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WSU treasury warns declining working capital, carry-forwards could force central reallocations
Summary
Treasury officials presented cash forecasts and argued the university may need to centralize some unit carry-forward balances to create a flexible central pool, warning that carry-forward accounting and timing complicate near-term liquidity.
University treasury managers told the board on Feb. 17 that while WSU entered fiscal 2025 with stronger cash than earlier years, the university remains exposed to cyclical cash-flow swings and to losses tied to paused federal reimbursements and unit deficits.
What treasury reported: Matt Skinner, who leads treasury and working-capital forecasting, described a conservative investment posture and a cash-forecasting model staff are using to map low points (August/September and January) and to stress-test liquidity when receivables are delayed. He showed a public-state dashboard of days cash on hand that fell as low as about 33 days in 2017 and rose after COVID relief funds; he warned the university cannot return to very low day‑cash levels without serious risk.
Carry-forwards and centralization: Regents were told that much of the university's apparent cushions are distributed across thousands of unit accounts, many of which are not fully liquid cash (some are receivables or donor‑restricted). Staff proposed creating a more centralized pool by reallocating some carry-forward balances for short-term flexibility, a move regents were told would be contentious because units often treat those reserves as "their" funds.
Immediate pressures: treasury and finance pointed to known FY25 exposures (athletics business risks, several college deficits, capital project cash, and grant arrears) that will draw down cash and reduce interest income. Staff emphasized the need for more precise unit-level cash reconciliations to know which retained earnings are actual liquid cash and which are accounting balances.
Direction: Matt said treasury will continue to refine a cash model tied to budget choices and asked academic and administrative units for clearer position control and forecasts. Regents were asked to expect a discussion of potential central-sweep policies and related governance options in coming meetings.
Ending note: Leaders described a trade-off: leaving funds decentralized diminishes central flexibility; centralizing them improves the university's ability to respond to shocks but will require clear policies and governance to manage incentives.
