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NCJ Number: 64156 Add to Shopping cart Find in a Library
Title: MORE EFFECTIVE FEDERAL AND STATE CASH MANAGEMENT WOULD INCREASE INTEREST INCOME OF UNEMPLOYMENT TRUST FUND
Author(s): ANON
Corporate Author: US Comptroller General
United States of America
Date Published: 1979
Page Count: 42
Sponsoring Agency: National Technical Information Service
Springfield, VA 22151
US Comptroller General
Washington, DC 20548
Sale Source: National Technical Information Service
US Dept of Commerce
5285 Port Royal Road
Springfield, VA 22151
United States of America
Type: Survey
Language: English
Country: United States of America
Annotation: THE EXAMINATION OF THE FEDERAL UNEMPLOYMENT TRUST FUND CONCLUDES THAT INEFFECTIVE CASH MANAGEMENT PRACTICES CAUSE FEDERAL AND STATE GOVERNMENTS TO LOSE $5.1 MILLION ANNUALLY IN INTEREST FROM TRUST FUND DEPOSITS.
Abstract: THE STUDY WAS CONDUCTED BY THE GENERAL ACCOUNTING OFFICE. THE AMENDED SOCIAL SECURITY ACT PROVIDES THAT UNEMPLOYMENT TAXES BE DEPOSITED IN THE UNEMPLOYMENT TRUST FUND SO THAT THE SECRETARY OF THE TREASURY CAN INVEST THEM. DURING THE LAST QUARTER OF 1978, THE FUND EARNED INTEREST AT AN ANNUAL RATE OF 6.25 PERCENT. SOME STATES, HOWEVER, TAKE TOO LONG TO DEPOSIT FUNDS, WITHDRAW MONEY EARLIER THAN NECESSARY TO PAY THE UNEMPLOYED ON TIME, MAINTAIN EXCESSIVE DAILY BALANCES, AND DEAL WITH BANKS REQUIRING HIGHER COMPENSATING BALANCES THAN OTHER BANKS. AS A RESULT, SEVERAL MILLION DOLLARS ARE NOT ON DEPOSIT AND EARNING INTEREST IN THE TRUST FUND. THESE CONDITIONS RESULT FROM THE LABOR DEPARTMENT'S FAILURE TO EFFECTIVELY MONITOR STATES' CASH MANAGEMENT PERFORMANCE AND TO GUIDE THE STATES ON CASH MANAGEMENT PRACTICES. THE SECRETARY OF LABOR SHOULD (1) ENCOURAGE ALL STATES TO DEVELOP A DELAYED DRAWDOWN SYSTEM FOR DAILY WITHDRAWALS FROM THE TRUST FUND, (2) ENCOURAGE STATES TO REMOVE LEGAL AND ADMINISTRATIVE BARRIERS TO EFFICIENT CASH MANAGEMENT, (3) ESTABLISH AN EFFECTIVE MONITORING SYSTEM FOR STATE CASH MANAGEMENT PERFORMANCE AND BANKING ARRANGEMENTS, (4) REVISE AND CLARIFY GUIDANCE ON SELECTING AND COMPENSATING BANKS FOR THEIR SERVICES, AND (5) DEVELOP A PILOT PROGRAM TO DETERMINE A CHECKS-PAID SYSTEM'S FEASIBILITY AND COST EFFECTIVENESS. THE HISTORY OF UNEMPLOYMENT INSURANCE AND TRUST FUND OPERATIONS ARE NOTED. AN ILLUSTRATION AND FOOTNOTES ARE INCLUDED. APPENDIXES PRESENT AGENCY COMMENTS AND STATE-BY-STATE DATA. (CFW)
Index Term(s): Federal government; Financial management; Management; State government; State-by-state analyses; US Department of Labor; US Government Accountability Office (GAO)
Note: REPORT TO THE CONGRESS BY THE COMPTROLLER GENERAL OF THE UNITED STATES
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=64156

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