Cash Management Plan

Controller's Office Policy CO 02 10

Statutory Policy North Carolina law, Chapter 147-86.10 of the General Statutes, requires that \"all agencies, institutions, departments, bureaus, boards, commissions and officers of the State...shall devise techniques and procedures for the receipt, deposit and disbursement of moneys coming into their control and custody which are designed to maximize interest-bearing investment of cash and to minimize idle and nonproductive cash balances.\"

Plan Administration The State Controller, with the advice and assistance of the State Treasurer, the State Budget Officer and the State Auditor, is charged with developing and implementing a uniform statewide plan to carry out the cash management policy for all State agencies, departments and institutions. This Statewide Cash Management Plan outlines the policies, duties, responsibilities and requirements for cash management within State government on a broad basis. It is the responsibility of each agency, department and institution to prepare a cash management plan that meets both the requirements of the Statewide Plan and the unique cash management needs of the individual agency, department or institution. The University Controller, who reports directly to the Vice Chancellor for Business Affairs, with the advice and assistance of the Office of the State Controller, the State Treasurer, the State Budget Officer, and the State Auditor, is charged with developing and implementing a uniform University-wide plan to carry out the cash management policy for all University departments.

Plan Requirements Cash Management Over Receipts: The objectives of cash management over receipts are to use diligence in collecting funds owed to the State, to provide internal control over cash and cash equivalents and to expedite the movement of monies collected into interest bearing accounts. To accomplish these objectives, all plans adopted will include these rules:  1. Except as otherwise provided by law, all funds belonging to the State of North Carolina, and received by an employee of the State in the normal course of their employment shall be deposited as follows:

  • All monies received shall be deposited with the State Treasurer pursuant to G.S. 147-77 and G.S. 147-69.1.
  • Monies received in trust for specific beneficiaries for which the employee-custodian has a duty to invest shall be deposited with the State Treasurer under the provisions of G. S. 147-69.3.
  • Monies received by the Cashier’s Office, University Bookstore, GPAC, Office of Advancement, and the University Student Center during the course of a day will be deposited the following day by noon or as near thereto as may be, but in no case beyond bank’s daily cut-off time, which is 2:00 p.m.

 2. Monies received shall be deposited daily in the form and amounts received, except as otherwise provided by law.

  • There are five main cash receipting functions at UNCP, the Cashier’s Office, University Bookstore, GPAC, Office of Advancement, and the University Student Center. The Cashier’s Office handles the receipting of funds from all sources. The head cashier has immediate responsibility. All deposits are prepared in the Cashier’s Office with the exception of the University Bookstore and the Student Center deposits that are prepared in those offices and submitted to the Cashier’s Office to be transported to the bank. A transmittal envelope for the University Center and a transmittal report for the University Bookstore are provided to the Cashier’s Office with the deposit. GPAC and Office of Advancement provide a cash report from their systems. The envelopes and reports provide the needed information to receipt the monies. The receipt total is matched with the authenticated deposit slip from the bank. 
  • All collection centers on campus, excluding the main locations, must issue manual receipts from pre-numbered receipt books issued by the Cashier’s Office. These books are signed out and the person receiving a book is responsible for monies collected until it is returned. A receipt is issued by the Cashier’s Office for the combined total of all hand written receipts issued from the book.  All receipt book deposits must be made at least weekly and more frequently if cash funds on hand are greater than $150.00.
  • Remittance address used in billings direct mail to the Cashier’s Office. A Cashier opens the mail, stamps the endorsement, and receipts the checks.
  • Internal control is maintained by periodic unannounced cash counts, providing methods of secure handling of monies, and separation of duties. Procedures for cash related activities are continually reviewed for ways of improvement.
  • A processing fee of twenty-five ($25.00) is charged for each returned check. When a check has been charged back to UNCP, a letter notifies the maker of the check that he/she must pay the face amount of the check plus the service charge within a specified time frame.
  • When monies are deposited in error, one of three procedures may be used to correct the situation.
    • If the error is found in the same month and involves only one bank account, a receipt correction will be made debiting monies out of the incorrect fund and crediting the appropriate fund.
    • If the error is not found until after month-end processing, the same procedure will be applied using a journal entry rather than a receipt correction.                                                                        
    • If monies are deposited to the wrong bank account (rather than the wrong fund number) the receipt is changed to the bank clearing fund and a transfer of funds will be executed via CMCS to move funds to the proper bank and fund. 
  • Funds received in advance for a student’s college expenses will be receipted to a “Funds Held” account, a temporary holding account, until funds can be receipted to the appropriate term.

3.  Monies due to a State agency, department or institution from other governmental agencies or from private persons shall be promptly billed, collected and deposited.

  • Intra-agency transfers and transfer of funds from another State institution/agency to UNCP may be executed via CMCS on-line transfer screens. Requisitions are reconciled to include and reflect electronic transfers. Transfers coming into the University from other State agencies are received and applied to proper accounts.
  • At the completion of registration for each upcoming term, bills are generated and mailed to registered students.  The billing packet includes costs for the registered period, date that payment is due and additional information relative to the term of enrollment.  Registered students who fail to make payment for the term are dropped for nonpayment after numerous attempts have been made to contact them.  Enrolled students and former students who have not met their payment obligations have holds applied to their student account which denies other services from being performed until payment is made.  Additional collection techniques are used as accounts become more aged in delinquency. Those techniques are referrals to the N.C. Attorney General’s Office, issuance of university promissory notes, additional billing, and referrals to the N.C. Department of Revenue Setoff Unit.  Accounts referred to the Attorney General’s Office must be $500.00 or greater and have a delinquency greater than 90 days.  University promissory notes involve working with debtors negotiating repayment plans to satisfy the indebtedness.  A schedule of payments is provided the debtor.
  • N.C. Department of Revenue Setoff Unit referrals are entered annually.  Claim listings are sent to the university from the Setoff Unit and are receipted to the delinquent accounts.  Taxpayers are sent a letter from university departments that send in the claim advising them of the debt and that they have thirty days to contest the claim in writing or an appearance.
  • After all diligence has been applied to delinquent accounts and accounts have met the three-year statute of limitations, the accounts are written off as uncollectible.

4. Unpaid billings due to a State agency, department or institution shall be turned over to the Attorney General for collection no more than 90 days after the due date of the billing unless the amount is less than five hundred dollars ($500), or (for institutions where applicable) for amounts owed by all patients which are less than the federally established deductible applicable to Part A of the Medicare program. The agency, department or institution may handle these unpaid bills pursuant to agency debt collection procedures.

  • Each semester all students who have pre-registered are billed accordingly. The bill states what is owed for tuition and fees, board, housing, etc. Students are given a payment due date and informed if payment is not received by the date specified, classes will be dropped. Bills are issued periodically on all receivables.  Accounts are flagged to prevent debtors from receiving services from the University.  If bills are not paid, the Attorney General’s office, the collection agency under current contract, as well as the provisions of the debt setoff collection policy is used, as appropriate, in collecting. Interest is not charged on student accounts.  After all available methods are exhausted without collections, the accounts are written off against 8700 under the area receiving the receipts with all General Fund receipts charged under the 170 purpose.
  • Annually, a summary report is submitted to the N.C Department of Revenue, which lists anyone who owes a debt to the University in excess of $50.00. The N.C Department of Revenue will notify the debtor of the proposed setoff, by letter, informing the debtor that a State agency has a claim against his/her state tax refund. The debtor is also informed that the State agency may be contacted if questions arise. If a debt has been satisfied, and the State agency has not purged the debtors name with the N.C Department of Revenue, then the agency will refund any credit balance to the taxpayer. In order to recover the costs incurred in setting off funds against Setoff Program Agency debts, G.S. 105 A-13 allows the Department of Revenue to charge a fee. The fee is deducted from the taxpayer’s refund and the remaining refund is applied against the debt.

5. Federal funds received for major federal assistance programs that are governed by the Cash Management Improvement Act of 1990, must be drawn in accordance with the current State/Federal Agreement. 6.  All federal fund draws should be timed to that the funds are on deposit with the State Treasurer no more than two business days prior to the disbursement. Federal Funds are drawn on a reimbursable basis. A FOCUS program shows the cash balances available for each program and the Grants Accountant determines needed funds. Requests for funds are done via Internet or via phone. When funds are received, the bank calls to inform the Grants Accountant that the requisitioned funds have been deposited. At this point, the cashier is informed and the funds are receipted to the appropriate accounts. The bank will fax a copy of the deposit received so the University will have proper documentation.    7.  State agencies shall accept electronic payments, in accordance with G.S. 147-86.22, to the maximum extent possible and consistent with sound business practices.

  • The University Cashier may only accept Master Card or Visa for payment; however, the Givens Performing Arts Center may accept Master Card and Visa. Credit Cards can be applied to tuition, fees, room, board, parking fines, ticket sales, etc. Credit cards are processed using Point of Sale Terminals. The cardholder’s card number and amount of transaction are provided via terminal (swiped or keyed) or via phone. Information is transmitted through the acquirer’s network provider, or other authorization service provider. Authorization is obtained on-line at the time of transaction. At the end of the day, after reconciliation is completed, the terminal is closed out, with the transaction data being transmitted to the acquirer bank for deposit. Fees related to credit card payments are funded from area acquiring the receipts.

In addition to adhering to these guidelines, agency plans shall employ proven techniques, which improve cash handling. Some of those techniques include:

  • Receipt of federal grant payments by wire transfer when possible.
  • Special post office boxes to facilitate the processing of large remittances.
  • Color-coded mailing labels and envelopes to identify remittances for special handling.
  • Separate addresses to distinguish remittances from other mail.
  • Reassignment of personnel, or the hiring of temporary personnel, when this proves cost effective, to accelerate the processing of remittances during peak periods.
  • Deposits made by units outside Raleigh should be made with cash concentration banks designated by the State Treasurer.
  • The evaluation and establishment of lock-boxes in areas which are large sources of remittances, but which are geographically distant from the nearest State agency office. Lock- boxes are locked Post Office boxes tended by banking agents. These allow quicker cash collection in areas, which are not served by agency offices.
  • The use of remittance processing equipment when justified by the volume of deposits.
  • Establishing billing schedules which are both efficient and lead to earlier receipt of monies due to the State.
  • Timing deposits in order to receive current day credit in accordance with schedules available from the State Treasurer. 

Cash Management over Disbursements:

The objective of managing disbursements is to maintain funds in interest-bearing accounts for the longest appropriate period of time. This allows the State to recognize the maximum earning potential on its funds. This is not intended to encourage late payment or have a negative impact on relationships with firms who, in good faith, supply goods and services to the State. The following rules should be included in all plans:

1. Monies deposited with the State Treasurer remain on deposit with the State Treasurer until final disbursement to the ultimate payee.

  • Invoices are paid according to vendor terms after proper approvals. Data is entered and is held in the Financial Records System (FRS) until the due date on the invoice. Funds are requisitioned from the State Treasurer prior to the release of checks and as needed to cover disbursements. Cash Requirement Reports are printed and analyzed prior to a check run to determine availability of funds necessary to cover disbursements. Bond requisitions are approved once a week. Requisitions on any check written on bond funds should be submitted by Thursday, no later than 11 a.m. After requisitioning bond funds, the check must be written and mailed within 24 hours.
  • Both bank accounts, Institutional Trust (Bank10) and State Treasury (Bank 3), must be reconciled each month. The State Treasury account is solely comprised of State budgeted funds. The Disbursing Technician only requisitions amounts that are actually spent each month. In order to reconcile the State Treasury account any outstanding deposits should be added to the balance for the month per the bank statement. Any outstanding checks should be subtracted from it. The total should always be zero. Institutional Trust is comprised of funds that are not State-budgeted funds. These monies remain in a STIF account at State Treasury. The Institutional Trust account is reconciled each month by obtaining the balance per the bank statement, adding outstanding deposits and transfers in, less outstanding checks and transfers out. The grand total should coincide with the balance per report FBM061 (General Ledger Fund Group Summary Report).

2.  As provided in Section 147-86.10, the order in which appropriations and other available resources are expended shall be subject to the provisions of the Executive Budget Act, G.S. 143-27, regardless of whether the State agency disbursing or expending the monies is subject to the Act.

3. Federal and other reimbursements of expenditures paid from State funds shall be paid immediately to the source of the State funds.

4. Billings to the State for goods received or services rendered shall be paid neither early nor late but on the discount date or the due date to the extent practicable.

5. Disbursement cycles for each agency shall be established to the extent practicable so that the overall efficiency of the warrant disbursement system is maximized while maintaining prompt payment of bills due.  In order to avoid disbursing account overdrafts, warrants should not be released before adequate funds have been requisitioned by the agency and approved and deposited to the applicable disbursing account by the OSC.

The financial system does not produce warrants for invoices until the due date specified. Time is allowed to sort and mail checks so vendors and others will receive University checks as payment becomes due. Payments to the same payee are combined on one check. Prior to mailing out warrants, the Disbursement Technician must verify that both the check and invoice are the same amount. The verification process should also include ensuring that the account number on the invoice is the same as the account number on the check.

6. Electronic Funds Transfer (EFT) should be used for certain payments between State and local units, vendors and employees when it is determined to be mutually beneficial to both parties.

  • The Cash Management Control System is used for electronic transfer of payroll funds from the General Fund and STIF accounts to OSC payroll accounts and other funds due other State agencies. Wire-outs may be processed by fax transmittal to NC Department of State Treasurer for bond and other payments.  

7. Delegation of Disbursing Authorities must be kept current and must be approved by the State Controller. The March 1, 2001 Delegation of Disbursing Authority is pending approval currently, but the request is the same as our current approval delegation dated July 1, 1999.   
 Techniques helpful in controlling disbursements include:

  • Establishing special procedures for making large disbursements such as social security and federal withholding tax remittances to ensure that payment is made on the due date and not before.
  • Managing inventory and supply levels to stock the minimum necessary to conduct business without disruption.