ICGFM International Conference Cash Management Workshop May 20, 2010

ICGFM Cash Management Workshop

Opening and Introductions
What is Cash Management? Organization and Communication

Treasury Single Account and Banking Relations

Debt and Investment Policies Cash Flow Forecasting

Managing Cash Inflows and Outflows

Q&A
2

What is Cash Management?

What is Cash Management?

Definition
Objectives Importance What It Is NOT Results of a Poorly Defined Program

Components of a Strong Program

Definition of Cash Management

Having the RIGHT money in the RIGHT place at the RIGHT time to meet Government obligations in the most cost effective way.
Government Cash and Treasury Management Reform by Ian Storkley, ADB The Government Brief, Issue 7-2003

Objectives of Cash Management

Cash Mobilization:
Get the cash in as fast as you can

Controlled Disbursement:
Release the cash at the last possible moment

Investment Program:
Do something worthwhile with the cash in the meantime
Best Practices in Treasury Management by Nicholas Greifer and Jeffrey Vieceli, Government Finance Review, April 2000
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Importance of Cash Management

Safeguard cash and investment assets
Minimize the volume of idle balances Match the timing of cash inflows and cash outflows
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Importance of Cash Management

Reduce operational risk by increasing the certainty that payments are made and receipts are deposited on time
Reduce the cost of borrowing, minimize transaction costs, increase investment income

Cash Management is NOT

Cash Management is NOT a substitute for:
Poor budgeting decisions
Spending in excess of budget authority

Cash Management is NOT

Cash management is NOT budget or accounting control
Budget and accounting controls (quotas and commitments) are intended primarily to ensure budget users compliance with budget

The intent of cash management is to manage the governments cash in a costeffective way that minimizes risk
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Cash Management is NOT

Many countries control their budgets and facilitate their accounting through the release of funds through various cash accounts
Budget revenue and expenditure control must be DE-LINKED from cash to meet cash management objectives
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Results of a Poorly Defined Program

Proliferation of both private and central bank accounts which are difficult to manage
Restrictions on the use of cash within those bank accounts resulting in unnecessary borrowing or lost investment income Lack of responsibility over idle balances or illtimed payments

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Results of a Poorly Defined Program

Inefficient and expensive choices about how short-falls are funded
Inappropriate or non-existent information for projecting short-falls or excess balances Isolation of the Treasury from information on cash balances and control of those balances Cash rationing occurs
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Results of a Poorly Defined Program

Inability to project cash inflows and outflows
Volatility in the government cash balance which can thwart the central banks monetary policy Expensive banking charges coupled with poor or non-existent banking services

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Components of a Strong Program

All of the following components are essential for a strong cash management program.

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Components of a Strong Program

Written Policies and Procedures
Responsibilities Banking

Investments
Cash Handling, Collections and Deposits Disbursements Cash Forecasting
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Components of a Strong Program

Organization
Cash Management Unit within Treasury has primary responsibility One Cash Management professional Responsibilities of all players (Treasury, spending ministries, revenue generating ministries) are clearly defined

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Components of a Strong Program

Banking
Strong banking relationships are established with the Treasury, NOT THE BANKS, as the driver Treasury is the owner and controls ALL government bank accounts

Number of bank accounts is kept to a bare minimum and cash balances are available to Treasury for disbursement
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Components of a Strong Program

Banking
There are written agreements with all banks including central bank

The government earns interest on all its available cash balances and in turn pays for all the banking services it receives Formal selection of banks through a tender process based on security, transaction costs, interest rates and other services
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Components of a Strong Program

Banking
Banks perform the following types of services:
Sweep funds at the end of day

Provide receipt, disbursement and cash balance information electronically in real time
Electronically transmit payroll and disbursements Electronically interface data from banking system to cash management / treasury software
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Components of a Strong Program

Receipts and Deposits
Collections are made through the banking system Deposits are available for disbursement or investment no later than the next day Deposit accounts are swept daily to central government accounts

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Components of a Strong Program

Disbursements
Treasury performs a centralized payment function Payments are only made on the dates payments are due Payments to vendors and employees are made electronically Cash disbursements are eliminated if possible or at least minimized

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Components of a Strong Program

Disbursements
Ministries and agencies are penalized for making commitments outside of their budget authority Disbursement timing matches timing of cash inflows (spending plans) Monies are only transferred to disbursing accounts when payments are made
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Components of a Strong Program

Cash Flow Forecasting
Annual, monthly, weekly and daily estimates of:
Receipts Disbursements Cash Balances

Performed daily on a 12-month roll-forward basis High rate of accuracy and predictability Follow-up and analysis on variances
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Components of a Strong Program

Be Proactive
Take action when projections indicate larger variances than expected

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Organization and Communication

Organization and Communication

Cash Management Unit Flow of Information Cash Management Committee

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Cash Management Unit

Responsibilities
Forecasts, monitors and tracks cash flows Prepares cash flow reports and identifies and reports on variances Provides leadership and direction to all ministries / departments on cash management issues Develops and maintains cash management policies and procedures
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Cash Management Unit

Responsibilities
Recommends improvements in all aspects of cash management to strengthen internal controls and enhance available cash balances Prepares risk and cost benefit analyses Maintains banking relationships
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Cash Management Unit

Qualifications of a Cash Manager
Degree in finance, accounting, economics Excellent communication skills, both written and verbal Ability to establish positive working relationships with internal and external key players Ability to discern trends and identify risks
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Cash Management Unit

Qualifications of a Cash Manager
Ability to sell new ideas Strong analytical skills:
Variance analysis Business processes

Cost benefit analysis

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Flow of Information
Borrowing Plan
Actual Inflows and Outflows

Investment Plan

Updated Economic Forecast

Cash Manager

Revenue Forecasts

Liquidity Management
Cash Balances

Spending Plan 32

Flow of Information
Key Information Sources
Banking System (Commercial and / or Central Bank) Accounting System Budget Spending Quotas, Plans and Amendments

Reports Monitoring Budget Execution

Macro-Economic Forecasts
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Flow of Information
Key Information Sources
Major Budget Institutions (Exception Reporting)

Revenue Institutions (Exception Reporting)

Debt Unit

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Cash Management Committee

Members
Macro-Economic Forecasting Unit Revenue Agencies Major Budget Agencies Central Bank MOF, Budget MOF, Debt Treasurer
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Cash Management Committee

Purpose
Review forecasts Agreements on initial forecasts and changes (macro-economic statistics, budget amendments, cash flow projections) Recommend short-term action Establish performance goals Recommend improvements to cash management practices
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Treasury Single Account and Banking Relations

Treasury Single Account

Treasury Single Account (TSA):

a series of linked bank accounts through which all government transactions flow

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Treasury Single Account

Active or Centralized TSA
Requests for payment are sent to the Treasury for payment
Most efficient both from a cash management and expenditure control perspective Avoids borrowing and additional interest charges to finance the expenditures of some agencies while other agencies keep idle balances in their bank accounts
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Treasury Single Account

Passive TSA
Multiple bank accounts in the Central or private banks controlled by Treasury but managed by spending agencies

Payments made directly by spending agencies

The Treasury sets cash limits but does not control individual transactions Accounts cleared every day and balances transferred to the central Treasury account
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Treasury Single Account

Passive TSA
Avoid pre-funding of ministry accounts Incentive structures:
UK - spending agencies are penalized for drawing cash in advance of need

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Treasury Single Account

Passive TSA
Incentive structures:
New Zealand - departments negotiate annual cash requirements and pay penalties if they run out of cash or earn interest on their surplus funds. The ministry of finance sweeps department bank accounts each evening and invests the surplus in the overnight money market.

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Treasury Single Account

Combination of Centralized and Passive TSA
Centralize Large Payments Decentralize Small Payments

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Treasury Single Account

Banking Relationships
Establish strong banking relationships with the Government as the driver Formal agreement with the central bank The government should earn interest on all its deposits and in turn should pay for all the banking services it receives

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Treasury Single Account

Banking Relationships
Formal selection of commercial banks through a tender process. Evaluation criteria should be based on:
Security Ability to link the central bank Ability to sweep funds at the end of day Interest and transaction rates Ability to provide information electronically in online, real time and other services.
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Moving to Centralized Cash

(Steps - in theory)
Functional Identify bank accounts Close unnecessary accounts Structure remaining accounts into pyramid style Re-engineer disbursement process Re-engineer revenue process Sequence transfer of cash balances Establish cash forecasting team Administrative Amend laws and regulations Revise reporting templates Draft procedures manuals Revise accounting processes Renegotiate banking arrangements

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Challenges
Typical issues in developing economies
Institutional malaise Culture change Entitlements Supplements/Per Diem

Absence of modern banking system

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Challenges
Absence of reliable information
No list of bank accounts

Lack of Infrastructure
For both banking and accounting systems

Lack of Human Capacity View of Imprest Accounts at Entitlement

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RFPs for Banking Services Components

Document the Current Environment Develop the RFP Evaluate the Bank Responses Bank Presentations and Bank Visits Develop Overall Implementation and Obtain Approval

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Step 1 Document the current environment

Banking Needs Assessment - The first step is a review of the current banking environment. The goal is to establish a firm understanding of what can and should be considered as requirements in the targeted banking structure.

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Step 1 Document the current environment

Major Tasks Prepare a customized packet for each area of your treasury organization regarding their current banking services Request current bank account analyses for all banks and accounts Design a checklist determining necessary information to gather from each function
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Step 1 Document the current environment

Results Understand the current environment for banking services Understand the key business and technical requirements Identify potential service gaps and improvement opportunities
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Step 2 Develop the RFP

RFP Formulation and Distribution - The second step is the development of the RFP based on the information gathered in Step 1.

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Step 2 Develop the RFP

Major Tasks
Develop an overall vision for banking structure and services required Analyze current bank account structures and providers Inventory and assess specific concerns and issues for bank service requirements Determine list of banks to be included in RFP process Develop the customized RFP for those selected banks and issue RFP

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Step 2 Develop the RFP

Results Conceptual design of the future banking structure Communication & recommendations for preferred services

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Step 3 - RFP Evaluation

The third step focuses on evaluating and prioritizing the bank responses to determine which banks can realistically be considered to move from the current to the target environment.

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Step 3 - RFP Evaluation

Major Tasks Customize RFP evaluation tool for bank services Conduct quantitative analysis of RFP responses Score bank RFP results on a weighted basis Perform additional technical and qualitative analysis on bank RFPs Complete cost analysis on proposed pricing using the estimated volumes Determine the short list of banks to participate in the presentation phase
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Step 3 - RFP Evaluation

Results Banks are objectively prioritized based on their capabilities and responses Recommended banks identified to participate in bank presentations and visits

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Step 4 - Finalist Presentations and On-Site Tours

The fourth step is the research and validation to ensure that the bank can meet the current and future requirements, as stated in their response, at a level of satisfaction to your needs.

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Step 4 - Finalist Presentations and On-Site Tours

Major Tasks Notify the banks that did not make the final cut Contact the short list of banks that made the final cut to let them know of next steps and give them advance notice Develop the desired presentation format/script, and provide this to the banks Schedule the presentations and bank visits Evaluate the demonstrations formally and debrief after each meeting Conduct on-site tours of finalist banks as necessary
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Step 4 - Finalist Presentations and On-Site Tours

Results Validation of bank capabilities with regard to your requirements

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Step 5 - Bank Selection and Plan Development

The fifth step is the selection of the bank and development of an overall plan which will consider the key tasks, the staffing / skill requirements, timeframes and estimated costs required as next steps to move towards the targeted environment.

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Step 5 - Bank Selection and Plan Development

Major Tasks Select the preferred bank(s) Develop overall implementation plan which includes: Key project tasks and dependencies Staffing and skill set requirements Timeframes Key deliverables
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Step 5 - Bank Selection and Plan Development

Results Documented and agreed upon implementation plan for the conceptual design of the preferred banking structure Approval to move forward with the implementation

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Debt and Investment Policies

Debt and Investment Policies

Tying Debt Issuances to Forecasts Short-Term vs. Long-Term Debt Assumption of Investment Risk Ensuring Investments Are Secure Examples of US State and Local Government Investment Policies

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Debt and Investment Policies

Importance of Tying Debt Issuances to Forecasts
Cash Flow Forecasts
Length of Debt
Match maturity date to sources of repayment Match service dates to sources

Return Forecasts
Debt proceeds must be invested
Match return on investment to interest of bonds

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Debt and Investment Policies

Long Term Debt
Municipal Bonds
Bonds issued by any of the 50 states, the territories and their subdivisions, counties, cities, towns, villages and school districts, agencies, such as authorities and special districts created by the states, and certain federally sponsored agencies such as local housing authorities. Historically, the interest paid on theses bonds has been exempt from federal income taxes and is generally exempt from state and local taxes in the state of issuance. Approximately $1.3 trillion municipal bonds outstanding. Generate about $50 billion tax-free interest income each year. Can be 20 years, or for the life of the project.
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Debt and Investment Policies

Short Term Debt
Municipal Notes. Short-term municipal obligations, generally maturing in one year or less. Common types are (1) bond anticipation notes (BANs), (2) revenue anticipation notes (RANs), (3) tax anticipation notes (TANs), (4) grant anticipation notes, (5) project notes, and (6) construction loan notes

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Debt and Investment Policies

Suggestions for Debt Policies
1. Issuance Guidelines
Town will strive to maintain/improve its bond and/or credit rating to minimize borrowing costs and preserve access to Credit. Annual Debt service costs not to exceed 8% of Towns Operating expenditures at the time obligation incurred. Total remaining balances of Long Term Debt obligations not to exceed 1.5% of Towns net assessable base at the time the obligation is incurred.

2. 3. 4. 5.

Allowable Investments for Proceeds Statements on Projects Refinancing Glossary of terms

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Debt and Investment Policies

Importance of Tying Investments to Forecasts Cash Flow Forecasts
Length of investment
Match maturity date to needs Match maturity date to potential new investments

Forecast on Estimated Returns

Benchmark
Blending your overall return to match your benchmark Average rate of return

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Debt and Investment Policies

Ensuring Investments are Secure
Follow the code of your state or country, then be conservative Be very specific in your investment policy on what can and cannot be used (examples on the next few pages) Investment policy needs to have oversight Constantly monitor information Monitor investment report daily Diversify And..
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Debt and Investment Policies

Assumption of Investment Risk Not just earning the highest return but protecting capital
Diversify Portfolio
Term Type Include details in your Investment Policy Investment Report

Types of Investment Risk

Internal vs. External

Suggestions to Mitigate Risk

Investment Policy Investment Monitor
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Debt and Investment Policies

Investment Policy Example
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Objective typically safety, liquidity, yield. Roles who is responsible for investing the funds (ultimately) Investment Monitor Finance Board Ethics and Conflict of Interest Internal Controls Uses for Investment Proceeds Benchmarks Purchasing Investments Mechanics Allowable Investments Report Components Glossary of terms
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Debt and Investment Policies

Class Length
75%

% of Total Portfolio

Stocks, bonds, and other 60 months or less evidences of indebtedness of the Commonwealth of VA Stocks, bonds, notes and other evidences of indebtedness of the United States Prime Quality Commercial Paper 60 months or less

100%

270 days or less

35% with a 5% per issuer limit

Note Include these parameters in your investment report.

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Debt and Investment Policies

Debt Policy Links - Links
http://www.sykesville.net/minutes/DEBT_POLICY09.pdf http://www.arlingtonva.us/Departments/ManagementAndFinance/Bond/PFM%20Response%20to%20 Debt.pdf http://www.co.hanover.va.us/finance/adopted-04/debt_policy.pdf

Municipal Bond Terms - Links

http://emuni.com/glossary.php

Investment Policy - Links

http://www.loudoun.gov/controls/speerio/resources/RenderContent.aspx?data=dafd99cde3184aa2b29 943686bf619d0&tabid=326 http://www.loudoun.gov/ http://www.arlingtonva.us/departments/Treasurer/files/file71534.pdf http://www.nctreasurer.com/dsthome/InvestmentMgmt/GovermentalOpsReports/asset+allocation+over view.htm http://www.nystar.state.ny.us/board/assets/sbtif.pdf http://www.treasurer.state.md.us/reports/Investment_Policy.pdf

Cash Flow Forecasting

Cash Flow Forecasting Outline

1. 2. 3. 4. 5. Objectives Process Components Analysis Float

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Objectives of Cash Flow Forecasting

1. 2. 3. 4. 5. Budget Execution Management Financial & Treasury Control Strategic Objectives Capital Budgeting & Net Borrowing Costs Liquidity Management

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Budget Execution Management

Cash flow planning and forecasting as a result of the synchronization of revenue estimates and spending plans results in a coordinated effort to make sure that resources are available when needed to properly execute the budget and meet the needs of a variety of budget stakeholders.

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Financial & Treasury Control

Comparing actual cash flows to estimates is fundamental to asset and liability management (especially in the current section of the balance sheet) Preparing cash flow estimates leads to improvements in the collections and disbursement processes

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Strategic Objectives
Cash forecasting can be used as the basis for evaluating alternative strategic financial policy objectives.

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Capital Budgeting & Net Borrowing Costs

Forecasts of revenues & expenditures (incl. borrowing costs) will lead to improved techniques for evaluating different projects.
Cash flow forecasting leads to a financial analysis of alternatives to finance operating and capital budgets that will seek to minimize the costs involved.

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Liquidity Management
Forecasting the cash position is essential to managing maturities and issuance of investments and debt.

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Cash Flow Forecasting Process

Horizon Participants Budget Methodology Information Sources Components
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Forecasting Horizons
Short Term
Less than one month

Medium Term
Quarterly

Long Term
One Year or More
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Participants
Treasury Budget Department External/Internal Debt Departments Ministry of Finance (Macro Economic Department) Tax/Customs Ministries Other Line Ministries Spending Units Central Bank (or Commercial Banks)
Everyone has to be involved in some way to get a good forecast!
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Budget
The primary financial management tool of the government. All estimates of cash flows must start with this financial management tool, especially since it is usually prepared on a cash basis.
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80 20 Rule
In cash flow forecasting every piece of the puzzle is important, but. 80 percent of our revenue (& expenditures) comes from (or goes to) 20 percent of our sources

This means that we need to spend the most time on the 80 rather than on the 20!
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Methodology
Fund vs. Agency Basis
Fund: Forecasting cash flows on the basis of governmental fund types i.e. general revenue fund, highway (road) fund, etc. Agency: Forecasting cash flows on the basis of governmental agency or ministry

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Methodology
Economic vs. Functional Basis
Economic Class Forecasting cash flows on the basis of economic classification is probably the best, because it lends itself to robust variance analysis Functional Forecasting cash flows on the functional basis of government is possible but probably does not lend itself to a thorough analysis of patterns or variances between forecasts and actuals.
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Methodology
Degree of Certainty
Certain Flows Forecastable Flows

Less Predictable Flows

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Information Sources
Information Systems Cash vs. Accrual Banking System Budget Documents
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Components
Revenues Expenditures

Lending
Borrowing Other Balance Sheet Accounts
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Revenues
Budget as source reference. The initial budget revenue estimate must be backed by some consistent, corroborating macroeconomic analysis. Revenue collecting agencies should prepare monthly estimates using budget as a base.

Weekly or daily estimates of the monthly plan can be prepared using historical daily data lined up against payment due dates.
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Revenues
For example: 1,000 currency units are estimated in a given month for corporate income tax which is due on the 15th of the month. It is probable that 70/80 percent of the tax estimated to be collected will be received from the 14th to the 18th of the month. (Assuming all are business days.) This type of information can be confirmed by reviewing historical cash flow information and comparing the dates received to the dates due.
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Revenues
40 35 30 25 20 15 10 5 0 1 8 15 22 29
Day of the Month

% of Monthly Collections

More than likely, for a tax like a corporate profits tax, you will see such a pattern during a month. A sales tax or VAT collected through the month will likely have a flatter, more even pattern.

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Expenditures
Spending Plans Historical Review
Rates of Spending Seasonality of Spending

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Spending Plans
The use of spending plans is probably the most thorough way to develop a forecast of cash outflows. Spending Units (or other level of Ministry) should prepare monthly spending estimates based on budget and guidance on revenue forecasts. The spending plan should incorporate the proper level of flexibility given the seasonal nature of some spending categories. The development of spending plans must be examined on a cost benefit basis relative to the value of their preparation. The 80 percent of the spending still needs the most attention!
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Historical Information
The past is usually the best predictor of the future in countries with mature financial and budgetary systems. The past can be the best predictor of the future in countries with young financial and budgetary systems if information can be normalized for the current years situation. Use the Calendar to examine the patterns!
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Expenditures
The spending plans and historical data can be used to forecast monthly data. Historical information, common sense and known dates will assist with weekly and even daily breakdowns.

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Lending (Assets)
Estimated cash flows from outstanding loans.
Cash flows out to fund new loans

Should be included in budget.

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Borrowing (Liabilities)
Existing debt payments
Timing of issuance of debt Timing of new payments on recently issued debt
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Changes in Other Balance Sheet Accounts

Cash flows from:
Accounts Receivable Asset Sales (Privatization) Sale of Precious Metals Equity Investments (Dividends) Foreign Exchange Activity Maturing Short Term Investments
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Changes in Other Balance Sheet Accounts

Cash flows to:
Equity investments in public entities Purchase of precious metals Pay down of past due accounts payable Foreign exchange activity New short term investments
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Variance Analysis
Fundamental Issues Legal Issues
Technical (Administrative) Issues

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Fundamental Issues Affecting Variances

Economic growth higher or lower relative to assumptions: Higher/lower than expected tax collections Decrease/Increase in citizens seeking social benefits Economic conditions leading to increased borrowing costs or higher investment earnings Inflation rates higher than expected leading to higher rates of growth in indexed payments. Disasters/Emergency Situations Foreign Exchange
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Legal Issues Affecting Variances

Changes to tax laws by legislature that effect revenue collections. Payouts of settlements of court cases. Court interpretations of existing tax laws or spending mandates. Sharing ratio of taxes between levels of government.
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Tech/Admin Issues Affecting Variances

Float
Collections Disbursements

Calendar Issues

Coding Issues
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Modifications to Cash Flow

Fundamental Issues Legal Issues
Technical (Administrative) Issues

110

Understanding and Measuring Float

Collection Float
Mail Float
The delay between the time a check (payment) is mailed and it is received.

Processing Float
The delay between the time a payment is received and it is deposited.

Availability Float
The delay between the time a payment is deposited and the time the account is credited.
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Disbursements Float
Mail Float
The delay between the time a check is mailed and the date the check is received.

Processing Float
The delay between the time the payee receives the check and the time the check is deposited.

Clearing Float
The delay between the time the check is deposited and the time it is presented to the payors bank for payment.
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Float Analysis
The purpose of analyzing disbursement and collections float is to shorter this float to as few days as possible. Cutting down the time for funds to go from point A to point B and having information systems tracking this information every step of the way will lead to decreased costs. Shortening disbursement or collections float will likely be the result of using improved banking products or making changes in internal administrative processes.
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Measuring Float
Revenue Dollar Amount 1,500,000 Calendar Days of Float 4 Dollar Days of Float 6,000,000

2
3 Totals

4,500,000
3,000,000 9,000,000

2
6

9,000,000
18,000,000 33,000,000

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Measuring Float
Average Daily Float = Total Dollar Days of Float/Total Calendar Days in Period
Annual Cost of Float = Average Daily Float * Opportunity Cost of Funds

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Measuring Float
Average Daily Float = 33,000,000/30 Average Daily Float = 1,100,000
Annual Cost of Float = 1,100,000*9% Annual Cost of Float = 99,000

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Managing Cash Inflows and Outflows

Managing Cash Flows

Accounting Controls Banking Products & Services

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Accounting Controls
Payment Frequency
On-Demand vs. Once Per Week Disbursements

Vendor Analysis Aggregation of Multiple Payments to Single Vendors Payment Terms

120

Banking Products
Zero Balance Account Fraud Prevention Wire Transfers Automated Clearing House

Disbursements
Purchasing and T/E Cards
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Banking Products/Terminology
Deposits - Paper Checks
Armored Car/Currency Lock Box Credit Cards
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Zero Balance Account

ZBAs are linked to Concentration Accounts At the end of each day any positive or negative balances are netted Can accept deposits or disbursements Not the same as a sweep account
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Zero Balance Account

Can be used to improve reconciliation process
Typically used for payroll or benefits Federal Receipts

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Fraud Prevention
Debit Blocks Debit Filters
Both restrict potentially fraudulent ACH transactions from posting to an account
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Wires
Real Time Gross Settlement (RTGS) Same day availability

126

Automated Clearing House

Batch processed electronic payment system Not same day credit Funds Availability Used for high volume/low value payments Payments can be scheduled up to two weeks in advance Electronic Data Interchange Cash Concentration
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Paper Checks - Disbursements

Account Reconcilement
Issue File Positive Pay/Payee Name Verification

Controlled Disbursement

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Purchasing Cards
Simplifies Purchasing and Payment Process
Lower Overall Transaction Processing Costs per Purchase Increased Information Reduced Paperwork
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Purchasing Cards
Decentralizes the Purchasing Function
Set/Control Purchasing Dollar Limits Set/Control Vendors Rebates Available
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Purchasing Cards
Written Agreement with Bank Written Polices and Procedures with Staff
End of Year Tax Reporting

131

Paper Checks - Receipts

Deposit Reconciliation
Reporting of deposits by location

Remote Deposit
On-site conversion of checks to electronic images for deposit

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Armored Car - Outsourcing

Some armored car companies can offer private vaults.
Vault acts as an extension of the banks teller line.

133

Lockbox
Wholesale
High dollar value/low volume Many non-standard invoices or single payments for multiple invoices

Retail
Low dollar value/high volume Standardized invoices (Utilities)
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Credit Cards
Types of Payments
Infrastructure needed Internal Controls Liability
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Questions?

Laura Trimble: ltrimble@ota.treas.gov

Gail Ostler: gostler@otatreas.us