Cash Management State of Michigan by liaoqinmei


       Cash Management

10/21/2009               Page 1
             Cash Management:
  Budget Process
  Funds Requests
    • Internal Procedures
    • Drawing Down Funds from MDE
  Final Expenditure Reports

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             Cash Management:
 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
       • 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.
 10/21/2009                           Page 5
              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

10/21/2009                           Page 6
              Cash Management:
             Definitions and Terms

 Reimbursement
    The preferred method of payment for
    federal grant expenses

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             Cash Management:
 LEAs records agree with MDE
  approved budget
 Funds Requests
        • Funds are requested on a regular

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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

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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
 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

10/21/2009                            Page 16
             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

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 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

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             Inventory Procedure

 All equipment purchased with grant
  funds is properly tagged and
 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

10/21/2009                           Page 24
             Cash Management:
              Critical Elements
 Budget Process
 Assets
 LEA Match
 Inventory Procedure
 Disposition of Equipment

10/21/2009                        Page 25
             Cash Management:
 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) ?

10/21/2009                            Page 26
             Cash Management:

 When will my payment arrive?
     Electronic Fund Transfers (EFTs)
     within two to three days; Paper
     warrants within three to five days

10/21/2009                                Page 27
             Cash Management:
 I saved my request for funds and have
  not received the money
  The recipient must also certify final
  expenditures for payment to be
 I am not able to access the CMS
  The certifier for a recipient must
  complete a CMS Security Access form
  and fax to MDE
10/21/2009                          Page 28
             Cash Management:
 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

10/21/2009                               Page 29
             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,
10/21/2009                         Page 30
             Cash Management:
              Other Resources

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

10/21/2009                           Page 31
                Cash Management:
               For More Information
       • CMS: Debbie Roberts, MDE
       • MDE: Specific Program Office
       • ISD:

10/21/2009                              Page 32

10/21/2009               Page 33
   All resources identified in this Professional
        Development module are available on:
                Michigan LearnPort
               Collaboration Center
                 Community Room
        LEA Financial Management Resources

10/21/2009                                   Page 34

10/21/2009                Page 35
      MDE/MAISA Monitoring and
       Compliance Committee
 Becky Rocho, Calhoun ISD, (269) 781-5141
 Patty Cantú, MDE, Office of Career and Technical
  Education, (517) 373-3373
 Mary Ann Chartrand, MDE, Grants Coordination and
  School Support, (517) 373-8862
 Terri Lynn Giannola, MDE, Office of Career and
  Technical Education, (517) 373-4670

10/21/2009                                    Page 36
             Cash Management
 Stan Kogut – ISD Chair
     Ingham ISD
     (517) 244-1214;
 Louis Burgess – MDE Co-Chair
     MDE – Grants Coordination and School Support
     (517) 335-3672;
 Craig Thurman - MDE Co-Chair
     MDE – Financial Management
     (517) 373-2810;
 Tom Armstrong
     Wexford-Missaukee ISD
     (231) 876-2312;
10/21/2009                                   Page 37

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