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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 3: Maximizing Interest Earnings

Your Account Analysis

If you are not receiving monthly analysis reports from the bank, contact your representative and ask for copies of your account analysis for the last 12 months. Compare these reports with your account listing to verify that the bank is reporting activity for all the accounts your locality has on deposit (not only the chief fiscal officer accounts, but all the departmental checking accounts, such as the tax collector, town clerk, town justices, etc.). Some banks may not track this type of information on their system, so you may not get detailed information on balances, transactions, and cost of bank services. In this case, you must review the last few months' bank statements to see if daily balances appear high.

To make monitoring compensating balance requirements easier, you should make sure that the bank's monthly analysis reports include all bank accounts of your municipality. Bankers have informed us that they do not expect each account to maintain a sufficient balance to cover service costs. Rather, they are satisfied when they recover service costs on an overall basis. By having information on all your departmental accounts (tax collector, justices, town clerk, building permits and inspection, etc.), you can easily determine if excess compensating balances from these accounts can cover the compensating balance requirement for the chief fiscal officer's checking accounts. This could free CFO funds for investment purposes.

  Next: Key Questions to Ask Your Bank