Treasury Standard Practice Guide references

601.24 – Delegation of Authority
519.01 – Banking and Treasury Services
501.06 – Acceptance of Credit Card Payments
519.03 – Cash Management General Policies

          Treasury Policies

• ATM/CDM Installations
• Allocating Banking Fees to Operating Units
• Merchant Policies
• Internet Sales Policy
• Opening/Closing a New Bank Account
• Wire Transfers

ATM/CDM Installations

The University allows the installation of automated teller machines (“ATMs”) or cash dispensing machines (“CDMs”) on its Ann Arbor, Dearborn and Flint campuses. The primary purpose for the installation of these machines is to benefit the student, faculty and staff populations having cash needs.

All activities related to the installation and operation of any ATM or CDM shall be the sole responsibility of the Treasurer’s office. University units and their staffs should not deal directly with any financial institution regarding the installation of any ATM or CDM except as authorized in writing by the Treasurer.

If you have any questions, please contact the Treasurer’s office at (734) 763-1299.

TREASURER’S OFFICE
POLICY ON ALLOCATING BANKING FEES TO OPERATING UNITS
(Internal Bank approval 2/22/06, rev 4/10/07)

The University maintains a centralized management approach for all of its Treasury Services.  The Treasurer’s Office is responsible for the optimization of cash flow and security of all funds collected, managed, and disbursed by the University.  All banking and treasury services are approved by the Treasurer’s Office (SPG 519.01). 

One of the advantages of the central management approach is the ability to leverage banking services based on volume and consistency of process.   The result should be the highest services, and security for an appropriate price. In doing so, a framework of best practices and internal controls in cash management are incorporated into the establishment of bank accounts, features and the related services.   

Standard University Account/Service Features

• Disbursement accounts will have positive pay capabilities to reduce risk.
• Controlled disbursement will be used when applicable to maximize cash position.
• Foreign checks will only be accepted when the amounts significantly exceed the fees associated with converting to dollars.  No checks should be accepted under $250.
• Account features will be required to maximize cash positioning, reporting, analysis and minimize risk.  These features include but are not limited to Account Reconciliation, Serialized Deposits, Zero Balance Accounts, and Web reporting.
• Secure transportation to bank (armored car or insured carrier)

These principles will be incorporated into the University’s banking structure and most costs absorbed centrally.  Fees associated with special requested collecting methods (lockbox, credit card, courier), disbursement (special checking accounts) or transferring revenues (wires, ACH) are charged directly to the unit receiving the benefit.     

There are instances when units request other special services that address unique situations in their department that would be an exception to the University’s banking structure.  The units are responsible for bearing the costs of these specialized services, with the appropriate features incorporated into central accounts.  The following are estimates of the type of service and cost .

• Fees for the acceptance of foreign checks  ($100/item)
• Lock Box Fees
• Acct. Maintenance, Imaging ($200/mo)
• Per item charges (vary depending on services $4-$8)
• Credit Card Fees (Transaction fee 2-3%, Equip. Purchase $500)
• Special Checking Account Fees (Est. $300/month+volume) 
• General Account Services ($120/Mo)
• Per item depository services ($0.10/transaction)
• Disbursement Services (Per item checks, imaging, positive pay, ($1.60 per item)  Stop Payments ($10/item)
• Reconciliation Services ($80/mo + .10/item)
• Reporting Services ($40/month)
• Insured courier service  - $10 local pickup (Metro delivery)
• Endorsement stamps $7
• Deposit bags & tickets $20/200

Depository Process Costs
The new bank restructuring process was established with the purpose of increasing cash balances available for investment.  The changes in the depository methodology will incur incremental costs associated with the new process.  These fees are intended to be offset by increased earnings from more frequent deposits to maximize investment earnings.  The following are some principles

• The costs of the current depository system is absorbed centrally by the Treasurer’s Office.   These fees will continue to be charged to the Bank Fees account and include:
• Bank Bags
• Deposit Tickets
• Armored Car Service – Cashiers Office at Central and North Campuses
• Cashiers Office redundancies could reduce budget by $250,000

• The new system will bring new costs to the table with new funding sources.  The cost of the new system include:
• Cost of the deposit boxes and related security system – LaSalle will pay for the first $50,000 of cost incurred for these.  Excess of $50,000 is absorbed the by the Treasurer’s Office.
• Increased Armored Car pickup service for the 2 additional boxes. – charged to the Bank Fees account.
• Increased number of bank bags and deposit tickets – LaSalle will pay for the first $10,000, and excess will be charged to the Bank Fees account.
• Increased number of endorsement stamps – charged to bank fees.
• For many units, Metro Delivery is the courier that took deposits to the cashier’s office with the old system.  The Treasurer’s Office has required Metro to obtain insurance in order to continue to perform this service.
• The cost of using Metro Delivery for existing depositors is already budgeted for in each department and will not be absorbed centrally.
• The Office of the Treasurer will, in special cases, cover the cost of courier service to deliver cash and check deposits to LaSalle Bank on a temporary basis until the depository project implementation is complete.  The primary condition under with courier service will be provided by the Office of the Treasurer is when multiple university departments will benefit from a single courier run.  In those cases, the Treasurer’s Office will evaluate the most economical solution between deposit box, armored car, courier, remote deposit or other options.  A memo to document this arrangement will be sent to each unit qualifying for this special case.

• The Office of the Treasurer reserves the right to re-evaluate the cost of any of the depository methods and their benefit to the overall process.  If the Treasurer determines that the cost of any method (courier service, remote deposit, etc.) is not justified, then the affected department(s) may need to pursue an alternative depository method or incur the cost of continued courier service.

Word version:  Bankingfeespolicy4/10/07.doc

Opening/Closing of a Bank Account

All activities related to the opening and closing of any financial institution account with regards to the University of Michigan shall be the sole responsibility of the Treasurer’s office. University units and their staffs should not deal directly with any financial institution regarding the opening or closing of a bank account except as authorized in writing by the Treasurer.

A financial institution account is defined as any account (checking, saving, depository, money market, etc.) opened at a financial institution that uses the name of the University of Michigan, Regents of the University of Michigan or any derivation thereof, uses the University of Michigan tax identification number, or receives the deposit of or disburses University funds.

To open a financial institution account requires appropriate approval by the Board of Regents. Additionally, the Treasurer’s office will need to know the business need for the account, whether it is to be a deposit or disbursement account (or both) and the appropriate structure/features for the account (zero balance basis, controlled disbursement, positive pay, etc.) The business need for the account might be satisfied by integrating the need with an existing account structure.

Unless otherwise directed by the Treasurer’s office, all statements for any accounts for the University shall be mailed to Banking and Transaction Services to allow for prompt account reconciliation. Additionally, all account analysis statements (showing charges for services rendered) for any accounts shall be sent to the Treasurer’s office.

Accounts no longer active or no longer needed should be closed. The closure process requires written authorization to close the account from the business unit utilizing the account. The Treasurer’s office will then contact the appropriate institution and request the account be closed and provide information as to the dispensation of any remaining funds left in the account. Additionally, the Treasurer’s office will provide information regarding the closing of the account to the appropriate personnel in Banking and Transaction Services.  The Treasurer’s Office will notify the business unit to confirm the completion of the account closure process.  The business unit is solely responsible for the proper destruction of any and all remaining check stock and/or deposit ticket inventory previously utilized for the account.  Check and deposit ticket items should be destroyed securely and within 5 business days of receipt of the account closure confirmation.  Any costs associated with the proper destruction of these items shall be borne by the business unit.

If you have any questions, please contact the Treasurer’s office at (734) 763-1299.

Wire Transfers

All wire transfer activity utilizing the Federal Reserve Systems’ FedWire capabilities shall be the responsibility of the Treasurer’s office.

The Treasurer’s office will only utilize a wire transfer of funds in payment of an obligation of the University when the situation requires immediate good funds to settle a transaction. If a more inexpensive mechanism can be utilized to effect payment of the obligation (i.e., ACH or paper check) the Treasurer’s office shall reserve the right to effect payment with the more inexpensive mechanism.

When a wire transfer is executed, the total cost of the wire transfer shall be borne by the operating/business unit requesting the wire transfer.

The Treasurer’s office will generally accept wire transfer requests for same day transfer by 10:00AM. (provided the date of the funds transfer request is NOT a federal holiday.) The Treasurer’s office cannot guarantee adequate funds to cover a wire transfer after 10:00AM.

Original wire instructions should accompany the funds transfer request.

Foreign cable/wire transfer requests should include the original wire instructions as well.

Once a wire transfer request is made and accepted by the Treasurer’s office, the requesting business/operating unit cannot cancel or modify the wire transfer request.

If you have any questions, please contact the Treasurer’s office at (734) 763-1299.