I apologize for this basic question but I just want confirmaiton that an account of a local school district would be automatically exempt from CTR reporting since they are a "department or agency of the US, of any state, or of any political subdivision of any state", and that a DOEP would not have to be filed and that the requisite time and number of transactions would not be required before the exemption. This would be the first such account for us and I just want to be sure. Thank you.

The public school, since it is a local government entity, is subject to exemption under Phase I. Banks do not need to file a Designation of Exempt Person form for Phase I-eligible customers that are banks, federal, state, or local governments, or entities exercising governmental authority. Nevertheless, a bank should take the same steps to assure itself of a customer’s initial eligibility for exemption, and document the basis for the conclusion, that a reasonable and prudent bank would take to protect itself from loan or other fraud or loss based on misidentification of a person’s status. Exemption of a Phase I entity covers all transactions in currency with the exempted entity, not only transactions in currency conducted through an account. Hope this helps.

It does, thank you.

My only caveat on this topic is that you need to be sure that the organization you are dealing with is, in fact, the school district. That may sound ridiculous on its face, but there are lots of cases in which school-relate organizations, such as sports or band booster clubs, have held themselves out to be arms of a school itself, even to the extent of offering the school or school district's EIN as its own. There may be school districts in which clubs of that sort are handling funds belonging to the district, but it's been my experience that the clubs are most often separate from the school. That sort of club or organization is not part of the district and can't be exempted as part of the district. It needs to obtain and use its own EIN, even if it's not constituted as a legal entity under state law.

Understood, John, thanks. Also, would we need to perform annual reviews as we do for Phase II exempt customers?

No annual reviews for banks and government entities...