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Oregon State Treasury
  350 Winter St. NE
       Suite 100
Salem, OR 97301-3896

  Darren Q. Bond              Cash Management Newsletter
 Director of Finance                                                                          February 2005
   (503) 378-4633

     Edie Kessel
  Cash Management
                                                    INTEREST RATES
   (503) 373-1897       The average annualized yield for January was 2.3474%. The rates for January
                        were as follows:
                                              January 1st - 6th          2.26%
 Judy Whaley-Fultz
 Banking Supervisor
                                              January 7th - 13th         2.33%
   (503) 378-2885                             January 14th - 25th        2.37%
                                              January 25th - 31st        2.41%
    Kim Buckout
   (503) 378-2409

     Brady Coy                              UPCOMING BANK HOLIDAY
   (503) 378-2457       Due to the Presidents’ Day holiday, the State Treasury, Federal Reserve, and
                        Oregon banks will be closed on Monday, February 21. Customer statements and
    Doris Fisher
   (503) 378-3400
                        files will not be produced for February 21, due to the closures. In addition, ACH
                        files sent to Treasury after the deadline on Friday, February 18, will be sent to
    Lisa Goonan         the bank on Tuesday, February 22, and must have an effective date of February
   (503) 373-1944       23, or later.
     Coren Hale
   (503) 373-1195
                                 VISA CHECK/MASTERMONEY LITIGATION
    Debbe Moore         You may, or may not, have heard about a lawsuit involving VISA and
   (503) 378-5043
                        MasterCard and off-line debit transaction fees between the years 1992 and 2003;
     Alan Park          but Treasury wanted to let you know that it is filing a "consolidated claim" on
   (503) 378-2462       behalf of the state agencies with merchant accounts. By filing a consolidated
                        claim, it allows the claims administrator to deal with a central contact and
 Fax (503) 373-1179     ensures that a claim is filed for all merchant accounts. Without the consolidated
                        claim, state agencies would receive a claim for each and every merchant account
  RELATIONSHIP          they manage - a total of 550 plus merchant accounts statewide.
     TEAM               The deadline for filing the consolidated claim is April. However, there is no
                        established timeline in the lawsuit that determines when the subsequent claim
   Sharon Prentice
     Team Leader
                        forms will be sent to the claimants; so it is not possible to know when settlement
    (503) 373-7312      funds might be expected. Treasury will provide updates as information becomes
 Rhonda Bachmann
   (503) 378-8256       If you have any questions or concerns, please call Judy Whaley-Fultz at (503)
   Laraine Mayer
                        378-2885 or Kim Buckout at (503) 378-2409.
   (503) 378-4064

 Fax (503) 373-1500

                                                                                           Cash Management Newsletter   1
                  A CASH MANAGMENT REVIEW?
In a time of dwindling budgets and massive retirements, many agencies are facing the
challenge of doing the same amount of work with a significantly smaller staff, resulting
in issues such as segregation of duties and timeliness of deposits. Without the necessary
resources, agencies may find it difficult to carry out best practices with regard to cash
management tasks. As a service to state agencies, Oregon State Treasury performs
reviews of existing cash management processes. Best of all, this service is performed at
no cost to the agency.

The main objective of the review is to evaluate the current processes that agencies have
in place and identify opportunities for improvements leading to more efficient and
effective cash management processes.

If you answer NO to one or more of the following questions, then your agency may
benefit from a cash management review:

       •      Are current written policies & procedures used with respect to collection,
              recording, safeguarding and depositing of receipts?

       •      Are responsibilities for cash receipt functions segregated from those for
              cash disbursement?

       •      Are responsibilities for collecting, depositing and accounting for receipts
              performed by different individuals?

       •      Are all accounts reconciled within 30 days of the statement date?

       •      Are all cash receipts deposited properly and timely?

       •      Are collections made over the counter or in the field documented by the
              issuance of sequentially pre-numbered receipts?

       •    Are there safeguards in place where cash is stored and processed?

For more information on Treasury’s Cash Management Review services or to schedule a
review for your agency, contact Edie Kessel at (503) 373-1897 or via email at

                                                                                  Cash Management Newsletter   2
                                            Welcome to STAN’S KORNER
Treasury will be devoting this section of the newsletter monthly to bring information to you
regarding electronic payment methods including, but not limited to, ACH, Credit/Debit Cards,
Stored Value Cards and any other form of electronic payment that might be on the horizon in
the industry. Sit back and enjoy. As always, we welcome your comments!

We probably don’t need to tell you about the industry wide push to move consumers and
businesses towards more electronic payment methods…just being a consumer in today’s world
means that you are presented daily with opportunities to convert your paper check into an
electronic transaction…and welcome or not, the move to electronic payment methods is in high
gear. So if you are an agency that is taking a “Wait and See” approach, this article will provide
you with some reasons to take a fresh look at your strategies for starting or increasing the usage
of electronic payment methods in your agency.
Taking advantage of electronic payment methods may not be as difficult as you think…and, in
some cases, may be as simple as developing a strategy to market the appropriate electronic
product to your customers.     Some of the advantages for moving to electronic payment
methods include:

       o     Improved customer/employee relations

       o     Reduced bank fees

       o     Faster deposit and investment of funds

       o     Improved cash flow

       o     Easier and less expensive bank reconciliations

       o     Reduced check production and distribution costs

       o     Reduced check fraud

       o     Fewer lost and stolen checks

       o     No unclaimed property process as with checks

       o     Demonstrates to customers that the organization is customer oriented,
             technologically capable and cost conscious.

As quoted from the National Automated Clearing House Association recently:
“The chance of having a problem with a check is 20 times greater than with direct deposit”

                                                                                    Cash Management Newsletter   3
The Federal Reserve just released a study in December of 2004 that stated for the first
time ever electronic payments have exceeded check payments! Following is an excerpt
from the Federal Reserve press release dated December 6, 2004:
       The decline in the number of checks paid from 41.9 billion transactions to
       36.7 billion reflects an annual average rate of decline of 4.3 percent from
       2000 to 2003. As for electronic forms of payment, the increase from 30.6
       billion to 44.5 billion reflects an average annual rate of increase of 13.2
       percent for the same period.
       "The balance has shifted from check writing to electronic payments, and we
       expect this trend to continue," said Richard Oliver, senior vice president of
       the Federal Reserve Bank of Atlanta and the Federal Reserve Banks' product
       manager for retail payments. "Indeed, at current growth rates, credit cards
       and debit cards will both surpass checks in terms of total annual transactions
       in 2007.”
       This article can be read in its entirety at:
If you would like more information about how to start strategizing for a move from
traditional paper checks to electronic payment methods, contact a member of Treasury’s
Relationship Management Team – Rhonda Bachmann, Laraine Mayer, or Sharon

  Treasury is always interested in hearing feedback from our customers regarding ways
  we can improve the service we provide. Please send any comments or suggestions you
  may have regarding this newsletter to or fax to (503) 373-1179.

                                                                                Cash Management Newsletter   4

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