Not quite sure I understood the post, but the logic of holding onto your money and only paying employees at the end of the month (or at certain periods at the end of the month) is to have the money on hand during an emergency.
Most employers want to legally hold onto the wages as long as possible (essentially, they want to pay labor last since it's usually the most expensive thing at the company).
It's kinda like how no one wants to pay bills upon receipt... they'd rather just pay when it's actually due since there might be other uses for the money.
Also, financial statements (which has a lot of external use, like by investors or whatever) are prepared during certain times and you want to artificially make the books look better during those times by having a lot of money on hand so it seems like your company is more liquid than it really is (so like... people will lend you money or some shit since they can be certain that you'll pay them back).
With regards to the university situation, someone just wants to make extra money (assuming what I've theorized is true... when you have a lot of money from the government, even a short time in the bank or something adds up to a lot)...