1. Roles and Responsibilities of the School District Treasurer
ASSOCIATION OF SCHOOL BUSINESS OFFICIALS
Roles and Responsibilities of the School District Treasurer
TREASURY DUTIES and LEGAL INVESTMENTS TO IMPROVE CASH FLOW AND FISCAL STABILITY
Nancy McKay
Educational Management Consulting
Blackwell Public Schools

2. Roles and Responsibilities
Authority
Oklahoma Statutes
Title 70 § 5-114
Title 70 § 5-115
Oklahoma Administrative Code
Title 210, Chapter 25, subchapter 5, section 11
Oklahoma State Courts Network (oscn.net)

3. Roles and Responsibilities
Surety Bond
Amount estimated by board that treasurer will have on hand at any one time during the current year, not including investments
Collateral
Does not need to exceed Co. Treasurer Collateral
Shall require depository to insure or guarantee the deposit by proper securities

4. Roles and Responsibilities
Cash Ledger
Separate cash ledger for each fund
Additional ledger for investments, if applicable
Appropriations
Temporary Appropriations (no publish)
Estimate of needs (publish)
Supplemental appropriations (no publish)
307, 308 and 150
School Budget Act

5. Roles and Responsibilities
Appropriations – cont’d
Must enter into ledger and monitor
Must not register check/warrants in excess of approved appropriations
Warrant registers
Each fund and each year
Number, fiscal year and fund on warrants
Non payable warrants

6. Roles and Responsibilities
Record and deposit revenue
Receipt and code using OCAS (yr, fd,prj,source,prg)
Monitor and compare your large revenue sources to last year
Deposit timely
Reconcile bank statements
Reconcile to cash and fund ledgers
In timely manner

7. Roles and Responsibilities
Financial Statements
Report monthly to board
Cash balance sheet by fund
Bank statement
Revenue report
Appropriation report
Investment report
Investments
Accordance with written board policy
Liquidity, diversification, type, return

8. Roles and Responsibilities
Exceptions
Not reconciling to ledgers
Improper coding
Not entering deposit info, in timely manner
Supplemental appropriations not correct
Also perform encumbrance clerk duties (breach in segregation of duties
Lack of reporting to board

9. TREASURY FUNCTIONS AND KNOWLEDGE BASE
The sources of revenue for the six major funds of Oklahoma School Districts and the five major sources of General Fund Revenue
Legal expenditures that may be made from each fund
Legal investments of public funds
Ability to calculate the school district’s state aid formula, identifying the elements used to compute foundation, transportation supplement, and incentive sections

10. TREASURY FUNCTIONS AND KNOWLEDGE BASE
Recognize and understand cash flow management applicable to your school district’s needs.
Keep up with current legislation which could potentially affect the financial condition of your school districts
Ability to read and understand a District Budget (Estimate of Needs) with all major components. (Function/Object)
Continuation of professional development in order to feel confident and secure in your knowledge and ability to interact with administration

11. A As INVESTING PUBLIC FUNDS IN TODAY’S MARKET ENVIRONMENT
A Practical Guide to Investing School Funds
: Nancy McKay
Educational Management Consulting, LLC
Blackwell Public Schools

12. ECONOMIC ENVIRONMENTS
WHAT IS A NORMAL ECONOMIC ENVIRONMENT?
DESCRIBE TODAYS ECONOMIC ENVIRONMENT ……………….
DESCRIBE TOMORROW’S ECONOMIC ENVIRONMENT………………..

13. INVESTMENTS “I am more concerned with the
return of my principal than the
return on my principal.”
Will Rogers

14. DEVELOPING AN INVESTMENT POLICY
To establish guidelines
To establish strategies
To set parameters
To assign responsibilities
To schedule critical actions

15. Oklahoma Requirements
Written Policy
Adopted by Board and monthly reporting
Addressing:
liquidity
diversification
safety
yield
maturity
quality of instrument
capability of investment management
Require competitive bids

16. INVESTING SCHOOL FUNDS
WHAT COLLATERAL MUST A FINANCIAL INSTITUTION PROVIDE WHEN SCHOOL FUNDS ARE DEPOSITED? (TITLE )

17. INVESTING SCHOOL FUNDS FDIC PROTECTION
IF AN INDIVIDUAL SCHOOL DISTRICT DEPOSITS SEPARATE FUNDS IN THE SAME BANK, ARE THE FUNDS ENTITLED TO SEPARATE FDIC PROTECTION? NO!
READ FDIC GUIDELINES AND POLICY CAREFULLY AND USE PRUDENT JUDGEMENT WHEN DEPOSITING FUNDS.
$250,000

18. INVESTING SCHOOL FUNDS
HOW IS THE BOARD OF EDUCATION INVOLVED IN THE INVESTMENT PROCESS? (House Bill 1157)
Written Investment Policy Adopted by Board
Addressing: liquidity, diversification, safety, yield, maturity, quality of instrument, capability of investment management and requiring competitive bids.
Resolution to Invest
Oversight and Review of Monthly Investments

19. CASH FLOW MANAGEMENT PROGRAM
Treasurers Investment Training
CASH FLOW MANAGEMENT PROGRAM

20. CASH FLOW MANAGEMENT
The success of every School District’s Investment Program is based upon “a sound Cash Flow Management Program”. DEFINITION: “RECEIVE THE CASH AND LET IT FLOW!!! NOT!
Blackwell Public Schools

21. CASH FLOW MANAGEMENT
Simply put
“To manage the cash flow of a fund basically means to save and invest surplus cash inflows (for maximum interest earnings) and have the cash available at the time needed to meet the spending requirements of your district”

22. CASH FLOW MANAGEMENT Goals
AVAILABILITY: To ensure availability (liquidity) to meet the daily needs of a school district and to increase cash available for investment purposes.
YIELD: To earn the maximum return on cash invested.
SAFETY: To protect the assets of the school district against loss of principal.
POLICY: To establish written statement defining the district policies relative to cash management.

23. CASH FLOW MANAGEMENT Who is it? School Treasurer
Finance Director or Business Manager
Chief Financial Officer
Superintendent
A Cash Flow Manager can wear many hats depending on the size of the district and the policy set forth by the Board of Education
Blackwell Public Schools

24. CASH FLOW MANAGEMENT Requires Cash flow Forecasting
HOW DOES IT WORK?
Requires Cash flow Forecasting
of all Revenue and Expenditures
Monitoring Actual Cash Flow
Review and Report Collections of Major sources of Revenue and other Factors
Blackwell Public Schools

25. CASH FLOW MANAGEMENT DAY-TO-DAY CASH MANAGEMENT PROCESS:
1. COLLECTIONS
2. INVESTMENTS
3. DISBURSEMENTS

26. INVESTING SCHOOL FUNDS, DEPOSITORY RELATIONSHIPS AND INTERNAL CONTROLS

27. INVESTING SCHOOL FUNDS
WHAT SCHOOL OFFICIAL CAN INVEST DISTRICT FUNDS?
O. S. TITLE
Except as otherwise provided for by law, the treasurer of any city, town or school district, when authorized by the appropriate governing body by a written investment policy, ordinance or resolution, shall invest monies in the custody of the treasurer.

28. INVESTMENT LEDGERS
MUST A DISTRICT MAINTAIN SEPARATE LEDGERS FOR INVESTING FUNDS? YES!
Discloses:
Date
Description
Principal amount paid for investment purchased
Date and principal received for investment liquidation

29. INVESTING SCHOOL FUNDS Choosing Investment Instruments
Choose Your Weapons!
Securities - banks - pools - funds???
How long can I safely go out?
What are these Instruments?
Can I use the web?

30. Authorized Investments-Definitions

31. INVESTING SCHOOL FUNDS What Types of Investments?
Legal Investments for School Districts (Amended Title )
Direct Obligations of the U.S. Government, ie., Treasury Bills, Treasury Notes
Collateralized or insured Certificates of Deposits of
Savings accounts or savings certificates of Savings and Loan banks or Credit Union Associations which are fully insured by FSLIC or acceptable collateral.
Repurchase agreements with collateral as listed above.
You want a diversified Portfolio. Market conditions can shift quickly.
Blackwell Public Schools

32. What Types of Investments?
AGENCIES:
Other obligations of the U.S. Government
- Only If the treasurer of a school district has satisfactorily completed an investment education program approved by the State Board of Education and the State Board of Vocational- Technical Education.

33. Treasury Bills Bills are sold at a discount
Bills are listed by days to maturity
Bills mature each Thursday
Strips, another discount treasury securities

34. Treasury Notes and Bonds
Notes and bonds have a coupon
Notes and bonds mature on the 15th and last day of the month

35. Federal Issue - Comparison
Treasury Bills
sold at discount weekly auction mature on Thursdays
Treasury Notes have a coupon
regular auctions
Agency “Discos” sold at discount sold at “window” you pick maturity
Agency Notes have a coupon regular issuances new issues

36. Authorized Investments Cont’d--
Money Market Mutual Funds which consist of obligations of the United States Government, its agencies and instrumentalities
Warrants, bonds or judgments of the school district
Approved Qualified pooled investment program by the Board of Education. (Oklahoma Inter local Pooled Investment Program)

37. Authorized Investments
Commingled Investments
Local Government Investment Pools (Oklahoma Interlocal Pool Investment Program)
Money Market Mutual Funds

38. Constant Dollar Funds/Pools
MONEY MARKET MUTUAL FUNDS
Designed for safety
Low risk
Short securities
Little volatility

39. INVESTING IN WARRANTS Issuing non-payables can send a
WHY WOULD A DISTRICT WANT TO INVEST IN ITS OWN WARRANTS?
Issuing non-payables can send a
negative signal to the Community
Law enables districts to do so.
Another tool to manage cash flow

40. INVESTING SCHOOL FUNDS HOW TO START
Remember the Cash Flow Steps
Identify data sources
General Ledger
Banking Records
Budget Reports (Historical and Current)
Total Revenues by month – Remember:
80% comes from 20% of Sources
Total Expenses by month
80% goes to 20% of Uses
Net balance or cash to invest

41. LET’S GET STARTED!!!

42. INVESTING SCHOOL FUNDS HOW TO START - OVERVIEW
CALENDAR
KNOW YOUR CASH FLOW NEEDS
Maintain daily cash ledger by fund
Disbursement dates
Use historical data
Communicate with “key” people (Encumbrance Clerk, Payroll, treasurer, etc.)
What dates are Major Sources of Revenue received?
Do you need the funds or can you investment immediately?

43. INVESTING SCHOOL FUNDS DEPOSITORY RELATIONSHIPS
Establish a rapport with your Banking Sources
Politics
Know your Banker or Broker
Request Bids for Services or
investments
If your district’s depository is the only Bank in town and negotiations break down, what would you do?

44. ALTERNATIVE BANKING SERVICES AND INVESTMENT OPPORTUNITIES:
Withdraw district funds and keep in a mayonnaise jar??? OR
Pursue an ALTERNATIVE Investment Instrument.
What are your OPTIONS?

45. INVESTING SCHOOL FUNDS OPTIONS:
NOW ACCOUNT
Generally pays minimum rate, ie.
SWEEP ACCOUNT
Invests school funds overnight into an investment instrument usually based upon the 90-day Treasury Bill
INTER LOCAL POOLED PROGRAM (Liquid Asset)
Liquid Asset Account
Fixed Term/Fixed Rate Account

46. CALCULATING INTEREST EARNINGS
Investments are traditionally calculated on a 360 day year base as is used in the Treasury Bill.
Most banks will try to calculate on 365 day base ……..negotiate!
Always verify the calculations of your investments to ensure you are receiving the full benefit of your district’s investment.

47. CALCULATING SIMPLE INTEREST
EX: ,000X63DAYSX.020 = $1,050.00
360 VS
300,000X63DAYSX.020 = $1,035.62
365
Difference : $

48. INTERNAL CONTROLS
Controls and procedures should be written to protect the funds and securities.
The School Board should establish a system of controls to be reviewed annually by the external auditor. Controls should be designed to prevent fraud, error, misrepresentation or imprudent actions.
The Treasurer should maintain a cash flow analysis designed to monitor cash positions and forecast cash needs for investment purposes.