Comptroller Fiscal Year Memo Letter Head

To:                  Chief Fiscal Officers, Single Audit Liaisons, Internal Control Officers, and Federal Grants Liaisons

From:              Martin J. Benison, Comptroller

Date:               August 13, 2014

Subject:           FY2015 Treasury State Agreements

Comptroller Memo FY#2015-07

Executive Summary

The purpose of this memo is to advise departments of the FY15 annual Treasury-State Agreements (TSA) between the U.S. Department of the Treasury, Financial Management Service and the Commonwealth of Massachusetts has been executed.  Departments should reference this memo and its contents upon request from federal granting agencies or auditors requiring a copy of the most recent TSA agreement.

The federal government enacted the Cash Management Improvement Act of 1990 (CMIA)to ensure greater efficiency, effectiveness, and equity in the exchange of funds between the federal government and the states.  The CMIA requires an annual Treasury-State Agreement (TSA) between the U.S. Department of the Treasury, Financial Management Service and the Commonwealth of Massachusetts.  On an annual basis, the Office of the Comptroller (CTR) and the US Department of Treasury execute a Treasury-State Agreement that ensures that neither the state nor the federal government is unduly enriched at the expense of the other as a result of state agencies having federal funds on hand prematurely before being disbursed, or state agencies disbursing state funds and not being reimbursed in a timely manner by a federal agency.

The CMIA regulations require the calculation of an interest liability due to the federal government when the state receives federal funds in advance of disbursement to vendors, subrecipients, or program participants.  Similarly, when the state incurs costs for federal programs prior to receiving federal funds, the CMIA allows the state to calculate interest due from the federal government.

All Federal funds transfers to the States are covered under the CMIA regulations.  However, only major assistance programs ($30 million and above) are included in a written Treasury-State Agreement (TSA), which specifies how the Federal funds transfers will take place.  Departments that manage major assistance programs should review the attached FY15 TSA agreement to ensure CFDA numbers are correct, funding mechanisms match current draw-down practices, and funding allocation percentages are accurate.  Departments managing major assistance programs with funding techniques other than “Weekly Automated Central Draw” should expect the receipt of a TSA sub agreement from the Comptroller’s Office, in which the Chief Fiscal Officer certifies that the specific draw down pattern is in accordance with the funding technique identified in the TSA agreement.

Please contact Taneka Simmons, Director of Federal Grants and Cost Allocation Bureau, with questions at (617) 973-2606.

FY15 TSA doc format of CMIA Agreement

Exhibit pdf format of CMIA Exhibit


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