Steward Chief Financial Officer
Previous Version College Investment (archived January 2013)
Full Text of the Policy
To ensure responsible management of investments and other funds to maximize financial return based upon an appropriate level of risk, and consistent with the college's socially responsible investing values.
All college investments except Endowed Funds
A. Roles and Responsibilities
1. The Board of Trustees delegates to the president or his or her designee responsibility for establishing an investment policy and appointing an Investment Committee.
2. The president delegates authority for investment of college funds to the Investment Committee (the Committee) comprising the Vice President for Finance and Administration, the Vice President for College Advancement, the Executive Director of Operational Planning and Budget, the Director of Business Services, and the Accounting Manager.
- The Committee will be chaired by the Vice President for Finance and Administration.
- This is the same Investment Committee as that established by the College Endowment Investment Policy.
3. The Committee will:
- Review policy to define investment objectives, allowable investments, and asset allocation;
- Evaluate investments based on the college’s commitment to socially responsible investing;
- Monitor investment performance;
- At least quarterly, review the portfolio investments and their performance, and overall adherence to the investment policy, including social responsibility.
- Produce an annual report of the state of the college investments including socially responsible investments.
4. The Vice President for Finance and Administration will report to the president at least annually on the status of investments, and on any recommendations for changes to the investment policy.
B. Ethics, Conflicts of Interest, and Standard of Care in Exercising Fiduciary Responsibilities
1. The President, Committee members, and applicable staff will perform their duties in a manner consistent with the standard of a “prudent person,” as derived from RCW 43.250.040:
“In investing and reinvesting moneys and in acquiring, retaining, managing, and disposing of investments, there shall be exercised the judgment and care under the circumstances then prevailing which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of the funds considering the probable income as well as the probable safety of the capital.”
2. The President, Committee members, and authorized investment officers will adhere to standards of conduct as stipulated by the following:
- Public Records Act, RCW 42.56;
- Ethics in Public Service Act, RCW 42.52; and
- Section 292-110-010 of the Washington Administrative Code.
C. Internal Controls
1. The Vice President for Finance and Administration will maintain internal controls to protect against the loss of public funds arising from negligence, theft, or misuse. These controls will include, but not be limited to:
- The use of third party custody and safekeeping;
- The execution of all securities transactions on a delivery versus payment basis;
- The separation of transaction authority from record keeping;
- The use of objective criteria in selecting financial institutions and dealers authorized to provide investment services to the state.
- The use of an non-discretionary investment advisor to provide investment strategy and competitive transactions.
1. The college’s investment management priorities are safety, liquidity, yield and socially responsibility.
2. The overall objective of the college’s investment policy is to construct, from the investment options listed below, investments that are optimal and efficient.
E. Eligible Investments
1. Eligible investments are only those securities and deposits authorized by statute (RCW 39.58, 39.59, 43.84.080 and 43.250). Eligible investments include:
- Obligations of the U.S. government;
- Obligations of U.S. government agencies, or of corporations wholly owned by the U.S. government;
- Obligations of government sponsored corporations which are or may become eligible as collateral for advances to member banks as determined by the board of governors of the Federal Reserve;
- Banker’s acceptances purchased on the secondary market rated A1 or P1 by Standard and Poor’s Ratings Services and Moody’s Investors Service;
- Commercial paper, provided that the college comply with policies and procedures of the State Investment Board regarding commercial paper (RCW 43.84.080(7));
- Certificates of deposit with financial institutions qualified by the Washington Public Deposit Protection Commission;
- Obligations of the state of Washington or its political sub-divisions.
F. Socially Responsible Investing
1. Per RCW 24.250.040, the Committee’s investment decisions must be guided foremost by its fiduciary responsibility.
2. Consistent with college values, the Committee will select investment options that meet the college’s criteria for socially responsible investment.
3. The college shall develop its own criteria for socially responsible investing. Because of the difficulties of closely monitoring the college’s funds, criteria shall consist of guiding principles.
4. Since the definition of socially responsible investing changes rapidly, the college’s set of socially responsible criteria shall be reviewed and updated every three years by an expanded committee with membership including at least two faculty and two students in addition to the membership of the standing committee. In the process of reviewing and updating the statement, public input will be considered from all campus constituents.
1. The Director of Business Services and the Accounting Manager will ensure that all cash from all college accounts not needed for daily operations is pooled for investment purposes.
- Federal, state, and local grants and contracts will be included in the current general local fund for investment management purposes.
2. The Director of Business Services and the Accounting Manager will distribute any i nterest on investments each quarter to the various accounts contributing to the pooled investments in the proportions that their average monthly cash balances for the quarter bear to the average monthly cash balance of the total cash invested.
3. The Director of Business Services and the Accounting Manager will charge interest to a ny account operating with a negative cash balance. The interest will be distributed on a prorated basis to the accounts contributing to the investment pool.
RCW 28B.10.528: Delegation of powers and duties by governing boards
RCW 39.58: Public funds — deposits and investments
- RCW 39.59: Public funds — authorized investments
RCW 42.56: Public Records Act
RCW 42.52: Ethics in Public Service Act
RCW 43.84.080: Investment of current state funds
RCW 43.250.040: Authority of official to place funds in the public funds investment account
WAC §292-110-010: Use of state resources
College Endowment Investment Policy; Conflict of Interest Policy