Cash Management


Purpose

The purpose of the Cash Management function is to monitor the cash collection, cash disbursement, and bank account to ensure that appropriate cash levels are maintained for the organization to meet its financial obligations. The AUI Corporate Office maintains the following accounts: 1) JP Morgan interest-bearing, sweep bank, 2) JP Morgan Prime Money Market Account, Multi-Asset Fund at The Investment Fund for Foundations (TIFF), 3) ING Business Savings Account and 4) ING Business Certificate of Deposit.

Definitions

Cash Equivalents – AUI considers all highly liquid investments with remaining maturities at date of purchase of three months or less to be cash equivalents for financial statement purposes. Cash equivalents include amounts held in a prime money market sweep fund.

Procedure

  1. On a weekly basis the AUI/NRAO Chief Accountant and AUI Treasurer review the cash balance of the JP Morgan bank account via the banking institute’s website to monitor spending and detect any errors.
  2. On a monthly basis the AUI/NRAO Chief Accountant posts the income from the NSF cooperative agreements management fee and indirect costs as well as the interest from investment activity.
  3. On a monthly basis the AUI/NRAO Chief Accountant prepares an Investment Summary report which aggregates the activity and performance of the AUI investments. This report is submitted to the AUI Treasurer for review.
  4. Controls
    A reconciliation of the JP Morgan Corporate Accounts is performed monthly by the NRAO Chief Accountant, to help identify any discrepancies in the bank account balance and the general ledger cash balance. The completed bank reconciliation is reviewed and approved by NRAO’s Accountant, which provides a segregation of responsibilities for the review and posting of cash transactions.