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By Victor Poore, Cash Management Improvement Act Program

The Cash Management Improvement Act (CMIA) program is currently preparing for states' submission of their 2008 annual reports and the subsequent review and interest exchange activity. This process begins with the receipt by FMS of annual reports from 50 states, five territories (American Samoa, the Northern Mariana Islands, Guam, Puerto Rico and the U.S. Virgin Islands) and the District of Columbia by December 31. The appropriate federal program agencies and the CMIA staff then review the annual reports to determine if the interest liability claims contained in the annual reports are appropriate. Finally, the exchange of interest will take place on March 31, 2009, in accordance with Department of the Treasury Regulations 31 CFR Part 205.28 (a). The annual reports summarize the federal and state interest liabilities that accrue when federal funds are disbursed late or the State/Territory draws down federal funds early. In addition, states/territories are entitled to submit claims for reimbursement of interest calculation costs (costs used to implement CMIA).

The CMIA Program is the “cornerstone of cash management policy” for the payment of federal financial assistance to the states, which totals more than $400 billion annually. The CMIA requires good cash management by both the State recipients of federal assistance and the federal agencies who distribute federal payments. CMIA has been a tremendous success as it has resulted in tangible savings to the federal government of about $40 million annually and more than $566 million since the first interest exchange in 1994.

For more information, or to find your assigned CMIA contact, visit www.fms.treas.gov/cmia/contacts.html.

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