Tennessee Code Title 49. Education § 49-3-1109

(a) No moneys derived from the sale of bonds or otherwise borrowed under this part, or received as a grant, shall be required to be paid into the state treasury, but shall be deposited by the treasurer or other fiscal officer of the board in a separate bank account or accounts in such bank or banks or trust company or trust companies as may be designated by the board.

(b) The separate bank account or accounts shall be designated with the name of the institution where the project is acquired.

(c) All deposits of such moneys shall, if acquired by the board, be secured by obligations of the United States, of a market value equal at all times to the amount of the deposit;  and all banks and trust companies are authorized to give such security.

(d) The money shall be disbursed as directed by the board and in accordance with the terms of any agreements with the holder or holders of any bonds.

(e) This action shall not be construed as limiting the power of the board to agree in connection with the issuance of any of its bonds, or the receipt of any grant, as to the custody and disposition of the moneys received from the sale of the bonds or as the payment of any such grant or the income and revenue of the institution pledged and assigned to or in trust for the benefit of the holder or holders of the bonds.