PHCC PHACT PHCC Policy System

VCCS Policy Section 4 : 4.2

Keywords

Applies to: Faculty | Adjunct Faculty | Staff | Administrative | Board

PHCC Policy No applicable policy

5.1 Fiscal Year
The fiscal year of the college shall be from July 1st through June 30th
.
5.2 Formula for Fiscal Support of the College by the Cooperating Jurisdictions
The Local Funds annual budget request is shared by the cooperating political
subdivisions. The amount of the total budget requested from each cooperating
political subdivision is based on the percentage of the current year fall semester
headcount, excluding out-of-state students, enrolled from each political
subdivision.
5.3 Deposit and Disbursement of Local and Auxiliary Enterprise Funds
a. All Local Maintenance and Operation (M & O) and Auxiliary Enterprise
Funds shall be placed in a local depository, which shall be designated as a
Concentration Bank by the Commonwealth of Virginia, Department of the
Treasury.
b. The president and the vice president for financial and administrative
services are designated to approve all disbursements of Local and
Auxiliary Enterprise Funds. Checks may be signed by the president, the
vice president for financial and administrative services, and the business
office manager.
c. The president and vice president for financial and administrative services,
in conjunction with the Local Board Budget and Finance Committee, are
responsible for the investment of idle Local and Auxiliary Enterprise
Funds using the following guidelines:
    i. Funds deposited in bank accounts must be fully secured as
provided under Section 6.1-79 of the Code of Virginia.
    ii. All deposited funds will be placed into high yield, low service cost,
low compensating balances and the best quality investment
instrument.
    iii. The administration shall have the authority to review the cash and
investment accounts every ninety (90) days to determine if the
college is receiving the best rate of return, and if not, move the
accounts to the institution paying the highest interest rate.    iv. All earned income will be distributed annually by the Local Board
upon recommendation of the College Administration and review
by the Local Board Budget and Finance Committee.
5.4 Investment of Local and Auxiliary Enterprise Funds
Section 4.2.2 (f) of the VCCS Policy Manual encourages the investment of idle
college local funds subject to the limitations of Chapter 18, Sections 2.1-327 and
2.1-328 of the Code of Virginia (Now Sections 2.2-4501-4518).
The policy of the College Board is to invest local funds in a manner which will
provide the highest investment return with maximum security while meeting the
daily liquidity needs of PHCC and conforming to all state statutes governing the
investment of public funds. Investments are made according to the “Prudent
Person Rule” which states that investments shall be made with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
person in a like capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims.5.4.1 Investment Objectives
The primary objectives, in priority order, of PHCC Local Fund investment
activities shall be:
a. Safety. Safety of principal is the foremost objective. Investments
shall be undertaken in a manner that seeks to ensure preservation
of capital in the overall portfolio.
b. Liquidity. The investment portfolio will be sufficiently liquid to
enable it to meet all operational requirements which might be
reasonably anticipated.
c. Return on investment. The investment portfolio shall be designed
with the objective of attaining a market rate of return, taking into
account its investment risk constraints of Local Fund investments.
5.4.2 Authorized Investments and Credit Quality
Authorized investments for public funds are limited to those of the type
and quality set forth in the “Investment of Public Funds Act” of the Code
of Virginia Sections 2.2-4500, et seq. (the “Act”). The College Board
authorizes the investment of Local Fund assets only in the types and
quality of investments permitted by the Act as amended from time to time.5.4.3 Diversification
The Local Board allows management at PHCC to deposit and maintain
investments within the following guidelines:
a. The portfolio can be diversified with no more than five percent of
the value of the portfolio invested in securities of any one issuer.
This limitation shall not apply to securities of the U.S. Government
or Agency thereof, government sponsored corporation, or fully
insured and/or collateralized certificates of deposits and time
deposits.
b. The portfolio may be invested with the financial institution
contracted by Patrick Henry Community College to handle all
local fund banking.
5.4.4 Liquidity Requirements
    a. Daily Liquid Assets—10% minimum
    b. Weekly Liquid Assets—30% minimum
    c. Illiquid Securities—Limited to 5 percent of total assets. Defined
as a security that cannot be sold or disposed of within 7 calendar
days at approximately the carrying value.
5.4.5 Prohibited Investments or Actions
    a. CMOs, inverse floaters, IOs, POs, and Z-tranche securities, etc.
    b. Futures, options, options on futures, margin buying, leveraging,
and commodities. Forward trades are permitted as long as they are
procured during normal “when issued” periods for individual
markets and as long as cash is reserved or a security will mature to
cover the purchase.
5.4.6 Pooling
Amounts available for investment from various local funds may be pooled
in order to maximize investment return. Interest earned on pooled
principle may be prorated, as earned, to the individual funds based on the
relative ratio of individual funds contribution amount to the total pooled
amount. Interest earned by the various funds may be transferred, as
approved in the local funds budget, to other local funds for scholarships,
general use, student activities, etc., so long as it benefits the operation of
the college.5.4.7 Reporting
On a monthly basis the investment manager will report to the Vice
President of Finance summary investment and performance information
and provide a copy of the investment portfolio at current market value.
Additional information will be provided if deemed appropriate or if
requested. The PHCC Investment Policy and Guidelines and investment
performance will be reviewed annually by the Vice President of Finance
and investment performance and recommendations shall be presented to
the Local Board annually.
5.4.8 Divestiture
The President and Vice President of Finance are authorized to execute
transactions within the scope of this policy. Investments not addressed by
this policy must be approved by the Local Board prior to executing the
transactions.
5.5 Audit of Local Funds Accounts
The audit of Local Funds accounts shall be conducted by the state auditor. The
report of such audit shall be reviewed by the Board and made available upon
request to the supporting jurisdictions.
5.6 Auxiliary Enterprises Fund
The president is authorized to establish an Auxiliary Enterprises Fund which may
receive revenue from student fees, the bookstore, vending machines, and other
approved activities for the purpose of funding student activities and college
activities. The audit of the Auxiliary Enterprises Fund shall be conducted by the
state auditor.
5.7 Budget Review
Management of the local funds shall be the responsibility of the College Board
and the college administration. All activities within the local funds, including
discretionary funds accounts, shall be within the limits set through budgets
prepared by the college administration and approved by the College Board. Local
funds budget expenditures shall be reviewed at least annually by the College
Board.
The president shall prepare a draft of the Local M & O Budget and the Auxiliary
Enterprises Budget. The draft of the Local M & O and Auxiliary Enterprises budget as approved by
the Administration and Budget & Finance Committee of the Board, shall be
submitted to the College Board for review and approval.
Financial statements of Local M & O budget expenditures shall be provided upon
request to the supporting jurisdictions.

PHCC Procedures No applicable procedure

PHCC Attachments & forms No applicable attachments