Recent legislation resulted in the creation of the Ohio Pooled Collateral System (OPCS), an interactive, web-enabled portal monitored by the Treasurer of State, which will allow participating financial institutions to pool collateral for Ohio public entities. Through this system, financial institutions will be able to pledge a single pool of collateral to the Treasurer of State for all public depositors.
To streamline efforts, the Treasurer of State is developing the OPCS website (“Portal”). This portal will be used to collect the report balance and collateral data used by banks and governmental entities.
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While the creation of the OPCS will not impact your entity’s ability to select which eligible financial institution holds your deposits, financial institutions will have two options for collateralizing public funds. They can either join the OPCS to secure pooled collateral, which will reduce the collateral required to 102 percent of uninsured public funds or they can collateralize with specific pledged securities at 105 percent of each governmental entity’s uninsured public funds.
How will the OPCS work?
Financial institutions will be expected to report public deposit balances on the portal daily. With this data, the Treasurer of State will be able to:
- Price collateral daily
- Compare the total market value to the total amount of public deposits by financial institution
- Post daily results
What’s this mean to me?
If your financial institution does not participate in the OPCS program, you will be required to maintain a record of all pledged securities at all times. However, if your financial institution does participate in the new OPCS, moving forward, you will need to:
- Periodically review your balances on the portal for accuracy and completeness and any discrepancies should be reported to the financial institution immediately.
- Inform your financial institution of any anticipated significant changes in the amount or activity of your deposits.
- Use the portal to confirm your account details (balances and contact information) at least annually. If you do not have a portal account, a hard copy of the report and attestation form will be mailed to you.
When is this change effective?
The Treasurer of State expects to have the OPCS in place by July 1, 2017.
As the implementation date approaches, you should expect to receive a variety of helpful resources to ease the transition. The team at Rea & Associates is also a great resource to reach out to if you have questions or need assistance as well. Feel free to email us at any time to learn more about the OPCS, the portal or for tips to help you prepare for this transition.
By Chad Welty, CPA (Medina office)
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