What is the Cash Management Improvement Act?

The Cash Management Improvement Act (CMIA) is a federal law that applies to Delaware and all other states in the United States. Enacted in 1994, the CMIA is designed to improve the efficiency of cash management and banking operations in state and local governments. In particular, the CMIA sets standards for how states and municipalities should manage their cash and investments, including the types of investments permissible and the length of time for which funds can be held. It also outlines procedures for collecting and disbursing funds in a timely manner, as well as for communicating with financial institutions to ensure prompt payments. The CMIA further requires states and local governments to develop comprehensive financial management policies and systems and to appoint a cash manager to carry out those general policies and procedures. Finally, the act specifies that states are responsible for collecting and maintaining information related to their banking activities and making that information available to the public upon request. By creating clear guidelines and procedures for cash management, the CMIA helps to ensure that states and local governments are able to efficiently manage their finances. This helps to ensure public funds are properly used and accounted for, so that taxpayer dollars are managed responsibly.

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What is the Cash Management Improvement Act?

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