cash flow management - wasbo€¦ · 2/25/2016 1 cash flow management tips & templates due to...
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2/25/2016
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Cash Flow Management
Tips & TemplatesDue to the nature and timing of revenues, all Wisconsin public school districts face periods of high and low cash flow. Managing those cash flows annually, monthly, or
even sometimes daily, while still keeping an eye on returns and safe investments, can all be very challenging
Heather Kraeuter, CPAMarch 17, 2016
WI School District Cash Flow
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
timing of cash surpluses & deficits
Will the
money be there every
week, when
we need it? Start Here
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1. Understand the needs and the environment
2. Organize the information you
already know
3. Monitor, reconcile, adjust
4. Find safe investment options (& maximize returns, too)
It’s…
(seriously, keep it simple)
qualitative quantitative
• Events affecting cash flow this year, compared to last
year or next year
• Banking relationships and services
• Relevant board policies
• Available resources for
monitoring
• Comfortable risk level
• A/P payment terms –standard vs. temporary
Data points to find:
• Lowest point in the year –week & day
• One week of payroll & A/P –at the maximum possible
• Overall increase or decrease in operating budget, compared to last year
• Is a borrowing needed?
• Listing of all available accounts
Understand the needs and environment
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1. Identify the data that is meaningful to you,
your administration, your schools, and your Board
2. Gather the data – you already have it!
3. Create a super-cool spreadsheet (or borrow one from a friend)
Organize the information you already know
Create a tool to monitor cash.
It will be time well spent.
What data is meaningful?
Fund 73 expenditures & transfers
IRS rebates
Capital project
expenditures & transfers
BIG Aid:High povertyEqualization
Per pupil categoricalSpecial education
Medicaid
A/P details or batches
Banking / merchant
feesHealth
insurance
Gather the datao Preliminary budget or budget assumptions and overall budget
increase / decrease for object series and fund.
o Budget to cash conversion*
o Property tax revenue by date*
o State aid payments schedule*
o BIG other federal or local aid/grants
o Grant receivable amounts expected in summer*
o Local/school deposits
o Food service deposits
o Payroll*
o Benefits and payroll taxes*
o A/P checks and A/P wires*
o P-card payments
o Rents and leases
o Contributions and transfers to other funds (to/from cash
accounts not pooled)
Budget:
Cash-IN: Cash-OUT:
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Create sub-schedules to organize and document major cash flow assumptions
Gather the dataSub-schedules not only organize the data, but are also
great documentation all year long and then double as
annual audit workpapers
Keep it simple
Keep it real
Build it thoughtfully
Make it pretty
Create a super-cool spreadsheet
Create a super-cool spreadsheet
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Create a super-cool spreadsheet
Create a super-cool spreadsheet
Monitor, Reconcile, Adjust
RECONCILE ALL CASH & INVESTMENT ACCOUNTS MONTHLY
Setup and maintain a daily/weekly/monthly process
& stick with it
Update projections
with actuals periodically
Adjust projections for mid-year
changes/events
Talk to your FA and request regular
investment account reports
DESIGNATE A 2ND SET OF EYES
ON THE BALANCES
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Investments & Returns
Rule #1 – Timing is everything
School district investing is mostly extremely short-term.
Identify your longest investment periods
Investments & Returns
= Smarter Investing
Build a LADDER:
A simple worksheet (like this) can track
liquid balances and timing of investments &
maturities.
Investments & Returns
Rule #2 – Stay in Compliance
School district investing is highly restricted.
• Relevant WI State statutes:
34.05, 66.0603, 67.12(8), 120.16
• Relevant School Board policies in your district – watch for both investing & authorized depositories.
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Investments & Returns
Rule #3 – Ask Questions & Read (don’t skim)
What if this was your own savings account?o Interest-bearing accounts
o Investment cash sweeps
oRepurchase agreements
oCDARS
oCD purchases
oLGIP
oWISC – several series
oLocal bank short-term investments
Lots of potential
Options! STOP& consider…
Investments & Returns
Rule #3 – Ask Questions & Read (don’t skim)
Things to consider when evaluating investments that are right for your district:
o Liquidity needs
o Availability of funds
o Ease of access and transfers
o Favorable banking policies
o Appearance of investment
o Collateralized / Insured
o Holder of the funds
o Local vs. National
o Comfort level
Investments & Returns
Rule #4 – Have Confidence
INVEST! – No need to keep everything liquid
Move the money
Think innovativelyDouble-check
Review with banker & financial advisor annually
Track your returns