What considerations are to be taken into account while investing the remaining excess of cash balance
Answers
The State of Illinois Legislative Audit Commission (LAC) permits self-supporting entities to maintain a cash
balance that is less than or equal to a “working capital allowance” plus a reserve for capital asset acquisition.
Cash balances in excess of this amount must be transferred to the University Income fund.
The LAC looks at cash balances for university-wide entities rather than for each fund. Therefore, an individual
self-supporting fund may exceed its limit and not be forced to transfer cash to the income fund because cash
balances for other funds in the same entity are below their limit.
When the total cash in an entity exceeds the permitted allowance, however, University Accounting and Financial
Reporting (UAFR) transfers cash from those funds that most contributed to the excess balance. Managers of
self-supporting funds should therefore monitor their own fund’s cash levels to assure their fund will not contribute
to an excess of entity-wide cash. See also the Self-supporting fund procedure Avoid a Build-up of Excess Cash
Balances.