9.1.1 Treasurer’s Responsibilities
The Treasurer of the Board of Regents has the responsibility of providing the corporate approval for setting up all new accounts and advising the banks as to approved signatories. The Vice Chancellor for Fiscal Affairs, as the Treasurer of the Board, is responsible for appointing a person or persons at each of the institutions of the University System with authority to sign checks drawn on banks where funds of the respective institutions are deposited. Persons so appointed shall be authorized to sign any documents that may be required by the banks concerned.
When new bank accounts are established, the Treasurer of the Board of Regents must be notified of the planned change and the following information must be provided:
- New bank name (if applicable)
- The bank’s Federal Reserve number
- The institution’s bank account number
- The name and number of the Federal Reserve Bank in Atlanta with whom the local bank corresponds
- The name or names of the signatories for the account
This information should reach the Vice Chancellor for Fiscal Affairs’ Office at least ninety (90) days before the effective date of the proposed change.
The Treasurer of the Board is then responsible for sending certified copies of the minutes of the Board of Regents to the new bank, which advises it of corporate authority for the signers to execute checks drawn on University System funds.
Upon accomplishing the above, the old bank account must be closed as soon as all outstanding checks have cleared, since the old account is no longer the bank account of record. Any transactions clearing through the old account, other than clearing outstanding checks and transferring any remaining cash balances, are unauthorized.
9.1.2 Selection of Banks for General Operating and/or Payroll Accounts
Board policy requires that banking services be subject to competitive bid every five (5) years. The process by which banking services are to be competitively bid is governed by the rules and regulations of the state of Georgia Office of Treasurer and Fiscal Services (OTFS) and the state Depository Board. These rules and regulations require that all banks under contract with a USG institution are expected to meet state Depository Board approved criteria. In addition, USG institutions must first contact OTFS when seeking a new banking service. OTFS will recommend a bidding format. Proposals received by the institution must be sent to OTFS, which will provide a pro forma analysis to the institution to make comparisons. Institutions are free to choose a bank among those filing bids if the bank meets approved criteria and is not the highest bidder. Institutions pay fees directly to the bank and receive any interest earned on deposits.
For further information on OTFS banking requirements, institutions are advised to contact the state Office of Treasury and Fiscal Services directly.
9.1.3 Placement of Cash in Time Deposits
All units of the University System of Georgia placing funds in time deposits shall restrict such placements to banks located in the state of Georgia.
The placement of funds in time deposits is usually associated with resources that must be converted periodically to cash to accommodate operational needs. The term of such placements should be in short periods, but should in no case be more than twenty-four (24) months.
When the sources of funds placed in time deposits are trust funds, the period should be short-term in anticipation of appropriate placement in longer-term, permanent-type investments that produce not only income, but also growth.
Authority for investments of any and all funds resides exclusively with the Treasurer of the Board of Regents. When the Treasurer deems delegation of such authority appropriate, such delegation of authority must be in writing and on file in both the Treasurer’s Office and office of the chief fiscal officer of the institution.
9.1.4 Recording of Interest Earned on Bank Accounts
The following guidelines should be used to record interest earned from bank deposits:
Interest earned on CASH IN BANKS – DEMAND DEPOSITS (invested in accounts known as Negotiable Orders of Withdrawal or N.O.W. accounts) is to be budgeted and receipted in unexpended plant funds and, thus, be used for capital outlay purposes.
Note: For fiscal years 2009 through 2012 only, the Board of Regents Reduction Plan allows institutions to use interest earned on Demand deposits for operating purposes also.
Interest earned on CASH IN BANKS – TIME DEPOSITS, in most instances Certificates of Deposit (C.D.), is to be budgeted and receipted as interest earned in the fund group that provides the resource to purchase the certificate(s).
Resources from restricted funds, auxiliary enterprises funds, loan funds, endowment funds, unexpended plant funds, and student activity funds, which are invested in time deposits, shall appear on the Statement of Net Assets as “Cash and Cash Equivalents”. Further, interest earned on said time deposits shall be reflected in the fund group providing the resource as “Non Operating Revenue – Interest Income.”
9.1.5 Bank Depositories
All depositories, where funds of the Board of Regents of the University System are held in time deposits, shall either give a depository bond in some acceptable security company qualified to do business in Georgia, or, in lieu thereof, may deposit with some other depository satisfactory to the Treasurer of the Board of Regents and the state of Georgia Office of Treasury and Fiscal Services, securities of the following classes, the current market value of which shall be equal to or in excess of the amount of the time deposits:
- Direct obligations of the United States Government
- Obligations unconditionally guaranteed by the United States Government
- Direct obligations of the state of Georgia
- Direct obligations of any political subdivision of the state of Georgia
- Georgia municipal, county, or state of Georgia Authority Bonds acceptable to the Treasurer of the Board of Regents
9.1.6 Service on Bank Governing Boards
The chief business officer of each institution of the University System of Georgia and any other officer or employee who participates in the selection of the institution’s depository (bank) are prohibited from serving on the governing boards of banks and other financial institutions, if such banks or other financial institutions have or seek a commercial relationship with that institution.
The president of an institution may serve on the governing board of a bank or financial institution that does not have a commercial relationship with the institution. However, such a bank or financial institution may not be considered by the institution for establishment of a commercial relationship with that institution of the University System of Georgia for not less than two (2) years after the termination of the president as a member of the board.