4. Are auditable.

wm 424 fer?

Printed Name: Ppl Ss lout’ wr

Certifying Signature:

rite logit, eo

Page 20 of 26


funds, as specified in Exhibit |.
8.4 Refund Liabilities

8.4.1 The State shall be liable for interest on refunds from the date the refund is credited to a State account until the date
the refund is debited from the State account for program purposes. The State shall apply a $50,000 refund transaction
threshold below which the State shall not incur or calculate interest liabilities on refunds. A transaction is defined as a
single deposit.

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

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

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

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

Refunds Deposited to Interest Neutral Programs:

With programs to which applicable interest neutral funding techniques are applied, the State interest liability shall be
based on the difference in whole days between the date the refund is deposited in a State account and the date the
refund is offset against a subsequent deposit of Federal funds.

8.5 Exemptions

8.5.1 Where more than one State agency is a recipient of Federal funds under a program, a particular State agency's
funding may be excluded from interest calculation procedures if the State agency receives an amount of funds less than 5
% of the State's threshold for major Federal assistance programs. Notwithstanding this potential exemption, however, in
no case shall less than 90% of a program's total funding be subject to interest calculation procedures.

Proration of calculations: If less than total program funding is subject to interest calculation procedures, the resulting
interest liability calculations shall be prorated to 100% of program funding.

8.6 State Interest Liabilities

8.6.1 The State shall be liable for interest on Federal funds from the date Federal funds are credited to a State account
until the date those funds are paid out for program purposes.

8.6.2 The State shall use the following method to calculate State interest liabilities on Federal funds:
8.6.2.1 Measuring Time Funds Are Held

Deposit to Clearance:
To determine the total time Federal funds are held, the State shall measure the time between the date Federal funds are
received and credit to a State's account and the date those funds are debited from the State's account.

8.6.2.2 Source of Data

Bank or Agency:

The time period from Deposit to Clearance shall be determined from information captured by each State Entity or
Commercial Bank and shall be determined from information captured in the State Entity 's accounting system in
conjunction with data provided by the Treasurer of the State of Arkansas Treasury Management System and Commercial

Page 14 of 26


_% Cleared

100.00
84.027 Special Education -- Grants to States
Payroll

BENT ac

Day 1 98.00
Day 2 0.00
Day 3 1.00
Day 4 1.00
Day 5 0.00
Day 6 0.00
Day7 0.00
Day 8 0.00,
Day 9 0.00,
Day 10 0.00
Day 14 0.00
Day 12 0.00.
Day 13 0.00.
Day 14 0.00
Day 15 0.00,
Day 16 0.00
Day 17 0.00
Day 18 0.00
Day 19 0.00
Day 20 0.00
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:
93.558 Temporary Assistance for Needy Families
Payroll
Day 1 98.01
Day 2 0.00
Day 3 1.00
Day 4 1.00
Day 5 0.00
Day 6 0.00
Day7 0.00
Day 8 0.00

Page 24 of 26


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 |. 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.

Actual Clearance, ZBA - Same Day Payment

The State shall request funds the same day it pays out funds, in accordance with the appropriate Federal agency cut-off
time specified in Exhibit |. A Federal agency will deposit funds in a State account the same day as requested. The amount
of the request shall be for the amount of funds that clear the State's account that day. This funding technique is interest
neutral.

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 Il - EC (Estimated Clearance). The request shall be made in accordance with the appropriate Federal
agency cut-off time specified in Exhibit |. The amount of each request will be a percentage of the disbursement, according
to the State's clearance pattern specified in Exhibit Il - 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.

Actual Costs - Department of Human Services

The State shall request funds for all Direct and Indirect payments on a daily basis. The amount of the request shall be
based on the amount of liabilities recorded since the last request for funds. The amount of Indirect Costs to be requested
per program shall be determined based on prior quarter cost allocation percentages by fund. The request for funds shall
be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. This funding technique is
interest neutral.

Actual Costs - Direct Administrative

The State shall request funds for all Direct Administrative costs on a daily basis. The amount of the request shall be based
‘on the amount of liabilities recorded for direct administrative costs since the last request for funds. The request for funds
shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. This funding
technique is interest neutral.

Actual Costs-EFT - Department of Human Services (CFDA 93.778)

Page 5 of 26


Cash Management Improvement Act - 2018 Treasury State Agreement
State of Arkansas - Exhibit Il Estimated Clearance

Effective 07/01/2017 until 06/30/2018

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

Payroll
Day | _% Cleared

Day 4 98.00
Day 2 0.00
Day 3 1.00
Day 4 1.00
Day 5 0.00
Day6 0.00
Day7 0.00
Day 8 0.00
Day 9 0.00
Day 10 0.00
Day 14 0.00
Day 12 0.00
Day 13 0.00)
Day 14 0.00)
Day 15 0.00:
Day 16 0.00,
Day 17 0.00
Day 18 0.00
Day 19 0.00
Day 20 0.00
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.

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

Day % Cleared
Day1 0.00
Day 2 10.55
Day 3 2.18

Page 21 of 26


Day 18 0.00

Day 19 0.00,
Day 20 0.00
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

84.010 Title | Grants to Local Educational Agencies
Payroll

Day 1 98.00

Day 2 0.00
Day 3 1.00
Day 4 1.00
Day 5 0.00
Day 6 0.00
Day 7 0.00
Day 8 0.00
Day 9 0.00
Day 10 0.00
Day 11 0.00
Day 12 0.00
Day 13 0.00
Day 14 0.00
Day 15 0.00;
Day 16 0.00.
Day 17 0.00
Day 18 0.00
Day 19 0.00
Day 20 0.00
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

. Page 23 of 26


Exhibit II - State of Arkansas

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
%
10.551 |Supplemental Nutrition Department of Human 100. |Direct Program Actual Costs - N/A
Assistance Program Services 00 | Expenditures Department of Human
Services
10.553 | School Breakfast Department of Human 18.0 |Direct Program Actual Costs - N/A
Program Services i) Expenditures Department of Human
Services
10.553 |School Breakfast Department of Education |82.0 |Direct Program Actual Clearance, ZBA- |1 Day
Program [} Expenditures ACH
10.555 |National School Lunch Department of Human 18.0 | Direct Program Actual Costs - NIA
Program Services [) Expenditures Department of Human
Services
10.555 | National School Lunch Department of Education |82.0 |Direct Program Actual Clearance, ZBA- |1 Day
Program 0 Expenditures ACH
10.557 |Special Supplemental Department of Health 81.0 |Direct Program Actual Clearance, ZBA- |0 Days
Nutrition Program for 0 Expenditures Same Day Payment
Women, Infants, and
Children
10.557 |Special Supplemental Department of Health 4.00 | Administrative Costs Actual Clearance, ZBA- |0 Days
Nutrition Program for Same Day Payment
Women, Infants, and
Children
10.557 |Special Supplemental Department of Health 1.00 |Contract Expenditures Actual Clearance, ZBA- |0 Days
Nutrition Program for Same Day Payment
‘Women, Infants, and
Children
10.557 | Special Supplemental Department of Health 14.0 |Payroll Estimated Clearance N/A
Nutrition Program for te)
‘Women, Infants, and
Children
10.558 |Child and Adult Care Department of Human 100. |Direct Program Actual Costs - N/A
Food Program Services 00 | Expenditures Department of Human
Services
17.225F |Unemployment Insurance |Department of Workforce |90.0 |Direct Program Actual Clearance, ZBA- |0 Days
-- Federal Benefit Services [) Expenditures Same Day Payment
Account and
Administrative Costs
17.225F |Unemployment Insurance | Department of Workforce |3.00 | Administration Costs Estimated Clearance NIA
-- Federal Benefit Services
Account and
Administrative Costs
17.225F |Unemployment Insurance | Department of Workforce |7.00 | Payroll Estimated Clearance NIA
-- Federal Benefit Services
Account and
Administrative Costs
17.225S |Unemployment Insurance | Department of Workforce |100. | Direct Program Actual Clearance, ZBA- |0 Days
-- State Benefit Account_|Services 00__|Expenditures Same Day Payment
20.205 | Highway Planning and State Highway and 15.0 |Administrative Costs Monthly Billing - Highway |0 Days
Construction Transportation 0 (CFDA 20.205)
Department.

Page 18 of 26


93.558 Temporary Assistance for Needy Families

Recipient: Department of Human Services

% of Funds Agency Receives: 28.00

Component: Administrative Costs and Direct Program Expenditures
Technique: Actual Costs - Department of Human Services

Average Day of Clearance: N/A

Recipient: Department of Workforce Services

% of Funds Agency Receives: 37.00

Component: Administrative Costs and Direct Program Expenditures
Technique: Actual Costs - Direct Administrative

Average Day of Clearance: N/A

Recipient: Department of Workforce Services
% of Funds Agency Receives: 1.00
Component: Direct Program Expenditures
Technique: EBT Debit Cards (CFDA 93.558)
Average Day of Clearance: 0 Days

Recipient: Department of Human Services
% of Funds Agency Receives: 24.00
Component: Direct Program Expenditures
Technique: EBT Debit Cards (CFDA 93.558)
Average Day of Clearance: 0 Days

Recipient: Department of Workforce Services
% of Funds Agency Receives: 10.00
Component: Payroll

Technique: Estimated Clearance

Average Day of Clearance: N/A

93.767 Children's Health Insurance Program

Recipient: Department of Human Services

% of Funds Agency Receives: 10.00

Component: Administrative Costs

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: $0.00

Component: Direct Program Expenditures

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

93.778 Medical Assistance Program
Recipient: Department of Human Services

Page 10 of 26


Component: Direct Program Expenditures
Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: Department of Human Services

% of Funds Agency Receives: 18.00

Component: Direct Program Expenditures

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

10.555 National School Lunch Program
Recipient: Department of Education

% of Funds Agency Receives: 82.00
Component: Direct Program Expenditures
Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: Department of Human Services

% of Funds Agency Receives: 18.00

Component: Direct Program Expenditures

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
Recipient: Department of Health

% of Funds Agency Receives: 4.00

Component: Administrative Costs

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Department of Health

% of Funds Agency Receives: 1.00

Component: Contract Expenditures

Technique: Actual Clearance, ZBA - Same Day Payment
Average Day of Clearance: 0 Days

Recipient: Department of Health

% of Funds Agency Receives: 81.00

Component: Direct Program Expenditures

Technique: Actual Clearance, ZBA - Same Day Payment
Average Day of Clearance: 0 Days

Recipient: Department of Health

% of Funds Agency Receives: 14.00
Component: Payroll

Technique: Estimated Clearance

Page 7 of 26


The State shall request funds for all Medicaid Direct paid via EFT once per week. The amount of the request shall be
based on the amount of liabilities recorded since the last request for funds. The request for funds shall be made in
accordance with the appropriate Federal agency cut-off time specified in Exhibit |. This funding technique is interest
neutral. This funding technique is interest neutral.

Average Clearance - Highway (CFDA 20.205)

The Arkansas State Highway and Transportation Department has a Direct Deposit system for payment of Construction
Contractor payments. This system is available to contractors on a voluntary basis (approximately 90% are currently
utilizing the system). Clearance patterns will be revised as needed when the Direct Deposit of contractor payments affect
the average clearance. Request of Federal funds by electronic wire transfer are made weekly, based on weekly
expenditures, and correspond with the established clearance patterns. The request for funds shall be made in accordance
with the appropriate Federal agency cut-off time specified in Exhibit 1. This funding technique is interest neutral.

EBT Debit Cards (CFDA 93.558)

The monthly recurring payments for the TANF program are authorized on the 1st of each month. Draw requests will be
made such that Federal reimbursements are received by the State based on the daily and monthly reports produced by
the Arkansas Client Eligibility System (ACES). Weekly draw requests will be submitted to fund benefits for new clients
based on the daily reports out of the Electronic Payment Processing and Information Control System (EPPIC). The
request for funds shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |.
This funding technique is interest neutral.

Monthly Billing - Highway (CFDA 20.205)

The State will request funds from the U.S. Department of Transportation for monthly payroll and administrative costs on
the second billing subsequent to the close of the month in which State issued payment. The billing will be submitted on
the normal weekly billing with the Vendor/Contractor costs. The request for funds shall be made in accordance with the
appropriate Federal agency cut-off time specified in Exhibit |. This funding technique is interest neutral.

6.3 Application of Funding Techniques to Programs

6.3.1 The State shall apply the following funding techniques when requesting Federal funds for the component cash flows
of the programs listed in sections 4.2 and 4.3 of this Agreement.

6.3.2 Programs
Below are programs listed in Section 4.2 and Section 4.3.

10.551 Supplemental Nutrition Assistance Program
Recipient: Department of Human Services

% of Funds Agency Receives: 100.00

Component: Direct Program Expenditures

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

10.553 School Breakfast Program
Recipient: Department of Education
% of Funds Agency Receives: 82.00

Page 6 of 26


Monthly Billing - Highway

Highway Planning and State Highway and Payroll
Construction Transportation (CFDA 20.205)
Department
20.205 =| Highway Planning and State Highway and 65.0 |Vendor/Contro!l Payments | Average Clearance - 3 Days
Construction Transportation 0 Highway (CFDA 20.205)
Department
84.010 | Title | Grants to Local Department of Education |91.0 |Direct Program Actual Clearance, ZBA- |1 Day
Educational Agencies 0 Expenditures ACH
84.010 |Title | Grants to Local Department of Education |8.00 | Payroll Estimated Clearance NIA
Educational Agencies
84.010 Title | Grants to Local Department of Education |1.00 |Administrative Costs Actual Costs - Direct 1 Day
Educational Agencies Administrative
84.027 |Special Education -- Department of Education |98.0 |Direct Program Actual Clearance, ZBA- |1 Day
Grants to States 0 Expenditures ACH
84.027 | Special Education -- Department of Education |1.00 | Payroll Estimated Clearance N/A
Grants to States
84.027 |Special Education -- Department of Education }1.00 |Administrative Costs Actual Costs - Direct 1 Day
Grants to States Administrative
93.558 |Temporary Assistance for|Department of Human | 24.0 | Direct Program EBT Debit Cards (CFDA |0 Days
Needy Families Services ) Expenditures 93.558)
93.558 | Temporary Assistance for|Department of Human {28.0 |Administrative Costs and |Actual Costs - NIA
Needy Families Services ) Direct Program Department of Human
Expenditures Services
93.558 |Temporary Assistance for|Department of Workforce |10.0 | Payroll Estimated Clearance NIA
Needy Families Services 0
93.558 |Temporary Assistance for |Department of Workforce |1.00 | Direct Program EBT Debit Cards (CFDA |0 Days
Needy Families Services Expenditures 93.558)
93.558 | Temporary Assistance for |Department of Workforce |37.0 |Administrative Costs and |Actual Costs - Direct NIA
Needy Families Services 0 Direct Program Administrative
Expenditures
93.767 |Children's Health Department of Human {90.0 |Direct Program Actual Costs - N/A
Insurance Program Services 0 Expenditures Department of Human.
Services
93.767 |Children's Health Department of Human 10.0 |Administrative Costs Actual Costs - NIA
Insurance Program Services 0 Department of Human
Services
93.778 |Medical Assistance Department of Human | 19.0 |Non EFT Direct Program | Estimated Clearance NIA
Program Services 0 Expenditures (EDS
Provider Payments)
93.778 |Medical Assistance Department of Human [3.00 |Administartive Costs Actual Costs - NIA
Program Services Department of Human
Services
93.778 |Medical Assistance Department of Human |3.00 |Payroll Actual Costs - NIA
Program Services Department of Human
Services
93.778 |Medical Assistance Department of Human {75.0 |EFT Direct Program Actual Costs-EFT - NIA
Program Services 0 Expenditures (EDS Department of Human
Provider Payments) Services (CFDA 93.778)

| 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,

Page 19 of 26


Technique: Monthly Billing - Highway (CFDA 20.205)
Average Day of Clearance: 0 Days

Recipient: State Highway and Transportation Department
% of Funds Agency Receives: 20.00

Component: Payroll

Technique: Monthly Billing - Highway (CFDA 20.205)
Average Day of Clearance: 0 Days

84.010 Title | Grants to Local Educational Agencies
Recipient: Department of Education

% of Funds Agency Receives: 91.00

Component: Direct Program Expenditures
Technique: Actual Clearance, ZBA - ACH

Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 1.00
Component: Administrative Costs

Technique: Actual Costs - Direct Administrative
Average Day of Clearance: 1 Day

Recipient: Department of Education
% of Funds Agency Receives: 8.00
Component: Payroll

Technique: Estimated Clearance
Average Day of Clearance: N/A

84.027 Special Education -- Grants to States
Recipient: Department of Education

% of Funds Agency Receives: 98.00
Component: Direct Program Expenditures
Technique: Actual Clearance, ZBA - ACH
Average Day of Clearance: 1 Day

Recipient: Department of Education

% of Funds Agency Receives: 1.00
Component: Administrative Costs

Technique: Actual Costs - Direct Administrative
Average Day of Clearance: 1 Day

Recipient: Department of Education
% of Funds Agency Receives: 1.00
Component: Payroll

Technique: Estimated Clearance
Average Day of Clearance: N/A

Page 9 of 26


Day9 0.00)
Day 10 0.00
Day 14 0.00
Day 12 0.00
Day 13 0.00
Day 14 0.00,
Day 15 0.00.
Day 16 0.00.
Day 17 0.00.
Day 18 0.00
Day 19 0.00
Day 20 0.00
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)

93.778 Medical Assistance Program

Non EFT Direct Program Expenditures (EDS Provider Payments)

Day
Day 1 0.00)
Day 2 0.00)
Day 3 0.00
Day 4 2.00,
Day 5 39.00
Day 6 33.00
Day7 8.00.
Day 8 5.00.
Day 9 0.00.
Day 10 0.00
Day 11 5.00
Day 12 3.00
Day 13 2.00
Day 14 2.00
Day 15 1.00
Day 16 0.00
Day 17 0.00
Day 18 0.00
Day 19 0.00
Day 20 0.00
Day 24 0.00
Day 22 0.00

Page 25 of 26


Cash Management Improvement Act Agreement
between
The State of Arkansas
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 Arkansas
(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 Arkansas shall be the Administrator of the Office of Accounting, Department
of Finance and Administration in all matters concerning this Agreement.

1.2 The Assistant Commissioner, Revenue Collections Management, Bureau of the Fiscal Service (Fiscal Service), U.S.
Department of the Treasury, shall act as the Secretary's representative in all matters concerning this Agreement.

2.0 AUTHORITY

2.1 The authority for this Agreement is the Cash Management Improvement Act of 1990 (Public Law 101-453), as
amended by the Cash Management Improvement Act of 1992 (Public Law 102-589), codified at 31 U.S.C. 6501 and 31
U.S.C. 6503.

2.2 The regulations codified at 31 CFR Part 205 shall apply to all matters pertaining to this Agreement, and are
incorporated herein by reference. In the event of any inconsistency between this Agreement and 31 CFR Part 205, the
regulations shall govern.

3.0 DURATION, AMENDING, TERMINATING, AND MISCELLANEOUS PROVISIONS
3.1 This Agreement shall take effect on 07/01/2017 and shall remain in effect until 06/30/2018.

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 26


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

NA.

The State shall also adjust each clearance pattern to reflect:

NA.

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

7.9 An authorized State official shall certify that each clearance pattern developed by the State accurately corresponds to
the clearance activity of the programs to which it is applied. This certification shall be provided to the Fiscal Service prior
to the effective date of the Agreement. The State shall recertify its clearance patterns at least every five years.

7.10 The State shall follow the procedures of 31 CFR 205 if it has actual or constructive knowledge, at any time, that a
clearance pattern does not correspond to a program's clearance activity.

8.0 INTEREST CALCULATION METHODOLOGY
8.1 General Terms

8.1.1 The State and the Secretary agree that no interest liabilities will be incurred for transfers of funds made in
accordance with the procedures specified in section 6 of this Agreement where the following funding techniques are
applied:

Actual Clearance, ZBA - ACH

Actual Clearance, ZBA - Same Day Payment

Actual Costs - Department of Human Services

Actual Costs - Direct Administrative

Actual Costs-EFT - Department of Human Services (CFDA 93.778)
Average Clearance - Highway (CFDA 20.205)

Page 12 of 26


% of Funds Agency Receives: 3.00

Component: Administartive Costs

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 3.00

Component: Payroll

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 75.00

Component: EFT Direct Program Expenditures (EDS Provider Payments)
Technique: Actual Costs-EFT - Department of Human Services (CFDA 93.778)
Average Day of Clearance: N/A

Recipient: Department of Human Services

% of Funds Agency Receives: 19.00

Component: Non EFT Direct Program Expenditures (EDS Provider Payments)
Technique: Estimated Clearance

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:

No exempt agencies.

7.0 CLEARANCE PATTERNS

7.1 The State shall develop separate clearance patterns for each of the following:
all programs listed in Sections 4.2, 4.3 and 4.4 (except any interest exempted program) of this Agreement.

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

State Highway and Transportation Department
Department of Education

Department of Human Services.

Department of Workforce Services
Department of Health

7.3 The sources of data the State shall use when developing its clearance patterns are as follows:
the Treasurer of the State of Arkansas’ Treasury Management System.
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 11 of 26


Average Day of Clearance: N/A

10.558 Child and Adult Care Food Program

Recipient: Department of Human Services

% of Funds Agency Receives: 100.00

Component: Direct Program Expenditures

Technique: Actual Costs - Department of Human Services
Average Day of Clearance: N/A

17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
Recipient: Department of Workforce Services

% of Funds Agency Receives: 90.00

Component: Direct Program Expenditures

Technique: Actual Clearance, ZBA - Same Day Payment

Average Day of Clearance: 0 Days

Recipient: Department of Workforce Services
% of Funds Agency Receives: 3.00
Component: Administration Costs
Technique: Estimated Clearance

Average Day of Clearance: N/A

Recipient: Department of Workforce Services
% of Funds Agency Receives: 7.00
Component: Payroll

Technique: Estimated Clearance

Average Day of Clearance: N/A

17.225S Unemployment Insurance -- State Benefit Account
Recipient: Department of Workforce Services

% of Funds Agency Receives: 100.00

Component: Direct Program Expenditures

Technique: Actual Clearance, ZBA - Same Day Payment
Average Day of Clearance: 0 Days

20.205 Highway Planning and Construction

Recipient: State Highway and Transportation Department
% of Funds Agency Receives: 65.00

Component: Vendor/Control Payments

Technique: Average Clearance - Highway (CFDA 20.205)
Average Day of Clearance: 3 Days

Recipient: State Highway and Transportation Department
% of Funds Agency Receives: 15.00
Component: Administrative Costs

Page 8 of 26


Day 4 7.58
Day 5 8.84
Day6 13.84
Day7 21.61
Day 8 13.13
Day 9 6.98
Day 10 3.42
Day 11 3.67
Day 12 2.12
Day 13 2.15
Day 14 3.93
Day 15 0.00
Day 16 0.00
Day 17 0.00
Day 18 0.00
Day 19 0.00
Day 20 0.00
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.

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

Payroll

0.00

1.00

1.00

0.00

0.00

0.00

0.00

0.00;

0.00,

0.00,

0.00

0.00

0.00

0.00

0.00

0.00

Page 22 of 26


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
tequests may be submitted by a state, for consideration by ACF, up through and including the 15th day of the third month
of any quarter of a fiscal year.

b. Justification for the Request

The request for a supplemental funding for any of the above mentioned programs should contain a justification clearly
documenting the need for the additional funding authority during the current quarter. This documentation should be in the
form of State accounting records or similar documents that will show the actual expenditures through the most recent
month for which such data are available, as well as the State's most accurate projection of its anticipated expenditures
during the remaining month(s) of the quarter. For either the TANF or the CCDF program, the State's justification should
also include an explanation of the activities requiring the obligation and/or expenditure of amounts that exceed the normal
quarterly grant award restrictions and why these activities could not have been delayed until the next quarter.

c. Form Submittal
Supplemental funding requests should be made by completing the appropriate ACF quarterly report of expenditures and
estimates applicable to the particular program for which the grant award request is being made.

d. Approval Process

Upon receipt of the state's request for additional funding authority for a quarter, the ACF Regional Office will promptly
review the supporting documentation. If the request is properly justified, so long as ACF has adequate funding
availability, the State's request will be expedited and supplemental funding will be issued within 5 days of ACF receiving
the request. The State will be notified by the Regional Office when the supplemental award has been transmitted to the
Payment Management System (PMS) and when it may initiate drawdowns against the supplemental funding.

Additional guidance on this policy is provided in the U.S. Department of Health & Human Services, Administration for
Children and Families, letter (May 19, 2004) to State Administrators from the Deputy Assistant Secretary for
Administration.

6.2 Description of Funding Techniques

6.2.1 The following are terms under which standard funding techniques shall be implemented for all transfers of funds to
which the funding technique is applied in section 6.3.2 of this Agreement.

Page 4 of 26


Banks. Each State Entity is responsible for its own programs.
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

Average Daily Balance:
|= ADB x R, where

| = Total State Interest Liability
ADB = Average Daily Balance of pertinent Federal Funds 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 State does
not participate in the program.

10.0 INTEREST CALCULATION COSTS

10.1 As set forth in 31 CFR 205.27, interest calculation costs are defined as those costs necessary for the actual
calculation of interest, including the cost of developing and maintaining clearance patterns in support of the interest
calculations. Interest calculation costs do not include expenses for normal disbursing services, such as processing of
checks or maintaining records for accounting and reconciliation of cash balances, or expenses for upgrading or
modernizing accounting systems. Interest calculation costs in excess of $50,000 in any year are not eligible for
reimbursement, unless the State provides justification with the annual report.

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

Data Processing charges necessary for the development and maintenance of clearance patterns and those costs
necessary to peform actual calculation of interest liabilities.

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 15 of 26


Exhibit | - Funds Request and Receipt Times Schedule

State of Arkansas

ayment Type |Request Cut-Off Tim Receipt Window _

Agriculture-F NS ACH 41:59 PM 14 day
Agriculture-FNS. Fedwire 5:45 PM 0 day
Agriculture-FS ACH 3:00 PM. 1day
Air National Guard ACH 12:00 PM 15 days
Army National Guard ACH 12:00 PM 15 days
Commerce-NOAA ACH 2:00 PM i 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 O day
HHS ACH 6:30 PM 4 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 i day
Interior-FWS. Fedwire 5:45 PM 0 day
Interior-OSM ACH 3:00 PM iday
Interior-OSM Fedwire 1:00 PM O 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 O day
National Science Foundation (NSF) ACH 8:00 PM. 1 day
National Science Foundation (NSF) Fedwire 5:45 PM. 10 day
Social Security Administration ACH 11:59 PM 1day
Social Security Administration Fedwire 5:45 PM 0 day
Transportation (FAA) ACH 2:00 PM 1day
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 3days

Page 17 of 26


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:

DXC 93.778 Medical Assistance Program

FIS - Efunds Corporation 10.551 Supplemental Nutrition Assistance Program

Solutran Inc 10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
US Bank 17.225F Unemployment Insurance -- Federal Benefit Account and Administrative Costs
US Bank 17.225S Unemployment Insurance -- State Benefit Account

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 | to ensure
funds will be received and credited to a State account by the times specified in the funding techniques. Exhibit | is
incorporated by reference herein.

6.1.2 The State shall schedule the receipt of Federal funds such that the funds are received and credited to a State
account in accordance with the clearance patterns specified in Exhibit II - List of State Clearance Patterns. Exhibit II is
incorporated by reference herein.

6.1.3 In instances where the receipt of funds is scheduled for a Saturday, the State shall request funds for deposit on
Friday. In instances where the receipt of funds is scheduled for a Sunday, the State shall request funds for deposit on
Monday. In instances where the receipt of Federal funds is scheduled for deposit on a day when the State is not open for
business, the State shall request funds for deposit the day following the scheduled day; in instances where the receipt of
Federal funds is scheduled for deposit on a day when the Federal Government is not open for business, the State shall
request funds for deposit the day prior to the scheduled day.

6.1.4 Estimates and Reconciliation of Estimates:

Where estimated expenditures are used to determine the amount of the drawdown, the State will indicate in the terms of
the State unique funding technique how the estimated amount is determined and when and how the State will reconcile
the difference between the estimate and the State's actual expenditures.

6.1.5 Supplemental Funding:
Unless otherwise defined by program rules, Supplemental Funding is the award of additional funds to provide for an
increase in costs due to unforeseen circumstances.

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

The State will comply with the following guidelines when requesting supplemental funding for the Medical Assistance
Program and associated administrative payments (CFDA 93.778):

The State must submit a revised Medicaid Program Budget Report (CMS-37) to request supplemental funding. The CMS
guidelines and instructions for completing the CMS-37 are provided in Section 2600F of the State Medicaid Manual
(SMM). The CMS/CO must receive the revised Form CMS-37 through the Medicaid Budget Expenditure
System/Children's Budget Expenditure System (MBES/CBES) no later than 10 calendar days before the end of the
quarter for which the supplemental grant award is being requested.

Page 3 of 26


Day % Cleared
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

Certification

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

Has been prepared in accordance with the standards provided in 31 CFR 205.20
Accurately represents the flow of federal funds under the federal assistance programs to which they apply:

Is auditable; and

1
2.
3. Reflects seasonal or other periodic variations in the clearance activities
4
5.

Has been certified as accurate by an authorized State Official

ignature

“24, 2017

Date Signed

Pal S lors

Printed Name

Printed Title

Page 26 of 26


4.0 PROGRAMS COVERED

4,1 The State's threshold and its major Federal assistance programs shall be determined based on the Federal Portion of
Statewide Single Audit Report prepared by the State of Arkansas Division of Legislative Audit for fiscal year ending
06/30/2016.

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 $53,011,175.
The following programs meet or exceed the threshold and are not excluded in Section 4.4:

10.551 Supplemental Nutrition Assistance Program

10.553 School Breakfast Program

10.555 National School Lunch Program

10.557 Special Supplemental Nutrition Program for Women, Infants, and Children
10.558 Child and Adult Care Food Program

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 | Grants to Local Educational Agencies

84.027 Special Education -- Grants to States

93.558 Temporary Assistance for Needy Families

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:

84.032 Federal Family Education Loans --- 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:

Department of Human Services

Department of Education

Department of Health

Department of Workforce Services

State Highway and Transportation Department

Page 2 of 26


EBT Debit Cards (CFDA 93.558)
Estimated Clearance
Monthly Billing - Highway (CFDA 20.205)

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:

Average Daily Balance:

The State shall track the actual cash activity for each Federal program by its own account. A negative cash balance at
the close of business indicates the State paid out its own funds for program purposes in the absence of supporting
Federal funds. The Federal interest liability shall be calculated by applying the daily interest rate to a program's average
negative cash balance.

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:

Federal and State Funds are Interest Neutral:

There are no interest earnings on funds withdrawn from the State account, as the State has implemented estimated
clearance, an interest-neutral funding technique, for such transfers. For transfers of funds from the State and Federal
accounts 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 on the pro-rata share less the related banking costs attributed to such
funds.

For Federal funds withdrawn from the UTF and result in a positive balance in a State account, the State shall multiply the
amount of Federal funds withdrawn by the daily rate equal to the average equivalent yields of 13-week Treasury bill
auctioned during the State's fiscal year. The result is multiplied times the number of days ahead of the average day of
clearance the Federal funds were deposited in a State account. This amount shall constitute the State's interest liability to
be remitted back to the Federal government.

8.3.2 CFDA 17.225F —- DIRECT PROGRAM EXPENDITURES - The State will request through U.S. Department of the
Treasury Unemployment Trust Fund(UTF) Accounting System by 12:00 noon Eastern time, for same day transfer of

Page 13 of 26


12.0 AUTHORIZED SIGNATURES

Paul S. Louthian CPA
Deputy Director/Comptr;
Department of Fi

Date Signed: WIL do ‘)

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management
Bureau of the Fiscal Service

U.S. Department of the Treagury

Signature:

A the)\ aor

Date Signed:, 26 q

Page 16 of 26