The Minnesota Constitution states in Article XI, Section 8, that "A board of investment consisting of the governor, the state auditor, the secretary of state, and the attorney general is hereby constituted for the purpose of administering and directing the investment of all state funds...."

These members of the State Board of Investment (SBI), pursuant to Chapter 11A of the Minnesota Statutes, have decided as a Board to have the Board retain its own staff, separate from the staffs of their respective offices. Each day the the Treasury Division informs the SBI staff of cash available for investment. The SBI staff then negotiates all investments and the Treasury Division electronically transfers funds to complete the deal. The Investments Division of the Treasury Division maintains a record of all of these investments. In this way, the Treasury Division is always aware of the State's short-term cash position.

Money paid to the State is not spent all at once. For example, individual income tax payments are due on April 15th of each year; however, these funds are spent over the next 12 months. In the meantime, this money (which will be spent in the short term) must be invested to earn interest, similar to when an individual deposits money into a savings account. Funds such as those just described are collectively referred to as Invested Treasurer's Cash (ITC), that is, cash in the treasury that is available for investment and is invested, usually for a short term.

The State must manage its money in much the same way as individuals manage their money. The State must make sure that it has enough cash available to pay current obligations and to earn interest on whatever is remaining. This is called cash management. Minnesota Management & Budget keeps track of the obligations and the Treasury Division keeps track of how much cash is on hand. Each day this agency compares notes to insure that the correct amount of money (not too much, not too little) is in the Treasury Division's bank accounts to pay the state's obligations that day.
One of the Treasury Division's important duties is to take all reasonable steps to insure that money paid to the State is deposited and reported to Minnesota Management & Budget immediately. The Treasury Division can then maximize the amount available for investment, thereby increasing interest income.