Process Confirmation

Treasury/Cash
Management

Project XYZ Initiative
April 23rd, 2008
2
Team Presentation Contents
Key Count Summary
Process Summary and Objectives
Roles
Leading Practices and Key Features
Process Optimization Opportunities
As-Is and To-Be Significant Process Changes
Identified Gaps
Policy and Board Rule Impacts
Change Impacts
Controls Framework
As-Is and To-Be Significant System Changes
To-Be Application Architecture Overview
Potential Key Development Objects
Support Required from the Steering Committee
Implementation Challenges
3
Potential Key Count Summary
Item Count
Processes: 4
Tasks: 23
Worksteps: 74
Roles: 3
Potential Key Development Objects
(excluding reports):
2
SMAs: 6
Review Sessions: 5
Validation Sessions: 1
4
Process Summary and Objectives
Summary CM-010 Manage Banks
This process deals with the approval and maintenance of banking master data elements
such as the Account ID, Bank Account Number, Name and address of bank, etc. It
includes managing bank master data from a centralized perspective. This process
ensures that all banking data is accurate and safeguarded

Objectives
Define the request and approval process for central maintenance of the banking master
data elements (i.e. Account ID, various types of bank accounts within each bank, Account
Number, Name and address of bank, etc.)

Maintain one single, central master data database for all House banks. All House bank
master data will be maintained within Treasury
5
Process Summary and Objectives
Summary CM-020 Manage Liquidity for District
This process deals with the daily cash management activities and the generation of cash
position and liquidity reporting. This process ensures that all cash is recorded accurately
within ICMS and SAP and provides the correct data required for short and mid term cash
management and investing activities

Objectives
Centralize cash receipting process. All incoming payments will be receipted to cash by
Treasury and application of cash and clearing will be done by the AR department within
General Accounting

Identify all cash flows daily and have real-time cash position information

Provide greater visibility to all cash

Provide comprehensive cash reporting and drill down capabilities to view transactions



6
Process Summary and Objectives
Summary CM-025 Debts & Investments
This process describes the various processes involved in managing Debts & Investments

All Debts & Investments will continue to be managed within ICMS and summary level
information will be interfaced to SAP

Objectives
Management of Debts & Investments will remain within ICMS and summary level
information will be interfaced to SAP, memo records will be created and included in the
Liquidity forecast report. This will assist Treasury when making key investment decisions
7
Process Summary and Objectives
Summary CM-030 Manage Liquidity at Schools
This process deals with the administration of cash flow within the schools. Each
Treasurer will be responsible for managing and controlling the cash flow within their
school. SAP will help schools record their cash efficiently and provide the data required
for short and mid term cash management and investing activities


Objectives
Identify all cash flows daily and leverage real-time cash position and liquidity information

8
Roles within Cash Management
Role Role Description
Treasurer Process approvals, approves transactions and responsible for all investment
and debts decisions and analysis
Treasury Accountant Review proof of cash report and ensures reconciliation is accurate. Generates
cash position reports
Treasury Analyst Receive and process incoming payments/deposits and wire transfers. Initiate
outgoing payments, wires, ACH, etc
ERP Support Responsible for configuration within SAP post go-live
Internal Funds Clerk Involves the administration of cash management at school sites
9
Leading Practices and Key Features
Centralized receipting process involving all incoming payments processed by Treasury
and posted to cash clearing accounts. AR will enter detail cash entries and clear
receivables

Manage all cash flows daily, have real-time cash position information and ensure
sufficient cash is available to meet daily requirements

Improved Liquidity reporting based upon real time sub ledger data

Forecast requested repayments of principle and interest from investment portfolio and
include data in Liquidity forecast reporting

Ability to view cash balances throughout Client X




10
Process Optimization Opportunities
Current and Proposed Service Delivery Model
Cash management activities reside with ICMS (Treasury workstation). It includes In-
House Bank functionality which controls cash balances by fund and also manages Debts
& Investments. Forecasts are created in ICMS for all incoming, outgoing payments, Debt
& Investments transactions, bank activity etc. The forecasts are reconciled with the
Electronic Banking System (EBS) transactions and interfaced to GL (MSAF)

Process Optimization
Increased efficiency and control resulting from:
Cash balances will be posted in SAP via ICMS-SAP interface. Cash Position will
remain within ICMS, however, Cash Liquidity forecast reporting will be generated from
SAP and will leverage the sub ledger data
Automated bank reconciliation process through EBS processing
Create cash clearing accounts to accurately identify cash in transit and not available
for use

Other efficiencies:
Bank reconciliation will be automated and discrepancies identified through balances within
clearing accounts
Loaded Bank Statements will be available for review within SAP and may be printed,
reconciled and stored with hard copy of bank statement
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As-Is and To-Be Significant Process Changes
As-Is
To-Be
Currently cash receipting is a fragmented
process where payments are first mailed
to individual departments then forwarded
to Treasury. Checks and information
become lost in transit

Treasury posts payments in ICMS and
interfaces reconciled items to GL
(MSAF). Cash and revenue/expense is
entered, no sub ledgers exist, therefore,
no accurate Liquidity forecast reporting

In-House Banking controls cash balances
by fund
All payments will be sent to Treasury
accompanied with remittance (A/R).
Treasury will post payments to cash and
image documentation and send to A/R
department for clearing of receivables

Cash Liquidity Forecast reporting will be
generated in SAP. Accurate forecasting
data derived from sub ledgers


Leverage SAPs document split process
to control cash by fund balances
12
As-Is and To-Be Significant Process Changes
As-Is
To-Be
Decentralized cash receipting process,
lag in time in receipting payments

Bank Reconciliation is manually
completed in Bank Reconciliation
Department
Payments will be posed to cash
immediately as Treasury will receive all
incoming payments
Bank reconciliation will be automated
through EBS processing within SAP.
Discrepancies are easily identified due to
balances left in cash clearing accounts
13
Identified GAPS
No gaps identified

14
Policy Impacts
No policy impacts have been identified


15
Change Impacts
Category
Process: All cash management activities occur within ICMS with an interface to update
the GL (MSAF). Future process involves select transactions (such as FEFP (Location
Y Education Finance Program) and Tax) having detailed accounting data housed within
ICMS and storing summary level information on incoming checks etc. SAP will provide
the accounting detail required for these transactions through the sub ledgers. EBS will
be downloaded to SAP in an effort to automate and ease reconciliation
Benefits of Change
Centralized receipting process involving Treasury posting all incoming payments to
cash clearing and AR relieving these accounts and clearing receivables

Accurate Liquidity Forecasting from SAP assists investment decision making

Automated Bank Reconciliation within SAP

Risks Associated with Change
Delay in the clearing of receivables, investigation required in the event of customer
failing to provide remittance portion of invoice



16
Change Impacts contd



Implementation Requirements
Individuals must have knowledge of the following:
End User training is mandatory for access to the system
Understand the integration between ICMS and SAP
Monitor and maintain interface and ensure that all errors are identified and
resolved quickly
Manage cash clearing accounts and ZBAs (Zero-Balance Accounts) to ensure
that all postings have cleared correctly within SAP

Impacted Audience
Treasury Department
General Accounting
Accounts Receivable
Accounts Payable
All schools

Level of Impact
High
17
Controls Framework
Centralized receipting process involves Treasury posting entries to cash clearing
accounts and AR department entering detailed cash entries and clearing
receivables or posting directly to revenue. Receipting of cash is completely
independent of the billing process
Creation of bank master data will be centralized within Treasury
Only cash application clerks within AR department will have access to receivable
clearing transactions within SAP
Treasury personnel will continue to have access to use ICMS and cash
management/banking transactions in SAP (EBS processing, Liquidity Forecast
reports, etc.)
Authorized Accounting personnel will create journal entries for bank
reconciliation corrections
Bank reconciliations are performed between EBS (Electronic Bank Statements)
and GL postings. Differences or outstanding items are investigated and
resolved on a timely basis


18
As-Is and To-Be Significant System Changes

Currently, all cash management is
conducted within ICMS and balances
are interfaced to GL (MSAF)

Inability to leverage sub ledgers within
ICMS for Liquidity Forecasting

Bank reconciliation department
reconciled bank statement to GL
manually


All forecasts are keyed in detail in
ICMS in order to generate correct GL
postings in MSAF

Cash Management will be managed within both
ICMS and SAP, with Cash position generated
in ICMS and cash liquidity generated in SAP

Liquidity forecast report will be generated out of
SAP and will leverage data from sub ledgers

EBS will post transactions within SAP and clear
cash clearing accounts. Bank reconciliation will
be automated and the only manual tasks will
involve error resolution

Only transactions such as FEFP, taxes etc will
be keyed in detail in ICMS and posted in SAP
via the interface. All other transactions will be
posted as summary and will be applied to
receivable or revenue within SAP. Cash
applied to receivable will derive the account
assignments from the AR invoice
As-Is
To-Be
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Potential Key Development Objects
Name Description Implementation
Requirements
ICMS-SAP
Interface
Create an interface between ICMS and SAP and post all
transactions to cash clearing accounts or revenue
accounts with the use of accounting rules
Need to define
which
transactions post
directly in SAP
and which are
posted to cash
clearing.
Examine
accounting rules
Banking
Interface - SAP
Create interface between banks and SAP for EBS
processing. Configure the EBS portion to ensure that
incoming transactions are posted to correct GL accounts
Define cash
clearing accounts
and identify all
entries that are
will be processed
through EBS
20
To-Be Application Architecture
ICMS
ORDERING
SUB -
SAP
PROCUREMENT AND
INVENTORY MANAGEMENT
INVENTORY MANAGEMENT
SUB - SYSTEMS
Ordering
Subsystems
SAP Procurement and
Inventory Management
Inventory
Management
Subsystems
Funds allocations
Into school accts
Statements
ORDERING
SUB -
SAP
PROCUREMENT AND
INVENTORY MANAGEMENT
SYSTEMS
District
SAP
Business Partners
Schools
SAP
SAP
House Banks:
Manual Deposits /
Disbursements
Payables and Receivables
Cash Position
In House Bank
Debt & Invest.
Incoming Checks & EFTs
Misc Bank Transfers
GL Postings
Liquidity Forecast
(Subledgers AR/AP).
Central House Banks
EBS processing
Payables/Receivables
reconciliation
Cashed Checks

.
21
Support Required from Steering Committee
Assist in gaining District-wide acceptance for a centralized
receipting process. All deposits will go through Treasury and AR
will apply cash receipts and clear all receivables

End User training is mandatory




22
Implementation Challenges
Timeliness of clearing receivables and processing cash receipts

Ensure personnel within the Treasury department retain the
knowledge gained in training within the Banking and Cash
Management modules

Ensure adequate personnel are available to maintain and monitor
the interface and resolve issues in a timely fashion

Ensure individuals are available to monitor the automated
reconciliation process and make corrective journal entries, if
required