BANK ACCOUNTS - 19462

(Revised: 07/2022)

Agencies/Departments may be authorized either by statute or by approval from the Department of Finance, Fiscal Systems and Consulting Unit (FSCU) to deposit moneys not under the control of the State Treasurer’s Office (STO) in banks outside of the Centralized Treasury System (CTS).

Agencies/Departments that have statutory authority to deposit state moneys in banks outside the CTS without FSCU approval should adhere to the conditions prescribed by the Director of Finance and must notify the STO by letter stating:

• The name and location of the bank
• Amount
• Source and purpose of the funds to be deposited
• The type and term of the deposit arrangement

Agencies/Departments without such statutory authority will request approval from FSCU by letter to deposit state moneys in bank accounts outside the CTS. See SAM Section 8002.

The Director of Finance prescribes the following conditions for depositing money in bank accounts outside the CTS authorized by statute or approved by FSCU:

1. Unless otherwise exempted by statute, an agency/department must have approval from FSCU to maintain the bank account outside the CTS.
2. Except as otherwise provided by law, no state officer other than the Treasurer will deposit General Fund money with any bank.
3. Deposits shall not exceed the Federal Deposit Insurance Corporation (FDIC) limit in any one bank, including all of its branches. However, an agency/department may deposit in excess of the FDIC limit in any one bank if the agency/department notifies the STO that deposit collateral requirements have been met. See SAM Section 8002 for collateral requirements.
4. Agencies/Departments will submit the Report No. 14, Report of Accounts Outside the State Treasury, annually via the Financial Information System for California by August 31 or the following Monday if August 31 falls on a weekend. Report No. 14 will state the balance as of June 30, the purpose and authority for each bank account. If the bank account has been closed during the reporting period, agencies/departments must specify the date the bank account was closed. See SAM Sections 7930, 7951, and 7975.
5. Annually, by August 31, agencies/departments will submit bank statements stating bank balances as of June 30, for each bank account indicating collateralization on Report No. 14 to STO, Collateral Management Section.
6. No withdrawals shall be permitted until a bank signature card has been properly completed. The same statement shown in SAM Section 8001.2 pertaining to the necessity of two authorized signatures for withdrawals in excess of $15,000 is required.

Any agency/department that maintains bank account balances close to the FDIC limit should periodically review its bank account balances to make certain that the maximum insured amount will not be exceeded when interest earnings are added to the bank accounts.

 

Agencies/Departments are responsible for making arrangements with the bank to allow interest payments to be sent directly to the agency/department when such payments would increase the balance of a bank account in excess of the maximum insurable amount. Upon approval of FSCU, agencies/departments may deposit these excess amounts in another bank or within the CTS approved depository banks. See SAM Section 8031.

 

The deposit of state moneys in bank accounts should permit the maximum earnings of interest and the ready access to a reasonable amount of cash to meet unusual demands, in addition to cash held in the CTS account to meet ordinary withdrawal demands.

Agencies/Departments should ensure that time or interest-bearing term deposits are held until the expiration of the certificate or certificate of deposit to avoid early withdrawal penalties. Federal regulations require a substantial interest penalty for early withdrawals of principal. Generally, no interest is earned for 90 days immediately preceding the withdrawal and any applicable interest earnings are calculated at the current rate on regular bank accounts.