Cash Management Improvement Act Agreement

between

The State of South Dakota

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 South

Dakota (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 South Dakota shall be the Commissioner or Deputy Commissioner of the

Bureau of Finance and Management 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 State's FY2019

Single Audit Report 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 $13,652,901.

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

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

12.401 National Guard Military Operations and Maintenance (O&M) Projects

15.611 Wildlife Restoration

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

17.225S Unemployment Insurance -- State Benefit Account

20.205 Highway Planning and Construction

66.458 Capitalization Grants for Clean Water State Revolving Funds

66.468 Capitalization Grants for Drinking Water Revolving Fund

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

93.767 Children's Health Insurance Program

93.778 Medical Assistance Program

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

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

There are currently no programs listed for Section 4.3.

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

84.038 Federal Perkins Loan Program -- Federal Capital Contributions --- Exclusion:Non-State

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

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

5.0 ENTITIES COVERED

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

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

4.0 of this Agreement:

Education

Environment & Natural Resources

Game Fish & Parks

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Health

Labor & Regulation

Military

Social Services

Transportation

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

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

Agreement:

Fidelity Information Services (FIS) 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children

First National Bank 66.458 Capitalization Grants for Clean Water State Revolving Funds

First National Bank 66.468 Capitalization Grants for Drinking Water Revolving Fund

eFunds 10.551 Supplemental Nutrition Assistance Program

6.0 FUNDING TECHNIQUES

6.1 General Terms

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

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

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

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

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

quarter for which the supplemental grant award is being requested.

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

Human Services.

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

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

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

a. Timing of the Request

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

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

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

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

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

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

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

of any quarter of a fiscal year.

b. Justification for the Request

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

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

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

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

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

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

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

c. Form Submittal

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

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

d. Approval Process

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

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

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

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

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

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

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

Administration.

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6.2 Description of Funding Techniques

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

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

There are no funding techniques listed in Section 6.2.1

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

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

There are 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.

Capitalization Grants for State Revolving Funds

The State shall request funds to minimize the time between the drawdown of funds from Treasury and their deposit into

the revolving fund. The timing of the drawdown of Federal funds for deposit to the revolving fund is subject to the interest

provisions of 31 CFR Part 205, however there is an interest exemption for the interest the State earns once the funds are

deposited into the revolving fund. The request for funds 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 the funds to be used for immediate

program purposes. The State will not incur an interest liability for interest earned on revolving fund loans. This funding

technique is interest neutral.

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.

Admin/Tech Grants for State Revolving Funds

The state shall request funds such that they are deposited by electronic payment to the State Revolving Fund Trustee,

which in turn deposits the funds by electronic payment in a state account. 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 based upon

expenditure reports from state's accounting system and the State Revolving Fund grants. This funding technique is

interest neutral.

Allocated Administrative Costs - Weekly

The State, for the Department of Labor, shall request funds on Tuesdays for expenditures posted the previous Friday, and

shall request funds on Fridays for expenditures posted the previous Tuesday. The request shall be made in accordance

with the appropriate Federal agency cut-off time specified in Exhibit I. The State, for the Department of Social Services,

shall request funds on the first business day of the week, such that they are deposited ACH in a State account on the

second business day of the week, to fund the allocated costs charged to the program during the prior week. 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 1/13 of the actual cost allocation of the prior quarter(s). If necessary, the State shall adjust the drawdown

to the actual allocation at the end of the quarter. This funding technique is interest neutral.

Direct Costs - Weekly

The State shall request funds on the first business day of the week, such that they are deposited ACH in a State account

on the second business day of the week, to fund the actual direct costs charged to the program during the prior week.

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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.

Modified ACH

The State shall request funds such that they are deposited by ACH in a State account. The State shall request funds on

the second business day of the week such that funds are deposited on the third business day of the week to fund all noncash transactions with a settlement date the prior week. The State shall request Administrative ACH transactions on

Tuesdays and Fridays such that they are deposited the following business day. The request shall be based on payment

reports issued by the State's accounting system. 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. 

The settlement date of payments issued by the State is the effective date of interagency transfers, journal vouchers, or

other accounting system transactions made by the State to pay out funds for program purposes. This funding technique

is interest neutral.

Modified 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; or,

	*	The effective date of interagency transfers, journal vouchers, or other accounting system transactions made by the State

to pay out funds for program purposes.

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

The amount of the request shall be rounded to the nearest dollar or the exact amount of the disbursement. This funding

technique is interest neutral.

Modified Electronic Benefit Transfer

eFunds, under a contractual agreement with the Department of Social Service, shall request funds via Fedwire as a same

day, cash drawdown for Electronic Benefit Transfers. The funds will be deposited directly to the account of eFunds. The

drawdown of funds shall be the same day that retailers are paid for transactions made at electronic point of sale

machines. The funds shall always be drawn on the same day that settlement funds are paid out. This funding technique

is interest neutral.

Modified Weekly Costs CFDA 17.225

The State, for the Department of Labor, shall request funds on Fridays to be received on the following Monday to cover

expenditures from the prior week. Draws will only be made when the expenditures from the week are over $5,000. This

funding technique is interest neutral.

Modified 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

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date.

	The settlement date of payments issued by the State is:

	*	The settlement date of ACH payments (also called Direct Deposit payments) made by the State to pay out funds for

program purposes; or,

	*	The effective date of interagency transfers, journal vouchers, or other accounting system transactions made by the State

to pay out funds for program purposes.

The State shall request funds on the first business day of the week, such that they are deposited on the second day of the

week, to fund all non-cash transactions with a settlement date during the prior week. This funding technique is interest

neutral.

Modified 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, less the amount of returns

received on the prior banking day. This funding technique is interest neutral.

National Guard Reimbursable Costs

The State shall request funds such that they are deposited by electronic payment. The request shall be made in

accordance with the appropriate Federal agency cut off time specified in Exhibit I. The request for reimbursable expenses

shall be based off the monthly expenditure report and shall not be requested prior to the issuance of the monthly

expenditure report. The request for reimbursable expenses shall be based on the expenditure report issued by the State's

accounting system and shall be made on a monthly basis. 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: Social Services

% of Funds Agency Receives: 100.00

Component: Electronic Benefit Transfer

Technique: Modified Electronic Benefit Transfer

Average Day of Clearance: 0 Days

10.555 National School Lunch Program

Recipient: Education

% of Funds Agency Receives: 100.00

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Component: Grants

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

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

Recipient: Health

% of Funds Agency Receives: 7.90

Component: Administrative ACH

Technique: Modified ACH

Average Day of Clearance: 1 Day

Recipient: Health

% of Funds Agency Receives: 5.55

Component: Interagency Transfer

Technique: Modified ACH

Average Day of Clearance: 1 Day

Recipient: Health

% of Funds Agency Receives: 6.06

Component: Administrative Warrants

Technique: Modified Average Clearance

Average Day of Clearance: 8 Days

Recipient: Health

% of Funds Agency Receives: 23.30

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Health

% of Funds Agency Receives: 57.19

Component: EBT

Technique: Modified ZBA - Same Day Payment

Average Day of Clearance: 0 Days

12.401 National Guard Military Operations and Maintenance (O&M) Projects

Recipient: Military

% of Funds Agency Receives: 100.00

Component: Reimbursable and Project Costs

Technique: National Guard Reimbursable Costs

Average Day of Clearance: N/A

15.611 Wildlife Restoration

Recipient: Game Fish & Parks

% of Funds Agency Receives: 60.00

Component: Payroll

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Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Game Fish & Parks

% of Funds Agency Receives: 40.00

Component: Vouchers

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

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

Recipient: Labor & Regulation

% of Funds Agency Receives: 17.94

Component: Interagency Transfers

Technique: Allocated Administrative Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Labor & Regulation

% of Funds Agency Receives: 15.03

Component: Direct Vouchers

Technique: Allocated Administrative Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Labor & Regulation

% of Funds Agency Receives: 67.03

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

17.225S Unemployment Insurance -- State Benefit Account

Recipient: Labor & Regulation

% of Funds Agency Receives: 100.00

Component: Benefits

Technique: Modified Weekly Costs CFDA 17.225

Average Day of Clearance: 1 Day

20.205 Highway Planning and Construction

Recipient: Transportation

% of Funds Agency Receives: 0.31

Component: Direct Costs

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Transportation

% of Funds Agency Receives: 16.86

Component: Program Warrants

Technique: Modified Average Clearance

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Average Day of Clearance: 6 Days

Recipient: Transportation

% of Funds Agency Receives: 80.75

Component: Program ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Transportation

% of Funds Agency Receives: 2.08

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

66.458 Capitalization Grants for Clean Water State Revolving Funds

Recipient: Environment & Natural Resources

% of Funds Agency Receives: 6.00

Component: Admin/Tech Costs

Technique: Admin/Tech Grants for State Revolving Funds

Average Day of Clearance: N/A

Recipient: Environment & Natural Resources

% of Funds Agency Receives: 94.00

Component: Program Grants

Technique: Capitalization Grants for State Revolving Funds

Average Day of Clearance: N/A

66.468 Capitalization Grants for Drinking Water Revolving Fund

Recipient: Environment & Natural Resources

% of Funds Agency Receives: 12.00

Component: Admin/Tech Costs

Technique: Admin/Tech Grants for State Revolving Funds

Average Day of Clearance: N/A

Recipient: Environment & Natural Resources

% of Funds Agency Receives: 88.00

Component: Program Grants

Technique: Capitalization Grants for State Revolving Funds

Average Day of Clearance: N/A

84.010 Title I Grants to Local Educational Agencies

Recipient: Education

% of Funds Agency Receives: 0.12

Component: Direct Costs / Admin Warrants

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

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Recipient: Education

% of Funds Agency Receives: 1.77

Component: Program Warrants

Technique: Modified Average Clearance

Average Day of Clearance: 8 Days

Recipient: Education

% of Funds Agency Receives: 0.33

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Education

% of Funds Agency Receives: 1.30

Component: Interagency Transfers

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Education

% of Funds Agency Receives: 96.48

Component: Grant Payments

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

84.027 Special Education -- Grants to States

Recipient: Education

% of Funds Agency Receives: 0.19

Component: Direct Costs

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Education

% of Funds Agency Receives: 7.96

Component: Program Warrants

Technique: Modified Average Clearance

Average Day of Clearance: 11 Days

Recipient: Education

% of Funds Agency Receives: 1.86

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Education

% of Funds Agency Receives: 1.25

Component: Interagency Transfers

Technique: Modified ZBA - ACH

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Average Day of Clearance: 1 Day

Recipient: Education

% of Funds Agency Receives: 88.74

Component: Grant Payments

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

93.558 Temporary Assistance for Needy Families

Recipient: Social Services

% of Funds Agency Receives: 19.68

Component: Allocated Costs

Technique: Allocated Administrative Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 13.90

Component: Direct Costs

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 6.30

Component: FACIS Payroll Warrants

Technique: Modified Average Clearance

Average Day of Clearance: 13 Days

Recipient: Social Services

% of Funds Agency Receives: 0.62

Component: TANF Payroll Warrants

Technique: Modified Average Clearance

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 4.45

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 55.05

Component: Regular ADC Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

93.568 Low-Income Home Energy Assistance

Recipient: Social Services

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% of Funds Agency Receives: 1.87

Component: Allocated Costs

Technique: Allocated Administrative Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 7.11

Component: Direct Costs

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 8.42

Component: LIHEAP Payroll Warrant

Technique: Modified Average Clearance

Average Day of Clearance: 8 Days

Recipient: Social Services

% of Funds Agency Receives: 1.67

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 80.93

Component: LIHEAP Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

93.767 Children's Health Insurance Program

Recipient: Social Services

% of Funds Agency Receives: 0.87

Component: Allocated Costs

Technique: Allocated Administrative Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 0.25

Component: Direct Costs

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 0.86

Component: Managed Care Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

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Recipient: Social Services

% of Funds Agency Receives: 12.07

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 85.95

Component: MMIS Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

93.778 Medical Assistance Program

Recipient: Social Services

% of Funds Agency Receives: 0.90

Component: Allocated Costs

Technique: Allocated Administrative Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 1.74

Component: Direct Costs

Technique: Direct Costs - Weekly

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 0.13

Component: Managed Care Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 0.44

Component: Health Home Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 0.22

Component: NEMT Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 0.20

Component: EHR Payroll ACH

Technique: Modified ZBA - ACH

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Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 3.13

Component: State Payroll

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Social Services

% of Funds Agency Receives: 93.24

Component: MMIS Payroll ACH

Technique: Modified ZBA - ACH

Average Day of Clearance: 1 Day

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

None

6.4 State Draws for all Funding Techniques:

The State shall have the option to defer any draw or draws which do not exceed $1,000. When the State defers the

drawing of funds they can include the amount or amounts with the next draw. The State considers this procedure to be

interest neutral.

7.0 CLEARANCE PATTERNS

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

The State shall use the same methodology to develop a separate clearance pattern for each program under the State

Departments; Education, Health, Social Services and Transportation.

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

The Bureau of Finance and Management 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 State shall use the following method to develop clearance patterns for System warrants:

For a three month period, all checks or warrants issued shall have their dates compared to check or warrant clearance

dates. From this information, dollar-weighted average clearance patterns shall be developed. For calculation purposes,

all checks and warrants will be deemed cleared when 99% of the checks or warrants have been cleared. 

For payroll, the following will be used on a statewide basis.

All state payroll will be drawn to be received on the 1st and 16th of each month. If a payday falls on a Saturday or

Sunday, the payday will be moved up to the first working day before the 1st or 16th. This will differ for the months of

January and July, when the payday will be the first working day of the calendar and fiscal year.

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

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

clearance, for a period of at least three months.

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

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

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

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

the date the check cleared the State's account.

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

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

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

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

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

of each day following the disbursement.

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

payroll, with the following exceptions:

None

The State shall also adjust each clearance pattern to reflect:

For the modified average clearance funding technique where percentages of checks mailed is reported by the State

Department in section 6.3.2 as less than 1.00%, the program average day of clearance is adjusted to 1 day.

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

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

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

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

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

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

8.0 INTEREST CALCULATION METHODOLOGY

8.1 General Terms

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

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

applied:

Admin/Tech Grants for State Revolving Funds

Page 16 of 25
Allocated Administrative Costs - Weekly

Capitalization Grants for State Revolving Funds

Direct Costs - Weekly

Modified ACH

Modified Average Clearance

Modified Electronic Benefit Transfer

Modified Weekly Costs CFDA 17.225

Modified ZBA - ACH

Modified ZBA - Same Day Payment

National Guard Reimbursable Costs

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

funding technique and document interest liabilities.

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

(1) amount of the issuance

(2) date of issuance

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

(4) amount of Federal funds received

(5) date funds were requested

8.2 Federal Interest Liabilities

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

day Federal funds are credited to a State account. With regard to funds transferred out of the Federal Highway Trust

Fund, if a State does not bill at least weekly for current project costs, the Federal interest liability shall not accrue prior to

the day the State submits a request for funds.

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

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

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:

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

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

At the end of the State's fiscal year, the State shall calculate the percentage of its total unemployment compensation

expenditures for (1) funds withdrawn from the State account in the UTF, or the State %, and (2) funds withdrawn from the

Federal Employees Compensation Account (FECA) and the Extended Unemployment Compensation Account (EUCA)

and any other accounts of Federal funds in the UTF, or the Federal %.

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

Page 17 of 25
the State account in the UTF by multiplying the State % by the amount of the actual interest earnings and the related

banking costs of the account as a whole. The State's liability for interest on funds withdrawn from its account in the UTF

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

funds.

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

its fiscal year. The State shall calculate the average daily cash balance of Federal funds by multiplying the Federal % by

the average daily cash balance of the benefit payment account on the whole. The State's liability for interest on funds

withdrawn from the FECA and EUCA (and any other benefit accounts of Federal funds in the UTF from which the State

draws funds) shall be the average daily cash balance of Federal funds multiplied by the annualized rate equal to the

average equivalent yields of 13-week Treasury bills auctioned during the State's fiscal year.

8.4 Refund Liabilities

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

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

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

single deposit.

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

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

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

(3) amount of the refund

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

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

based on the difference in whole days between the date the refund is deposited in a State account and the date the

refund is offset against a subsequent deposit of Federal funds.

8.4.4 There is no interest liability on WIC rebates, as per 1994 Appropriation Act, if used for program purposes.

For the Medical Assistance Program, each week the state shall deduct all posted refunds and/or adjustments made during

the prior week against medical assistance payroll. The draw shall be based on the current weeks medical assistance

payroll less any refunds and/or adjustments posted the prior week. This procedure will be considered interest neutral.

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

Page 18 of 25
8.6.1 The State shall be liable for interest on Federal funds from the date Federal funds are credited to a State account

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

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

8.6.2.1 Measuring Time Funds Are Held

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

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

8.6.2.2 Source of Data

Bank or Agency:

The time period from deposit date to clearance date shall be determined from information captured by each agency.

8.6.2.3 Standards Applied

Census (Average Daily Balance):

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 issuance or clearance, whichever is pertinent.

8.6.2.4 Calculation Procedure

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:

Developing and maintaining clearance patterns,

Performing the actual calculation of interest,

Compiling and analyzing data related to interest calculation,

Preparing the Annual report,

Page 19 of 25
Programming and computer time related to clearance patterns

and 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 20 of 25
12.0 AUTHORIZED SIGNATURES

Liza Clark

Commissioner, Bureau of Finance & Management, State of South Dakota

Signature:________________________________________Date Signed:_______________

Date Submitted 05/08/2020

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management

Bureau of the Fiscal Service

U.S. Department of the Treasury

Signature:________________________________________Date Signed:_______________

Page 21 of 25

Liza Clark (Jun 25, 2020 18:09 CDT)

Liza Clark

Jun 25, 2020

Corvelli A. McDaniel (Jul 2, 2020 12:08 EDT)

Corvelli A. McDaniel

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

State of South Dakota

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 22 of 25
Exhibit II - State of South Dakota

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

Social Services 100.

00

Electronic Benefit

Transfer

Modified Electronic

Benefit Transfer

0 Days

10.555 National School Lunch

Program

Education 100.

00

Grants Modified ZBA - ACH 1 Day

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Health 57.1

9

EBT Modified ZBA - Same

Day Payment

0 Days

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Health 7.90 Administrative ACH Modified ACH 1 Day

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Health 5.55 Interagency Transfer Modified ACH 1 Day

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Health 6.06 Administrative Warrants Modified Average

Clearance

8 Days

10.557 Special Supplemental

Nutrition Program for

Women, Infants, and

Children

Health 23.3

0

State Payroll Modified ZBA - ACH 1 Day

12.401 National Guard Military

Operations and

Maintenance (O&M)

Projects

Military 100.

00

Reimbursable and

Project Costs

National Guard

Reimbursable Costs

N/A

15.611 Wildlife Restoration Game Fish & Parks 60.0

0

Payroll Modified ZBA - ACH 1 Day

15.611 Wildlife Restoration Game Fish & Parks 40.0

0

Vouchers Modified ZBA - ACH 1 Day

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Labor & Regulation 67.0

3

State Payroll Modified ZBA - ACH 1 Day

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Labor & Regulation 15.0

3

Direct Vouchers Allocated Administrative

Costs - Weekly

1 Day

17.225F Unemployment Insurance

-- Federal Benefit

Account and

Administrative Costs

Labor & Regulation 17.9

4

Interagency Transfers Allocated Administrative

Costs - Weekly

1 Day

17.225S Unemployment Insurance

-- State Benefit Account

Labor & Regulation 100.

00

Benefits Modified Weekly Costs

CFDA 17.225

1 Day

20.205 Highway Planning and

Construction

Transportation 2.08 State Payroll Modified ZBA - ACH 1 Day

Page 23 of 25
CFDA Program Name Recipient % Component Technique Round

ed

days

20.205 Highway Planning and

Construction

Transportation 0.31 Direct Costs Direct Costs - Weekly 1 Day

20.205 Highway Planning and

Construction

Transportation 16.8

6

Program Warrants Modified Average

Clearance

6 Days

20.205 Highway Planning and

Construction

Transportation 80.7

5

Program ACH Modified ZBA - ACH 1 Day

66.458 Capitalization Grants for

Clean Water State

Revolving Funds

Environment & Natural

Resources

94.0

0

Program Grants Capitalization Grants for

State Revolving Funds

N/A

66.458 Capitalization Grants for

Clean Water State

Revolving Funds

Environment & Natural

Resources

6.00 Admin/Tech Costs Admin/Tech Grants for

State Revolving Funds

N/A

66.468 Capitalization Grants for

Drinking Water Revolving

Fund

Environment & Natural

Resources

88.0

0

Program Grants Capitalization Grants for

State Revolving Funds

N/A

66.468 Capitalization Grants for

Drinking Water Revolving

Fund

Environment & Natural

Resources

12.0

0

Admin/Tech Costs Admin/Tech Grants for

State Revolving Funds

N/A

84.010 Title I Grants to Local

Educational Agencies

Education 0.33 State Payroll Modified ZBA - ACH 1 Day

84.010 Title I Grants to Local

Educational Agencies

Education 0.12 Direct Costs / Admin

Warrants

Direct Costs - Weekly 1 Day

84.010 Title I Grants to Local

Educational Agencies

Education 1.77 Program Warrants Modified Average

Clearance

8 Days

84.010 Title I Grants to Local

Educational Agencies

Education 96.4

8

Grant Payments Modified ZBA - ACH 1 Day

84.010 Title I Grants to Local

Educational Agencies

Education 1.30 Interagency Transfers Modified ZBA - ACH 1 Day

84.027 Special Education --

Grants to States

Education 88.7

4

Grant Payments Modified ZBA - ACH 1 Day

84.027 Special Education --

Grants to States

Education 0.19 Direct Costs Direct Costs - Weekly 1 Day

84.027 Special Education --

Grants to States

Education 7.96 Program Warrants Modified Average

Clearance

11 Days

84.027 Special Education --

Grants to States

Education 1.86 State Payroll Modified ZBA - ACH 1 Day

84.027 Special Education --

Grants to States

Education 1.25 Interagency Transfers Modified ZBA - ACH 1 Day

93.558 Temporary Assistance for

Needy Families

Social Services 55.0

5

Regular ADC Payroll

ACH

Modified ZBA - ACH 1 Day

93.558 Temporary Assistance for

Needy Families

Social Services 19.6

8

Allocated Costs Allocated Administrative

Costs - Weekly

1 Day

93.558 Temporary Assistance for

Needy Families

Social Services 13.9

0

Direct Costs Direct Costs - Weekly 1 Day

93.558 Temporary Assistance for

Needy Families

Social Services 6.30 FACIS Payroll Warrants Modified Average

Clearance

13 Days

93.558 Temporary Assistance for

Needy Families

Social Services 0.62 TANF Payroll Warrants Modified Average

Clearance

1 Day

93.558 Temporary Assistance for

Needy Families

Social Services 4.45 State Payroll Modified ZBA - ACH 1 Day

93.568 Low-Income Home

Energy Assistance

Social Services 80.9

3

LIHEAP Payroll ACH Modified ZBA - ACH 1 Day

93.568 Low-Income Home

Energy Assistance

Social Services 1.87 Allocated Costs Allocated Administrative

Costs - Weekly

1 Day

93.568 Low-Income Home

Energy Assistance

Social Services 7.11 Direct Costs Direct Costs - Weekly 1 Day

93.568 Low-Income Home

Energy Assistance

Social Services 8.42 LIHEAP Payroll Warrant Modified Average

Clearance

8 Days

93.568 Low-Income Home

Energy Assistance

Social Services 1.67 State Payroll Modified ZBA - ACH 1 Day

Page 24 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.

Date: ___________________________________________________________

Printed Name: ____________________________________________________

Certifying Signature: _______________________________________________

Title: ___________________________________________________________

CFDA Program Name Recipient % Component Technique Round

ed

days

93.767 Children's Health

Insurance Program

Social Services 12.0

7

State Payroll Modified ZBA - ACH 1 Day

93.767 Children's Health

Insurance Program

Social Services 0.87 Allocated Costs Allocated Administrative

Costs - Weekly

1 Day

93.767 Children's Health

Insurance Program

Social Services 0.25 Direct Costs Direct Costs - Weekly 1 Day

93.767 Children's Health

Insurance Program

Social Services 85.9

5

MMIS Payroll ACH Modified ZBA - ACH 1 Day

93.767 Children's Health

Insurance Program

Social Services 0.86 Managed Care Payroll

ACH

Modified ZBA - ACH 1 Day

93.778 Medical Assistance

Program

Social Services 93.2

4

MMIS Payroll ACH Modified ZBA - ACH 1 Day

93.778 Medical Assistance

Program

Social Services 0.90 Allocated Costs Allocated Administrative

Costs - Weekly

1 Day

93.778 Medical Assistance

Program

Social Services 1.74 Direct Costs Direct Costs - Weekly 1 Day

93.778 Medical Assistance

Program

Social Services 0.13 Managed Care Payroll

ACH

Modified ZBA - ACH 1 Day

93.778 Medical Assistance

Program

Social Services 0.44 Health Home Payroll

ACH

Modified ZBA - ACH 1 Day

93.778 Medical Assistance

Program

Social Services 0.22 NEMT Payroll ACH Modified ZBA - ACH 1 Day

93.778 Medical Assistance

Program

Social Services 0.20 EHR Payroll ACH Modified ZBA - ACH 1 Day

93.778 Medical Assistance

Program

Social Services 3.13 State Payroll Modified ZBA - ACH 1 Day

Page 25 of 25

Liza Clark (Jun 25, 2020 18:09 CDT)

Liza Clark

Chief Financial Officer Jun 25, 2020 Liza Clark