The Treasurer of State serves as the State’s banker and is responsible for an investment portfolio of approximately $4.5 billion. Every day, our staff accepts deposits, reconciles accounts, prepares statements and answers customers’ questions. As the bank for the State, the office provides many of the same services as private banks.
On average, the office accepts more than $70 million daily in deposits from various local, state and federal sources, and credits them to the proper accounts. These deposits are made up of electronic funds transfers, checks and cash. We process between 2,000 to 3,000 checks and reconcile over 3,000 accounts daily, representing the funds of nearly 200 state agencies, boards and commissions.
The Treasurer is also charged with managing the Arkansas 529 Education Savings Plan, the Achieving a Better Life Experience (ABLE) program for people with disabilities, and is active in promoting financial education.
Here is more information about the responsibilities of the various divisions in the office.
CASH MANAGEMENT DIVISION
The Cash Management Division works with banks and investment firms, initiating daily payment wires and fund transfers to and from the Treasury’s demand accounts to maintain consistent balances. This division also coordinates with the Department of Finance and Administration and other agencies concerning state fund transfers, adjustments, and collection items.
In addition, the Cash Management Division distributes General and Special Revenues on a monthly basis to state agencies, colleges, and universities according to the Revenue Stabilization Act. Interest earning distributions are completed monthly as set forth by law. Finally, Cash Management balances the General Ledger each day.
The Treasury receives deposits on a daily basis. All deposits are verified and documented upon receipt. Each day, the receiving department balances its books and submits a deposit summary to the cash management desk. There are three ways money is received by the Treasury:
DELIVERIES: State agency personnel deliver deposits to the Treasury. State agencies collect money for fees, taxes, etc., which is deposited to the Treasury and then allocated to a respective fund.
FEDERAL RESERVE WIRES: Agencies request funding from the Federal Reserve Department. Once funding is approved, the agencies set up an account at the Treasury. The Federal Reserve wires money to the Treasury where agency personnel can access the federal funds.
DFA REVENUE: The Department of Finance and Administration sends a daily deposit with the “Revenue Receipts Deposit” form to the Treasury. The process for verifying the deposit is the same as documented above for deliveries made to the Treasury.
The State Treasurer is an executive officer of the state, established by the
Constitution of the State of Arkansas; and, is required to perform “ all . . . duties which may be required of him or her by law.” One of the responsibilities assigned to the Treasurer is the investment of funds in the State Treasury and the State Treasury Money Management Trust. The Treasurer works under the policies and procedures established by the State Board of Finance concerning the management and investment of these funds.
The priorities of the objectives of the State Treasurer’s investment practices are safety, liquidity and return on investments.
The Treasury requires that banks doing business with the investment program pledge adequate securities and have a market value equal to at least 105% of the amount of Treasury deposits and/or investments (including accrued interest); and that those securities be held by a third-party Financial Institution Custodian. The Collateralization Policy was adopted to ensure that the State Treasury Funds deposited with a financial institution must be secured at all times by conveyance of a perfected security interest in eligible securities as prescribed in Arkansas Code Annotated (Statute Symbol) 9-8-209 and (Statute Symbol) 23-32-1003 and evidenced by a security agreement.
LOCAL GOVERNMENT SERVICES
The Local Government Services division is responsible for distributions to the state’s 75 counties and 501 incorporated cities.
Monthly distributions include County and Municipal Aid, commonly known as turnback funds, and Local Sales and Use Taxes. The Treasury also distributes several other special revenues to cities and counties throughout the year.
Distributions total over $1.7 billion dollars each fiscal year, an important part of our state’s economy.
A warrant is a check issued by Arkansas State Agencies for payments of services rendered. Warrants can be issued as a paper warrant or an electronic payment. The Warrant Division redeems these warrants once a payee cashes the warrant or the electronic payment is received at the payee’s bank.
The 529 Division manages the Arkansas 529 Education Savings Plan, the Achieving a Better Life Experience (ABLE) program for people with disabilities, and AR Finance AR Future, the financial education outreach efforts of the Treasurer of State’s office. More information is available at arkansas529.org or by calling the 529 Division at (501) 682-1406.