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The Guilford County Board of Education believes that it is in the best interest of the public to fully maximize the use of district funds, and that the finance and/or assistant finance officer is responsible for supervising the management of these funds to ensure that all funds are used in the most efficient manner. The cash management plan has been devised to be used in conjunction with the Local School Fund Accounting Procedures Manual and the Auxiliary Services Procedures Manual as an administrative procedure for the implementation of Board Policy DF - CASH MANAGEMENT.
The following procedures are hereby established and shall be incorporated in the appropriate sections of the cash management plan.
Section I. CASH RECEIPTS
A. Deposits are to be made whenever monies on hand amount to as much as $250, but in any event, deposits are to be made on the last business day of the week and on the last business day of the month. Monies shall be deposited in such a manner as to receive the current day's credit. The deposit shall be made by the finance and/or assistant finance officer or by employees duly authorized to do so and supervised by the finance and/or assistant finance officer.
B. Monies due to the Board shall be promptly billed, collected, and deposited. The finance and/or assistant finance officer shall monitor the status of all uncollected monies owed to the Board and implement measures to collect any and all delinquent accounts except as otherwise provided by law. Prompt action will be undertaken to collect good funds for any checks received and deposited which are returned due to insufficient funds.
C. Applications and reports to the state or federal government for funds and/or reimbursement requests are to be filed promptly. Employees who administer programs that receive monies from the state or federal government should meet with the finance and/or assistant finance officer to establish a cash flow schedule for these monies.
D. The finance and/or assistant finance officer shall periodically review each revenue source of the Board and examine the methods for prompt billing, collecting, depositing, and reporting of those sources. These methods shall be analyzed with the individual responsible for the particular revenue source, and changes shall be instituted if quicker and more efficient means of revenue realization are possible.
Section II. CASH MOBILIZATION AND MANAGEMENT OF AVAILABLE RESOURCES (DEPOSITS AND/OR INVESTMENTS)
A. The finance and/or assistant finance officer shall devise and implement a central depository system for the district. This system shall include the creation of two bank accounts: a cash concentration account and an imprest payroll account. These two accounts will be established with an official depository approved/designated by the Board.
B. Collateralization for deposits shall be in accordance with Title 20, Chapter 7 of the North Carolina Administrative Code (20 NCAC 7). All deposits for the Board shall be fully protected through deposit insurance and eligible collateral securities pursuant to 20 NCAC 7. While there are two methods of collateralization available to depositories - the Dedicated Method wherein the responsibility for monitoring collateral is with the finance and/or assistant finance officer and the Pooling Method wherein the responsibility for monitoring collateral is with the State Treasurer - the Board's deposits shall be held in financial institutions which utilize the Pooling Method of collateralization and the finance and/or assistant finance officer shall maintain necessary documentation to show that the responsibility of monitoring collateralization levels is with the State Treasurer.
C. The finance and/or assistant finance officer shall strive to maximize the percentage of the Board's monies invested at all times. Eligible investments shall be limited to the classes of securities cited in General Statute 115C-443 with an additional consideration being given to the factors of legality, safety, liquidity, and rate of return. The finance and/or assistant finance officer will maintain adequate diversification of the investment portfolio in order to minimize risks brought on by economic and market changes.
D. The finance and/or assistant finance officer shall be responsible for obtaining custody and providing safekeeping of securities and deposit certificates. All securities purchased by the Board shall be delivered to the Board's custodian and placed in the Board's custody account. The custodian agent will promptly provide the Board with a custody receipt. All such custodial agreements shall be between the Board and the custodian. Certificates of deposit purchased by the Board shall be between the Board and the custodian.
E. Each year (a) the Board shall designate official depositories for all funds of the district including the accounts of individual schools pursuant to General Statute 115C-444 and (b) the Board shall appoint a treasurer for each school within the district pursuant to General Statute 115C-448.
Section III. CASH DISBURSEMENTS
A. To create the maximum amount of funds available for investment, a cost effective disbursement cycle shall be established. The obligations of the Board shall be paid by their due date; however, the finance and/or assistant finance officer shall determine whether or not the discount for cash payment is more beneficial than payment on the billing's due date. The disbursement cycle shall be revised periodically by the finance and/or assistant finance officer and changes shall be instituted when appropriate.
B. The finance and/or assistant finance officer shall develop a system of inventory and supply controls to ensure that the quantity of materials on hand keeps the Board operating efficiently without maintaining excessive amounts of inventories/supplies.
C. A purchase order or encumbrance system requiring a preaudit certificate shall be used to ensure that there is an appropriation authorizing any purchase orders or expenditures.
D. The finance and/or assistant finance officer will consolidate, to the extent practicable, all payments to a particular vendor rather than issuing separate checks for each billing period.
Section IV. BANKING RELATIONS
A. The finance and/or assistant finance officer shall maintain the minimum number of bank accounts necessary to conduct the Board's business. A cash concentration account and an imprest payroll account shall be required accounts.
B. The finance and/or assistant finance officer shall maintain in the Board's accounts enough monies to meet the Board's daily obligations.
C. An official depository for the Board shall be selected based on a competitive request for proposal (RFP). The proposals shall be evaluated and the banking services awarded to a financially sound institution that demonstrates the ability to handle the Board's business in a cost effective manner. Evaluations of financial institutions shall include, but not be limited to, an examination of historical trend data and ratio analysis to determine capital adequacy, profitability, asset/loan quality and liquidity. The financial institution selected and designated as the official depository shall receive the Board's bank accounts for a period of three years with an opportunity for a two year extension. The finance and/or assistant finance officer shall sign for the Board a contract with the official depository establishing the banking services and costs (compensating balances or direct charges) that will be applicable to the Board and what conditions will necessitate termination of the contract. The official depository shall be monitored for compliance with the specifications contained in the RFP, and for any new services that may become available in the banking industry.
Section V. MONITORING AND REPORTING
A. The finance and/or assistant finance officer shall report to the Board as requested concerning the status of investments, the collateralization of Board monies, and the comparison of actual disbursements and receipts to the budgeted disbursements and receipts.
B. Significant changes in banking services or costs, and the issuance of a Request for Proposals for Banking Services shall be reported to the superintendent and/or Board.
C. The finance and/or assistant finance officer shall semi-annually submit the LGC-203 Report of Deposits and Investments to the secretary of the Local Government Commission. This information, with appropriate explanations, shall also be reported to the superintendent after each report has been submitted to the Local Government Commission. Any schools having funds in financial institutions which utilize the Dedicated Method of collateralization shall be advised to place those funds in financial institutions which utilize the Pooling Method of collateralization. Also, given Federal Deposit Insurance Coverage (FDIC) protection is available up to $100,000, schools shall be further advised that deposits/investments must not exceed $100,000 per institution.
D. Each year the cash management plan shall be reviewed by the finance and/or assistant finance officer during budget preparation. The finance and/or assistant finance officer shall report to the superintendent and/or Board any amendments he/she has adopted, any procedural changes he/she has made, and any actions he/she recommends the Board take to enhance the cash management plan.
E. The annual audit shall contain findings and recommendations relative to the Board's compliance with the established cash management plan and the reports of the finance and/or assistant finance officer thereon.
F. All employees of the Board shall follow the cash management plan and provisions of this procedure. The willful or continued failure to do so is sufficient cause for disciplinary action, including dismissal, and such deviations from the plan by an employee shall be reported to the superintendent and/or his/her designee.
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