Administrative Procedures

Cash Management And Credit Facilities

Business & Finance AP 515

Background

Parkland School Division recognizes its responsibility to fund operations by effectively managing cash flow and credit facilities and maximizing investments to achieve the highest return on investment while maintaining maximum security and appropriate liquidity.

Definitions

Liquidity: refers to the ability of an asset to be converted to cash.

Rate of Return: refers to the net gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s initial cost.

Credit facilities: refers to a type of loan made in a business. It may include revolving credit, term loans, credit cards, bank overdraft, vehicle finances, etc.

With respect to cash management:

1. The Associate Superintendent of Corporate Supports and Services shall arrange for a financial agreement from financial institutions.

2. Cash balances shall not fall below levels of any externally restricted funds and such funds shall not be accessed for operational purposes.

3. Bank account reconciliations shall be completed monthly and reviewed by the Director of Financial Services.

4. Responsibility for the various cash management functions should be clearly assigned to different members of the Financial Services department.

With respect to investments:

5. Investment of funds shall be made in the following order of priority:

5.1.  Safety of principal;

5.2.  Rate of return.

6. Investments shall be restricted to those which may be invested under the Trustee Act or as otherwise permitted by the Minister of Education.

7. Investments shall be made taking into consideration available cash funds, payment schedules, large commitments, current interest rates and predicted interest rate trends with the goal of maintaining liquidity and maximizing the rate of return and interest income.

8. Funds shall be invested in a manner and time horizon that guarantees a positive cash flow and prevents the use of higher cost operating loans or overdraft lending facilities. page1image1024380896

9. Investment returns from defined sources (e.g., scholarship trusts, deferred salary plans, etc.) shall be added to the principal on a pro-rata basis.

With respect to credit facilities:

10. TheAssociateSuperintendentofCorporateSupportsandServicesmayenterintocredit facilities agreements for temporary bank overdraft, Division purchasing cards, vehicle or technology leases as per Signing Authorities Matrix - 539

signature

Date Approved:  July 4, 2019

Reference: 

Education Act: 33, 52, 68, 222, Part 6

Trustee Act

Reviewed or Revised:
Executive: June, 2019

References shall be updated as required and do not require additional approval.