Section 3.4 Financial Services: Treasury - Internal Financing of University Projects
Issued: May 2016
Replaces: October 2001
From time to time it is appropriate to finance certain projects from University funds (pooled investments or reserves) when alternate arrangements are not viable, such as through the capital budget process or revenue bonds. Since internal financing represents a reduction of funds available for investment, it should only be used after considering the cost in lost interest on investments and with the involvement of appropriate University officers. The following guidelines apply:
- Internal financing will be used only when it is more practical and economically feasible than external financing.
- The Treasurer will determine an appropriate interest rate, which typically would be based on the current investment rate and duration of the loan.
- The duration of the loan will not exceed the usefullife of the asset financed.
- Interest charged under the financing arrangement will be credited to the units providing the funds for financing.
- Internal financing proposals require the approval of the respective Chancellor, Dean and Provost of SIU School of Medicine, and the Board Treasurer.