FEDERAL CASH MANAGEMENT IMPROVEMENT ACT PROGRAM

Michigan Office of the
Auditor General
Thomas H. McTavish, C.P.A.
Auditor General

EXECUTIVE DIGEST #2760501
FEDERAL CASH MANAGEMENT IMPROVEMENT ACT PROGRAM

INTRODUCTION
This report, issued in November 2001, contains the results of our performance audit of the Federal Cash Management Improvement Act Program, Department of Treasury.

AUDIT PURPOSE
This performance audit was conducted as part of the constitutional responsibility of the Office of the Auditor General. Performance audits are conducted on a priority basis related to the potential for improving effectiveness and efficiency.

BACKGROUND
The federal Cash Management Improvement Act (CMIA) of 1990, as amended, and the associated federal regulations require agreements between the states and the Secretary of the Treasury, U.S. Department of Treasury. The Michigan Department of Treasury, as State coordinator, has entered into agreements on behalf of the State of Michigan. These agreements primarily describe the methods to be used to request federal funds and require the payment of interest by either party if funds are not received on a timely basis.

The Department of Treasury's responsibilities include ensuring that all applicable federal programs are included in the agreements; performing draws of federal funds for selected programs; developing check clearance patterns for State disbursements; performing interest calculations, when applicable; submitting claims for reimbursement of direct costs for implementing CMIA; and submitting an annual report to the U.S. Department of Treasury.

AUDIT OBJECTIVES AND CONCLUSIONS
Audit Objective: To assess the effectiveness of the Department's efforts as the State coordinator for the CMIA agreements and in ensuring that all applicable federal programs were included in the agreements.

Conclusion: We concluded that the Department was generally effective as the State coordinator for the CMIA agreements and in ensuring that all applicable federal programs were included in the agreements. However, we noted a reportable condition related to clearance patterns (Finding 1).

Audit Objective: To assess the effectiveness of the Department's procedures related to developing check clearance patterns, performing interest calculations, and submitting an annual report to the U.S. Department of Treasury.

Conclusion: We concluded that the Department's procedures related to developing check clearance patterns, performing interest calculations, and submitting an annual report to the U.S. Department of Treasury were effective. Our report does not include any reportable conditions related to this objective.

AUDIT SCOPE AND METHODOLOGY
Our audit scope was to examine the program and other records of the Federal Cash Management Improvement Act Program. Our audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included such tests of the records and such other auditing procedures as we considered necessary in the circumstances.

Our audit objectives included examination of agency procedures and records for the period October 1, 1999 through September 30, 2000. Our audit methodology included an analysis of the procedures and documentation used to develop the CMIA agreements and check clearance patterns. Also, we verified the calculation of interest owed to or due from the federal government. In addition, we examined the annual report, procedures for submission, and documentation supporting the annual report.

AGENCY RESPONSE
Our audit report contains 1 finding and 2 corresponding recommendations. The Department's preliminary response indicated that it agreed with the finding and will comply with the recommendations.

Full Audit Report - #2760501 - FEDERAL CASH MANAGEMENT IMPROVEMENT ACT PROGRAM

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This page was created on November 14, 2001.


INTRODUCTION This report, issued in November 2001, contains the results of our performance audit of the Federal Cash Management Improvement Act Program, Department of Treasury.

AUDIT PURPOSE This performance audit was conducted as part of the constitutional responsibility of the Office of the Auditor General. Performance audits are conducted on a priority basis related to the potential for improving effectiveness and efficiency.

BACKGROUND The federal Cash Management Improvement Act (CMIA) of 1990, as amended, and the associated federal regulations require agreements between the states and the Secretary of the Treasury, U.S. Department of Treasury. The Michigan Department of Treasury, as State coordinator, has entered into agreements on behalf of the State of Michigan. These agreements primarily describe the methods to be used to request federal funds and require the payment of interest by either party if funds are not received on a timely basis. The Department of Treasury's responsibilities include ensuring that all applicable federal programs are included in the agreements; performing draws of federal funds for selected programs; developing check clearance patterns for State disbursements; performing interest calculations, when applicable; submitting claims for reimbursement of direct costs for implementing CMIA; and submitting an annual report to the U.S. Department of Treasury.

AUDIT OBJECTIVES AND CONCLUSIONS Audit Objective: To assess the effectiveness of the Department's efforts as the State coordinator for the CMIA agreements and in ensuring that all applicable federal programs were included in the agreements. Conclusion: We concluded that the Department was generally effective as the State coordinator for the CMIA agreements and in ensuring that all applicable federal programs were included in the agreements. However, we noted a reportable condition related to clearance patterns (Finding 1). Audit Objective: To assess the effectiveness of the Department's procedures related to developing check clearance patterns, performing interest calculations, and submitting an annual report to the U.S. Department of Treasury. Conclusion: We concluded that the Department's procedures related to developing check clearance patterns, performing interest calculations, and submitting an annual report to the U.S. Department of Treasury were effective. Our report does not include any reportable conditions related to this objective.

AUDIT SCOPE AND METHODOLOGY Our audit scope was to examine the program and other records of the Federal Cash Management Improvement Act Program. Our audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States and, accordingly, included such tests of the records and such other auditing procedures as we considered necessary in the circumstances. Our audit objectives included examination of agency procedures and records for the period October 1, 1999 through September 30, 2000. Our audit methodology included an analysis of the procedures and documentation used to develop the CMIA agreements and check clearance patterns. Also, we verified the calculation of interest owed to or due from the federal government. In addition, we examined the annual report, procedures for submission, and documentation supporting the annual report.

AGENCY RESPONSE Our audit report contains 1 finding and 2 corresponding recommendations. The Department's preliminary response indicated that it agreed with the finding and will comply with the recommendations.