Treasurer's Office Department Spotlight

What are the key functions and services of the Treasurer's Office?

The Treasurer's Office manages the university’s financial resources to preserve financial assets, mitigate risks, augment revenues, minimize expenses and create operational efficiencies.

Key responsibilities of the Treasurer’s Office include liquidity management, debt management, and cash operations. Here is a breakdown of what we do in each of those areas:

Liquidity Management: Liquidity management is all about making sure the institution has enough cash on hand to meet its near-term financial obligations. This entails monitoring cash flow, ensuring there are funds available as needed, and maintaining processes and procedures. The Treasurer’s Office manages the university's short-term liquidity investments, which are funds not tied to the university endowment, as well as the related broker-dealer relationships. These funds are used to cover daily operating expenses and help generate additional revenue for the university. By forecasting and analyzing how much cash will be available in the future, we make strategic decisions about the allocations, maturity, and credit profile of securities in the university’s investment portfolio. This allows the university to plan, not just for how to cover today’s financial needs, but future financial needs of the university as well.

Debt Management: Debt management involves strategies and practices to help support the financing needs of the university. This includes managing the debt incurred from loans, bonds, and other financial instruments used to fund various operations and capital projects. The Treasurer’s Office manages the university’s debt and interest rate hedging portfolio through the issuance of tax-exempt and taxable debt across a range of maturities to minimize cost on a risk-adjusted basis over time. For example, the university might issue short-term debt that mature in less than one year, medium-term bonds that mature in 5-10 years, and long-term bonds that mature in 30 years. This allows us to manage debt maturities more efficiently and take advantage of different interest rates for various maturities.

The Treasurer’s Office partners closely with internal stakeholders on the analysis of capital projects associated with new debt and manages credit rating agency, underwriter, and investor relationships. We also manage the university’s internal loan portfolio and provide strategic guidance on asset-liability management. For example, we work with the Budget and Financial Planning Office, Campus Design and Facility Development (CDFD), as well as senior leadership and the Board of Trustees to recommend optimal debt issuance strategies for the university’s capital projects. Effective debt management helps the university maintain financial stability, support our educational and research missions, and invest in future growth.

Cash Operations: The Treasurer’s Office oversees and facilitates the safe use of cash, check, coin, and credit card usage across campus. We guide stakeholders on the most efficient way to process incoming funds, such as tuition payments, donations, and other sources of revenue. In this capacity, the Treasurer’s Office manages the university’s bank relationships, which includes the opening of new bank accounts and related financial services, as well as the university’s centrally managed eCommerce platform, Cashnet. Cashnet provides campus users with access to secure credit card transaction processing and an end-user shopping experience with credit card payment checkout options. We also advise on the implementation of bank products, new payment technologies and other initiatives that create operational efficiencies, minimize costs, and mitigate risks to the financial resources of the university.

What are some ways that the Treasurer's Office contributes to Carnegie Mellon’s success? 

Ultimately, by effectively assisting in the management of the university's finances, the Treasurer's Office helps to create a stable and sustainable financial environment, which allows the institution to thrive and achieve its academic and research objectives. This is done in many ways, but the top three are through debt management strategies, serving as a liaison between the university and financial institutions, and ensuring compliance with financial policies and safeguards.

The Treasurer’s Office debt management strategy compliments other university funding sources, such as gifts, in order to fund new capital projects with debt. Separately, we conduct a regular review of existing debt outstanding to determine if it can be refinanced at lower rates, thus reducing university interest expense. For example, in FY24 we refinanced over $40 million of existing debt at a lower interest rate, thus providing approximately $700,000 in annual interest expense savings. This was achieved by a lower rate environment, strong investor demand, and strategic positioning in the context of the broader economic environment. Finally, we also developed a strategy to eventually reduce the impact of legacy tax-exempt debt on the university’s ability to conduct private business research as tax-exempt bonds are subject to federal laws that limit the amount of private business use in facilities financed by these bonds.

As the primary liaison between the university and its banks, bond investors, and credit rating agencies, the Treasurer’s Office seeks the best service and pricing from banks, expand the base of investors for university debt, and support the appropriate credit rating for the university in the context of the university’s broader strategy.

To ensure compliance, the Treasurer’s Office provides oversight of the university’s adherence to Payment Card Industry Data Security Standards (PCI-DSS), an industry standard for safeguarding cardholder data. Because CMU has a decentralized credit card acceptance infrastructure, we work with the Information Security Office (ISO) to advise units accepting credit cards on how to structure payment systems in ways that limit compliance risk and balance administrative burden with hard costs.

How does the Treasurer's Office support the Finance Division’s mission “To provide strategic, predictive, data-informed financial service and guidance to address challenges, explore opportunities, and ensure the university's financial sustainability?” 

The Treasurer’s Office participates in group efforts, both within the Finance Division and with campus units, to minimize costs and make manual tasks more efficient. Treasury recently participated in the Accounts Receivable Automation project that implemented machine learning into the highly manual process of booking incoming funds to the university’s bank account, which eliminated repetitive, manual tasks of our staff and our campus partners including the Finance Division, University Advancement, Student Accounts Office, and Operations.

Additionally, the decision to use debt, rather than unit reserves (e.g., funds held by individual departments or units within the university), allowed the university to fund the expansion of the Richard King Mellon Hall of Sciences, which broke ground on the corner of Forbes Avenue and Craig Street, and will be home to departments from the Mellon College of Science and the School of Computer Science, as well as the Institute for Contemporary Art Pittsburgh. The 338,900 square-foot building is expected to be completed in 2027.

The Treasurer's Office is ever curious about finding better ways to do things. We embrace innovation and are ever-curious to find better and more efficient ways to do things. 

What other departments in the Finance Division have an important upstream/ downstream connection to your department?

The Treasurer’s Office coordinates closely with The Controller’s Office and the Budget and Financial Planning teams within the Finance Division. We jointly lead efforts to prepare comprehensive materials for the Finance Committee of the Board of Trustees. A great example of this collaboration includes an innovative balance sheet forecasting tool that measures the university’s financial performance in the context of a baseline, as well as stress-test scenarios. This allows us to make informed financial projections for the future based on scenario-based evaluations in the context of potential peer performance. These plans inform financial ratio forecasts and risk management decision making. We also partnered with these groups on a detailed analysis of the university’s optimal liquidity position and options for enhancing liquidity. Both of these special collaborations were presented to the Finance Committee of the Board of Trustees. The Treasurer’s Office also works with Business Applications Development and Support (BADS) on technology projects that can reduce costs and increase staff efficiency by identifying and eliminating or reducing as many repetitive, manual tasks as possible.

What Finance Division strategic goal is the Treasurer's Office most proud of accomplishing in the last few years?

• Financial Sustainability and Reporting: The Treasurer’s Office, the Controller’s Office, the Budget and Financial Planning Office, and the Investment Office worked together to develop a framework that enabled optimization of the university’s working capital liquidity. Together we performed a deep analysis of liquidity levels relative to campus claims, and in the context of minimum operating needs – in other words how much money do we have compared to what the university needs to keep things running smoothly. From this collaborative study, the group offered university leadership actionable recommendations related to the most efficient deployment of excess liquidity. This is an example of how the Treasurer’s Office provides guidance that helps to enhance the economic value of the university.