The purpose of this PPS is to establish procedures for the approval and status reporting of interfund borrowings. The administration of Southwest Texas State University discourages the use of interfund borrowings as a method of financing operations or capital improvement projects. All accounts should rely on regular sources of their own income, appropriations or regular allocations from specific capital funds as a primary source of financing.
Interfund borrowings are, however, permissible in rare and unusual circumstances.
All interfund loans are to be submitted to the Board of Regents as an agenda item for approval. The motion must clearly state the recipient of the loan, the source of funding, the purpose for which the funds are to be expended and the repayment terms. All interfund loans will bear interest at a rate computed at the time of the loan and based on SWT's total composite yield on its investment as of the most recent quarterly investment report. The annual status of all interfund loans will be disclosed in SWT's annual financial report in the Notes to the Financial Statements. The status report will include the principal amount repaid during the year as well as the amount of interest paid.