CMIA Terminology

Administrative Cost – expenses incurred by a state agency associated with managing a federal assistance program. This term includes indirect cost.

Auditable – Records must be retained to allow for calculations outlined in the Treasury-State Agreement to be reviewed and replicated for compliance purposes. The records must be readily available, fully documented, and verifiable.

Authorized State Official - A person with the authority under the laws of a State to make commitments on behalf of the State for the purposes of this regulation, or that person's official designee as certified in writing.

Average Clearance Funding Technique - On the dollar-weighted average day of clearance of a disbursement, a single draw is made equal to the amount of the total disbursement. The dollar weighted average day of clearance is the day when, on a cumulative basis, 50 percent of the funds have been paid out. The dollar-weighted average day of clearance is calculated from the clearance pattern established for the program.

Business Day – A day when Federal Reserve Banks are open.

Check - A negotiable demand draft or warrant.

Clearance Pattern – A projection showing the daily amount subtracted from the State’s bank account each day after the State makes a disbursement. For example, a State
mailing out benefit payments may project that the percentage of checks cashed each day will be 0% for the first day, 10% for the second day, 80% on the third day, and 10% on the fourth day following issuance. Clearance patterns are used to schedule the transfer of funds with various funding techniques and to support interest calculations.

CMIA - Cash Management Improvement Act of 1990 which governs how funds are transferred between the federal government and the State government for certain programs.

CMIA Direct Costs - Costs associated with developing and maintaining clearance patterns necessary to perform the actual calculation of interest liabilities. Composite clearance funding technique - A single draw is made to cover the total amount for a series of disbursements. The draw is made on the dollar-weighted average number of days required for funds to clear the bank. The average day of clearance is added to the average issuance date to determine the composite day of clearance for the series of payments.

Day - A calendar day unless otherwise specified.

Drawdown - The process whereby a State requests and receives federal funds.

Electronic Funds Transfer (EFT) - In the context of federal payments to States, the
delivery of funds through wire transfer or the Automated Clearing House.

Estimated Clearance Funding Technique - A series of draws are made to cover a disbursement based on the estimated amount of funds that will clear the State’s bank account each day following the disbursement.

Federal Agency - An executive agency as defined by section 102 of title 31, United States Code, exclusive of the TVA.

Federal-State Agreement - An agreement between a State and a federal program agency specifying terms and conditions for carrying out a program or group of programs. This is different than the Treasury-State Agreement described in 31 CFR 205.9.

Fiscal Year - Unless otherwise indicated, a State's budget year ending in the specified
calendar year.

Indirect Costs – Costs incurred that are necessary to the operation and performance of its federal assistance programs, but that are not readily identifiable with a particular
project or federal assistance program.

Indirect Cost Rate – A formula that identifies the amount of indirect costs based on the amount of accrued direct costs. The applicable indirect cost rate shall be described in the Treasury-State agreement.

Issue checks - To release or distribute checks to the payees.

Major Federal Assistance Program - Those grant programs exceeding the dollar threshold determined by OSRAP according to the threshold levels in 31 CFR 205 or by using OMB Circular A-133.

Obligational Authority - The existence of a definite commitment on the part of the federal government to provide appropriated funds to a State to carry out specified programs, whether the commitment is executed before or after a State pays out funds for program purposes. This term means that an obligation to a State has been executed and does not refer to the amount of budgetary resources available.

Pay Out - This term means to debit a State bank account for the purpose of making a payment. This includes not only issuing a check, but the check actually clearing the State's bank account. Also, the payment must be made to a person or entity not considered to be a part of the State, unless that State entity is the actual provider of goods or services to the federal program.

Program - A program is the range of activities encompassed under, and classified by, the Catalog of Federal Domestic Assistance number (CFDA #). It can be made up of one or more grants. Funding from a federal letter of credit may make up all or only a portion of a program's revenue source, or a single letter of credit may cover more than one program.

Refund – Funds that a State recovers that it previously paid out for federal assistance program purposes. Refunds include rebates from third parties.

Related Banking Costs –Separately identified costs which are necessary and customary for maintaining an account in a financial institution, whether a commercial account or a State Treasury account. Investment service fees and fees for credit-related services are not related banking costs.

Request for Funds - A solicitation for funds that is completed and submitted in accordance with federal agency guidelines.

Secretary - The Secretary of the United States Department of the Treasury. The Financial Management Service (FMS) is the Secretary's representative in all matters concerning CMIA, unless otherwise specified.

State - A State of the United States, and an agency, instrumentality, or fiscal agent of a State so defined. This does not include local governments or Indian tribal governments. A State agency or instrumentality is any organization of the primary government of the State financial reporting entity, as defined by Generally Accepted Accounting Principles (GAAP), excluding institutions of higher education, hospitals, and nonprofit organizations. A fiscal agent of a State is an entity that pays, collects, or holds federal funds on behalf of the State in furtherance of a federal program, but does not include a private non-profit community organization.

Treasury-State Agreement – The agreement document between the State and the US Department of Treasury describing the accepted funding techniques and methods for calculating interest and identifying the federal assistance programs governed by 31 CFR 205.

Zero Balance Accounting (ZBA) Funding Technique – The Federal Program Agency transfers the actual amount of federal funds to the State that are paid out by the State each day.