FI105 Umoja Cash Management and Treasury Overview. Umoja Cash Management and Treasury Overview Version 16 1

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1 FI105 Umoja Cash Management and Treasury Overview Umoja Cash Management and Treasury Overview Version 16 Copyright Last Modified: United 14-Aug-13 Nations 1

2 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Course Summary Course Assessment Course Survey 2

3 Course Overview The purpose of the Umoja Cash Management and Treasury Overview course is to introduce the Cash Management processes conducted at UNHQ Treasury and UN cashier field offices and to introduce how these processes are changing with the implementation of Umoja. Prerequisite Review You should have completed the following prerequisite courses: Umoja Overview Umoja Master Data & Coding Block Overview Course Duration: 3 hours 3

4 Course Objectives After completing this course, you will be able to: Describe the Cash Management and Treasury process within Umoja List the key roles and responsibilities in Cash Management and Treasury Describe the key changes and benefits of Umoja Cash Management and Treasury Name the elements that constitute Cash Management and Treasury Master Data Identify key impacts that Cash Management changes will have on other Umoja process areas Identify the Umoja processes within the Cash Management and Treasury process area Identify how each process integrates with other Cash Management and Treasury processes as well as with other Umoja process areas Identify the reports used for Cash Management and Treasury 4

5 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Course Summary Course Assessment Course Survey 5

6 Module 1 Objectives After completing this module, you will be able to: Explain the purpose of cash management within the Umoja framework Explain the roles played by UNHQ Treasury in New York as well as Cashier offices in field missions and offices away from the headquarters Explain how the roles played by UNHQ Treasury and Cashier offices will change with the implementation of Umoja Identify key changes being implemented within UNHQ Treasury and the global implications of these changes Identify key impacts of cash management changes to UNHQ Treasury and Cashier offices in the field 6

7 Key Terminology Key Term Bank Master Record House Bank Account Straight Through Processing (STP) Foreign Exchange (FX) Description The central repository where bank information such as bank name, ABA number, SWIFT code, etc. is stored in Umoja Bank accounts through which the organization makes outgoing payments and receives funds. A House Bank account contains multiple General Ledger (G/L) subaccounts to facilitate the daily reconciliation of the account Setting a sequence of events into a logical automated process without the need of re-entering master or transactional data across the entire process The global market where one currency is traded for another currency 7

8 Key Terminology Key Term Electronic Funds Transfer (EFT) OAH SWIFT Automated Clearing House (ACH) Description Transfer of funds between accounts by electronic means rather than conventional paper-based payment methods, such as cheque United Nations Offices Away from Headquarters Society for Worldwide Interbank Financial Telecommunication An industry cooperative that provides a standard format for transmitting payments and other financial messages to more than 7,500 member banks, broker dealers and organizations around the world An electronic network for financial transactions in the United States large volume, low cost batches. It is used for all kinds of fund transfer transactions including direct deposit of funds, cheques and routine payments to vendors. Rules and regulations that govern the ACH network are established by National Automated Clearing House Association (NACHA) and the US Federal Reserve 8

9 Roles & Responsibilities Cashier Back Office Treasury User Treasury Administrator Front Office User Investment Cashier Generates payments (F110) from bank accounts within authority Ensure transactions are posted and bank communication files are generated by Umoja Reviews Cash Control by Fund/Grant Manages all Cashier Window activities, including Cash Journal Generates receipts and initiate payment application vs. A/R, etc. items Reviews and imports bank statements and oversee auto-reconciliation of bank accounts Confirms/settles investment and FX trades with counterparties and transmit relevant details to custodian via SWIFT Reviews and approves payment requests for investments and FX related trades Reviews and posts daily net investment income as calculated by ADB processes Issues daily investment reports and provide ad hoc investment statistics Reviews/authorizes Treasury transactions between House banks (2nd level authorization) Creates and maintains Master Data pertaining to Treasury activities, including business partners, issues, brokers, banks, etc. Works with Finance Managers to open/close bank accounts in Umoja Executes investment and foreign currency transactions Responsible for cash positioning relying on cash and liquidity forecasts and creating memo records for items not yet reflected in the system Initiates bank to bank transfers Generates all payments (F111) in SAP Ensures that bank data are reflected in SAP accurately and timely to allow Front Office to manage daily liquidity Verifies that all bank communication files are processed and accepted by SWIFT/banks in a timely manner 9

10 Cash Management Process Area The Cash Management process area comprises all business processes needed to: Keep the cash balances of the UN bank accounts, funds and grants at optimal levels Support the processing of deposit receipts into the UN bank accounts Support the execution of payments from the UN bank accounts Maintain the stability of the UN s financial structure Manage investments and foreign currency of the UN in a profitable way 10

11 Cash Management Process Cash Management Process Cashier Offices in Field Missions UNHQ Treasury in New York Cashier Offices in OAH Though most cash management activities are performed by UNHQ Treasury in New York, the Cashier offices in the field missions and in OAH also play a key role in the Cash Management process. 11

12 Field Missions & OAH: Cashier Office In the field missions and OAH, the Cashier office is responsible for: Checking the accuracy of posted transactions for outgoing payments Conducting or generating payment runs for outgoing payments to various payees such as staff members, commercial vendors, MILOBs, UNPOLs or individual contractors Notifying payees when outgoing payments have been made Following up with banks to resolve issues related to incoming receipts or outgoing payments Receiving cash and cheques and depositing them to the assigned House Bank Account(s) Assisting in forecasting cash needs (amount and currency) based on the projected inflows and outflows of the various sections or departments Coordinating with the UNHQ Treasury for the replenishment of the House Bank Account(s) Reporting to UNHQ if there are insufficient funds at the fund and grant level (as identified by cash control) Assisting in the timely recording of incoming receipts to the proper fund/grant 12

13 Relationship between UNHQ Treasury & Field Cashier Offices UNHQ Treasury Currently, regular contact is maintained to manage, track and resolve: Outgoing FX payments High-value USD payments Monthly cash forecast (by week based on projected expenditures) Resolution of disputes with UNHQ or field banks Cashier Offices in Field Missions 13

14 UNHQ Treasury: Cash Management Responsibilities Currently, in addition to managing its own bank accounts, UNHQ Treasury has the following cash management responsibilities: Replenishing the UN House Bank accounts based on field office cash flow forecast Purchasing foreign currency for non-us dollar House Bank accounts, as required Arranging inter-fund borrowing with the UN Accounts division 14

15 Cash Management in Umoja Umoja Efficiency Enhanced Control Cost Savings Better Client Service The Umoja implementation brings about efficiency, enhanced control, cost savings and better client services to cash management within UN. Consequently, the responsibilities of all cashier s offices will be changed as their operations will be integrated with the rest of the organization through Umoja. 15

16 Cash Management: Key Changes The implementation of Umoja introduces a number of changes to the way cash management is conducted at UN. These changes include: Treasury Fund House Bank Accounts Treasury Fund House Bank Accounts All cash will be pooled under Treasury Fund. All House Bank accounts will be maintained under Treasury Fund. Structure of the House Bank accounts will be streamlined. 16

17 Cash Management: Key Changes The implementation of Umoja introduces a number of changes to the way cash management is conducted at UN. These changes include: G/L Sub- Account Sub- Account Sub- Account SWIFT Multiple sub-accounts will be maintained in the G/L for each House Bank account. SWIFT will be used for payments and communication with the House Banks. Various payment methods (including ACH, SEPA) will be available. This course explains these changes, their concepts and the effects on the work to be performed by the UN staff. 17

18 Current Challenges & Benefits of Umoja The implementation of the Umoja solution tackles a host of cash management pressing issues leading to efficient and streamlined processes and a unified and accurate data source. Challenge Fragmented IT Infrastructure Payments are processed using different payment systems in different duty stations Mission-based accounting is overly compartmentalized making cash level management inefficient and cumbersome More than 100 bank accounts are maintained in USD because each account is linked to a fund Different missions within the same country maintain separate multiple bank accounts, processing payments independently For example: UNIFIL and ESCWA maintain their own independent bank accounts within Lebanon Umoja Solution Benefit Umoja moves payment processing from multiple systems to one system Legacy systems still in use will be interfaced with Umoja The consolidation of financial data and transition to cash management across the missions will result in a steep reduction in the number of UN bank accounts House bank accounts will be used to pay vendors across missions 18

19 Current Challenges & Benefits of Umoja Challenge Umoja Solution Benefit Current UN Banking Model does not accommodate business needs of UN Inability to consolidate the payments for invoices from the same vendor for multiple missions/offices Lack of accurate forecasting results in a higher than optimum cash reserve in some duty stations Use of SWIFT is limited to UNHQ Treasury Global Data is fragmented and inter-office financial processing is cumbersome UN offices independently maintain vendor profiles and banking instructions on various systems High volume of intra-office payment transfers The transition to UN cash pooling and House Bank accounts, where House Bank accounts used to service multiple missions, will enable UN to better manage cash levels The introduction of global Master Data in one system would unify UN s Financial Data Model This would lead to real-time account balances, faster consolidated payment to vendors 19

20 Key Changes to Cash Management & Treasury The key changes to the Cash Management and Treasury process are as follows: Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions 20

21 Transition to Cash Pooling & House Banks Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions Umoja introduces cash pooling where funds are consolidated into Treasury Fund House Bank Accounts. Treasury can manage the cash levels in House Banks based on payment forecasts compiled from multi-mission data. The goal is to minimize the number of bank accounts per country. Benefits Treasury will have a better view of cash levels globally resulting in better cash management Vendors will be paid locally for multiple missions/offices thus reducing international transaction fees Key Changes Payments will be pooled by currency (based on House Bank Determination logic) Bank accounts will be under the name of the UNHQ Treasury Fund, not individual missions These changes will increase the level of interaction across UN locations globally. Note: International payments will be routed to the appropriate House Bank account, maintained by UNHQ Treasury. Local payments will continue to be the responsibility of the mission-based cashiers. 21

22 Transition to Cash Pooling & House Banks Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions Before Umoja Each mission managed its cash in a separate bank account. After Umoja All UN cash is consolidated into UNHQ Treasury Fund (Cash Pool) and each mission/office will have a specific share in the pool as illustrated below. UNHQ Treasury Fund (Cash Pool) UNIFIL MINUSTAH BINUCA UNMIT UNIFIL MINUSTAH BINUCA UNMIT ONUCI UNAMID UNAMI UNMOGIP ONUCI UNAMID UNAMI UNMOGIP UNSCOL UNMISS UNPOS MINURSO UNSCOL UNMISS UNPOS MINURSO ESCOA MONUSCO UNMIK BNUB ESCOA MONUSCO UNMIK BNUB 22

23 Transition to Cash Pooling & House Banks Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions 23

24 Transition to Cash Pooling & House Banks Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions When a mission spends cash, since each mission no longer has its own bank account, that expense is deducted from its share in the Treasury fund and the corresponding House Bank Account. Cash Pool Vendor -400,000LBP UN TREASURY (Lebanese Pounds) UNIFIL ONUCI Interest Total: $3,000,000 -$266 New Total: $2,999,734 24

25 Transition to Cash Pooling & House Banks Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions House Bank Determination Logic: The selection of a specific House Bank Account to pay a vendor is determined by 3 factors: 1. The location of the vendor s bank account 2. The currency required for payment 3. The method of payment being used These criteria constitute what is referred to as House Bank Determination Logic 25

26 Transition to Cash Pooling & House Banks Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions Example: UNSMIS (peacekeeping mission in Syria) has an outstanding bill with a Lebanese vendor. 2. Payment Currency: LBP 1. Vendor Bank Account Location: Lebanon 3. Payment Method: EFT House Bank Account: UNHQ Treasury, Lebanon (LBP) 26

27 Introduction of Cash Journal to Field Missions Transition to Cash Pooling and House Banks Introduction of Cash Journal to Field Missions The electronic cash journal replaces Cash Receipt Vouchers in the field. Immediately, on receipt of cash or a cheque, a Cash Journal will be raised. A system document will be generated at the end of the process and given to the payee to acknowledge the receipt of the cash or cheque. Incoming payments received via bank transfer (EFT) will not require the raising of a Cash Journal because the system will automatically allocate and clear all open items in AP or AR, which match the open items in the uploaded bank statements. 27

28 Key Impacts of Treasury Changes The transition to Umoja will result in key impacts across Cash Management and Treasury: Cash Management UNHQ Treasury can more easily manage global cash levels to ensure only required operational balances are maintained in bank accounts, and investments can be maximized to generate income Bank directory populated from a SWIFT database with automated monthly updates directly to Umoja Improved liquidity forecasting globally The remittance process is no longer required Treasury Umoja facilitates the creation of IPSAS compliant reporting at year-end (June & December) since all data will reside in one system (e.g. mark-to-market valuation) Automated daily reconciliation of investment positions will be done between Umoja and the custodian USD and foreign currency will be managed centrally by UNHQ Treasury based on Umoja liquidity forecasts 28

29 Learning Checkpoint 1 Umoja will introduce cash pooling where cash and investments will be grouped into. Fill in the blank with the correct option. A. Treasury Fund B. Mission Bank accounts C. Sub ledger accounts D. Vendor Bank accounts 29

30 Learning Checkpoint 1 Umoja will introduce cash pooling where cash and investments will be grouped into. Fill in the blank with the correct option. A. Treasury Fund B. Mission Bank accounts C. Sub ledger accounts D. Vendor Bank accounts Option A is the correct answer. Umoja will introduce cash pooling where cash and investments will be grouped into Treasury Fund. 30

31 Learning Checkpoint 2 The determination of the disbursing UN bank accounts (House Bank Determination) will be based on which of the following factors? Select the correct option. A. Currency B. Payment Method C. Location of the vendor bank account D. Options A and C E. Options A, B and C 31

32 Learning Checkpoint 2 The determination of the disbursing UN bank accounts (House Bank Determination) will be based on which of the following factors? Select the correct option. A. Currency B. Payment Method C. Location of the vendor bank account D. Options A and C E. Options A, B and C Option E is the correct answer. The determination of the disbursing UN bank accounts (House Bank Determination) will be based on various factors such as currency, payment method and location of the vendor bank account. 32

33 Module 1 Summary The key points covered in this module are listed below: The Cash Management process includes all business processes needed to maintain UN s bank accounts and financial stability Current challenges include fragmented IT infrastructure, compartmentalized mission-based accounting, current banking model that does not accommodate UN business needs, fragmented global data and cumbersome financial processing Benefits of the Umoja system include unification of UN financial data model, real-time account balances and consolidated payments to vendors Key changes to the Cash Management and Treasury process include transition to Cash Pooling and House Banks, and the introduction of Cash Journal to Cashier Offices in Field Missions A key impact of Umoja on cash management is improved liquidity forecasting globally Key impacts of Umoja on Treasury include the central management of USD and foreign currency by UN Treasury based on liquidity forecasts, and the elimination of the remittance process 33

34 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Course Summary Course Assessment Course Survey 34

35 Module 2 Objectives After completing this module, you will be able to: Identify the Master Data elements used within the Cash Management and Treasury process area 35

36 Cash Management & Treasury Master Data Elements Master Data enables all UN data across specific functional areas to be housed in one place and to be accessed from anywhere in the world. Each process area utilizes a different combination of Master Data elements. The Cash Management and Treasury process uses the following Master Data elements to execute transactions and maintain source data: House Bank Payee Bank Bank Reference List UNHQ Treasury Business Partner 36

37 House Bank House Bank Payee Bank Bank Reference List UNHQ Treasury Business Partner House Bank Account refers to the bank account of UN. Payments are deposited into the House Bank Accounts and payments are made out of the House Bank Accounts. The House Bank Account is linked to the Bank Master Data. House Banks allow: UN to manage multiple funds out of one bank account (for example, RSC Entebbe will use one bank account to make local payments for multiple mission funds) UNHQ Treasury to settle invoices more efficiently in multiple currencies 37

38 House Bank House Bank Payee Bank Bank Reference List UNHQ Treasury Business Partner UNHQ Treasury is responsible for maintaining a House Bank Determination Table in Umoja. This table is referenced by Umoja each time a payment is created. This table determines which House Bank account will be assigned for a particular payment (Please see House Bank Determination Logic in Module 1). House banks are assigned to various UN offices by the UNHQ Treasury. In principle, a UN office will be responsible for executing its local payments, such as payments in local currency or payments going to local banks. 38

39 Payee Bank House Bank Payee Bank Bank Reference List UNHQ Treasury Business Partner Payee Bank is included in Business Partner Master, and contains banking information for Business Partners established in Umoja. Payees include: UN employees UN Agencies Foundations and other affiliated funding sources (WHO, ILO for example) Commercial vendors Non-staff consultants and contractors Member States Implementation Partners of UN Grants 39

40 Bank Reference List House Bank Payee Bank Bank Reference List UNHQ Treasury Business Partner The Bank Reference List is a data table stored in Umoja that contains important Master Data for global banks. The Bank Reference List contains the following information: Bank name Bank address Bank contact details SWIFT/BIC (if applicable) CHIPS UID (if applicable) National clearing codes (if applicable) The information in the Bank Reference List is used to generate payments and communicate with banks. The central database eliminates the need for each local UN office to manually verify bank data before executing a transaction. 40

41 UNHQ Treasury Business Partner House Bank Payee Bank Bank Reference List UNHQ Treasury Business Partner In Umoja, a Treasury Business Partner can take the form of a person, group or organization. Treasury Business Partners are entities with whom the UNHQ Treasury maintains banking relationships, including investment and foreign currency transactions. Examples of Business Partner roles include: Depository banks custodians Brokers FX counterparty banks Issuers of securities 41

42 Learning Checkpoint 1 Brokers and depository banks are examples of which of the following Master Data elements? Select the correct option. A. Master Data B. House Bank C. Payee Bank D. UN Treasury Business Partner 42

43 Learning Checkpoint 1 Brokers and depository banks are examples of which of the following Master Data elements? Select the correct option. A. Master Data B. House Bank C. Payee Bank D. UN Treasury Business Partner Option D is the correct answer. Brokers and depository banks are examples of UN Treasury Business Partners. 43

44 Learning Checkpoint 2 Which of the following Master Data elements eliminates the need to manually verify bank data before executing a transaction? Select the correct option. A. Payee Bank B. House Bank C. Bank Reference List D. UN Treasury Business Partner 44

45 Learning Checkpoint 2 Which of the following Master Data elements eliminates the need to manually verify bank data before executing a transaction? Select the correct option. A. Payee Bank B. House Bank C. Bank Reference List D. UN Treasury Business Partner Option C is the correct answer. The Bank Reference List is a data table stored in Umoja that contains important Master Data for the banks with which UN interacts. It eliminates the need to manually verify bank data before executing a transaction. 45

46 Module 2 Summary The key points covered in this module are listed below: House Bank: Record of Master Data elements associated with the UN bank accounts Payee Bank: Master Data list containing banking information for all payees (business partners) and included as part of the business partner profile Bank Reference List: Data table stored in Umoja that contains important Master Data for global banks UN Treasury Business Partner: Third parties with whom UN Treasury maintains a banking relationship or enters into investment or foreign currency transactions 46

47 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Course Summary Course Assessment Course Survey 47

48 Module 3 Objectives After completing this module, you will be able to: Identify the Umoja processes within the Cash Management and Treasury process area Identify how each of the processes integrate with one another as well as processes within other Umoja process areas 48

49 Outgoing Payments Create a payment proposal Check cash sufficiency at fund/grant level Approve payment Create payment media Release payment files Description The Outgoing Payments process identifies the steps to create a payment proposal, conduct required cash sufficiency checks, create payment media, and release payment files. Prerequisites The prerequisite processes that must be completed prior to the execution of the Outgoing Payments process are: Daily review of bank account cash levels Setup of Master Data for business partners, including payee data Note: The steps followed to execute the Outgoing Payments process in Umoja are covered in the Umoja Payment Processing course. 49

50 Outgoing Payments Disbursement Methods in Umoja The Outgoing Payment process outlines the various disbursement channels used by UN Treasury to pay vendors. These disbursements methods include: Sending SWIFT payment messages to House Bank accounts Transmitting ACH payments to House Banks for non-urgent USD payments in the U.S Transmitting SEPA payments to House Banks for non-urgent Euro payments within SEPA countries Printing and distributing cheques Requesting a UN Agency to make payments, acting as a pay agent 50

51 Incoming Payments Cash & Cheque Review cash and cheques Confirm the purpose of the payment Examine the validity of cash and cheques Post receipt of the incoming payment in Cash Journal Issue receipt as required Description The Incoming Payments Cash and Cheque process outlines how incoming receipts, received in the form of cash or cheques, are processed. The introduction of Cash Journal functionality to field missions impacts the processing of cash and cheque receipts. The Cash journal functionality simplifies the incoming receipt process by eliminating the need for someone outside of the Cashier s Officer to approve the CRV raised to attest the receipt of the cash or cheque. This will have the added benefit of pooling incoming payment records into one system immediately upon receipt, and so produce real-time information for management. Note: The steps followed to execute the Incoming Payments - Cash and Cheque process in Umoja are covered in the Umoja Payment Processing course. 51

52 Daily Reconciliation of Bank Transactions Validate open items against open line items in the General Ledger Clear reconciled open items from prior day bank statement Send receipt confirmations to payers, as needed Manually adjust the generated Cash Position and Liquidity Forecast reports Note: Finance/Accounts Division has primary responsibility for bank account reconciliation. Treasury or the Cashier will assist with reconciling as required. Description The Daily Reconciliation of Bank Transactions process outlines the steps to reconcile the UN bank statements at the end of each day. Treasury will assist the Accounts Division with daily reconciliation by providing additional information as required. Benefit Prior to Umoja, most of the reconciliation process was manual. In Umoja, with the exception of bank statement line items that cannot be reconciled due to missing or incorrect information, this process is automated. The automation of the daily reconciliation reduces the overall time commitment currently required. As a result, it enables UN employees to focus their attention on more analytical accounting issues. Note: The steps followed to execute the Daily Reconciliation of Bank Transactions process in Umoja as well as the Reconciliation Exception processes are covered in the Umoja Payment Processing course. 52

53 Cash Position & Liquidity Forecast Generate Cash Position and Liquidity Forecast Report Extract relevant cash and liquidity data Ensure reports include current bank data Manage Cash Levels as Required Description The Cash Position and Liquidity Forecast process introduces the Cash Position and Liquidity Forecast report. Prerequisites The prerequisite processes that must be completed prior to the execution of the Cash Position and Liquidity Forecast process are: Accounts Payable (A/P) Accounts Receivable (A/R) Material Management Sales and Distribution Note: The steps followed to execute the Cash Position and Liquidity Forecast process are covered in the Umoja Cash and Liquidity Management course. 53

54 Manage Cash Levels Generate Cash Position and Liquidity Forecast Report Extract relevant cash and liquidity data Ensure reports include current bank data Manage Cash Levels as Required Description The Manage Cash Levels process outlines the steps to manage cash levels in UN House Bank Accounts. Depending on the operational requirements, cash levels are managed using the following options: Execute bank-tobank transfer Manage Cash Levels Liquidate/purchase investments Purchase required currency 54

55 Manage Cash Levels The process followed to initiate a bank-to-bank transfer is comprised of three key steps: Execute bank-to-bank transfer Create and approve transfer payment request Transmit MT202 SWIFT message Receive confirmation of MT202 SWIFT receipt Note: The steps followed to initiate the cash concentration process are also covered in the Umoja Cash and Liquidity Management course. 55

56 Transaction Execution Investments Determine daily cash excess / deficit positions Select appropriate investments to be purchased / liquidated Execute the transaction in the Bloomberg AIM trading platform Enter the transaction into Umoja Description The Transaction Execution Investments process outlines the steps to manually record investment transactions in Umoja, since trade execution occurs outside of Umoja. Prerequisites The prerequisite processes that must be completed prior to the execution of the Transaction Execution Investments process are: Cash position Liquidity forecast Treasury Business Partner Security Master Setup Note: The steps followed to execute the Transaction Execution Investments process are covered in the Umoja Investment Accounting course. 56

57 Transaction Execution Foreign Exchange Identify FOREX exposure and prepare FX trade request Execute trade in FXall trading platform Enter trade details into Umoja Attach standard settlement instructions to trade Upon settlement, receipt/ payment of currency Description The Transaction Execution Foreign Exchange process outlines the steps involved in entering into foreign exchange trades such as spot transactions. Prerequisites The prerequisite processes that must be completed prior to the execution of the Transaction Execution Foreign Exchange process are: Cash position and liquidity forecast Current House Bank Account balance FOREX exposure as required Note: The steps followed to execute the Transaction Execution Foreign Exchange process are covered in the Umoja Investment Accounting course. 57

58 Investment Accounting Daily Process Description The Investment Accounting Daily process outlines the steps to execute the daily investment accounting process, which includes the following activities: Generating, reviewing and posting accounting entries for cash flows related to maturities, redemptions, coupon and other interest income received Generating, reviewing and posting accounting entries for accrued income and amortization of premiums/discounts Allocating net interest income to pool participants on a fund basis Reconciling positions between Umoja, the custodian, and the trading platform Fixing variable interest rates and processing corporate actions to update the security cash flows and liquidity forecast Verifying that UNORE and relevant security prices are available in the system, as needed Prerequisites The prerequisite processes that must be completed prior to the execution of the Investment Accounting Daily Process are: Transaction Execution Investments Transaction Execution Foreign Exchange Note: The steps followed to execute the Investment Accounting Daily process are covered in the Umoja Investment Accounting course. 58

59 Investment Accounting Period-End Process Description The Investment Accounting Period-End process includes the following activities: Executing a test run to evaluate Umoja s mark-to-market computations and proposed accounting entries Reviewing accounting journal entries and validating that they are correct (includes mark-tomarket computations) Verifying that UNORE and relevant security prices are available in the system, as needed Prerequisites The prerequisite processes that must be completed prior to the execution of the Investment Accounting Period-End process are: Transaction Execution Investments Transaction Execution Foreign Exchange Investment Accounting Daily Process Note: The steps followed to execute the Investment Accounting Period-End process are covered in the Umoja Investment Accounting course. 59

60 Cash Management and Treasury Reporting Reporting plays an integral role in the Cash Management and Treasury process area. Reports used in this area include: Cash Position Report Liquidity Forecast Report Investment Portfolio Report House Bank Report 60

61 Learning Checkpoint 1 Which of the following process outlines the steps to manage cash levels in the UN House Bank accounts? Select the correct option. A. Incoming Payments Cash and Cheque B. Investment Accounting Period-End C. Transaction Execution Investments D. Manage Cash Levels 61

62 Learning Checkpoint 1 Which of the following process outlines the steps to manage cash levels in the UN House Bank accounts? Select the correct option. A. Incoming Payments Cash and Cheque B. Investment Accounting Period-End C. Transaction Execution Investments D. Manage Cash Levels Option D is the correct answer. The Manage Cash Levels process outlines the steps to manage cash levels in the UN House Bank accounts and replenish those funds when necessary. 62

63 Learning Checkpoint 2 Cash levels can be managed by all of the following methods, EXCEPT: Select the correct option. A. Bank-to-bank transfers B. Liquidate/purchase investments C. Purchase required currency D. Mission account transfers 63

64 Learning Checkpoint 2 Cash levels can be managed by all of the following methods, EXCEPT: Select the correct option. A. Bank-to-bank transfers B. Liquidate/purchase investments C. Purchase required currency D. Mission account transfers Option D is the correct answer. Missions no longer have individual bank accounts. Depending on the House Bank Account being replenished, cash levels can be maintained by either a bank-to-bank transfer, liquidation/purchase of investments, or purchase of required currency. 64

65 Module 3 Summary The key points covered in this module are listed below: The Umoja processes within the Cash Management and Treasury process area Outgoing Payments process Incoming Payments Cash and Cheques process Daily Reconciliation of Bank Transactions process Cash Position and Liquidity Forecast process Manage Cash Levels process Transaction Execution Investments process Transaction Execution Foreign Exchange process Investment Accounting Daily process Investment Accounting Period-End process 65

66 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Course Summary Course Assessment Course Survey 66

67 Course Summary The key points covered in this course are listed below: Current challenges in the Cash Management and Treasury process and the benefits of the Umoja system Key changes to the Cash Management and Treasury process include transition to cash pooling and House Bank creation and the introduction of the Umoja cash journal Master Data elements used within the Cash Management and Treasury process The Umoja Cash Management and Treasury process area include includes processes to execute outgoing payments, incoming payments (cash and cheque), daily reconciliation of bank transactions, cash position and liquidity forecasting, managing cash levels, executing and recording investment transactions, and conducting investment accounting (daily and period-end) Cash Management and Treasury Reporting 67

68 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Module 4: Cash Management and Treasury Reporting Course Summary Course Assessment Course Survey 68

69 Course Assessment Now that you have completed all the modules in this course, you can test your knowledge by completing the Course Assessment. To receive credit for completing this course, you must pass this assessment with a minimum score of 90%. To complete the assessment you must return to the Learning Management System: 1. Log into Inspira 2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning 3. Search for the name of the course under the My Learning Activities section 4. Click the Start link of the course assessment 5. Click the Submit button once you have completed the assessment 69

70 Agenda Course Introduction Module 1: Introduction to Cash Management in Umoja Module 2: Cash Management and Treasury Master Data Module 3: Cash Management and Treasury Processes Module 4: Cash Management and Treasury Reporting Course Summary Course Assessment Course Survey 70

71 Course Survey Your feedback is important to the continuous improvement of our training program. Please complete the evaluation for this course using the following steps: 1. Log into Inspira 2. Navigate to Main Menu -> Self-Service -> Learning -> My Learning 3. Search for the name of the course under the My Learning Activities section 4. Click the Start link of the course survey 5. Click the Submit button once you have completed the course survey 71

72 Congratulations! You have successfully completed the Umoja Cash Management and Treasury Overview course. 72