What is the Cash Management Improvement Act?

The Cash Management Improvement Act (CMIA) is a federal law which applies to all states, including Kansas. It was passed in 1994 and is designed to improve the way states manage their money and cash flow. The CMIA encourages states to be conservative in their budgeting and financial decisions, and to use more prudent investment and cash management practices. More specifically, the CMIA requires states to identify their cash flow needs, assess their risk tolerance and develop policies and procedures to protect their resources. It further requires that states maintain sufficient cash reserves to cover all cash disbursements for at least seven days, along with other prudent cash management practices. The CMIA also limits state borrowing and the amount of short-term debt they can take on for a fiscal year. And it regulates interstate banking and restricts the amount of state funds that can be placed into the same bank account. Overall, the CMIA is designed to improve the efficiency and accountability of states’ financial systems and ensure that all states have safe and sound practices when it comes to cash management. By adhering to the CMIA, states can ensure their fiscal stability, protect their resources and maintain their financial obligations to their citizens.

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What is the Cash Management Improvement Act?

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