Unit 15 and the recent financial news

SandyHood

Look at the specifications for the unit
It relates to 15.2 Manage Cash Balances
Performance criteria – in order to perform this element successfully you need to:
B Invest surplus funds in marketable securities within defined financial authorisation limits.
C Ensure the organisation’s financial regulations and security procedures are observed
D Ensure account is taken of trends in the economic and financial environment in managing cash balances
E Maintain an adequate level of liquidity in line with cash forecasts

Knowledge and understanding – perform this unit effectively you will know and understand:
The business environment
2 The basic structure of the banking system and the money market in the UK and the relationships between financial institutions
4 Types of marketable security (bills of exchange, certificates of deposit, government securities, local authority short term loans); terms and conditions: risks
5 Government monetary policies
Accounting techniques
16 Managing risk and exposure
Accounting principles and theory
25 Liquidity management
The organisation
26 Understanding that the accounting systems of an organisation are affected by its organisational structure, its administrative procedures and the nature of its business transactions
28 An understanding that practice in this area will be determined by an organisation’s specific financial regulations, guidelines and security procedures
29 An understanding that in public sector organisations there are statutory and other regulations relating to the management of cash balances

SandyHood

Year after year students post threads asking about the regulation of short-term cash surpluses by public sector and private sector organisations, and helpful forumites dive for stock answers from text books.
But this time we are living through an example of a problem in this area.

So rather than running for the comfort of a text book, I advise good students to pick up a newspaper such as the Observer this Sunday and to read the commentaries on the financial crisis.
You will then see so much of the standards and have a chance to think about this very real subject area.


B Invest surplus funds in marketable securities within defined financial authorisation limits.
Try and find the financial authorisation limits for investing surplus funds (in any type of investment) in the organisation where you work. Nothing secretive, just broad principles they use to guide their decisions.
Then try and find the same rules used by your local authority (and just a brief reminder, your local authority can't be too secretive afterall they are elected by you and they are funded by your money). You are entitled to know what guidelines they use.

SandyHood

D Ensure account is taken of trends in the economic and financial environment in managing cash balances

Ask your sources, are they changing the policies and procedures in the light of the current financial difficulties in the world around them?