• What Does the Cash Management Improvement Act (CMIA) Do?

CMIA governs the transfer of federal funds to state governments and ensures timely and efficient use

of these funds.

If federal agencies fail to provide funds for entitlements (e.g., Medicaid) in a timely manner, CMIA

requires them to pay interest to state governments for the delays.

This ensures states are compensated for any financial burden caused by delayed federal transfers.

• Why Other Options Are Incorrect:

A . Debt Collection Improvement Act: Focuses on improving debt collection practices for the federal

government, not entitlements or interest payments to states.

B . CFO Act: Improves federal financial management but does not address payment timeliness or

interest.

C . Accountability for Tax Dollars Act: Expands audit requirements but does not involve compensation

for delays.

• Reference and Documents:

CMIA (1990): Requires federal agencies to pay interest on late entitlement payments to states.

Treasury Financial Manual: Details CMIA interest payment provisions.