Technically, nearly all cash disbursed under federal programs listed in the Catalog of Federal Domestic Assistance (CFDA) is subject to CMIA. Only larger programs, however, are subject to the interest provisions of CMIA. This distinction can be better understood by consulting the CMIA regulations.

Subpart A of the regulations deals with the larger federal programs under which the state receives funding, and which are subject to the cash management requirements detailed in the CMIA statute INCLUDING the interest provisions. Subpart B deals with the state’s smaller federal programs, which are also subject to the cash management requirements EXCLUDING the interest provisions. If a state or federal program agency fails to comply with the provisions of Subpart B, (205.3-c), the Treasury Department may decide to require that certain Subpart B programs also become subject to Subpart A, which would probably increase the amount of CMIA interest the state will have to pay the Federal Government. Please see CMIA regulations (e.g. 205.27b and 205.29) for other potential actions.

Guide to Financial Operations

REV. 03/19/2012