Purpose: It is the policy of the Board of Trustees to invest its funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow needs of Kirtland Community College (hereinafter “The College”) and comply with all state statutes governing the investment of public funds.
- Scope: This policy on banking and investments applies to all financial assets of the College. These assets are accounted for in the various funds of the College and include the general fund, auxiliary funds, restricted funds, plant funds, and agency funds and any other funds established by the College. Investment income will be allocated to the general fund in accordance with generally accepted accounting principles.
- Objectives: The primary objectives, in priority order, of the College’s banking and investment activities shall be:
- Safety – Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to insure the preservation of capital in the overall portfolio.
- Diversification – The investments will be diversified by security type, as allowed by regulation, financial institution and maturity of securities in order to reduce portfolio and market risks.
- Liquidity – The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
- Delegation of Authority to Make Investments: The College delegates the daily management responsibility for the investment program to the Chief Financial Officer.
- Permissible Investments: The Michigan Community College Act No. 331, as amended, provides the following permissible investments:
- Bonds, bills, or notes of the United States, or of an agency or instrumentality of the United States, or obligations of this State.
- Negotiable certificates of deposit, savings accounts, or other interest-earning deposit accounts of a financial institution. As used in this subdivision, “financial institution” means a bank that is a member of the Federal Deposit Insurance Corporation, a savings and loan association that is a member of the Federal Savings and Loan Insurance Corporation, or a credit union whose deposits are insured by the national Credit Union Administration.
- Bankers’ acceptances issued by a bank that is a member of the Federal Deposit Insurance Corporation.
- Commercial paper that is supported by an irrevocable letter of credit issued by a bank that is a member of the Federal Deposit Insurance Corporation.
- Commercial paper of corporations located in this state rated prime by at least one of the standard rating services.
- Mutual funds, trusts, or investment pools composed entirely of instruments that are eligible collateral.
- Repurchase agreements against eligible collateral, the market value of which must be maintained during the life of the agreements at levels equal to or greater than the amounts advanced. An undivided interest in the instruments pledged for these agreements must be granted to the community college. As used in this section, “eligible collateral” means all securities which otherwise would qualify for outright purchase under this act.
Additional funds of the College shall not be invested or deposited in a financial institution that is not eligible to be a depository of surplus funds belonging to this state under section 6 of 1855 PA 105, MCL 21.146.
August 11, 1983
Revised December 8, 2011