Cash Management Improvement Act Agreement

The Cash Management Improvement Act (CMIA) Agreement is a government agreement enacted in 1990 between the federal government and states, territories, and the District of Columbia. The agreement provides guidelines for states to manage federal funds effectively and efficiently.

The CMIA Agreement requires that states establish and maintain procedures for cash management that conform to federal standards. This includes developing systems that ensure federal funds are used in a timely and cost-effective manner. The goal of the CMIA is to improve the management of cash between the federal government and states, thus reducing the costs associated with managing cash and promoting more efficient use of funds.

The CMIA Agreement outlines several key requirements that states must meet, including:

1. The establishment of a single Treasury account – States must set up a single Treasury account for all federal funds received, which is used for the deposit, disbursement, and investment of those funds.

2. Accelerated payments – States must request accelerated payments from the federal government in a timely manner to ensure that they have access to the funds when needed.

3. Interest on advances – States must pay interest to the federal government on any advances received, which helps to offset the costs associated with managing the cash.

4. Investment of funds – States must invest any excess cash in a manner that is consistent with federal guidelines and regulations. This includes ensuring that the investments are liquid and can be easily converted to cash when needed.

By complying with the requirements outlined in the CMIA Agreement, states are able to manage federal funds more efficiently and effectively. This helps to reduce the costs associated with managing cash and ensures that funds are used in a timely and cost-effective manner.

In conclusion, the Cash Management Improvement Act Agreement is an important agreement between the federal government and states. It provides guidelines for states to manage federal funds effectively and efficiently, reducing the costs associated with managing cash and promoting a more efficient use of funds. Compliance with the CMIA is essential for states to receive and manage federal funds effectively.