Cash Flow Management - WASBO€¦ · 2/25/2016 1 Cash Flow Management Tips & Templates Due to the...

8
2/25/2016 1 Cash Flow Management Tips & Templates Due 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, CPA March 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

Transcript of Cash Flow Management - WASBO€¦ · 2/25/2016 1 Cash Flow Management Tips & Templates Due to the...

2/25/2016

1

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

2/25/2016

2

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

2/25/2016

3

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:

2/25/2016

4

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

2/25/2016

5

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

2/25/2016

6

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.

2/25/2016

7

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

2/25/2016

8

Cash Flow is FUN

Want help to get started?

Heather Kraeuter

[email protected]