Cash Management Improvement Act Agreement

between

The State of Montana

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 Montana

(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 Montana shall be the State Accountant of the State Financial Services

Division, Department of Administration in all matters concerning this Agreement.

1.2 The Assistant Commissioner, Revenue Collections Management, Bureau of the Fiscal Service (Fiscal Service), U.S.

Department of the Treasury, shall act as the Secretary's representative in all matters concerning this Agreement.

2.0 AUTHORITY

2.1 The authority for this Agreement is the Cash Management Improvement Act of 1990 (Public Law 101-453), as

amended by the Cash Management Improvement Act of 1992 (Public Law 102-589), codified at 31 U.S.C. 6501 and 31

U.S.C. 6503.

2.2 The regulations codified at 31 CFR Part 205 shall apply to all matters pertaining to this Agreement, and are

incorporated herein by reference. In the event of any inconsistency between this Agreement and 31 CFR Part 205, the

regulations shall govern.

3.0 DURATION, AMENDING, TERMINATING, AND MISCELLANEOUS PROVISIONS

3.1 This Agreement shall take effect on 07/01/2019 and shall remain in effect until 06/30/2020.

3.2 This Agreement may be amended at any time by written, mutual consent of the State and the Fiscal Service. This

Agreement shall be amended annually to incorporate new programs that qualify as major Federal assistance programs

and remove programs that no longer qualify as major Federal assistance programs. A State must notify the Fiscal Service

in writing within 30 days of the time the State becomes aware of a change that involves additions or deletions of programs

subject to Subpart A, changes in funding techniques, and/or changes in clearance patterns. The notification must include

a proposed amendment for review by the Fiscal Service.

3.3 Notwithstanding section 3.2, in the event of Federal or State non-compliance with Subpart B of 31 CFR, Part 205, the

Fiscal Service may amend this Agreement at any time to incorporate additional programs and the entities that administer

those programs.

3.4 This Agreement may be terminated by either party with 30 days written notice. If this Agreement is terminated, the

Fiscal Service will prescribe the funding techniques, clearance patterns, and methods for calculating interest liabilities to

be used by the State.

Page 1 of 25
4.0 PROGRAMS COVERED

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

recent Schedule of Expenditures of Federal Awards for fiscal year ending 06/30/2018.

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

this Agreement.

4.1.1 The State of Montana threshold was calculated as follows:

Total Federal assistance expenditures for fiscal year 2018: $3,019,422,500 Percentage assigned by Fiscal Service per

the Federal Register, 31 CFR Part 205, 205.5, Table A (Column B): 0.6 percent

0.6 percent threshold for fiscal year 2020 = $3,019,422,500 X .006 = $18,116,535

To ensure adequate coverage of all State programs, the Federal regulations require that the threshold should also be

calculated using one-half of the percentage assigned by Fiscal Service per the Federal Register, 31 CFR Part 205, 205.5,

Table A (Column B): .5 X 0.6 percent = 0.3 percent.

Once both thresholds were calculated, program coverages were compared. If the percentage of programs covered varied

by more than 10% between the two thresholds, the State must lower its threshold, or add programs, until the difference is

less than or equal to 10%.

The State of Montana program coverages (using both thresholds) was compared as follows:

Threshold calculated using 0.6% = $18,116,535 Program coverage: 12 out of 337 programs = 3.56%

Threshold calculated using 0.3% = $9,058,268 Program coverage: 28 out of 337 programs = 8.31%

Program coverage difference: 8.31% - 3.56% = 4.75% (less than 10%)

According to the federal regulations, the threshold of $18,116,535 is an allowable threshold.

4.2 The State's threshold for major Federal assistance programs is $18,116,535.

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

14.195 Section 8 Housing

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

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

Page 2 of 25
93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

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

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

There are currently no programs listed for Section 4.3.

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

There are currently no programs listed for Section 4.4.

5.0 ENTITIES COVERED

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 Commerce

Department of Labor and Industry

Department of Public Health and Human Services

Department of Transportation

Office of Public Instruction

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

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

Agreement:

There are currently no fiscal agencies listed for Section 5.2.

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

Page 3 of 25
the State unique funding technique how the estimated amount is determined and when and how the State will reconcile

the difference between the estimate and the State's actual expenditures.

6.1.5 Supplemental Funding:

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

increase in costs due to unforeseen circumstances.

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

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

Program and associated administrative payments (CFDA 93.778):

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

guidelines and instructions for completing the CMS-37 are provided in Section 2600F of the State Medicaid Manual

(SMM). The CMS/CO must receive the revised Form CMS-37 through the Medicaid Budget Expenditure

System/Children's Budget Expenditure System (MBES/CBES) no later than 10 calendar days before the end of the

quarter for which the supplemental grant award is being requested.

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

Human Services.

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

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

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

a. Timing of the Request

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.

Page 4 of 25
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.

Actual Clearance, ZBA - ACH

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

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

in Exhibit I. The amount of the request shall be for the amount of funds that clear the State's account on the settlement

date. This funding technique is interest neutral.

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.

Estimated Clearance

The State shall request funds such that they are deposited in a State account in accordance with the clearance pattern

specified in Exhibit II - EC (Estimated Clearance). The request shall be made in accordance with the appropriate Federal

agency cut-off time specified in Exhibit I. The amount of each request will be a percentage of the disbursement, according

to the State's clearance pattern specified in Exhibit II - EC. This funding technique is interest neutral.

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

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

There are no funding techniques listed in Section 6.2.2

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

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.

Page 5 of 25
Drawdowns at Fixed Intervals - Daily

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

shall request funds such that they are deposited by ACH in the State Account using an estimated daily average cost that

is based on the actual costs of the month two months prior to the current month. Estimated indirect costs will be recorded

daily to unique expenditure accounts. At the end of the month, actual costs for the prior month will be recorded, and the

prior month's estimated costs reversed. The funds will be reconciled monthly after the cost allocation program has been

run. The State will draw or return funds based on the reconciliation differences for the month. This funding technique is

interest neutral.

Drawdowns at Fixed Intervals - Weekly

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

shall request funds weekly on Wednesday such that they are deposited on the following business day. The amount of the

request shall be based on the amount of actual cash outlays for direct and indirect administrative costs during the prior

week, Wednesday through Tuesday. This funding technique is interest neutral.

Drawdowns at Fixed Intervals - Weekly (2)

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

shall request funds weekly on Wednesday such that they are deposited on the following business day. The amount of the

request shall be based on the amount of actual cash outlays for direct and estimated indirect administrative costs during

the prior week, Wednesday through Tuesday. The estimated indirect costs are based on the actual indirect costs of the

month two months prior to the current month. At the end of the month, actual indirect costs for the prior month will be

recorded, and the prior month's estimated costs reversed. The funds will be reconciled monthly after the cost allocation

program has been run. The State will draw or return funds based on the reconciliation differences for the month. This

funding technique is interest neutral.

Drawdowns at Fixed Intervals - Weekly (3)

The Department of Transportation shall submit a weekly invoice for all program costs and payments. There maybe

instances that require MDT to draw more than once within a week (i.e. month-end closing or large dollar payments that

cannot wait until the next weekly draw). The request of the funds shall be made in accordance with the appropriate

Federal agency cut-off time in Exhibit I to the extent practical. The amount of the request shall be the amount of actual

costs and payments incurred since the last request for funds. This funding technique is interest neutral.

Drawdowns at Fixed Intervals - Weekly (4)

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

shall request funds weekly on Wednesday, or as reasonable to address negative cash needs, such that they are

deposited on the date of receipt from the appropriate Federal Agency. The amount of the request shall be based on the

amount of actual program costs incurred during the prior week, Wednesday through Tuesday. This funding technique is

interest neutral.

Modified Actual Clearance (ZBA - ACH)

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

the State will receive notification of the amount of EBT benefits and fee payments that processed the previous day, and

the State's cash balance will be reduced by the amount of EBT payments processed. On the same day, the State will

request that amount and receive and deposit the funds on the same day requested. This funding technique is interest

Page 6 of 25
neutral.

Payment Schedule - HUD

The Department of Commerce completes monthly reports during the fiscal year. HUD (Housing and Urban Development)

uses these monthly reports to calculate the amount of HAP (Housing Assistance Payments) and direct administrative

costs needed by the State for the next fiscal year. HUD pays the calculated amount on the first business day of each

month during the fiscal year.

The Department of Commerce will disburse the funds in the following manner:

(1) Payments to landlords by EFT (Electronic Fund Transfer) will be disbursed so that the settlement date is within the first

five business day of the month and the 15th day of the month or the closest working date after the 15th.

(2) Payments to landlords by warrant will be issued within the first five business day of the month and the 15th day of the

month or the closest working date to the 15th. Emergency warrants will be considered and settled on a case by case

basis. The warrant clearance pattern listed in Exhibit II will be used.

(3) Direct administrative costs will be recorded on the dollar-weighted average date of clearance of payroll.

(4) Indirect administrative costs will be recorded at the end of each month. The costs will be calculated using the indirect

cost rate and actual salary expenditures for the month. This funding technique is interest neutral.

Payment Schedule - HUD (2)

The Department of Commerce electronically transmits voucher payment information to HUD via TRACSMail

approximately four business days prior to the last business day of the month. HUD's Tenant Rental Assistance System

(TRACS) compares the transmitted voucher information to HUD data on file. The voucher payment request, excluding any

voucher and contract discrepancies identified in the comparison process, is then forwarded to the HUD payment funding

system (LOCCS  Line of Credit Control System). On the last business day of the month, LOCCS sends an e-mail to the

Department of Commerce regarding the HUD deposit scheduled for the first business day of the next month. The e-mail

includes an estimated deposit date, dollar amount, and an attachment with individual contract payment detail. The

Department of Commerce reconciles the voucher payment information transmitted to HUD to the LOCCS e-mail deposit

total.

The Department of Commerce will then disburse housing assistance payments by EFT (Electronic Fund Transfer), so that

the settlement date is the first business day of the month, except for the months of January and July.The settlement date

will be the second business day of those months due to 1099 reporting (January) and fiscal year-end reporting (July).

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 Public Health and Human Services

% of Funds Agency Receives: 100.00

Page 7 of 25
Component: EBT

Technique: Modified Actual Clearance (ZBA - ACH)

Average Day of Clearance: N/A

10.555 National School Lunch Program

Recipient: Office of Public Instruction

% of Funds Agency Receives: 100.00

Component: Benefits Paid by Electronic Fund Transfer

Technique: Drawdowns at Fixed Intervals - Weekly (4)

Average Day of Clearance: N/A

14.195 Section 8 Housing

Recipient: Department of Commerce

% of Funds Agency Receives: 100.00

Component: Payments to Landlords by Electronic Fund Transfer

Technique: Payment Schedule - HUD (2)

Average Day of Clearance: N/A

14.871 Section 8 Housing Choice Vouchers

Recipient: Department of Commerce

% of Funds Agency Receives: 1.00

Component: Indirect Administrative Costs

Technique: Payment Schedule - HUD

Average Day of Clearance: N/A

Recipient: Department of Commerce

% of Funds Agency Receives: 80.00

Component: Payments to Landlords by Warrant

Technique: Payment Schedule - HUD

Average Day of Clearance: 6 Days

Recipient: Department of Commerce

% of Funds Agency Receives: 15.00

Component: Payments to Landlords by Electronic Fund Transfer

Technique: Payment Schedule - HUD

Average Day of Clearance: N/A

Recipient: Department of Commerce

% of Funds Agency Receives: 4.00

Component: Direct Administrative Costs

Technique: Payment Schedule - HUD

Average Day of Clearance: N/A

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

Recipient: Department of Labor and Industry

Page 8 of 25
% of Funds Agency Receives: 49.00

Component: Benefits Paid by Electronic Fund Transfer

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 1.00

Component: Direct Administrative Costs - Electronic Transfers

Technique: Drawdowns at Fixed Intervals - Weekly

Average Day of Clearance: N/A

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 1.00

Component: Direct Administrative Costs - Warrant Payments

Technique: Drawdowns at Fixed Intervals - Weekly

Average Day of Clearance: N/A

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 49.00

Component: Benefits Paid by Warrant

Technique: Estimated Clearance

Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 50.00

Component: Benefits Paid by Electronic Fund Transfer

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Labor and Industry

% of Funds Agency Receives: 50.00

Component: Benefits Paid by Warrant

Technique: Estimated Clearance

Average Day of Clearance: N/A

20.205 Highway Planning and Construction

Recipient: Department of Transportation

% of Funds Agency Receives: 100.00

Component: All program costs

Technique: Drawdowns at Fixed Intervals - Weekly (3)

Average Day of Clearance: N/A

84.010 Title I Grants to Local Educational Agencies

Recipient: Office of Public Instruction

% of Funds Agency Receives: 100.00

Page 9 of 25
Component: Admin Costs, Benefits Paid by Electronic Fund Transfer

Technique: Drawdowns at Fixed Intervals - Weekly (4)

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States

Recipient: Office of Public Instruction

% of Funds Agency Receives: 100.00

Component: Admin Costs, Benefits Paid by Electronic Fund Tranfer

Technique: Drawdowns at Fixed Intervals - Weekly (4)

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 6.00

Component: Benefits Paid by Electronic Fund Transfer

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 85.00

Component: Benefits Paid by Warrant

Technique: Average Clearance

Average Day of Clearance: 5 Days

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 1.00

Component: Indirect Administrative Costs

Technique: Drawdowns at Fixed Intervals - Daily

Average Day of Clearance: N/A

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 2.00

Component: Program Costs - Other

Technique: Drawdowns at Fixed Intervals - Weekly (2)

Average Day of Clearance: N/A

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 6.00

Component: EBT Benefits

Technique: Modified Actual Clearance (ZBA - ACH)

Average Day of Clearance: N/A

93.568 Low-Income Home Energy Assistance

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 53.00

Component: Benefits Paid by Electronic Fund Transfer

Page 10 of 25
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 40.00

Component: Benefits Paid by Warrant

Technique: Average Clearance

Average Day of Clearance: 4 Days

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 1.00

Component: Indirect Administrative Costs

Technique: Drawdowns at Fixed Intervals - Weekly (2)

Average Day of Clearance: N/A

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 6.00

Component: Direct Adminstrative Costs

Technique: Drawdowns at Fixed Intervals - Weekly (2)

Average Day of Clearance: N/A

93.767 Children's Health Insurance Program

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 3.00

Component: Indirect Administrative Costs

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 94.00

Component: Benefits Paid by Electronic Fund Transfer

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 1.00

Component: Benefits Paid by Warrant

Technique: Average Clearance

Average Day of Clearance: 6 Days

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 2.00

Component: Direct Administrative Costs

Technique: Drawdowns at Fixed Intervals - Weekly

Average Day of Clearance: N/A

93.778 Medical Assistance Program

Page 11 of 25
Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 4.00

Component: Indirect Administrative Costs

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 81.00

Component: Benefits Paid by Electronic Fund Transfer

Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 7.00

Component: Benefits Paid by Warrant

Technique: Average Clearance

Average Day of Clearance: 7 Days

Recipient: Department of Public Health and Human Services

% of Funds Agency Receives: 8.00

Component: Direct Administrative Costs

Technique: Drawdowns at Fixed Intervals - Weekly

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

No exemptions.

7.0 CLEARANCE PATTERNS

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

The State shall develop separate clearance patterns for the Statewide Payroll and for each program and separate

functions within specific programs listed in sections 4.2 and 4.3 (any interest exempted program) of this Agreement.

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

The Department of Administration shall develop the State's clearance patterns.

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

The data utilized in the development of clearance patterns for comes from SABHRS (Statewide Accounting, Budget and

Human Resource System). The System is administered by the SABHRS Financial Services Technology Bureau of the

State Financial Services Division within the Department of Administration.

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.

Page 12 of 25
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:

No exceptions.

The State shall also adjust each clearance pattern to reflect:

No exceptions.

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

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

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

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

7.10 The State shall follow the procedures of 31 CFR 205 if it has actual or constructive knowledge, at any time, that a

clearance pattern does not correspond to a program's clearance activity.

8.0 INTEREST CALCULATION METHODOLOGY

8.1 General Terms

8.1.1 The State and the Secretary agree that no interest liabilities will be incurred for transfers of funds made in

accordance with the procedures specified in section 6 of this Agreement where the following funding techniques are

applied:

Actual Clearance, ZBA - ACH

Average Clearance

Drawdowns at Fixed Intervals - Daily

Drawdowns at Fixed Intervals - Weekly

Drawdowns at Fixed Intervals - Weekly (2)

Drawdowns at Fixed Intervals - Weekly (3)

Page 13 of 25
Drawdowns at Fixed Intervals - Weekly (4)

Estimated Clearance

Modified Actual Clearance (ZBA - ACH)

Payment Schedule - HUD

Payment Schedule - HUD (2)

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:

1. 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.

2. Estimated Clearance

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

compare the daily clearance pattern, as specified in Exhibit II, to the date Federal funds are credited to a State Account.

The Federal interest liability shall be based on the difference in whole days between the estimated clearance of State

funds and the actual deposit of Federal funds. With Federal-State matching programs, interest shall be calculated on the

Federal percentage of the disbursement.

3.Average Clearance

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 the

disbursement, as specified in Exhibit II, and the date the related Federal funds are credited to State account. With

Federal-State matching programs, interest shall be calculated on the Federal percentage of the disbursement.

4. Other Payment Schedules

Page 14 of 25
For all other 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 date the related Federal funds

should have been credited to the State as specified in Section 6 of this Agreement and the date they were actually

credited to a State account. With Federal-State matching programs, interest shall be calculated on the Federal

percentage of the disbursement.

The State draw process is validated by the spreadsheet calculations prepared and filed with the Annual report.

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:

There are no interest earnings on funds withdrawn from the State account, as the State has implemented the estimated

clearance funding technique, an interest-neutral funding technique, for such transfers. For transfers of funds from the

State account in the UTF that do not follow the technique specified in section 6.2 and result in a positive balance of funds

in a State account, the State's liability for interest on funds withdrawn from its account in the UTF shall consist of the

actual interest earnings of the benefit payment account attributed to such funds less the related banking costs attributed to

such funds.

8.4 Refund Liabilities

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

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

threshold below which the State shall not incur or calculate interest liabilities on refunds. A transaction is defined as a

single deposit.

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

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

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

(3) amount of the refund

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

With programs to which the following 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: Actual Clearance (ZBA-ACH), Modified Actual Clearance

(ZBA-ACH), Estimated Clearance, Drawdowns on a Payroll Cycle, Drawdowns at Fixed Intervals - Weekly, and Specified

Payment Schedules.

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

Page 15 of 25
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 credited to a State's account and the date those funds are debited from the State's account.

For programs using non-interest neutral Payment Schedules funding techniques where Federal funds are received and

credited to a State's account before the date those funds are debited from the State's account, the State interest liability

shall be based on the difference in whole days between the date the Federal funds are received and credited to a State's

account and the date those related State funds are debited from the State's account as specified in Section 6.2.4 (noninterest neutral Payment Schedules funding techniques) of this Agreement. With Federal-State matching programs,

interest shall be calculated on the State percentage of the disbursement.

8.6.2.2 Source of Data

The time period from the date Federal funds are credited to the State's account to the date of clearance shall be

determined from information captured by the Department of Administration from the agency administering the program.

8.6.2.3 Standards Applied

The average daily cash balance of Federal funds in the program's account reflects the actual activity of each draw from

the date of deposit to the date of clearance.

8.6.2.4 Calculation Procedure

I = AD x R x T/365, where

I = State's interest liability

AD = Actual dollar amount of Federal funds credited to State's account

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

T = Number of days from credit of Federal funds to State's account to date of clearance or payout as determined by the

appropriate clearance pattern in Exhibit II or the payout schedule specified in section 6 of this Agreement.

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.

Page 16 of 25
10.0 INTEREST CALCULATION COSTS

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

calculation of interest, including the cost of developing and maintaining clearance patterns in support of the interest

calculations. Interest calculation costs do not include expenses for normal disbursing services, such as processing of

checks or maintaining records for accounting and reconciliation of cash balances, or expenses for upgrading or

modernizing accounting systems. Interest calculation costs in excess of $50,000 in any year are not eligible for

reimbursement, unless the State provides justification with the annual report.

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

Costs of calculating interest, including the cost of developing and maintaining clearance patterns in support of interest

calculations.

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 25
12.0 AUTHORIZED SIGNATURES

Cody Pearce

State Accountant

State Financial Services Division

Department of Administration

Signature:________________________________________Date Signed:_______________

Date Submitted 04/23/2019

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 25

Cody Pearce (Jun 25, 2019)

Cody Pearce

6/25/2019

Corvelli A. McDaniel (Oct 24, 2019)

Corvelli A. McDaniel
Exhibit I - Funds Request and Receipt Times Schedule

State of Montana

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 25
Exhibit II - State of Montana

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 Public

Health and Human

Services

100.

00

EBT Modified Actual

Clearance (ZBA - ACH)

N/A

10.555 National School Lunch

Program

Office of Public

Instruction

100.

00

Benefits Paid by

Electronic Fund Transfer

Drawdowns at Fixed

Intervals - Weekly (4)

N/A

14.195 Section 8 Housing Department of

Commerce

100.

00

Payments to Landlords

by Electronic Fund

Transfer

Payment Schedule - HUD

(2)

N/A

14.871 Section 8 Housing

Choice Vouchers

Department of

Commerce

4.00 Direct Administrative

Costs

Payment Schedule - HUD N/A

14.871 Section 8 Housing

Choice Vouchers

Department of

Commerce

1.00 Indirect Administrative

Costs

Payment Schedule - HUD N/A

14.871 Section 8 Housing

Choice Vouchers

Department of

Commerce

80.0

0

Payments to Landlords

by Warrant

Payment Schedule - HUD 6 Days

14.871 Section 8 Housing

Choice Vouchers

Department of

Commerce

15.0

0

Payments to Landlords

by Electronic Fund

Transfer

Payment Schedule - HUD N/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of Labor and

Industry

1.00 Direct Administrative

Costs - Warrant

Payments

Drawdowns at Fixed

Intervals - Weekly

N/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of Labor and

Industry

1.00 Direct Administrative

Costs - Electronic

Transfers

Drawdowns at Fixed

Intervals - Weekly

N/A

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of Labor and

Industry

49.0

0

Benefits Paid by

Electronic Fund Transfer

Actual Clearance, ZBA -

ACH

1 Day

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Department of Labor and

Industry

49.0

0

Benefits Paid by Warrant Estimated Clearance N/A

17.225S Unemployment Insurance

-- State Benefit Account

Department of Labor and

Industry

50.0

0

Benefits Paid by

Electronic Fund Transfer

Actual Clearance, ZBA -

ACH

1 Day

17.225S Unemployment Insurance

-- State Benefit Account

Department of Labor and

Industry

50.0

0

Benefits Paid by Warrant Estimated Clearance N/A

20.205 Highway Planning and

Construction

Department of

Transportation

100.

00

All program costs Drawdowns at Fixed

Intervals - Weekly (3)

N/A

84.010 Title I Grants to Local

Educational Agencies

Office of Public

Instruction

100.

00

Admin Costs, Benefits

Paid by Electronic Fund

Transfer

Drawdowns at Fixed

Intervals - Weekly (4)

N/A

84.027 Special Education --

Grants to States

Office of Public

Instruction

100.

00

Admin Costs, Benefits

Paid by Electronic Fund

Tranfer

Drawdowns at Fixed

Intervals - Weekly (4)

N/A

93.558 Temporary Assistance for

Needy Families

Department of Public

Health and Human

Services

6.00 Benefits Paid by

Electronic Fund Transfer

Actual Clearance, ZBA -

ACH

1 Day

Page 20 of 25
________________________________________________________________________________________________________

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.

CFDA Program Name Recipient % Component Technique Round

ed

days

93.558 Temporary Assistance for

Needy Families

Department of Public

Health and Human

Services

1.00 Indirect Administrative

Costs

Drawdowns at Fixed

Intervals - Daily

N/A

93.558 Temporary Assistance for

Needy Families

Department of Public

Health and Human

Services

6.00 EBT Benefits Modified Actual

Clearance (ZBA - ACH)

N/A

93.558 Temporary Assistance for

Needy Families

Department of Public

Health and Human

Services

2.00 Program Costs - Other Drawdowns at Fixed

Intervals - Weekly (2)

N/A

93.558 Temporary Assistance for

Needy Families

Department of Public

Health and Human

Services

85.0

0

Benefits Paid by Warrant Average Clearance 5 Days

93.568 Low-Income Home

Energy Assistance

Department of Public

Health and Human

Services

53.0

0

Benefits Paid by

Electronic Fund Transfer

Actual Clearance, ZBA -

ACH

1 Day

93.568 Low-Income Home

Energy Assistance

Department of Public

Health and Human

Services

1.00 Indirect Administrative

Costs

Drawdowns at Fixed

Intervals - Weekly (2)

N/A

93.568 Low-Income Home

Energy Assistance

Department of Public

Health and Human

Services

6.00 Direct Adminstrative

Costs

Drawdowns at Fixed

Intervals - Weekly (2)

N/A

93.568 Low-Income Home

Energy Assistance

Department of Public

Health and Human

Services

40.0

0

Benefits Paid by Warrant Average Clearance 4 Days

93.767 Children's Health

Insurance Program

Department of Public

Health and Human

Services

2.00 Direct Administrative

Costs

Drawdowns at Fixed

Intervals - Weekly

N/A

93.767 Children's Health

Insurance Program

Department of Public

Health and Human

Services

94.0

0

Benefits Paid by

Electronic Fund Transfer

Actual Clearance, ZBA -

ACH

1 Day

93.767 Children's Health

Insurance Program

Department of Public

Health and Human

Services

3.00 Indirect Administrative

Costs

Actual Clearance, ZBA -

ACH

1 Day

93.767 Children's Health

Insurance Program

Department of Public

Health and Human

Services

1.00 Benefits Paid by Warrant Average Clearance 6 Days

93.778 Medical Assistance

Program

Department of Public

Health and Human

Services

8.00 Direct Administrative

Costs

Drawdowns at Fixed

Intervals - Weekly

N/A

93.778 Medical Assistance

Program

Department of Public

Health and Human

Services

81.0

0

Benefits Paid by

Electronic Fund Transfer

Actual Clearance, ZBA -

ACH

1 Day

93.778 Medical Assistance

Program

Department of Public

Health and Human

Services

4.00 Indirect Administrative

Costs

Actual Clearance, ZBA -

ACH

1 Day

93.778 Medical Assistance

Program

Department of Public

Health and Human

Services

7.00 Benefits Paid by Warrant Average Clearance 7 Days

Page 21 of 25
Date: ___________________________________________________________

Printed Name: ____________________________________________________

Certifying Signature: _______________________________________________

Title: ___________________________________________________________

Page 22 of 25

Cody Pearce (Jun 25, 2019)

Cody Pearce

Cody Pearce 6/25/2019 State Accountant
Cash Management Improvement Act - 2020 Treasury State Agreement

State of Montana - Exhibit II Estimated Clearance

___________________________________________________________________________________________________________

Effective 07/01/2019 until 06/30/2020

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

Benefits Paid by Warrant

17.225S Unemployment Insurance -- State Benefit Account

Benefits Paid by Warrant

Day % Cleared

Day 1 9.09

Day 2 32.00

Day 3 15.15

Day 4 19.77

Day 5 7.54

Day 6 4.49

Day 7 2.73

Day 8 1.42

Day 9 1.59

Day 10 1.09

Day 11 0.99

Day 12 0.71

Day 13 0.32

Day 14 0.50

Day 15 0.44

Day 16 0.36

Day 17 0.17

Day 18 0.16

Day 19 0.19

Day 20 1.29

Day 21 0.00

Day 22 0.00

Day 23 0.00

Day 24 0.00

Day 25 0.00

Day 26 0.00

Day 27 0.00

Day 28 0.00

Day 29 0.00

Day 30 0.00

Day 31 0.00

Total 100.00

Day % Cleared

Day 1 9.09

Day 2 32.00

Day 3 15.15

Page 23 of 25
Certification

I hereby certify that the % Cleared listed in Exhibit II Estimated Clearance of this Treasury State Agreement:

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

 2. Accurately represents the flow of federal funds under the federal assistance programs to which they apply;

 3. Reflects seasonal or other periodic variations in the clearance activities;

 4. Is auditable; and,

 5. Has been certified as accurate by an authorized State Official.

 ___________________________________ ___________________________________

 Signature Date Signed

 ___________________________________

Day % Cleared

Day 4 19.77

Day 5 7.54

Day 6 4.49

Day 7 2.73

Day 8 1.42

Day 9 1.59

Day 10 1.09

Day 11 0.99

Day 12 0.71

Day 13 0.32

Day 14 0.50

Day 15 0.44

Day 16 0.36

Day 17 0.17

Day 18 0.16

Day 19 0.19

Day 20 1.29

Day 21 0.00

Day 22 0.00

Day 23 0.00

Day 24 0.00

Day 25 0.00

Day 26 0.00

Day 27 0.00

Day 28 0.00

Day 29 0.00

Day 30 0.00

Day 31 0.00

Total 100.00

Page 24 of 25

Cody Pearce (Jun 25, 2019)

Cody Pearce

Jun 25, 2019 Cody Pearce
 Printed Name

 ___________________________________

 Printed Title

Page 25 of 25 State Accountant