Cash Management Improvement Act (CMIA)
Frequently Asked Questions
Why enact CMIA?
What were the key issues?
Specifically, two recurrent intergovernmental problems needed attention:
(1) States were drawing federal funds in advance of need.
(2) The federal government was providing late grant awards to states.
Who is covered?
What is covered?
All federal funds transfers to the States are covered. However, only major assistance programs (large-dollar programs) are included in a written Treasury-State Agreement (TSA), which specifies how the federal funds transfers will take place.
In FY 1994, the first year of CMIA, 20 major programs were covered under TSAs. Today, more than 100 different Federal programs are included in TSAs with an average of approximately 20-25 programs per State.
The key entities involved in making CMIA work are the U.S. Treasury, the federal granting agencies, and the states.
What are CMIA's objectives?
(1) Efficiency -- To minimize the time between the transfer of funds to the States and the payout for program purposes.
(2) Effectiveness -- To ensure that federal funds are available when requested.
(3) Equity -- To assess an interest liability to the federal government and/or the States to compensate for the lost value of funds.
What are the key components of CMIA?
- Annual Treasury-State Agreements (based on the State's fiscal year), which include:
--Clearance pattern methodologies
--Interest calculation methodologies
--Projected reimbursements for direct costs
- Annual Reports (submitted by December 31 of each year), which report on:
--Federal interest liabilities
--State interest liabilities
--State direct cost claims
- Annual Interest Exchange (accomplished no later than March 31 of each year) to disburse:
--Federal and State interest liabilities
--Approved direct cost payments to States