Cash management

By law, the Comité de gestion is the only organization authorized to take out loans to cover its own needs and those of the three school service centres and two school boards on the Island of Montreal.

The Comité de gestion also handles the cash management needs of those school service centres and school boards. Cash management has two components: centralized cash management and short-term loans.

Centralized cash management for the school service centres and school boards

Each day, the Comité de gestion determines its liquidity needs and those of the school service centres and school boards on the Island of Montreal to establish the amounts it must borrow each day based on disbursements and deposits to be made by the six organizations.

Since the Comité de gestion has an account in each financial institution used by those school service centres and school boards, it transfers the sums required each day into those accounts. They are thus replenished each morning and returned to zero at the end of each day.

This centralized cash management system makes optimal use of fund surpluses and short-term loans.

Savings

Centralized cash management generates savings for the school service centres and school boards on the Island of Montreal resulting from the cost-effective management of bank balances and interest savings.

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Loans

Short-term loans

To meet its short-term financing needs, the Comité de gestion has access to the commercial paper market and the Financing Fund. It issues promissory notes to meet the consolidated short-term borrowing needs of the Comité de gestion, the school service centres, and the school boards.

In this way, the Comité de gestion obtains below-prime interest rates. Its promissory notes are generally for 1 to 90 days and are non-redeemable before maturity. When operating subsidies and interest income from school tax proceeds are received, those funds are used to repay short-term loans.

Long-term loans

Long-term loans made from the Financing Fund are used to finance capital expenditures and IT-related expenditures and refinance long-term debts.

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Portfolio management

The Comité de gestion manages the Risk management plan fund. Available funds are invested in high-quality long-term investment vehicles in the domestic bond market to maximize returns in accordance with the fund’s specific needs.

Return

The annual return from these operations can be found in the Comité de gestion’s annual report.

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