19462 BANK ACCOUNTS
(Revised 9/00)
Departments may be authorized either by statute or by approval from DOF, Fiscal Systems and Consulting Unit, (FSCU) to deposit moneys not under the control of the State Treasurer in banks outside of the centralized State Treasury System (CTS).
Departments that have statutory authority to deposit moneys in banks outside the CTS should adhere to the conditions prescribed by the Director of Finance and must notify the State Treasurer by letter stating the name and location of the bank, amount, source, and purpose of the funds to be deposited, and the type and term of the deposit arrangement. In addition, departments that have statutory authority to deposit outside the CTS must submit the report required by Condition 4 of this section.
Departments without such statutory authority will request approval from DOF, FSCU by letter to deposit moneys in bank accounts outside CTS. See SAM Section 8002.
The following conditions are prescribed by the Director of Finance for depositing moneys in bank accounts outside CTS:
- Unless otherwise exempted by statute, a department must have approval from DOF, FSCU to maintain the account outside CTS.
- Except as otherwise provided by law, General Fund money will not be deposited with banks by any State officer other than the State Treasurer.
- Deposits shall not exceed $100,000 in any one bank, including all of its branches. Deposits of personal funds of patients, wards, inmates, or students that are held in trust by a State institution maintaining accounting records that identify the specific ownership of such funds shall also not exceed $100,000 per account. However, departments may deposit in excess of the maximum ($100,000) in any one bank if the State department notifies the State Treasurer that deposit collateral requirements have been met. See SAM Section 8002 for collateral requirements.
- The Report of Bank/Savings and Loan Association Account Outside the Treasury System form, STD. 445 (No. 14) stating the balance in each such account as of June 30 of each year shall be submitted to SCO and STO by August 20. See SAM Sections 7951, 7975, and 7990.
- No person shall make withdrawals until a bank signature card has been properly completed. The same statement shown in SAM Section 8001.2 pertaining to the necessity of two authorized signatures for withdrawals in excess of $15,000 is required.
Any department that maintains maximum deposits of $100,000 should periodically review its bank account balances to make certain that the maximum insured amount will not be exceeded when interest earnings are added to the accounts. It is the department's responsibility to make arrangements with the bank to allow interest payments to be sent directly to the department when such payments would increase the balance of an account in excess of the maximum insurable amount. These excess amounts may be deposited in another bank (upon approval by DOF, FSCU) or within CTS.
The deposit of moneys in bank accounts should permit the maximum earnings of interest and the ready access to a reasonable amount of cash to meet unusual demands.
Departments should assure that time or interest-bearing term deposits are held until expiration of the certificate or certificate of deposit to avoid early withdrawal penalties. Federal regulations require a substantial interest penalty for early withdrawals of principal.
