An analysis of the investment of idle-funds in the four-year universities of the Tennessee State Board of Regents

The purpose of the study was to analyze descriptively the current process and accomplishments of idle-fund investment procedures for the four-year higher education institutions under the jurisdiction of the Tennessee State Board of Regents. In addition, it was the purpose of this study to adapt an analytical cash management model for the advancement of idle-fund investment, plus provide assistance for the establishment of cash management programs in other State supported colleges and universities.

The study presented a cash flow model that increased the projected investment return and provided an insight to everyday transactional procedures which affected the investment process. The investment return was increased through the methodologies of: (1) trend investment procedure, (2) compensating bank balance, (3) accounts payable discounts, and (4) grant allotment procedure.

The major finding of the study dealt with a projected increase in investment return of $576,276.91 for the four-year universities of the Tennessee State Board of Regents for the projected fiscal year 1978-79. This projection was substantiated through the efforts of Memphis State University in that their actual investment return exceeded the projected investment return.

Based on the results of this study, it was recommended that State-supported institutions familiarize themselves with modernistic investment techniques such as presented in this study and adapt a model which would provide a maximum investment return. Also, the recommendation was made that the State colleges and universities included in this analysis make a concentrated effort to obtain the projected increase for idle-fund investments as outlined in this study.