State and Corporate Cash Management: A Comparison

Abstract

Public and private sector portfolio managers pursue similar goals even though they perform their portfolio management responsibilities in significantly different environments. This article compares and contrasts corporate cash management with state government practices. The comparison and analyses are based on data drawn from a survey of state government portfolio managers and an earlier study which reviewed corporate cash management practice. The comparison and analyses consider investment objectives, permissible assets, assets held, and asset holding period, among other factors. The results suggest that portfolio management practices are quite similar even though the cash management environment is significantly different.

Getting all you Can: County Government Investment Pool Participation Based on Need or Want

“…For smaller governments, investment pools have become a primary investment opportunity for idle funds that help sustain a positive cash flow throughout the fiscal year (Modlin & Stewart, 2013) State efforts at protecting pooled monies have been an evolving process due to highly questionable investment practices during the 1990s. State-mandated limitations have not prevented public sector managers from exploring options that maximize yields on short-term securities similar to that of an equivalent private sector counterpart (Mattson, Hackbart, and Ramsey, 1999). Investment practices among investment pools in California and Texas provided the prompt for increased legislative changes and oversight.…”