Financial Management: Cash Management

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Financial Management:

Cash Management

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Cash Management: Overview

Budget Process Funds Requests

• Internal Procedures

• Drawing Down Funds from MDE Final Expenditure Reports

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Cash Management: Regulations

OMB Circular A-87, Cost Principles for State, Local and Tribal Governments

OMB Circular A-133, Compliance Supplement. (March 2008)

EDGAR, Sub Part C, §76.707: When Obligations are made.

EDGAR, Sub Part C, §80.21: Payment

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Cash Management:Definitions and Terms

Cash Management System:• MDE system that manages the cash

disbursement of federal and state pass-through grants

EDGAR:

• Education Department General Administrative Regulations. Regulations that contain important administrative requirements that apply to federal education funds

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Cash Management: Definitions and Terms

Final Expenditure Reports (FERs): FERs close projects by reporting that funds have been expended and are in compliance with the aproved budget. This report is due as soon as the LEA has spent project funds, but no later than 60 days after the termination of the project. 

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Cash Management: Definitions and Terms

OMB-Circular A-87: Cost Principles for State, Local, and Indian Tribal Governments. Source of the basic threshold standards that must be present for a cost to be payable with federal funds

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Cash Management: Definitions and Terms

Reimbursement

The preferred method of payment for federal grant expenses

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Cash Management: Content

LEAs records agree with MDE approved budget

Funds Requests

• Funds are requested on a regular basis

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Funds Deposit

All funds are deposited promptly The person performing the cash

receipts function:

• Does not sign checks

• Does not reconcile bank accounts or maintain non-cash accounting records

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Bank Reconciliation

Bank statements are received directly (and unopened) by the person responsible for bank reconciliation

Bank statements are reconciled at least monthly

Paid checks are examines for date, name, cancellation, and endorsements

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Handling of Vouchers (and Grant Alignment)

Vouchers are identified by grant, number, date, and expense classification

Checks include supportive documentation when being submitted for signature• Supportive documents are

canceled to prevent reuse

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Handling of Vouchers (and Grant Alignment)

Invoices or vouchers are approved in advance by authorized officials.

Voided checks are properly canceled and retained

Blank checks are secured

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Cash Payable Policy/Practice Drawing cash payable to “cash” or

“bearer” is prohibited

There are established procedures that prevent checks from being issued on an oral authority

Employees are prohibited from having custody of any unrecorded cash or negotiable instruments of the LEA

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Program Income LEA has written policies and procedures

on the receipt and obligation/ expenditure of program income

The policies and procedures assure that program income is obligated properly, and during the required period

Two different people are assigned the responsibility for the receipt and obligation of program income funds

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Final Expenditure Reporting

FERS are filed on time

FERS should equal the cumulative total of the funds requested

FERS for less than approved amounts will result in recovery of excess funds

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Budget Process

The LEA operating budget reflects sufficient non-federal funds to match the federal funds during the grant period, if required by the grant

The responsibility for budget preparation is defined at all organizational levels

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Budget Process

The LEA has an operating budget for each of its grants

Line item costs for the grant award are consistent with the MDE approved budget for the grant

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Budget Process

The LEA does not exceed the grant established threshold for moving expenditures between functions

All expenditures recorded in a function were approved by the MDE program office

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Assets

The LEA has written procedures and controls in place to protect assets acquired with grant funds

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LEA Match

If the federal grant requires local match, the LEA operating budget reflects sufficient non-federal funds to match the federal funds during the grant period for the fiscal years under review

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Inventory Procedure

All equipment purchased with grant funds is properly tagged and inventoried

Equipment records are maintained

A physical inventory is taken at least annually and reconciled with the equipment records

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Inventory Procedure

The LEA has adequate maintenance procedures that keep the equipment in good condition

An inventory control system exists that protects against loss, damage, or theft of equipment and required investigation of such

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Disposition of Equipment

The LEA has procedures for the disposition of equipment

Equipment that is purchased with grant funds shall be disposed of according to federal criteria

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Cash Management:Critical Elements

Funds Deposit

Bank Reconciliation

Vouchers

Cash Payable Policies/Procedures

Program Income

Final Expenditure Reporting

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Cash Management:Critical Elements

Budget Process

Assets

LEA Match

Inventory Procedure

Disposition of Equipment

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Cash Management: FAQs

What day(s) of the week are grant payments processed?

Tuesday and Thursday

Food & Nutrition Services/Fiscal Reporting System payments are processed on what day(s) ?

Wednesday

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Cash Management: FAQs

When will my payment arrive?

Electronic Fund Transfers (EFTs) within two to three days; Paper warrants within three to five days

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Cash Management: FAQs

I saved my request for funds and have not received the money

The recipient must also certify final expenditures for payment to be processed

I am not able to access the CMS

The certifier for a recipient must complete a CMS Security Access form and fax to MDE

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Cash Management: FAQs

What are the steps for certifying a Final Expenditure Report?You must save, post, and certify your final report

Where do I find what a payment is for?Go to Viewing Data, then to Payment Ledger, and enter your requested date in the Disbursement Date field. Select the date and this will display payment details

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Cash Management: Other Resources

• CMS Training• Deputy Superintendent Memoranda

• NEW MDE Cash Management System (September 13,2006

• Required Change in Federal Cash Advance Procedures May 29, 2007)

• Three-Day Cash Advance (Oct. 21, 2008)

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Cash Management: Other Resources

MDE Federal Fiscal Review, Local Education (LEA) Review Tool

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Cash Management: For More Information

Contacts:

• CMS: Debbie Roberts, MDE

robertsd4@michigan.gov

• MDE: Specific Program Office

• ISD:

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Resources

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ResourcesAll resources identified in this Professional

Development module are available on:

Michigan LearnPort

www.learnport.org

Collaboration Center

Community Room

LEA Financial Management Resources

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Committee

Membership

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MDE/MAISA Monitoring and Compliance Committee

Becky Rocho, Calhoun ISD, (269) 781-5141 rochob@calhounisd.org

Patty Cantú, MDE, Office of Career and Technical Education, (517) 373-3373

cantup@michigan.gov Mary Ann Chartrand, MDE, Grants Coordination and

School Support, (517) 373-8862 chartrandm@michigan.gov

Terri Lynn Giannola, MDE, Office of Career and Technical Education, (517) 373-4670

giannolat@michigan.gov

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Cash Management Subcommittee

Stan Kogut – ISD ChairIngham ISD(517) 244-1214; skogut@inghamisd.org

Louis Burgess – MDE Co-Chair MDE – Grants Coordination and School

Support(517) 335-3672; burgessl@michigan.gov

Craig Thurman - MDE Co-Chair MDE – Financial Management

(517) 373-2810; thurmanc@michigan.gov Tom Armstrong

Wexford-Missaukee ISD(231) 876-2312; tarmstrong@wmisd.org