19463 SAVINGS AND LOAN ASSOCIATION ACCOUNTS
(Revised 9/00)
Departments may be authorized either by statute or by approval from DOF, FSCU, to deposit moneys not under the control of the State Treasurer in savings and loan associations.
Departments that have statutory authority to deposit moneys in savings and loan associations should adhere to the conditions prescribed by the Director of Finance but must notify the State Treasurer by letter of each new account and must submit the report required by Condition 6 of this section. The letter will state the name and location of the savings and loan association, amount, source, and purpose of the funds to be deposited and the type and term of the deposit arrangement.
Departments without such statutory authority will request approval from DOF, FSCU, by letter to deposit moneys in savings and loan associations. See SAM Section 8002.
The following conditions are prescribed by the Director of Finance for depositing moneys with savings and loan associations:
- Unless otherwise exempted by statute, a department must have written approval from DOF, FSCU, to maintain the account outside CTS.
- Except as otherwise provided by law, General Fund money will not be deposited with savings and loan associations by any State officer other than the State Treasurer.
- Deposits shall be made only with eligible savings and loan associations as stated in Government Code Section 16600.
- Deposits shall not exceed $100,000 in any one savings and loan association, 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, a department may deposit in excess of the maximum ($100,000) in any one savings and loan association if the State department notifies the State Treasurer that deposit collateral requirements have been met. See SAM Section 8002 for collateral requirements.
- No person shall make withdrawals until a savings and loan 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.
- 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 the SCO and the STO by August 20. See SAM Sections 7951, 7975, and 7990.
A department that maintains maximum deposits ($100,000) should periodically review its savings and loan balances to make certain that the maximum insured amount will not be exceeded when interest earnings are added to its accounts. It is the department's responsibility to make arrangements with its savings and loan association 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 eligible savings and loan association (upon approval by DOF, FSCU) or within CTS.
The deposit of moneys in savings and loan associations should permit the maximum earnings of interest, and the ready access to a reasonable amount of cash to meet unusual demands, in addition to cash held in the State Treasury account to meet ordinary withdrawal demands.
Agencies 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. Generally, no interest is earned for 90 days immediately preceding the withdrawal and any applicable interest earnings are calculated at the current rate on regular accounts.
