Beyond Balance: Designing a Cash-Flow-Based Early Warning System for Financial Sustainability in Universities

This study investigates models for optimising financial cash flow control in Italian public universities, aiming to design a sector-specific early warning indicator system. The goal is to develop a diagnostic tool to monitor financial dynamics and detect early signs of imbalance, supporting long-term financial sustainability. Based on a literature review and comparative analysis, a set of financial indicators was identified and tested on 16 medium-small universities over five years. Results highlight significant variability in liquidity and debt ratios, with greater stability in personnel and sustainability indicators. The findings confirm the model’s diagnostic utility and practical relevance for both internal evaluation and external benchmarking. This research addresses the lack of structured alert systems in higher education, offering a dual contribution: it aids universities in adopting continuous monitoring practices. It provides policymakers with a framework to identify fiscal vulnerability. The model balances theoretical rigor and practical application, promoting proactive financial governance.