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Statewide Cash Management Policy

Authority:

• Cash Management Improvement Act of 1990 (Public Law 101-453)
• G.S. 147-86.10 through 147-86.14

Effective Date:
7/1/95

References:
For detail information relating to the State's cash management policies and procedures, refer to OSC Cash Management Policies and Procedures. Also see, The Public s Money, available from the Investment and Banking Division of the Department of State Treasurer.

Policy:
All agencies, institutions, departments, bureaus, boards, commissions, and officers of the State devise techniques and procedures for receiving, depositing, and disbursing monies in their control and custody that are designed to maximize interest-bearing investment of cash while minimizing idle and nonproductive cash balances. This policy applies to the General Court of Justice, public school administrative units, and community colleges with respect to receiving, depositing, and disbursing monies required by law to be deposited with the State Treasurer and with respect to monies made available to them for expenditures by warrants drawn on the State Treasurer. All cash deposited with the State Treasurer by State agencies should be managed in pooled investment accounts to maximize interest earnings.

OSC develops, implements, and amends the Statewide Cash Management Policy for all State agencies. The Office of the State Auditor (OSA) monitors agency compliance with the cash management policy. The State Treasurer publishes a quarterly report on all funds in the control or custody of the State Treasurer, showing cash balances on hand, investments of cash balances, and a comparative analysis of earnings and investment performances.

Any net earnings (amounts remaining after deduction for cost of administration, management, and operation of the invested funds) on invested funds whose beneficial owner is not the State or a local governmental unit, should be paid to the beneficial owners of the funds.

The minimum requirements of the statewide plan for receipts include the following:

• Unless otherwise provided by law, receipts received by employees of State agencies in the normal course of their employment should be deposited as follows:
  • Monies received in trust for specific beneficiaries for which the employee-custodian has a duty to invest should be deposited with the State Treasurer under the provisions of General Statues 147-69.3.
  • All other monies received should be deposited with the State Treasurer according to General Statutes 147-77, 147-69.1 and 147-69.2.
• Monies received should be deposited daily in the form and amounts received, unless otherwise provided by the statute.
• Monies due to a State agency by another governmental agency or by private persons should be promptly billed, collected, and deposited.
• Unpaid billings due to a State agency should be turned over to the Attorney General for collection no more than 60 days after the due date of the billing, except amounts owed by all patients that are less than the federally established deductible applicable to Part A of the Medicare program. The State instead may handle these unpaid bills according to agency debt collection procedures.
• Monies received in the form of warrants drawn on the State Treasurer should be deposited by the State agency and not through the banking system, unless otherwise approved by the State Treasurer.

The minimum requirements of the Statewide plan for disbursements include the following:

• Monies deposited with the State Treasurer should remain on deposit with the State Treasurer until final disbursement to the ultimate payee.
• The order in which appropriations and other available resources are expended are subject to the provisions of General Statutes 143-27 regardless of whether the State agency disbursing or expending the monies is subject to the Executive Budget Act.
• Federal and other reimbursements of expenditures paid from State funds should be paid immediately to the source of the State funds.
• Billings to the State for goods received or services rendered should be paid neither early nor late, but on the discount date or due date.
• Each agency should establish disbursement cycles to maximize the overall efficiency of the warrant disbursement system while maintaining prompt payment of bills due.

General Fund and State Highway Fund interest earnings should be maximized, and to this end:

• Interest earnings should not be allocated to an account by the State Treasurer unless all monies in the account are eligible by law for receiving interest allocations.
• No investment income should be allocated by the State Treasurer to trust or other investment accounts until properly segregated into investment accounts as provided by law and the rules of the State Treasurer.

The State has adopted specific cash management policies for federal funds, which apply to all federal funds received from federal assistance programs and deposited into the State Treasurer's account by agencies and institutions. This policy ensures that neither the federal government nor the State of North Carolina benefits or suffers financially as a result of the transfer of cash in support of State-administered federal assistance programs. (Refer to the "Cash Management Directive for Federal Funds" in OSCs Cash Management Policies and Procedures for detailed information about this policy.)
The statewide cash management plan should consider new technologies and procedures whenever the technologies and procedures are economically beneficial to the State as a whole.

Any willful or continual failure of a State employee to follow the Statewide Cash Management Policy is sufficient cause for immediate dismissal.