Cash on hand monitoring
Download
1 / 21

Cash on Hand Monitoring - PowerPoint PPT Presentation


  • 194 Views
  • Updated On :

Cash on Hand Monitoring. July – September 2008. Agencies Affected. Public Assistance Agencies Child Support Enforcement Agencies beginning January 1, 2009 Workforce Investment Agencies. Why the Fuss???. 45 CFR 92.20 Standards for financial management systems Paragraph (7): Cash Management

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Cash on Hand Monitoring' - earl


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Cash on hand monitoring l.jpg

Cash on Hand Monitoring

July – September 2008

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Agencies affected l.jpg
Agencies Affected

  • Public Assistance Agencies

  • Child Support Enforcement Agencies beginning January 1, 2009

  • Workforce Investment Agencies

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Why the fuss l.jpg
Why the Fuss???

  • 45 CFR 92.20 Standards for financial management systems

  • Paragraph (7): Cash Management

    • Minimize time between transfer of funds from U.S. Treasury and disbursement by grantees and subgrantees

    • When advances are made by EFT transfer, grantees must make draw downs as close as possible to the time of making disbursements

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Closeout rules l.jpg
Closeout Rules

  • Requirement for cash on hand:

    • Counties must disburse draws within average of 10 days

    • Interest should be calculated when draws exceed expenditures

    • Reasonable and feasible

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Affected funds l.jpg
Affected Funds

  • County Child Care and Quality Allocations

  • Child Care “2”

  • Federal Medicaid and Food Stamp Administration

  • Federal Social Services

  • Food Stamp Employment and Training (FSET)

  • Income Maintenance Control

  • Help Me Grow

  • State Social Services Operating

  • Temporary Assistance for Needy Families (TANF)

  • Title XX TANF Transfer

  • Department of Labor Funds (WIA)

  • Title IV-D Funds Child Support

  • State Child Support Match

  • OCS Incentive Match Reduction

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Excess cash on hand l.jpg
Excess Cash on Hand

  • Calculate interest when monthly average is greater than one day of cash on hand

  • Document internal control improvement when monthly average is greater than 10 days of cash on hand

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Cash on hand l.jpg

Cash on Hand

The Calculation

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Cash on hand calculation l.jpg
Cash on Hand Calculation

Excess

Cash on

Hand

Average

Daily

Expenditures

Average

Days of

Cash on

Hand

  • Formula based on accessible information

  • Applied separately to each subgrant award

  • Three months (one quarter) calculated at a time

=

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Step 1 calculate cash on hand l.jpg
Step 1: Calculate Cash on Hand

Total $

Drawn

During

Month

Total

Expenditures

During

Month

Excess

Cash on

Hand

-

=

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Step 2 calculate average daily expenditures l.jpg
Step 2: Calculate Average Daily Expenditures

Total

Expenditures

During

Month

Number

of Days

In Month

Average

Daily

Expenditures

=

Excess

Cash on

Hand

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Step 3 calculate average days of cash on hand l.jpg
Step 3: Calculate Average Days of Cash on Hand

When the result exceeds one day, the local agency must calculate interest.

Excess

Cash on

Hand

Average

Daily

Expenditures

Average

Days of

Cash on

Hand

=

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Cash on hand calculation example l.jpg
Cash on Hand Calculation Example

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Cash on hand calculation example13 l.jpg
Cash on HandCalculation Example

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Interest l.jpg
Interest

  • When the calculation shows that the agency has, on average, more than one day of cash on hand within a month, interest must be calculated

  • Interest will be compounded daily

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Star ohio interest rate l.jpg
STAR Ohio Interest Rate

  • State Treasury Asset Reserve (STAR) administered by the Treasurer of State

  • Public investment pool in which Ohio counties and other governmental subdivisions may participate

  • ODJFS will build the applicable rate into the cash on hand monitoring spreadsheet

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Calculating interest l.jpg
Calculating Interest

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Interest17 l.jpg

Interest

The Calculation

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Interest calculation l.jpg
Interest Calculation

  • Excess Cash on Hand: $29,502.07

  • Interest Rate: 5.00%

  • Total: $ 1,475.10

  • $1,475.10 / 365 days per year = $4.04 per day

  • Number of days in month: 31 X $4.04 = $125.24

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Recording interest l.jpg
Recording Interest

  • Local agency records “net interest liability” as a reduction to expenditures.

  • ODJFS will establish codes for public assistance agencies for SFY’s 08 and 09

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


Interest offset l.jpg
Interest Offset

  • Negative cash on hand (COH) occurs when a federal program’s expenditures are paid from local funds (not from other state or federal funding sources)

  • At SFY end, local agency may offset excess COH by months with negative COH

  • Must have documentation identifying the funds used as local

Office of Fiscal Services

Bureau of County Finance & Technical Assistance


In summary the cash on hand monitoring process is l.jpg
In Summary, the Cash on Hand Monitoring Process Is…

  • Reasonable

    • 10 days, not three, for HHS (includes Child Support) and DOL funds

    • Accounts for variation in local processes

    • Allows for practical implementation and monitoring

  • Feasible

    • Use existing data

    • Use template provided

    • Calculate four times a year

Office of Fiscal Services

Bureau of County Finance & Technical Assistance