

allocable to the program until the next scheduled drawdown. All requests will be 

made in accordance with the appropriate Federal agency cut-off times specified in 

Exhibit I. Under these conditions and in accordance with 31 CFR 205.12(d), no 

interest liability will be incurred or calculated on these revolving loan funds. 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.

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10.551 Supplemental Nutrition Assistance Program

Recipient: Department of Human Resources

% of Funds Agency Receives: 100

Component: Payments to Beneficiaries

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

10.555 National School Lunch Program

Recipient: Department of Education

% of Funds Agency Receives: 100

Component: Payments to LEA and other recipients

Technique: Pre-Issuance

Average Day of Clearance: N/A

10.557 Special Supplemental Nutrition Program for Women, Infants, 

and Children

Recipient: Department of Public Health

% of Funds Agency Receives: 77

Component: Vendor Payments to Food Providers

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

10.557 Special Supplemental Nutrition Program for Women, Infants, 

and Children

Recipient: Department of Public Health

% of Funds Agency Receives: 23

Component: Administrative Costs-Payroll, Indirect Costs, Clinic 

Administration, and Administrative Costs-Other

Technique: Scheduled Draws Funding

Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and 

Administrative Costs

Recipient: Department of Labor

% of Funds Agency Receives: 17

Component: Payments to Beneficiaries

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

17.225F Unemployment Insurance -- Federal Benefit Account and 

Administrative Costs

Recipient: Department of Labor

% of Funds Agency Receives: 83

Component: Administrative Costs-Payroll, Administrative Costs-Other 

and Indirect Costs

Technique: Scheduled Draws Funding

Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account

Recipient: Department of Labor

% of Funds Agency Receives: 100

Component: Payments to Beneficiaries (UC)

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 100

Component: All Costs (Construction and Consultant Contracts, 

Administrative, Payroll, Indirect and Reallocated)

Technique: Highway Composite (Average Clearance)

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Average Day of Clearance: 7 Days

84.010 Title I Grants to Local Educational Agencies

Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Indirect Costs

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

84.010 Title I Grants to Local Educational Agencies

Recipient: Department of Education

% of Funds Agency Receives: 98

Component: Payments to Local Education Agencies (LEAs) and Other 

Recipients

Technique: Pre-Issuance

Average Day of Clearance: N/A

84.010 Title I Grants to Local Educational Agencies

Recipient: Department of Education

% of Funds Agency Receives: 1

Component: Administrative Costs-Payroll; Administrative Costs-Other

Technique: Pre-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 Costs

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

84.027 Special Education -- Grants to States

Recipient: Department of Education

% of Funds Agency Receives: 90

Component: Payments to Local Education Agencies (LEAs) and Other 

Recipients

Technique: Pre-Issuance

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: Department of Education

% of Funds Agency Receives: 9

Component: Administrative Costs-Payroll; Administrative Costs-Other

Technique: Pre-Issuance

Average Day of Clearance: N/A

93.575 Child Care and Development Block Grant

Recipient: Department of Human Resources

% of Funds Agency Receives: 100

Component: Payments to Service Providers, Admin Costs-Payroll, 

Admin and Indirect Costs

Technique: Actual Costs - Estimated Allocation - Monthly

Average Day of Clearance: N/A

93.767 Children's Health Insurance Program

Recipient: Department of Public Health

% of Funds Agency Receives: 10

Component: Medical Payments

Technique: Actual Clearance, ZBA - Same Day Payment

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Average Day of Clearance: 0 Days

93.767 Children's Health Insurance Program

Recipient: Department of Public Health

% of Funds Agency Receives: 90

Component: Administrative Costs

Technique: Scheduled Draws Funding

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Alabama Medicaid Agency

% of Funds Agency Receives: 92

Component: Benefits Grant (Payments to Service Providers through the 

Fiscal Agent)

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

93.778 Medical Assistance Program

Recipient: Alabama Medicaid Agency

% of Funds Agency Receives: 3

Component: Administrative Costs-Payroll, Administrative Costs-Other 

and Indirect Costs

Technique: Scheduled Draws Funding

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Recipient: Alabama Medicaid Agency

% of Funds Agency Receives: 5

Component: Benefits Grant (CMS Medicare Premium Payments)

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

97.050 Presidential Declared Disaster Assistance to Individuals and 

Households - Other Needs

Recipient: Department of Labor

% of Funds Agency Receives: 100

Component: Lost Wages Assistance (Benefit Payments and 

Administrative Cost)

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

None

7.0 CLEARANCE PATTERNS

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

All programs with the exception of programs listed in Sections 7.1.1, 7.1.2, 7.1.3, 7.1.4, and 7.1.5.

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

Each State Agency will be responsible for developing the clearance pattern(s) for its applicable federal programs.

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

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Departmental accounting files, payment document dates, disbursement issue dates, disbursement redemption dates, and any other 

relevant data needed.

7.4 The State shall use the following methodology when developing its clearance patterns:

When developing each clearance pattern, the State shall track at least 99% of the funds disbursed, from issuance to clearance, for a 

period of at least three months.

7.5 The State shall identify for each check or warrant (hereafter, check) in the population: (1) the date the check was released 

for payment; (2) the date the check was debited from the State's account, and, (3) the amount of the check.

7.6 The State shall use the following method to calculate the dollar-weighted average day of clearance:

To determine the number of days each check was outstanding (clearance time), the issue date shall be subtracted from the date the 

check cleared the State's account.

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

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

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

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

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

following the disbursement.

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

with the following exceptions:

None

The State shall also adjust each clearance pattern to reflect:

na

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

7.9 An authorized State official shall certify that each clearance pattern developed by the State accurately corresponds to the 

clearance activity of the programs to which it is applied. This certification shall be provided to the Fiscal Service prior to the 

effective date of the Agreement. The State shall recertify its clearance patterns at least every five years.

7.10 The State shall follow the procedures of 31 CFR 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 - Same Day Payment

Actual Costs - Estimated Allocation - Monthly

Highway Composite (Average Clearance)

Scheduled Draws Funding

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

technique and document interest liabilities.

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

(1) amount of the issuance

(2) date of issuance

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

(4) amount of Federal funds received

(5) date funds were requested

8.2 Federal Interest Liabilities

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

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

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

funds.

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

For all transactions where the State pays out its own funds for program purposes prior to receiving Federal funds, the Federal interest 

liability shall be based on the difference in whole days between the average date of clearance for a disbursement, as specified in Exhibit 

II, and the date the related Federal funds are credited to a State account. With Federal-State matching programs, interest shall be 

calculated on the Federal percentage of the disbursement.

8.3 The Unemployment Trust Fund

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

in the Unemployment Trust Fund:

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

UTF under the Unemployment Insurance program.

Based on statements provided by its financial institution, or other appropriate source, the State shall determine the actual interest 

earnings and the related banking costs attributable to funds withdrawn from its account in the UTF.

At the end of the State's fiscal year, the State shall calculate the percentage of its total unemployment compensation expenditures for (1) 

funds withdrawn from the State account in the UTF, or the State %, and (2) funds withdrawn from the Federal Employees 

Compensation Account (FECA) and the Extended Unemployment Compensation Account (EUCA) and any other accounts of Federal 

funds in the UTF, or the Federal %.

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

account in the UTF by multiplying the State % by the amount of the actual interest earnings and the related banking costs of the account 

as a whole. The State's liability for interest on funds withdrawn from its account in the UTF shall consist of the actual interest earnings 

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

The State shall determine the average daily cash balance of its unemployment compensation benefit payment account for its fiscal year. 

The State shall calculate the average daily cash balance of Federal funds by multiplying the Federal % by the average daily cash balance 

of the benefit payment account on the whole. The State's liability for interest on funds withdrawn from the FECA and EUCA (and any 

other benefit accounts of Federal funds in the UTF from which the State draws funds) shall be the average daily cash balance of Federal 

funds multiplied by the annualized rate equal to the average equivalent yields of 13-week Treasury bills auctioned during the State's 

fiscal year.

8.4 Refund Liabilities

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

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

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

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

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

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

(3) amount of the refund

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

With programs to which applicable interest neutral funding techniques are applied, the State interest liability shall be based on the 

difference in whole days between the date the refund is deposited in a State account and the date the refund is offset against a 

subsequent deposit of Federal funds.

8.5 Exemptions

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

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

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

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

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

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

8.6 State Interest Liabilities

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

date those funds are paid out for program purposes.

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

8.6.2.1 Measuring Time Funds Are Held

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 the State Treasury and the date those funds are debited from the State Treasury through disbursement redemption.

8.6.2.2 Source of Data

The time period from receipt to issuance of Federal funds shall be determined from information captured by State agencies 

managing those funds. State agencies are required to maintain records of Federal fund drawdowns for each Federal 

program. Records of Federal fund drawdowns will be recorded by CFDA# and will include date requested, date available 

at the bank, date credited to the State Treasury, amount of draw, etc. The time period from issuance of Federal funds to the

date funds are debited from the State Treasury through disbursement redemption shall be determined from information 

captured by the agencies from information captured in the State of Alabama Accounting and Resource System (STAARS) 

administered by the State Comptroller's Office. The STAARS will track disbursement issuance date and disbursement 

redemption (paid) date.

8.6.2.3 Standards Applied

Statistical Sampling (Pre-Issuance):

To measure the time Federal funds are held in a State account prior to being disbursed, the State shall use statistical sampling. The 

sample shall be randomly selected, and shall be of sufficient size to ensure, at a minimum, a 95% confidence interval no wider than ƒÖ 

0.3 dollar-weighted days about the estimated mean.

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

1 subtract the deposit date from the issuance date

2 multiply the difference of step 1 by the disbursement amount

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

that disbursement

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

8.6.2.4 Calculation Procedure

Pre-Issuance Time + Clearance Time:

I = P x r x {PI + CT}, where

I = State's total interest liability

P = Total annual expenditures of Federal funds for program or component cash flow of program

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

divided by 365 days

PI = Dollar-weighted average number of days Federal funds are held by State prior to issuance

CT = Dollar-weighted average number of days Federal funds are held by State between issuance and clearance of 

disbursements, as determined by the appropriate clearance pattern in Exhibit II

9.0 REVERSE FLOW PROGRAMS

The State is not required to cover any reverse flow programs under the terms of this Agreement because the State does not 

participate in the program.

10.0 INTEREST CALCULATION COSTS

10.1 As set forth in 31 CFR 205.27, interest calculation costs are defined as those costs necessary for the actual calculation of 

interest, including the cost of developing and maintaining clearance patterns in support of the interest calculations. Interest 

calculation costs do not include expenses for normal disbursing services, such as processing of checks or maintaining records for 

accounting and reconciliation of cash balances, or expenses for upgrading or modernizing accounting systems. Interest 

calculation costs in excess of $50,000 in any year are not eligible for reimbursement, unless the State provides justification with 

the annual report.

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

Actual staff time, actual computer time, and other actual expenses incurred to establish clearance patterns, make interest calculations, 

and prepare the annual report.

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

CFR 205.

11.0 NON-COMPLIANCE

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

this Agreement.

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12.0 AUTHORIZED SIGNATURES

Kathleen D. Baxter, PhD, CGFM, CPM

State Comptroller

Signature: Date Signed:

Date Submitted 12/30/2021

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: 80619ED4-2311-4AE4-BD5D-CC13B22F2438

1/4/2022

1/10/2022
Page 14 of 18

Exhibit I - Funds Request and Receipt Times Schedule

State of Alabama

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 Alabama

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 Resources

100.0 Payments to 

Beneficiaries

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

10.555 National School 

Lunch Program

Department of 

Education

100.0 Payments to LEA and 

other recipients

Pre-Issuance N/A

10.557 Special 

Supplemental 

Nutrition Program

for Women, 

Infants, and 

Children

Department of 

Public Health

77.0 Vendor Payments to 

Food Providers

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

Special 

Supplemental 

Nutrition Program 

for Women, 

Infants, and 

Children

Department of 

Public Health

23.0 Administrative CostsPayroll, Indirect 

Costs, Clinic 

Administration, and 

Administrative CostsOther

Scheduled Draws 

Funding

N/A

17.225

F

Unemployment 

Insurance --

Federal Benefit 

Account and 

Administrative 

Costs

Department of 

Labor

17.0 Payments to 

Beneficiaries

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

Unemployment 

Insurance --

Federal Benefit 

Account and 

Administrative 

Costs

Department of 

Labor

83.0 Administrative CostsPayroll, 

Administrative CostsOther and Indirect 

Costs

Scheduled Draws 

Funding

N/A

17.225

S

Unemployment 

Insurance -- State 

Benefit Account

Department of 

Labor

100.0 Payments to 

Beneficiaries (UC)

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

20.205 Highway Planning 

and Construction

Department of 

Transportation

100.0 All Costs 

(Construction and 

Consultant Contracts, 

Administrative, 

Payroll, Indirect and 

Reallocated)

Highway Composite 

(Average Clearance)

7 Days

84.010 Title I Grants to 

Local Educational 

Agencies

Department of 

Education

1.0 Indirect Costs Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

Title I Grants to 

Local Educational 

Agencies

Department of 

Education

98.0 Payments to Local 

Education Agencies 

(LEAs) and Other 

Recipients

Pre-Issuance N/A

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Title I Grants to 

Local Educational 

Agencies

Department of 

Education

1.0 Administrative CostsPayroll; 

Administrative CostsOther

Pre-Issuance N/A

84.027 Special Education 

-- Grants to States

Department of 

Education

1.0 Indirect Costs Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

Special Education 

-- Grants to States

Department of 

Education

90.0 Payments to Local 

Education Agencies 

(LEAs) and Other 

Recipients

Pre-Issuance N/A

Special Education 

-- Grants to States

Department of 

Education

9.0 Administrative CostsPayroll; 

Administrative CostsOther

Pre-Issuance N/A

93.575 Child Care and 

Development 

Block Grant

Department of 

Human Resources

100.0 Payments to Service 

Providers, Admin 

Costs-Payroll, Admin 

and Indirect Costs

Actual Costs -

Estimated 

Allocation -

Monthly

N/A

93.767 Children's Health 

Insurance 

Program

Department of 

Public Health

10.0 Medical Payments Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

Children's Health 

Insurance 

Program

Department of 

Public Health

90.0 Administrative Costs Scheduled Draws 

Funding

N/A

93.778 Medical 

Assistance 

Program

Alabama 

Medicaid Agency

92.0 Benefits Grant 

(Payments to Service 

Providers through the 

Fiscal Agent)

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

Medical 

Assistance 

Program

Alabama 

Medicaid Agency

3.0 Administrative CostsPayroll, 

Administrative CostsOther and Indirect 

Costs

Scheduled Draws 

Funding

N/A

Medical 

Assistance 

Program

Alabama 

Medicaid Agency

5.0 Benefits Grant (CMS 

Medicare Premium 

Payments)

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

97.050 Presidential 

Declared Disaster 

Assistance to 

Individuals and 

Households -

Other Needs

Department of 

Labor

100.0 Lost Wages 

Assistance (Benefit 

Payments and 

Administrative Cost)

Actual Clearance, 

ZBA - Same Day 

Payment

0 Days

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;

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

4. Are auditable.

Date: 

Printed Name: 

Certifying Signature: 

Title: 

DocuSign Envelope ID: 80619ED4-2311-4AE4-BD5D-CC13B22F2438

Kathleen Baxter

State Comptroller

1/4/2022
Page 18 of 18

DocuSign Envelope ID: 80619ED4-2311-4AE4-BD5D-CC13B22F2438