ADMINISTRATIVE RULE NO: 5020-01
RELATED TO POLICY SERIES NO: 5020
TITLE: ADMINISTRATION OF COLLEGE FUNDS — INVESTMENTS
To establish parameters for the investment of college funds and related accounts
Administration of college monies for Linn-Benton Community College applies to all funds budgeted and accounted for in the college's annual financial report, with the exception of funds held in custody by the county treasurer. Investments of any tax-exempt borrowing proceeds and any related debt service funds shall comply with the arbitrage restrictions in all applicable Internal Revenue Codes.
Funds held by the county treasurer during tax collection periods and those held by the county fiscal officer in the LBCC District Bond Interest and Sinking Fund shall be governed by the county's investment policies and are not subject to the provisions of this policy.
Deferred employee compensation funds are deposited at the direction of the individual employee. They are not subject to review or investment policy of the College and are not subject to collateral requirements (ORS 294.033).
Primary objectives in priority order in managing investment funds are:
- Preservation of principal investment;
- Liquidity to meet cash requirements; and
- Maximizing the rate of return on the portfolio.
The means of accomplishing these objectives are described throughout this administrative rule.
The performance of the college portfolio will be measured against the performance of the Local Government Investment Pool, using monthly net yield of both portfolios as the yardstick.
RESPONSIBILITY AND AUTHORITY
The Director of Accounting and Budget serves as the portfolio manager and is responsible for meeting day-to-day liquidity demands and investing all excess cash while adhering to the rules set forth in ORS 294.035 through 294.048, ORS 294.125 through 294.155, and this administrative rule. Any deviation from this administrative rule must be approved by the President or his/her designee. In the absence of the portfolio manager, the Vice President of Finance and Operations shall perform the duties.
Management of the portfolio includes:
- The selection of securities for the investment of excess cash;
- Management of availability of funds to meet daily cash needs; and
- Preparing semi-annual reports for the Board of Education for investments outside of the Local Government Investment Pool.
INVESTMENT STANDARD PRUDENCE
The portfolio manager and all other participants in the investment of the college's funds shall act responsibly as custodians of the public trust.
Investments shall be made under the prudent investor's rule, which states:
"Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived."
The portfolio manager and other authorized investment personnel, acting in compliance with applicable Oregon Revised Statutes and this investment administrative rule, shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported promptly to the Vice President of Finance and Operations and appropriate action is taken to control adverse developments.
Internal controls will be reviewed annually by the college's independent auditor. The internal controls are designed to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees or officers of LBCC.
The portfolio manager shall provide a portfolio performance report semi-annually to the Board of Education for investments outside of the Local Government Investment Pool.
The following shall be used as a guideline when placing investments:
- The college may invest up to 100 percent of its portfolio in the Local Government Investment Pool (LGIP) Oregon Short Term Fund (OSTF), which maximizes liquidity.
- Any investment vehicles outside of the Local Government Investment Pool (LGIP) Oregon Short Term Fund (OSTF) must be approved by the Vice President of Finance and Operations and must adhere to all applicable investment guidelines as set forth in ORS 294.035 through 294.048, OR 294.125 through 294.155. Professional investment services must be utilized in the management of these funds and shall be obtained through a competitive Request for Proposals procurement process. The results of this procurement shall be reviewed and approved by the Audit & Professional Services Committee of the Board of Education.
The college shall comply with all required legal provisions and Generally Accepted Accounting Principles (GAAP). The accounting principles are those contained in the pronouncement of authoritative bodies including, but not necessarily limited to, the American Institute of Certified Public Accountants (AICPA); the Financial Accounting Standards Board (FASB); and the Government Accounting Standards Board (GASB).
DATE OF ADOPTION: 06/15/93
DATE(S) OF REVISION(S): 08/23/94; 08/06/96; 10/31/16; 11/5/2020
DATE OF LAST REVIEW: 10/31/16