00-28579. Public Meetings on Proposed Revisions to the Regulations Implementing the Cash Management Improvement Act

AGENCY:

Financial Management Service, Fiscal Service, Treasury.

ACTION:

Notice of public meetings.

SUMMARY:

On October 12, 2000 the Financial Management Service (FMS) published a notice of proposed rule making (NPRM) to revise the regulations at 31 CFR Part 205 implementing the Cash Management Improvement Act of 1990 (65 FR 60796). These regulations govern the transfer of funds between the Federal Government and States for certain Federal assistance programs. As a next step in the process, FMS is holding public meetings to seek input on all aspects of the NPRM. All parties in attendance may give a prepared statement and/or raise questions in the meetings.

DATES:

The public meetings will be held on November 30, 2000 in San Francisco, CA and on December 8, 2000 in Washington, DC. Persons desiring to attend must register by November 22, 2000. See supplementary information section on how to register.

ADDRESSES:

The first meeting will be held in San Francisco at FMS' San Francisco Regional Financial Center, 390 Main Street, in Conference Rooms A 7 B on the 6th Floor at 10 a.m. (PST).

The second meeting wil be held in Washington, DC at the General Services Administration Building, 7th and D Streets (SW), in the GSA Auditorium at 10 a.m. (EST).

FOR FURTHER INFORMATION CONTACT:

Oscar S. Oña, at [phone], Martha Thomas Mitchell, at [phone], or Matt Helfrich, at [phone].

SUPPLEMENTARY INFORMATION:

Background

The Cash Management Improvement Act (CMIA) was enacted to create greater efficiency and equity in the exchange of funds between the Federal Government and the States. Prior to the enactment of CMIA, Federal agencies expressed concerns that States were drawing down funds well in advance of the time those funds were needed by the States. States, on the other hand, expressed concerns about having to pay out their own funds in advance of receiving funds from the Federal Government.

CMIA, which requires the heads of executive agencies to provide for the timely disbursement of Federal funds in accordance with regulations prescribed by the Secretary of the Treasury, has three major provisions designed to address these issues:

• States and Federal agencies must minimize the time between transfer of funds from the U.S. Treasury and the clearance of funds out of the accounts of a State.
• The Secretary of the Treasury shall enter into a Treasury-State Agreement with each State which specifies the funds transfer procedures for Federal assistance programs.
• In general, States and the Federal Government are respectively entitled to interest when the other fails to make a funds transfer in a timely fashion. States owe the Federal Government interest for the time Federal funds are in State accounts before they are spent for Federal assistance program purposes. The Federal Government owes a State interest if the State disburses its own funds with obligational authority before receiving Federal funds.

The notice of proposed rule making (NPRM) updates the existing regulation based upon eight years of program implementation experience (since the issuance of Part 205) on the part of States, Federal program agencies, the General Accounting Office and the Department of the Treasury. The concerns of all stakeholders were considered in drafting the NPRM. The proposed changes are:

• The NPRM raises the default dollar thresholds that determine which programs are subject to CMIA's interest provisions. This allows States to make fewer programs subject to subpart A of the rule, reducing the administrative burden of tracking smaller dollar volume programs, but retaining coverage of the large dollar programs. A State retains the option of retaining or expanding program coverage by applying a lower dollar threshold amount.
• The NPRM makes Treasury-State Agreements (TSAs) effective until terminated instead of being valid for one to five years. This provision enables FMS and States to smooth the high-volume renegotiation process that exists due to 47 States sharing July 1 as the first day of the fiscal year. By reducing the number of renegotiations each year, FMS and States can focus resources on efficient CMIA implementation.
• The NPRM eliminates restrictions on allowable funding techniques. States and FMS can agree to any funding technique that meets certain requirements, including reimbursable funding.
• The CMIA provides that a State is entitled to interest if it disburses its own funds for program purposes in accordance with Federal law, Federal regulation, or Federal-State agreement. Some agencies require States to obtain agency approval of certain expenditures. Those requirements may be set forth in a Federal law, Federal regulation, or Federal-State Agreement. The NPRM requests comment on the nature and operation of agency approval requirements that currently are in place.
• The NPRM proposes that funds transfers requested by States and later allowed by Federal agencies for program reasons by subject to the interest provisions of CMIA. Disallowed fund transfers are not addressed by the current CMIA regulation. The NPRM specifically seeks comment on the implementation of this provision.
• The NPRM incorporates previously issued Policy Statements into the regulation. Over the past seven years, FMS has issued a number of Policy Statements clarifying proper CMIA implementation. This draft integrates the relevant Policy Statements into the body of the regulation. Outdated Policy Statements have been discarded.
• The NPRM raises the refund transaction exemption threshold to $50,000 (from $10,000). Adequate coverage will be maintained and the administrative burden of tracking small dollar amounts will be eliminated.
• The NPRM requires that all transfers of Federal funds be conducted in accordance with the Debt Collection Improvement Act (DCIA) of 1996. All Federal funds transactions must be conducted via Electronic Funds Transfer (EFT).
• The NPRM has been reformatted in accordance with the Administration's “Plan Language” Executive Memorandum issued on June 1, 1998. The regulation has been rewritten in a manner to make it easier to understand.

How to Register: Any person desiring to attend either of the two public meetings must register for the meetings by November 22, 2000. Requests to present a prepared statement at the public meetings should be made at the time of registration. This request should include the topic(s) which will be addressed, along with a brief description of the statement.

Any restrictions on the length of the prepared statement will depend on the number of requests received. The FMS staff will acknowledge receipt of requests to present a prepared statement and will inform participants of the schedule for presentation.

Registration for both public meetings can be completed through the Internet. The CMIA webpage, found http://www.fms.treas.giv/​policymia, will provide an online registration form, allowing all interested parties to register for either public meeting. Registration can also be done by any of the following means: via email by sending your request to [e-mail]; by facsimile transmission to fax number [phone]; by phone by calling Martha Thomas Mitchell at [phone] or Oscar S. Oña at [phone]; by written request sent to Martha Thomas Mitchell-Public Meetings, Cash Management Policy and Planning Division, Financial Management Service, U.S. Department of the Treasury, Room 404F, 401 14th Street, SW, Washington, DC 20227, or hand delivered on business days between 9:00 a.m. and 5:00 p.m.

Please be sure to include your name and contact phone number, which meeting you will attend, and the organization or agency you represent.

Requests to present a prepared statement at either meeting should be made at the time of registration. The online registration form will provide a field to specify whether you would like to participate. The topic to be addressed in the testimony should be disclosed, as well as a brief description of issues which will be discussed. Requests to present a statement should also be disclosed in conjunction with registration via email, fax, mail, or telephone.

Please notify Oscar S. Oña, at [phone] by November 22, 2000 if auxiliary aids or services are needed, including an interpreter or handicapped access.

Dated: November 2, 2000.

Bettsy Lane,

Assistant Commissioner, Federal Finance Financial Management Service.