Treasury's Role in Promoting Efficient Cash

Management: Evidence from South Africa

THE IMPACT OF CORPORATE TREASURY ROLE IN THE FINANCIAL MANAGEMENT OF A
PUBLIC UNIVERSITY, UNIVERSTY FOR DEVELOPMENT STUDIES, TAMALE.
1.0INTRODUCTION
After the world financial crisis in 2008 couple with the rapid development in
technological advancement, and the volatility of national and international
economies, the business environment has seen a dramatic changed. These changes
have been observed in both the national and corporate regulations. Moreover,
economic conditions, socio-political regulations and rapid increase in computing
system has played a vital role in remodeling the organizational financial
management practice. Organizations who fails to practice sound treasury
management in line with the above situations will have no choice than to face many
financial challenges. It is against these backdrop that demand for treasury
management have become increasingly important.
The responsibility of financial management of an organization varies, but the
important decision comes from the finance director. All finance decisions hinges on
liquidity of the institution, and all organizations, whether public, private,
government, or not-for-profit, shares the concern over liquidity management,
because liquidity is the livelihood of business. Thus treasury management is
imperative in every business organization. It is safe assumption that no
educational organization will complies with the going concern principle or attained
its mission if it does not prudently manage its liquidity (FMA WENLY). Thus, every
organization should have concern over liquidity management. The profession which
practices liquidity management as their core responsibility in every organization is
the treasury department or section under the finance department.
Treasury management service applies to organizations of all sizes and complexities,
but it is best suited to organizations with significant cash, finance risks, liquidity
constrains, international operations and or comprehensive cost cutting (KPMG
CHINA). All these are no exception to the public universities. Again treasury
functions cuts across the every section in the organization, hence treasury is the
hub of strategic organizational operation.
Treasury management is the optimization of an organization`s holdings through
maximization of returns from surplus funds and minimization of cost of payment
and borrowing of the organization. It is the management of organization monetary
assets and liabilities with the ultimate goal of managing the organization`s liquidity
and mitigating it operational, financial and reputational risk, the collections,
disbursement, concentration, investment and funding activities and banking
relationship. (V VIP Treasury mngt)