4.6.2 Cash Management and Banking Services

A. Purpose

The purpose of this policy is to maintain adequate liquidity for The University of Texas at Tyler (UT Tyler) for operational needs without being underinvested as well as address cash management and banking services procedures.

UT Tyler funds in excess of those needed for operations are to be invested in accordance with The University of Texas System (UT System) Allocation Policy for Non-Endowment Funds.

The UT System Cash Management and Cash Handling Policy (UTS 166) addresses the fiduciary responsibilities of UT Tyler and UT System in handling, securing, disbursing, and investing the funds of the System. UTS 166 addresses the specific functional areas of cash management including: cash flow analysis, collections and disbursements, cash handling and transport, petty cash, and full investment. UTS 166 establishes controls which assure the safety of assets, provide required liquidity for operations, obtain the best banking relationships, and attain reasonable returns on all funds.

UT Tyler has incorporated UTS 166 by reference into this policy and will use UT System guidelines for its internal policies, controls and procedures with additional limitations on daily operations.

The UT System Banking Services Policy (UTS 167) addresses the fiduciary responsibilities of UT Tyler and UT System to control transactions with banks and to develop internal procedures supporting such transactions to prevent fraud, collusion or loss of assets. Accurate and timely balancing, reconciliation, and automated postings are required.

UT Tyler has incorporated UTS 167 by reference into this policy and will use UT System guidelines for its banking services arrangements with banking institution(s).

The purpose of this policy is to supplement the referenced UT System Policies in these three areas with controls specifically designed for UT Tyler.

B. Persons Affected

N/A

C. Definitions

N/A

D. Policy and Procedure

  1. Cash Management

    The provisions of UTS 166 shall be reviewed at least annually to meet all UT System requirements. UT Tyler procedures will further assure that:

    • a cash flow analysis is maintained, linked to receivables and capital plans, and updated no less than monthly with material variances reviewed by the Chief Business Officer 

    • all deposits totaling over $500 are to be made within one business day to the designated banking services institution or authorized collection point 

    • all vendor disbursements over $5,000 should be made electronically

    • all receivables over 120 days should be reviewed for collection service designation

    • cash and assets will be secured at all times with responsibility assigned

  2. Local Banking Arrangements

    UT Tyler will attempt to maintain a daily balance of $300,000 at the designated banking services institution for operational liquidity. The target balance will be periodically evaluated based on changing cash flows. A sweep account structure should be utilized to minimize collateral risk and an annual review of banking services will be conducted to assure services are being applied effectively.

    UT System solicits System-wide Competitive proposals from financial institutions at least every five years. The process results in a System-wide agreement with one or more financial institutions. UT Tyler will review the banking services offered by each financial institution selected through this process and designate a primary bank for depository services. To control costs and service levels, the account analysis will be reviewed on a monthly basis. On no less than an annual basis, staff will meet with bank representatives to evaluate services and new technologies.

E. Review

This policy shall be reviewed by Financial Services every five years or as required due to legislation.

ORIGINALLY APPROVED 12/01/2001

LAST AMENDED:  AY 2014/15

REVIEWED: 2015/16