Cash Management Improvement Act Agreement

between

The State of Connecticut

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 Connecticut

(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 Connecticut shall be the Comptroller of the State of Connecticut 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 07/01/2020 and shall remain in effect until 06/30/2021.

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 the Single Audit which

has been audited by the State Auditors of Public Accounts for fiscal year ending 06/30/2019.

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 $58,593,453.

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

10.551 Supplemental Nutrition Assistance Program

10.555 National School Lunch Program

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program

14.871 Section 8 Housing Choice Vouchers

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

17.225S Unemployment Insurance -- State Benefit Account

20.205 Highway Planning and Construction

20.507 Federal Transit Capital and Operating Assistance Formula Grants

84.010 Title I Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

93.558 Temporary Assistance for Needy Families

93.568 Low-Income Home Energy Assistance

93.658 Foster Care -- Title IV-E

93.778 Medical Assistance Program

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

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

There are currently no programs listed for Section 4.3.

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

84.063 Federal Pell Grant Program --- Exclusion:Non-State

84.268 Federal Direct Student Loan --- Exclusion:Non-State

5.0 ENTITIES COVERED

5.1 State agencies and instrumentalities that meet the definition of a State per 31 CFR Part 205, shall be subject to the

terms of this Agreement. The following is a list of such entities that administer funds under the programs listed in Section

4.0 of this Agreement:

Department of Children and Families

Department of Education

Department of Housing

Department of Labor

Department of Social Services

Department of Transportation

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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:

Xerox State and Local Solutions 10.551 Supplemental Nutrition Assistance Program

Xerox State and Local Solutions 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance

Program

6.0 FUNDING TECHNIQUES

6.1 General Terms

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

funds will be received and credited to a State account by the times specified in the funding techniques. Exhibit 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.

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

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

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

a. Timing of the Request

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

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

a State, for consideration by ACF, up through and including the 15th day of the third month of the first, second or third

quarter of any fiscal year. Since TANF and CCDF are block grant programs, all unawarded portions of the annual

allotment will automatically be issued at the beginning of the fourth quarter. Therefore, supplemental funding requests will

not be available during the fourth quarter for these programs. For the CSE and FC/AA programs, supplemental funding

requests may be submitted by a state, for consideration by ACF, up through and including the 15th day of the third month

of any quarter of a fiscal year.

b. Justification for the Request

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

documenting the need for the additional funding authority during the current quarter. This documentation should be in the

form of State accounting records or similar documents that will show the actual expenditures through the most recent

month for which such data are available, as well as the State's most accurate projection of its anticipated expenditures

during the remaining month(s) of the quarter. For either the TANF or the CCDF program, the State's justification should

also include an explanation of the activities requiring the obligation and/or expenditure of amounts that exceed the normal

quarterly grant award restrictions and why these activities could not have been delayed until the next quarter.

c. Form Submittal

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

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

d. Approval Process

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

review the supporting documentation. If the request is properly justified, so long as ACF has adequate funding

availability, the State's request will be expedited and supplemental funding will be issued within 5 days of ACF receiving

the request. The State will be notified by the Regional Office when the supplemental award has been transmitted to the

Payment Management System (PMS) and when it may initiate drawdowns against the supplemental funding.

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

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

Administration.

6.1.6 The processes described in Section 6.1.5 pertains to the State agency receiving the supplemental award during the

current quarter and do not preclude the State from seeking reconciliation awards pursuant to the normal reconciliation

process between the estimated and actual expenditures subsequent to the conclusion of a quarter. (This section provides

a means of seeking reconciliation awards after a quarter ends as part of the normal reconciliation process comparing

estimated and actual expenditures).

6.1.7 Federal cash draws for programs covered in this agreement shall be based upon actual transactions processed

through the CORE-CT accounting system. These transactions shall be reported to the State agency by reports generated

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from CORE-CT. These reports are generated from the central computer system job streams which record the

expenditures for which checks are being generated, banking activity is being initiated, or internal accounting activity is

being recorded. The agency shall receive a report detailing the necessary clearance patterns required under this

agreement. The agency shall receive instructions on the funding methods to be used for each program covered under this

agreement. Instructions shall be issued on how to construct a Federal draw amount using these factors and reports. The

State agency shall maintain detail records suitable for audit in which each component of the drawdown shall be

referenced in the drawing agency to the approved funding technique for that component (estimated clearance, average

clearance, etc.) in this Agreement. Where necessary, State agencies will maintain for audit the reconciliations between

their accounting records and CORE-CT.

6.1.8 Payments of Federal funds to vendor State agencies for goods or services rendered, including payments into

internal service funds or enterprise funds within the State's CAFR, are considered to be paid out for program purposes

pursuant to 31 CFR Part 205.2.

6.1.9 Transfers of expenditures between State agencies shall be drawn on the day immediately subsequent to the agency

being notified of its posting on the CORE-CT accounting system.

6.2 Description of Funding Techniques

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

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

Actual Clearance, ZBA - 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.

Average Clearance

The State shall request funds such that they are deposited by ACH on the dollar-weighted average day of clearance for

the disbursement, in accordance with the clearance pattern specified in Exhibit II. The request shall be made in

accordance with the appropriate Federal agency cut-off time specified in Exhibit I. The amount of the request shall be for

the exact amount of that disbursement. This funding technique is interest neutral.

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.

There are no funding techniques listed in Section 6.2.2

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

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

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There are no funding techniques listed in Section 6.2.3

6.2.4 The following are terms under which State unique funding techniques shall be implemented for all transfers of funds

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

Actual Clearance - Direct Draw

The State shall request funds such that they are deposited by ACH in a State account one day after the date that agency

to agency transfer expenditures are posted by a State agency in the Comptroller's accounts. The request shall be made

in accordance with the appropriate Federal agency cut-off time specified in Exhibit I. This funding technique is interest

neutral.

Fee for Services Rendered

This program's administrative costs are based and earned on the number of payments processed to beneficiaries. The

request and receipt of funds will coincide with the draw for the beneficiaries' portion. The request shall be made in

accordance with the appropriate Federal agency cut-off time specified in Exhibit I. This funding technique is interest

neutral.

Indirect Cost Rates - Actual Base Quarterly

The State shall request funds once a quarter, such that they are deposited during the month following the end of the

quarter. The request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit I.

The amount of the request shall be determined by applying the indirect cost rate to actual expenditures of the prior

quarter. This funding technique is interest neutral.

Payment Schedule

This funding technique applies to CFDA 93.658 only. The State shall request funds such that they are deposited in a State

account on the fifth business day following the fifteenth day of each 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 for funds shall be one-third of

the quarterly estimate.

The initial award for a particular quarter is based on the estimated need for that quarter. One month after the end of the

quarter, reports from providers are used to determine the actual disbursements for the quarter. The difference between

the estimate and the actual is reported as an adjustment on the submission of the next quarterly claim request. In the

event that actual disbursements exceed the estimate, the difference is expected to be awarded on the first of the month,

three months after the end of the quarter in which the expense was reported. The State is eligible to calculate a Federal

Interest liability in the event the award is not posted into the proper Connecticut Department of Children and Families

account in the U. S. Department of Health and Human Services Payment Management System by the first of the month.

The accrual of interest would commence on the first of the month, three months after the end of the quarter in which the

expense was incurred until the award is posted in the Payment Management System. If the end of quarter reconciliation

reveals that the States estimate exceeded actual disbursements for the quarter, the State interest liability will accrue from

the date Federal funds were overdrawn until the date the overdraw liability is offset. This funding technique is interest

neutral.

Prorated Draw - Medical Assistance - EFT

The State shall request funds such that they are deposited by ACH in a state account on the settlement date of payments

issued by the State. The request shall be made in accordance with the appropriate Federal agency cut-off time specified

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in Exhibit I. The amount of the request shall be 99.3 percent of the benefit payments paid (except Additional Low Income

Medicare Beneficiary, School Based Child Health Programs, and Medicare Part B Premiums).

The award shall be based on an estimate of the need for a calendar quarter. After the end of the quarter, a report of

actual expenditures shall be submitted. Reconciliation award requests shall be made for the difference between actual

expenditures and the estimate. Adjustments to funds drawn shall be scheduled upon receipt of reconciliation awards.

This funding technique is interest neutral.

Prorated Draw - Unemployment Insurance

Prorated draws of the previous month's expenditures to be reconciled on a monthly basis to actual expenditures. The

drawdowns will be on a bi-weekly basis and coincide with the Bi-Weekly Payroll date of clearance for payroll checks. The

request shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit I. This funding

technique is interest neutral.

Prorated Draws

The State shall draw down a prorated amount of the quarterly estimate of its administrative award funds such that they

are deposited by ACH in a State account on the average day of clearance for payroll during each pay period. The request

shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit I . 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 Social Services

% of Funds Agency Receives: 100.00

Component: Electronic Benefit Payments

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: 3.00

Component: Transfers to other State Agencies

Technique: Actual Clearance - Direct Draw

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 97.00

Component: Payments to Providers

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Technique: Average Clearance

Average Day of Clearance: 1 Day

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program

Recipient: Department of Social Services

% of Funds Agency Receives: 100.00

Component: Administrative Costs

Technique: Prorated Draws

Average Day of Clearance: 1 Day

14.871 Section 8 Housing Choice Vouchers

Recipient: Department of Housing

% of Funds Agency Receives: 92.00

Component: Payment to Vendors

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Housing

% of Funds Agency Receives: 8.00

Component: Administrative Costs

Technique: Fee for Services Rendered

Average Day of Clearance: 1 Day

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

Recipient: Department of Labor

% of Funds Agency Receives: 5.00

Component: Benefit Payments (EUCA, FECA, FUBA Accounts)

Technique: Pre-Issuance

Average Day of Clearance: N/A

Recipient: Department of Labor

% of Funds Agency Receives: 95.00

Component: All Administrative Costs

Technique: Prorated Draw - Unemployment Insurance

Average Day of Clearance: 0 Days

17.225S Unemployment Insurance -- State Benefit Account

Recipient: Department of Labor

% of Funds Agency Receives: 100.00

Component: Benefit Payments (State Accounts)

Technique: Pre-Issuance

Average Day of Clearance: N/A

20.205 Highway Planning and Construction

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Recipient: Department of Transportation

% of Funds Agency Receives: 100.00

Component: All Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

20.507 Federal Transit Capital and Operating Assistance Formula Grants

Recipient: Department of Transportation

% of Funds Agency Receives: 100.00

Component: All Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

84.010 Title I Grants to Local Educational Agencies

Recipient: Department of Education

% of Funds Agency Receives: 2.00

Component: Transfers to other State Agencies

Technique: Actual Clearance - Direct Draw

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 95.00

Component: Payments to Local Education Agencies (LEA's)

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 1.00

Component: Direct Administrative Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 1.00

Component: Payroll

Technique: Average Clearance

Average Day of Clearance: 0 Days

Recipient: Department of Education

% of Funds Agency Receives: 1.00

Component: Indirect Costs (if necessary)

Technique: Indirect Cost Rates - Actual Base Quarterly

Average Day of Clearance: 1 Day

84.027 Special Education -- Grants to States

Recipient: Department of Education

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% of Funds Agency Receives: 2.00

Component: Transfers to other State Agencies

Technique: Actual Clearance - Direct Draw

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 7.00

Component: Direct Administrative Costs (non-EFT)

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 88.00

Component: Payments to Local Education Agencies (LEA's)

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 2.00

Component: Payroll

Technique: Average Clearance

Average Day of Clearance: 0 Days

Recipient: Department of Education

% of Funds Agency Receives: 1.00

Component: Indirect Costs (if necessary)

Technique: Indirect Cost Rates - Actual Base Quarterly

Average Day of Clearance: 1 Day

93.558 Temporary Assistance for Needy Families

Recipient: Department of Social Services

% of Funds Agency Receives: 100.00

Component: All Costs

Technique: Average Clearance

Average Day of Clearance: 5 Days

93.568 Low-Income Home Energy Assistance

Recipient: Department of Social Services

% of Funds Agency Receives: 100.00

Component: All Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

93.658 Foster Care -- Title IV-E

Recipient: Department of Children and Families

% of Funds Agency Receives: 30.00

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Component: Payment to Providers

Technique: Payment Schedule

Average Day of Clearance: N/A

Recipient: Department of Children and Families

% of Funds Agency Receives: 70.00

Component: All Administrative Costs (non-EFT)

Technique: Prorated Draws

Average Day of Clearance: 0 Days

93.778 Medical Assistance Program

Recipient: Department of Social Services

% of Funds Agency Receives: 0.30

Component: Benefit Payments - Paid By Check (Except Additional Low Income Medicare Beneficiary, School-Based Child

Health Programs and Medicare Part B Premiums).

Technique: Average Clearance

Average Day of Clearance: 0 Days

Recipient: Department of Social Services

% of Funds Agency Receives: 3.20

Component: Additional Low Income Medicare Beneficiary, School Based Child Health Programs, and Medicare Part B

Premiums.

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Social Services

% of Funds Agency Receives: 92.20

Component: Benefit payments - Paid by EFT (except Additional Low Income Medicare Beneficiary, School Based Child

Health Programs, and Medicare Part B Premiums

Technique: Prorated Draw - Medical Assistance - EFT

Average Day of Clearance: 0 Days

Recipient: Department of Social Services

% of Funds Agency Receives: 4.30

Component: Administrative Costs

Technique: Prorated Draws

Average Day of Clearance: 1 Day

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

N/A

7.0 CLEARANCE PATTERNS

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

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The State shall develop clearance patterns for accounts through which Federal funds are disbursed. For the major

Federal program expenditures which flow through more than one account (e.g., a program account and the State's payroll

or vendor accounts), the State will use the clearance patterns for each expenditure component in calculating aggregate

drawdowns of Federal funds.

	The State will develop separate check clearance patterns for the following accounts:

		.	Payroll

		.	Department of Social Services (Medicaid and TANF account)

		.	Vendor (beneficiary payments included)

	The State will use the "average daily balance" interest calculation technique in the UTF program, and thus will not

develop clearance patterns for this account.

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

The Connecticut Office of the State Treasurer and Bank of America will develop the State's clearance patterns.

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

For the payroll, Department of Social Services, and vendor payments, the State provides its banks with a file of checks

issued, with issue dates and dollar amounts. Our banks then compare our issue data with their data on clearances to

determine the clearance time, or days outstanding, for each check. The banks produce check clearance reports for each

account. The reports list the number of items and dollar amounts by days of float, for those checks that clear during the

reporting period.

	The banks then calculate dollar-weighted average clearance days for each account according to the following formula:

			Dollar-weighted average

			clearance days			=	Sum (A x B) / C

			where:		A = Days outstanding per item

					B = Item dollar amount

					C = Total dollar amount cleared in Statement period.

	The Department of Social Services account payroll account and vendor account clearance patterns are based on

calendar days. The vendor account clearance pattern may be adjusted to exclude certain types of payments, such as

State education grants to municipalities and tax refund payments that do not include Federal funds.

	The State reserves the right to factor electronic funds transfers (EFT's) into a composite clearance pattern for accounts in

which they occur. State accounts are not program specific.

The State will use actual daily clearance patterns in the development of estimated clearance patterns.

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.

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For all clearance patterns developed by statistical sampling, the State shall randomly sample checks to ensure, at a

minimum, a 95% confidence interval for a .25 weighted-day level of precision for the checks in the sample. The State

shall track at least 99% of the funds disbursed, from issuance to clearance, in the sample period.

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:

All electronic funds transfers will be excluded from the banks' check clearance calculations.

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.

7.11 The State Auditors of Public Accounts will use the bank provided reports to audit and verify the accuracy of the

State's clearance pattern.

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:

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Actual Clearance - Direct Draw

Actual Clearance, ZBA - Same Day Payment

Average Clearance

Fee for Services Rendered

Indirect Cost Rates - Actual Base Quarterly

Payment Schedule

Prorated Draw - Medical Assistance - EFT

Prorated Draw - Unemployment Insurance

Prorated Draws

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

funding technique and document interest liabilities.

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

(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

8.1.3 Leave pools and reserve funds. Federal funds drawn down by the State on an accrual basis for future or

contingency needs, as in the case of self-insurance reserve funds or accrued employee leave, will be excluded from

interest liability calculation and reporting set forth in this Agreement and in 31 CFR Part 205.27. Interest earned by the

State on such funds will be treated as an applicable credit, as defined in 2 CFR Part 200, and will be used to reduce

expense items allocable to grants as direct or indirect costs. (The State Department of Transportation (DOT) does not

charge Federal grants directly for paid vacation and sick leave taken by employees working on Federal projects. Instead,

DOT develops a usage rate to establish a cost pool to charge employee paid leave time to Federal programs and other

funding sources).

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:

Actual Activity:

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

State shall track each payment from the date it is paid out of a State account to the date Federal funds are subsequently

credited to a State account to cover that outlay. The Federal interest liability on each payment shall be based on the

difference in whole days between the two events. With Federal-State matching programs, interest shall be calculated on

the Federal percentage of the disbursement.

8.3 The Unemployment Trust Fund

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

accounts in the Unemployment Trust Fund:

Page 14 of 22
Federal and State Funds are Not Interest Neutral:

UTF activity (Federal and State accounts) shall be recorded and reported on by the Connecticut Department of Labor.

The Department shall follow the Federal draw procedures, record keeping and reporting requirements agreed to with the

Federal Department of Labor.

Because State and Federal Unemployment Insurance Program (CFDA #17.225) expenditures are commingled in the

same bank account, the State shall use the following method to calculate the interest liabilities: The State shall calculate

the ratio of the average daily cash balances for State funds and Federal funds (includes the Federal Employees

Compensation Account, Extended Unemployment Compensation Account, and the Federal Unemployment Benefits

Account). Monthly, the State shall determine the percentage of Federal benefits paid, which shall be applied to determine

the average daily balance of Federal dollars in the account. The result shall be deducted from the daily deposits of

Federal dollars to determine the daily average balance of bank balances for Federal programs for that month. An annual

average of daily balances of Federal dollars shall be deducted from total average bank balances to establish the State

and Federal percentages.

Based on Statements provided by its financial institution the State shall determine the actual interest earnings and related

banking costs for the unemployment compensation account. The State will apply the State and Federal percentages

derived from the above formula to determine the actual interest earnings and bank costs attributable to each program.

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

attributable to such funds less related banking costs. The State's liability for interest on funds withdrawn from FECA,

EUCA, and FUBA funds in the UTF shall be the average daily cash balance of Federal funds multiplied by the Treasury

Bill rate provided by the Fiscal Service.

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:

Refunds Deposited to Interest Neutral Programs:

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.

8.4.4 Each State agency shall manually, or within its agency accounting system, track and document refunds and rebates

which shall be offset against subsequent drawdowns of Federal funds, rather than returned to the Federal government.

As they are used for program purposes, WIC rebates are exempt from interest liabilities.

8.4.5 With programs to which pre-issuance funding is applied, the State interest liability shall be based on two periods: (1)

the difference in whole days between the date the refund is deposited to a state account and the date the refund is offset

Page 15 of 22
against a subsequent deposit of federal funds; (2) the difference in whole days between the date the refund is offset

against a subsequent deposit of Federal funds and the date the refund is paid out for program purposes.

Interest on refunds during period 1 shall be calculated using the information recorded in a separate account. Interest on

refunds during period 2 shall be captured under the State's method for calculating interest under pre-issuance funding, set

forth in section 8.3.1 of this Agreement. Under this method interest is calculated on totals disbursed, which includes

refunds on hand as well as amounts drawn. The reported interest liability for refunds, therefore, will reflect period 1 only.

8.5 Exemptions

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

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

% of the State's threshold for major Federal assistance programs. Notwithstanding this potential exemption, however, in

no case shall less than 90% of a program's total funding be subject to interest calculation procedures.

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

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

8.6 State Interest Liabilities

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

until the date those funds are paid out for program purposes.

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

8.6.2.1 Measuring Time Funds Are Held

Deposit to Clearance:

To determine the total time Federal funds are held, the State shall measure the time between the date Federal funds are

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

8.6.2.2 Source of Data

Central Accounting System:

The time period from issuance of funds to the date funds are debited from the State's account shall be determined from

information captured by CORE-CT, the State's central accounting system.

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 ± 0.3 dollar-weighted days about the estimated mean.

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

1 subtract the deposit date from the issuance date

2 multiply the difference of step 1 by the check amount

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

Page 16 of 22
The State shall then sum the dollar-weighted pre-issuance time for each check to arrive at the total dollar-weighted

average pre-issuance time to be used for calculating State interest liabilities.

8.6.2.4 Calculation Procedure

Average Daily Balance:

I = ADB x R, where

I = State's total interest liability

ADB = Average Daily Balance of cash in a program's account, measured from deposit to clearance

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

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:

The State expects ICC to include:

-	bank service charges and State costs for disbursement float analysis to determine clearance patterns, both initially and

annually;

-	state personnel costs for development and maintenance of clearance patterns, and calculation of interest liabilities;

 -	costs of developing and producing databases and application programming for tracking

 Federal funds for the purpose of calculating interest;

-	costs of developing and producing special reports for tracking Federal funds for the

 purpose of calculating interest.

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.

Page 17 of 22
12.0 AUTHORIZED SIGNATURES

Kevin Lembo

State Comptroller, State of Connecticut

Signature:________________________________________Date Signed:_______________

Date Submitted 06/01/2020

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management

Bureau of the Fiscal Service

U.S. Department of the Treasury

Signature:________________________________________Date Signed:_______________

Page 18 of 22

Kevin Lembo (Jun 12, 2020 10:06 EDT)

Kevin Lembo

Jun 12, 2020

Corvelli A. McDaniel (Jul 2, 2020 11:52 EDT)

Corvelli A. McDaniel

Jul 2, 2020
Exhibit I - Funds Request and Receipt Times Schedule

State of Connecticut

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

Page 19 of 22
Exhibit II - State of Connecticut

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 Round

ed

days

10.551 Supplemental Nutrition

Assistance Program

Department of Social

Services

100.

00

Electronic Benefit

Payments

Actual Clearance, ZBA -

Same Day Payment

0 Days

10.555 National School Lunch

Program

Department of Education 3.00 Transfers to other State

Agencies

Actual Clearance - Direct

Draw

1 Day

10.555 National School Lunch

Program

Department of Education 97.0

0

Payments to Providers Average Clearance 1 Day

10.561 State Administrative

Matching Grants for the

Supplemental Nutrition

Assistance Program

Department of Social

Services

100.

00

Administrative Costs Prorated Draws 1 Day

14.871 Section 8 Housing

Choice Vouchers

Department of Housing 92.0

0

Payment to Vendors Average Clearance 1 Day

14.871 Section 8 Housing

Choice Vouchers

Department of Housing 8.00 Administrative Costs Fee for Services

Rendered

1 Day

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of Labor 5.00 Benefit Payments

(EUCA, FECA, FUBA

Accounts)

Pre-Issuance N/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of Labor 95.0

0

All Administrative Costs Prorated Draw -

Unemployment Insurance

0 Days

17.225S Unemployment Insurance

-- State Benefit Account

Department of Labor 100.

00

Benefit Payments (State

Accounts)

Pre-Issuance N/A

20.205 Highway Planning and

Construction

Department of

Transportation

100.

00

All Costs Average Clearance 1 Day

20.507 Federal Transit Capital

and Operating Assistance

Formula Grants

Department of

Transportation

100.

00

All Costs Average Clearance 1 Day

84.010 Title I Grants to Local

Educational Agencies

Department of Education 2.00 Transfers to other State

Agencies

Actual Clearance - Direct

Draw

1 Day

84.010 Title I Grants to Local

Educational Agencies

Department of Education 1.00 Indirect Costs (if

necessary)

Indirect Cost Rates -

Actual Base Quarterly

1 Day

84.010 Title I Grants to Local

Educational Agencies

Department of Education 1.00 Payroll Average Clearance 0 Days

84.010 Title I Grants to Local

Educational Agencies

Department of Education 1.00 Direct Administrative

Costs

Average Clearance 1 Day

84.010 Title I Grants to Local

Educational Agencies

Department of Education 95.0

0

Payments to Local

Education Agencies

(LEA's)

Average Clearance 1 Day

84.027 Special Education --

Grants to States

Department of Education 2.00 Transfers to other State

Agencies

Actual Clearance - Direct

Draw

1 Day

84.027 Special Education --

Grants to States

Department of Education 1.00 Indirect Costs (if

necessary)

Indirect Cost Rates -

Actual Base Quarterly

1 Day

84.027 Special Education --

Grants to States

Department of Education 7.00 Direct Administrative

Costs (non-EFT)

Average Clearance 1 Day

Page 20 of 22
________________________________________________________________________________________________________

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: ____________________________________________________

CFDA Program Name Recipient % Component Technique Round

ed

days

84.027 Special Education --

Grants to States

Department of Education 88.0

0

Payments to Local

Education Agencies

(LEA's)

Average Clearance 1 Day

84.027 Special Education --

Grants to States

Department of Education 2.00 Payroll Average Clearance 0 Days

93.558 Temporary Assistance for

Needy Families

Department of Social

Services

100.

00

All Costs Average Clearance 5 Days

93.568 Low-Income Home

Energy Assistance

Department of Social

Services

100.

00

All Costs Average Clearance 1 Day

93.658 Foster Care -- Title IV-E Department of Children

and Families

70.0

0

All Administrative Costs

(non-EFT)

Prorated Draws 0 Days

93.658 Foster Care -- Title IV-E Department of Children

and Families

30.0

0

Payment to Providers Payment Schedule N/A

93.778 Medical Assistance

Program

Department of Social

Services

3.20 Additional Low Income

Medicare Beneficiary,

School Based Child

Health Programs, and

Medicare Part B

Premiums.

Average Clearance 1 Day

93.778 Medical Assistance

Program

Department of Social

Services

0.30 Benefit Payments - Paid

By Check (Except

Additional Low Income

Medicare Beneficiary,

School-Based Child

Health Programs and

Medicare Part B

Premiums).

Average Clearance 0 Days

93.778 Medical Assistance

Program

Department of Social

Services

92.2

0

Benefit payments - Paid

by EFT (except Additional

Low Income Medicare

Beneficiary, School

Based Child Health

Programs, and Medicare

Part B Premiums

Prorated Draw - Medical

Assistance - EFT

0 Days

93.778 Medical Assistance

Program

Department of Social

Services

4.30 Administrative Costs Prorated Draws 1 Day

Page 21 of 22 Jun 12, 2020 Kevin Lembo
Certifying Signature: _______________________________________________

Title: ___________________________________________________________

Page 22 of 22

Kevin Lembo (Jun 12, 2020 10:06 EDT)

Kevin Lembo

Comptroller