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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 to the CFO- Example

The following example illustrates potential interest earnings for departments remitting directly to the CFO:

  Number of Days Between Receipt and Remittance  
Date of Receipt Date of Remittance 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 Actual Interest Earnings Over the Period (2) 500
Total Potential Interest Earned Over the Period [(1) + (2)] $1,958

RECAP: In our example, we assume the requirement is that departments remit money daily. The above example illustrates that over a 90-day period, the collections did not earn any interest for 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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