AR: Little Rock Cash Flow Forecasting Project

Nominee: Innovative Management – Small Project
Little Rock Cash Flow Forecasting Project
Little Rock, AR

“The system is an excellent example making optimum use of limited taxpayers’ dollars, which is crucial in achieving the maximum benefit for the road user.”

Johnnie Bolin, Executive Director
Arkansas Good Roads Transportation Council

The Arkansas State Highway and Transportation Department has developed a computer system that models future cash balances of state funds. The Cash Flow Forecasting System is an important tool that aids management in accurate and responsible financial decision making. By using actual and projected cash receipts and disbursements from various computer systems within AHTD, this system provides realistic and useful information. Many benefits have been realized since the launch of this system, the chief being that of making optimum use of limited taxpayers’ dollars, which is crucial in achieving the maximum benefit for the road user.

The Cash Flow Forecasting System was developed and implemented to model future cash balances of state funds needed to match Federal Highway Administration funds used for transportation projects. This model is designed to help prevent major planning errors, anticipate problems, and identify opportunities to improve cash flow. The Cash Flow Forecasting System replaced a 30 year old computer program that was outdated, required manual data entry and was difficult to use. This system uses various computer systems within AHTD and has virtually eliminated duplicate data entry, which was one of the weaknesses of the old system. The information it provides is not only easily validated, but also easy to use. This system is used to compile forecasts, assess possible funding requirements and explore the likely financial consequences of alternative strategies. Alternative strategies or “what if games” are one of the most helpful features of this financing tool. This feature allows management to easily explore all options available concerning highway funding resulting in confident decision making.

The potential for long term benefits is significant. The general idea is that cash flow forecasts should be prepared where they are meaningful in terms of the information they provide, and where they are useful in terms of the decision that can be made based on the information the cash flow forecast provides. The ability to accurately analyze possible funding shortfalls will allow AHTD to correct deficiencies in order to match FHWA funds and therefore eliminate the risk of losing federal dollars. The Cash Flow Forecast System ensures that sufficient funds are available to meet current obligations, emergencies and FHWA fund matching, while optimizing the cash available to help fulfill the public’s transportation needs.

AR: Little Rock Cash Flow Forecasting Project

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