Cash management

By law, the Comité de gestion is the only organization that can borrow to cover its needs and those of the three school service centers and two school boards on the island of Montreal.

On a daily basis, the Comité de gestion carries out the centralized management of the cash flow of these school service centers and school boards. This management includes three components: cash management, requests for loans through lines of credit to the Fonds de financement du Québec for expenditures financed by investment allocations from the Ministère de l’Éducation and other requests for loans for expenditures financed by operating allocations from the Ministère de l’Éducation or other sources.

Centralized cash management

Centralized cash management generates time and administrative cost savings as well as interest income when cash flow exceeds operating requirements.  This additional revenue is in addition to the funds available to finance the allocations to underprivileged areas.

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Borrowing through lines of credit and short-term borrowing

The day-to-day cash flow requirements of school service centers, school boards and the Comité de gestion, in expenditures financed by capital allocations to the Ministère de l’Éducation must be financed from the Fonds de financement du Québec. The interest charged by the Fonds de financement du Québec on these loans is subsidized by the Ministère de l’Éducation.

With respect to financing requirements for expenses financed by operating allowances (salaries and current expenses), the Comité de gestion is free to borrow from other sources of financing, either on the money market or from other sources authorized by the Ministère de l’Éducation, at the most advantageous interest rates for members. Repayment and interest expenses related to these loans are the responsibility of the members of the centralized management.

Long-term loans

Lines of credit for capital expenditures are periodically converted into long-term loans from the Financing Fund. The interest expense on these loans is subsidized by the Ministry of Education.

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Portfolio management

The Comité de gestion manages the investment portfolio of the Risk Management Plan Fund to which the school service centers and school boards on the Island of Montreal belong.

According to the investment policy of the Comité de gestion funds, investments can only be made in the following vehicles: bonds issued by the Government of Canada, bonds or bills guaranteed by the Government of Quebec or bonds issued by a municipal corporation located in Quebec and must respect certain proportion and maturity conditions. The vehicle is selected on the basis of maximizing returns (see Annual Report for details).

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