Interest On Overdraft
The Interest On Overdraft program is designed to encourage schools and other operating units to monitor the balances of their departmental funds and to limit spending to available, approved resources. Interest on a cash overdraft is charged on certain cost objects with a negative cash balance. The overdraft program considers gl accounts 100000 and 132000 to be cash. When the net of these two gl accounts is negative, interest is charged on the cash overdraft. Some funds are exempt from overdraft charges (such as current unrestricted funds (1xx) and grants from federal agencies (30x-38x).
Each month Corporate Cash Management monitors the prior months balances on cost objects that are subject to interest on overdraft charges. If a code has a negative cash balance, and is not exempt from overdraft, the code is charged 2x the current Wells Fargo prime rate.
If a department believes interest on a negative cash balance has been charged to a cost object in error, they should submit an interest on overdraft reversal/adjustment form to Corporate Cash Management and provide the following details on the form:
- Cost object impacted.
- Reason for the request to reverse interest.
- Was the overdraft caused by circumstances outside the departments control?
- Is this an approved internal loan?
- Duke contact name and telephone number
- Amount of interest requested to reverse.
- How long the code has been in overdraft
- When was the overdraft first discovered?
- When is the cost object going to be funded to cover the negative cash?
Questions regarding Interest on Overdraft can be directed to the Corporate Cash Management office.