Exhibit II - State of North 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

m Name

10.551 |Supplemental Nutrition |Department of Human All Program Costs Weekly Reimbursable NIA
Assistance Program Services Funding

10.555 {National School Lunch _| Department of Public Direct Costs Average Clearance 1 Day
Program Instruction

10.557 | Special Supplemental ND Department of Health Direct Costs Direct Costs - Weekly NIA
Nutrition Program for Draw - CFDA 10.557
Women, Infants, and
Children

10.557 | Special Supplemental ND Department of Health |8.00 | Indirect Costs County/Local NIA
Nutrition Program for Administrative Costs
Women, Infants, and Actual Allocation
Children

10.557 |Special Supplemental ND Department of Health |2.00 |Direct Costs - Not County/Local NIA
Nutrition Program for Associated with Food Administrative Costs
Women, Infants, and Actual Allocation
Children

10.557 |Special Supplemental ND Department of Health |20.0 |Local Administrative County/Local N/A
Nutrition Program for 0 Costs Administrative Costs
Women, Infants, and Actual Allocation
Children

10.557 | Special Supplemental ND Department of Health |20.0 |Payroll County/Local NIA
Nutrition Program for 0 Administrative Costs
Women, Infants, and Actual Allocation
Children

10.558 | Child and Adult Care Department of Public 92.0 |Direct Costs Average Clearance 1 Day
Food Program Instruction 0

10.558 |Child and Adult Care Department of Public 2.00 | Indirect Costs Actual Allocation NIA
Food Program Instruction

10.558 |Child and Adult Care Department of Public 4.00 | Payroll Actual Allocation NIA
Food Program Instruction

10.558 | Child and Adult Care Department of Public 2.00 |Direct Administrative Fixed Interval NIA
Food Program Instruction Costs (Non-Payroll) Drawdowns

10.561 State Administrative Department of Human 100. |All Program Costs Weekly Reimbursable NIA
Matching Grants for the | Services 00 Funding
Supplemental Nutrition
Assistance Program

12.401 National Guard Military —|ND Adjutant General 17.0 |Adm Costs Average Clearance 3 Days
Operations and 0
Maintenance (O&M)
Projects

12.401 _|National Guard Military | ND Adjutant General 83.0 |Payroll Actual Allocation N/A
Operations and 0
Maintenance (O&M)
Projects

15.437 |Minerals Leasing Act State Treasurer's Office |100. |Program Benefits Non- {Automatic Payment NIA

00___| Payroll Distribution

20.205 | Highway Planning and Department of 100. |All Program Costs Average Clearance 1 Day

Construction Transportation 00

Page 20 of 22


The State shall use the following methodology to calculate State interest liabilities on funds withdrawn from the several
accounts in the UTF under the Unemployment Insurance program.

Based on statements provided by its financial institution, or other appropriate source, the State shall determine the actual
interest earnings and the related banking costs attributable to funds withdrawn from its account in the UTF.

At the end of the State's fiscal year, the State shall calculate the percentage of its total unemployment compensation
expenditures for (1) funds withdrawn from the State account in the UTF, or the State %, and (2) funds withdrawn from the
Federal Employees Compensation Account (FECA) and the Extended Unemployment Compensation Account (EUCA)
and any other accounts of Federal funds in the UTF, or the Federal %.

The State shall calculate the actual interest eamings and the related banking costs attributable to funds withdrawn from
the State account in the UTF by multiplying the State % by the amount of the actual interest earnings and the related
banking costs of the account as a whole. The State's liability for interest on funds withdrawn from its account in the UTF
shall consist of the actual interest earnings attributable to such funds less the related banking costs attributed to such
funds.

The State shall determine the average daily cash balance of its unemployment compensation benefit payment account for
its fiscal year. The State shall calculate the average daily cash balance of Federal funds by multiplying the Federal % by
the average daily cash balance of the benefit payment account on the whole. The State's liability for interest on funds
withdrawn from the FECA and EUCA (and any other benefit accounts of Federal funds in the UTF from which the State
draws funds) shall be the average daily cash balance of Federal funds multiplied by the annualized rate equal to the
average equivalent yields of 13-week Treasury bills auctioned during the State's fiscal year.

8.4 Refund Liabilities

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

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 Rebates for the Medicaid components for CFDA #93. 778

Medical Assistance Program will be interest neutral when used in conjunction with an estimated refund process. Three
refund components have been identified to be used in the reduction of the weekly requests for federal funds: (1) Drug
Rebates are identified on a quarterly basis and tracked to establish a historical trend that will be used to estimate the
weekly rebates. The estimates will be adjusted to actual collections the following week; (2) Provider Refunds these
refunds were averaged over a weekly basis to obtain a historical trend that will be used to estimate the weekly refund.

Page 14 of 22


accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of the request shall be for
the exact amount of that disbursement. This funding technique is interest neutral.

Composite Clearance

The State shall request funds such that they are deposited on the dollar-weighted average number of days required for
funds to be paid out for a series of disbursements, in accordance with the clearance pattern specified in Exhibit Il. 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 the sum of the payments issued in the series of disbursements. 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 Allocation

The State shall request funds, such that they are deposited on the first business day after the cost allocation system
records the expenditures in the statewide accounting system. The request shall be made in accordance with the
appropriate Federal agency cut-off time specified in Exhibit |. The amount of the request for a given month's activity shall
be based on actual costs distributed in accordance with the State's approved cost allocation plan. This funding
technique is interest neutral.

Automatic Payment Distribution

Revenue from Public or Flood Control land leasing will trigger automatic payment distribution, from the Federal
Government. The payment distributions are computed in accordance with Federal Law. . This funding technique is interest
neutral.

County/Local Administrative Costs Actual Allocation

The State, for the ND Department of Health, shall request funds weekly, when clearings through each Wednesday have
been determined, such that they are deposited on the following business day. 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 on the
amount of actual cash outlays for direct administrative costs, and recorded by abstract in the statewide accounting system
prior to the Wednesday request. This funding technique is interest neutral.

Direct Costs - Weekly Draw - CFDA 10.557

The State, for the ND Department of Health, shall request funds weekly for the amount of checks that have cleared, for
receipt for the following business day. The amount requested is based on the checks that have cleared from Thursday
through Wednesday; two weeks prior to the day of the request. Example: The day of the request is Wednesday, June 11,

Page 5 of 22


CFDA} Program Name Recipient % Component Technique Round
ed
days
84.010 | Title | Grants to Local Department of Public 90.0 |Program Costs Average Clearance 2 Days
Educational Agencies Instruction i)
84.010 | Title | Grants to Local Department of Public 2.00 |Indirect Costs Actual Allocation NIA
Educational Agencies Instruction
84.010 | Title | Grants to Local Department of Public 4.00 |Payroll Actual Allocation N/A
Educational Agencies Instruction
84.010 | Title | Grants to Local Department of Public 4.00 |Direct Administrative Fixed Interval NIA
Educational Agencies Instruction Costs (Non-Payroll) Drawdowns,
84.027 |Special Education - Department of Public 90.0 |Program Costs Average Clearance 2 Days
Grants to States Instruction it}
84.027 |Special Education ~ Department of Public 1.00 | Indirect Costs Actual Allocation NIA
Grants to States Instruction
84.027 | Special Education -- Department of Public 5.00 | Payroll Actual Allocation NIA
Grants to States Instruction
84.027 |Special Education - Department of Public 4.00 |Direct Administrative Fixed Interval NIA
Grants to States Instruction Costs (Non-Payroll) Drawdowns
93.558 | Temporary Assistance for |Department of Human 100. |All Program Costs ‘Weekly Reimbursable NIA
Needy Families Services 00 Funding
93.563 |Child Support Department of Human 100. |All Program Costs Weekly Reimbursable NIA
Enforcement Services 00 Funding
93.568 |Low-Income Home Department of Human 100. |All Program Costs Weekly Reimbursable NIA
Energy Assistance Services 00 Funding _
93.658 |Foster Care -- Title |V-E |Department of Human 100. |All Program Costs ‘Weekly Reimbursable N/A
Services 00 Funding
93.778 |Medical Assistance Department of Human 100. |All Program Costs Weekly Reimbursable N/A
Program Services 00 Funding
97.039 |Hazard Mitigation Grant |ND Adjutant General 94.0 |All Program Benefits - Composite Clearance 0 Days
0 Non-payroll (Grants)
97.039 _|Hazard Mitigation Grant_ |ND Adjutant General 3.00 _| Payroll Actual Allocation N/A
97.039 |Hazard Mitigation Grant |ND Adjutant General 3.00 |Direct Administrative Fixed Interval N/A
Costs - Non-payroll Drawdowns

| 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.

pate:__ Ce [\S/1t

Printed Name: Cnysrat Voda

Certifying Signature;

Page 21 of 22


12.0 AUTHORIZED SIGNATURES

Rachel Kmetz
Fiscal Officer, N_D. Office of Management and Budget

Signature:

Date Signed: 6 13h

Date Submitted 06/13/2017

Corvelli A. McDaniel

Assistant Commissioner

Revenue Collections Management
Bureau of the Fiscal Service

U.S. Department of the Tre

Signature: TeeasttlA, fh nom

Date Signed: Gb 2Y 2

Page 18 of 22


Recipient: Department of Public Instruction
% of Funds Agency Receives: 90.00
Component: Program Costs

Technique: Average Clearance

Average Day of Clearance: 2 Days

Recipient: Department of Public Instruction

% of Funds Agency Receives: 4.00

Component: Direct Administrative Costs (Non-Payroll)
Technique: Fixed Interval Drawdowns

Average Day of Clearance: N/A

93.558 Temporary Assistance for Needy Families
Recipient: Department of Human Services

% of Funds Agency Receives: 100.00
Component: All Program Costs

Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

93.563 Child Support Enforcement
Recipient: Department of Human Services
% of Funds Agency Receives: 100.00
Component: All Program Costs
Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

93.568 Low-Income Home Energy Assistance
Recipient: Department of Human Services

% of Funds Agency Receives: 100.00
Component: All Program Costs

Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

93.658 Foster Care — Title IV-E

Recipient: Department of Human Services
% of Funds Agency Receives: 100.00
Component: All Program Costs
Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

93.778 Medical Assistance Program
Recipient: Department of Human Services
% of Funds Agency Receives: 100.00
Component: All Program Costs

Page 10 of 22


Component: All Program Costs
Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

10.555 National School Lunch Program
Recipient: Department of Public Instruction
% of Funds Agency Receives: 100.00
Component: Direct Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

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

% of Funds Agency Receives: 2.00

Component: Direct Costs - Not Associated with Food

Technique: County/Local Administrative Costs Actual Allocation

Average Day of Clearance: N/A

Recipient: ND Department of Health

% of Funds Agency Receives: 8.00

Component: Indirect Costs

Technique: County/Local Administrative Costs Actual Allocation
Average Day of Clearance: N/A

Recipient: ND Department of Health

% of Funds Agency Receives: 20.00

Component: Local Administrative Costs

Technique: County/Local Administrative Costs Actual Allocation
Average Day of Clearance: N/A

Recipient: ND Department of Health

% of Funds Agency Receives: 20.00

Component: Payroll

Technique: County/Local Administrative Costs Actual Allocation
Average Day of Clearance: N/A

Recipient: ND Department of Health

% of Funds Agency Receives: 50.00

Component: Direct Costs

Technique: Direct Costs - Weekly Draw - CFDA 10.557
Average Day of Clearance: N/A

10.558 Child and Adult Care Food Program
Recipient: Department of Public Instruction
% of Funds Agency Receives: 2.00
Component: Indirect Costs

Page 7 of 22


2025 then the request would be made for the amount of checks that have cleared from Thursday, May 29 through
Wednesday, June 4. The request for funds shall be made in accordance with the appropriate Federal agency cut-off time
specified in Exhibit |. (See section 6.2.5 for additional information relating to the State's procedures in administering this
technique). This funding technique is interest neutral.

Fixed Interval Drawdowns

The State, for non-payroll direct administrative costs, shall request funds once a month, such that they are deposited on
the last working day of each month. 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 based on the amount of actual cash outlays for direct
administrative costs during the month.

The State, for the Department of Public Instruction, for non-payroll direct administrative costs, shall request funds once a
month, such that they are deposited on the first business day after the cost allocation system records the expenditures in
the statewide accounting system. 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 based on the amount of actual cash outlays for direct
administrative costs during the month. This funding technique is interest neutral.

Weekly Reimbursable Funding

The State shall request funds such as they are deposited in a State account in accordance with the clearance pattern
specified in Exhibit Il. The request shall be made in accordance with the appropriate Federal agency cut-off specified in
Exhibit |. The amount of the request shall be the actual sum of expenditures that have been incurred, recorded, identified
and reconciled as billable since the last weekly draw request was processed. In all the cases the request for funds will
occur after the state has disbursed funds. This funding technique is interest neutral.

6.2.5 The State, for the North Dakota Department of Health, shall request $181,652 effective July 1, 2017, to be deposited
in a State account for receipt the following business day. The request is considered a rebalancing of the amount in the
prior CMIA agreement and will be shown as an adjustment in the first weekly draw of the new fiscal year. The request for
funds shall be made in accordance with the appropriate Federal agency cut-off time specified in Exhibit |. The amount of
the request shall be an estimate derived from average weekly clearance amounts, based on the period July 1, 2016,
through April 1, 2017.

6.2.6 An agency is not required to drawdown federal funds if the expenditures for which reimbursement is being requested
are under $50,000. An agency can wait to request federal funds for their expenditures until their federal drawdown will
exceed $50,000. However, agencies still have the option of requesting federal funds for amounts under $50,000.

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

Page 6 of 22


Exhibit | - Funds Request and Receipt Times Schedule

State of North 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 iday
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 1day
Energy Fedwire 3:00 PM Q day
HHS ACH 6:30 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 41:59 PM 4 day
Interior-FWS Fedwire 5:45 PM 0 day
Interior-OSM. ACH 3:00 PM 4 day
Interior-OSM Fedwire 4:00 PM 0 day
Justice ACH 11:00 PM 6 days
Justice Fedwire 2:00 PM 2 days
Labor-Non-UTF ACH 3:00 PM dday
Labor-UTF ACH 3:00 PM 1day
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 4 day
Social Security Administration Fedwire 5:45 PM 0 day
Transportation (FAA) ACH 2:00 PM 4 day
Transportation (FHWA) ACH 12:00 PM 3 days
Transportation (FHWA) Fedwire 12:00 PM 0 day
Transportation (FTA) ACH 2:00 PM 4 day
Veterans Administration ACH 12:00 PM 3 days

Page 19 of 22


Average Day of Clearance: N/A

20.205 Highway Planning and Construction
Recipient: Department of Transportation

% of Funds Agency Receives: 100.00
Component: All Program Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

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

% of Funds Agency Receives: 2.00

Component: Indirect Costs

Technique: Actual Allocation

Average Day of Clearance: N/A

Recipient: Department of Public Instruction
% of Funds Agency Receives: 4.00
Component: Payroll

Technique: Actual Allocation

Average Day of Clearance: N/A

Recipient: Department of Public Instruction
% of Funds Agency Receives: 90.00
Component: Program Costs

Technique: Average Clearance

Average Day of Clearance: 2 Days

Recipient: Department of Public Instruction

% of Funds Agency Receives: 4.00

Component: Direct Administrative Costs (Non-Payroll)
Technique: Fixed Interval Drawdowns

Average Day of Clearance: N/A

84.027 Special Education -- Grants to States
Recipient: Department of Public Instruction
% of Funds Agency Receives: 1.00
Component: Indirect Costs

Technique: Actual Allocation

Average Day of Clearance: N/A

Recipient: Department of Public Instruction
% of Funds Agency Receives: 5.00
Component: Payroll

Technique: Actual Allocation

Average Day of Clearance: N/A

Page 9 of 22


Cash Management Improvement Act Agreement
between
The State of North 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 North
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 North Dakota shall be the Fiscal Officer, Office of Management and Budget
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 22


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 methad 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.

7.6.1 The issue date shall be the day following the date on the check, to allow for one day processing time before checks
are mailed.

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:

Interdepartmental Billings are not included for the programs that have a separate component for those billings.
The State shall also adjust each clearance pattem to reflect:

NIA

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 pattems at least every five years.

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

7.11 Estimated clearance activity is based on a sample of checks over a three to six month period. The system, knowing
when the checks were written, determines if they are outstanding or have been cashed. The estimated clearance pattern
is then based on this information. The information is kept in a spreadsheet by the agency responsible for it and is
reconciled daily.

8.0 INTEREST CALCULATION METHODOLOGY

Page 12 of 22


Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

97.039 Hazard Mitigation Grant
Recipient: ND Adjutant General

% of Funds Agency Receives: 3.00
Component: Payroll

Technique: Actual Allocation
Average Day of Clearance: N/A

Recipient: ND Adjutant General

% of Funds Agency Receives: 94.00

Component: All Program Benefits - Non-payroll (Grants)
Technique: Composite Clearance

Average Day of Clearance: 0 Days

Recipient: ND Adjutant General

% of Funds Agency Receives: 3.00

Component: Direct Administrative Costs - Non-payroll
Technique: Fixed Interval Drawdowns

Average Day of Clearance: N/A

6.3.3 Materiality Exemptions

Agencies exempt from coverage on the basis of materiality:
None

7.0 CLEARANCE PATTERNS

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

Separate clearance pattems will be developed for the following programs by the following responsible State Agencies:
NIA

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

The ND Office of Management and Budget shall develop all of the State's clearance patterns for all major Federal
Programs.

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

The sources of data the State shall use when developing its clearance patterns for payments made by the Statewide
Accounting System are the PeopleSoft transaction history file, and the Bank of North Dakota cleared check file. The
months of June through November 2016 were used to calculate the clearance pattern for CFDA #20.205. The months of
June thru August 2016 were used to calculate clearance patterns for CFDA #84.010, #84.027, and #12.401. The months
July thru September 2016 were used to calculate the clearance pattern for #97.039. The months of September thru
November of 2016 were used to calculate the other clearance patterns.

Page 11 of 22


Technique: Actual Allocation
Average Day of Clearance: N/A

Recipient: Department of Public Instruction
% of Funds Agency Receives: 4.00
Component: Payroll

Technique: Actual Allocation

Average Day of Clearance: N/A

Recipient: Department of Public Instruction
% of Funds Agency Receives: 92.00
Component: Direct Costs

Technique: Average Clearance

Average Day of Clearance: 1 Day

Recipient: Department of Public Instruction
% of Funds Agency Receives: 2.00

Component: Direct Administrative Costs (Non-Payroll)

Technique: Fixed Interval Drawdowns.
Average Day of Clearance: N/A

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program

Recipient: Department of Human Services
% of Funds Agency Receives: 100.00
Component: All Program Costs
Technique: Weekly Reimbursable Funding
Average Day of Clearance: N/A

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

Recipient: ND Adjutant General

% of Funds Agency Receives: 83.00
Component: Payroll

Technique: Actual Allocation
Average Day of Clearance: N/A

Recipient: ND Adjutant General

% of Funds Agency Receives: 17.00
Component: Adm Costs

Technique: Average Clearance
Average Day of Clearance: 3 Days

15.437 Minerals Leasing Act

Recipient: State Treasurer's Office

% of Funds Agency Receives: 100.00
Component: Program Benefits Non- Payroll
Technique: Automatic Payment Distribution

Page 8 of 22


Title: Accounnna, Meuracyerr ES

Page 22 of 22


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 Famities (HHS/ACF):

a. Timing of the Request

A State should initiate its request for supplemental funding during a quarter as soon as it becomes aware of the fact that a
shortfall does/will exist. For the TANF and CCDF grants, supplemental funding requests (estimates) may be submitted by
a State, for consideration by ACF, up through and including the 15th day of the third month of the first, second or third
quarter of any fiscal year. Since TANF and CCDF are block grant programs, all unawarded portions of the annual
allotment will automatically be issued at the beginning of the fourth quarter. Therefore, supplemental funding requests will
not be available during the fourth quarter for these programs. For the CSE and FC/AA programs, supplemental funding
requests may be submitted by a state, for consideration by ACF, up through and including the 15th day of the third month
of any quarter of a fiscal year.

b. Justification for the Request

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

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

d. Approval Process

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

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

6.2 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.

Average Clearance

The State shall request funds such that they are deposited by ACH on the dollar-weighted average day of clearance for
the disbursement, in accordance with the clearance pattern specified in Exhibit II. The request shall be made in

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This weekly estimated amount will be reduced from the weekly request and then adjusted the following week to actual
refunds collected; and (3) Other Rebates these refunds were averaged over a weekly basis to obtain a historical trend that
will be used to estimate the weekly refund. This weekly estimated amount will be reduced from the weekly request
andthen adjusted the following week to actual refunds collected.

8.5 Exemptions

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

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

8.6 State Interest Liabilities

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

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

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

The time period from issuance of funds to the date funds are debited from the State's account shall be determined by the
appropriate clearance pattern specified in Exhibit Il.

8.6.2.3 Standards Applied

To measure the time Federal funds are held in a State account prior to being disbursed, the State shall use statistical
sampling. The sample shall be randomly selected, and shall be of sufficient size to ensure, at a minimum, a 95%
confidence interval no wider than + 0.3 dollar-weighted days about the estimated mean.

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

1 subtract the deposit date from the issuance date

2 multiply the difference of step 1 by the check amount

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

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

8.6.2.4 Calculation Procedure

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11.0 NON-COMPLIANCE

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

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State Treasurer's Office

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:

E-Funds 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 | 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 Il - List of State Clearance Patterns. Exhibit Il is
incorporated by reference herein.

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

6.1.4 Estimates and Reconciliation of Estimates:

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

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

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

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

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

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

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4.0 PROGRAMS COVERED

4.1 The State's threshold and its major Federal assistance programs shall be determined based on the State's most
recent Single Audit, which is done every two years, 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 $10,206,894.
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
10.558 Child and Adult Care Food Program

10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program
12.401 National Guard Military Operations and Maintenance (O&M) Projects
15.437 Minerals Leasing Act

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

93.563 Child Support Enforcement

93.568 Low-Income Home Energy Assistance

93.658 Foster Care -- Title IV-E

93.778 Medical Assistance Program

97.039 Hazard Mitigation Grant

4.3 The following programs fall below the State's threshold but have been required to be covered by Fiscal Service in
accordance with the non-compliance provisions of Subpart B of 31 CFR Part 205:

There are currently no programs listed for Section 4.3.

4.4 The following programs exceed the State's threshold but have been excluded from coverage for the reason indicated:
There are currently no programs listed for Section 4.4.

5.0 ENTITIES COVERED

5.1 State agencies and instrumentalities that meet the definition of a State per 31 CFR Part 205, shall be subject to the
terms of this Agreement. The following is a list of such entities that administer funds under the programs listed in Section
4.0 of this Agreement:

Department of Human Services
Department of Public Instruction
Department of Transportation
ND Adjutant General

ND Department of Health

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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 Allocation

Automatic Payment Distribution

Average Clearance

Composite Clearance

County/Local Administrative Costs Actual Allocation
Direct Costs - Weekly Draw - CFDA 10.557

Fixed Interval Drawdowns

Weekly Reimbursable Funding

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.

Average Clearance: For all transactions where the State pays out its own funds for program purposes prior to receiving
Federal funds, the Federal interest liability shall be based on the difference in whole days between the average date of
clearance for the disbursement, as specified in Exhibit II, and the date the related Federal funds are credited to a State
account. With Federal-State matching programs, interest shall be calculated on the Federal percentage of the
disbursement.

8.3 The Unemployment Trust Fund

8.3.1 The State shall use the following method to calculate State interest liabilities on funds withdrawn from the several
accounts in the Unemployment Trust Fund:

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|= ADB x R, where
| = 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

8.7 There are no interest earnings on funds withdrawn from the State UTF account, as the State has implemented
estimated clearance funding technique, an interest-neutral funding technique, for such transfers. For transfers of funds
from the State account in the UTF that do not follow the technique specified 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 eamings of the benefit payment account attributed to such funds less the related banking costs attributed to such
funds.

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:

The State of North Dakota developed a system to monitor clearance patterns. In general, for those warrants generated by
the statewide accounting system, OMB creates a file of transactions unique to the Federal Programs covered by our
agreement. This file is updated on a daily basis and contains the check number; the date the check was written; the date
the check cleared the Bank of North Dakota; the state accounting system's grant number, (this corresponds to the CFDA
number); the transaction amount; etc.. This program computes the number of days from the time the check was written to
when it cleared the Bank of North Dakota. We use it to determine if our clearance patterns are holding true and to
compute any interest due or payable.

The State shall bill the Federal Government for all costs associated with the above. This includes the following charges
for: programming; data processing; file storage; and any other cost associated with this file. Ata minimum, data
processing and file storage costs shall be an annual cost incurred by the state and billed to the Federal Government. The
State shall also bill for the time to: compute the actual calculation of interest; compiling and analyzing data related to
interest calculation; preparing and transmitting the Annual Report. Costs are not available at this time, however, all costs
billed the Federal Government shall be properly documented and available for audit.

10.3 The State shall submit all claims for reimbursement of interest calculation costs with its Annual Report in accordance
with 31 CFR 205.

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