MAXIMIZATION OF INTEREST EARNINGS - 8099
The state’s priority is to optimize its interest earnings, as every dollar gained from investments reduces the need for equivalent taxation or other income sources.
Agencies/Departments shall adhere to daily practices of sound cashiering, depositing, and other cash flow management practices to permit the state to achieve the maximum interest from the dollars that flow through the state. The state earns approximately $27 on each million dollars per calendar day for each one percent of interest earning rate.
The following SAM sections refer to practices that agencies/departments shall follow:
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Centralized State Treasury System – The purpose of the centralized State Treasury System (CTS) is to maximize the earning of interest, provide safe and prudent treasury management, and ensure depository banks provide the state with proper and adequate security for deposits of state money. All money in possession of any agency/department shall be deposited in the CTS, except when otherwise authorized by the Department of Finance, statute, or unless deposited directly into the State Treasury. |
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Receipt of Federal Funds – Agencies/Departments shall minimize the time between the deposit of federal funds in the state’s account and the disbursement of funds in accordance with the Cash Management Improvement Act. |
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When to Deposit – Agencies/Departments shall use the most efficient procedure that provides timely deposits. |
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Method of Depositing – Outlines various methods used to deposit money into the CTS in a secure and timely manner. |
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Accounts Receivable – Provides management with the proper controls over receipts and receivables. |
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Billing and Accounting for Receivables – Provides instructions for prompt invoicing for amounts due to the state. |
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Collecting Non-Employee Accounts Receivable – Provides instructions and guidelines for prompt collection of amounts due to the state from non-employees. |
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Collecting Employee Accounts Receivable – Provides instructions and guidelines for prompt collection of amounts due to the state from employees. |
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Disbursement Methods – Agencies/Departments shall minimize the cost of making disbursements by using the most cost-effective means available. |