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NYS Comptroller

THOMAS P. DiNAPOLI

The Academy for New York State's Local Officials

Cash Management: A Tutorial for Local Governments and School Districts

Module 1: Speeding Up the Collection and Deposit of Receipts

Departments Depositing Funds Directly into the CFO's Account - Example

The following example illustrates potential interest earnings for departments depositing directly into the chief fiscal officer's account.

  Number of Days Between Receipt and Deposit  
Date of Receipt Date of Deposit Current Proposed Difference Deposit Amount Annual Interest Rate Number of Days in Year Additional Interest Earnings
1/1 1/10 9 1 8 $100,000 2% 365 $44
1/11 1/31 20 1 19 $300,000 2% 365 $312
2/1 2/24 23 1 22 $250,000 2% 365 $301
2/25 3/11 14 1 13 $500,000 2% 365 $356
3/12 3/31 19 1 18 $450,000 2% 365 $444
Additional Interest Earnings Over the Period (1) $1,458
Enter Your Actual Interest Earnings Over the Period (2) $1,000
Total Potential Interest Earnings Over the Period [(1) + (2)] $2,458

RECAP: In our example, we assume the requirement is that departments deposit moneys daily. The above example illustrates that over a 90-day period, some of the funds did not earn any interest for up to 80 days of that period. We based our computations on a conservative 2% APR. You would use the interest rate applicable to your situation.

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