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Policy 1010

Investment of Local Funds

I. Purpose

The majority of revenue collected by Longwood University is submitted to the State Treasury Department. The limited amount that is not remitted is considered to be local funds by the University and is therefore available for investment.

II. Objectives

Investment objectives for Longwood University local funds include preservation of capital, investment liquidity, and maximum income return.

III. Policy

  1. Investment Instruments and Quality Guidelines

    In the event that local funds are invested, the investment instruments and the quality of the investment instruments employed by Longwood University local operating funds shall comply with Code of Virginia 55-268.13 (Standard of Conduct). All investments should be set up with sufficient transparency satisfactory to the Board.
  2. Liquidity

    Liquidity of the portfolio is to be monitored by the Assistant Vice President of Financial Operations and is based on specific cash needs of the University. In order to achieve the required liquidity, amounts not subject to immediate needs may be invested in instruments having a maturity rating from overnight to 90 days, or in long term investments as deemed appropriate. The balance of local funds will be invested in overnight instruments.
  3. Diversification Guidelines

    No more than 10% of the portfolio may be invested in the obligations of any one issuer other than money market funds, U.S. Government issues, and repurchase agreements. No more than 25% of the portfolio may be invested in any one industry.
  4. Management

    In the event the University takes steps to invest its local funds, an investment committee will be appointed by the Vice President for Administration and Finance. The objectives of the investment committee are as follows:
    1. Invest portfolio assets in order to earn a return net of fees in excess of the rate of anticipated inflation, rate of spending, and a cushion to provide for a shortfall and ensure the growth of assets.
    2. Diversify the portfolio among various asset classes to reduce the volatility of return, and among various issuers of securities to reduce principal risk.
    3. Divide assets between short-term and long-term investments so as to ensure that funds will be available to meet short term obligations as well as grow investments assets over the long term.
    4. Monitor cash flows to ensure adequate liquidity in order to meet University cash needs. 

The investment committee maintain appropriate records of its activities. Investment results shall be reported to the Board of Visitors at least annually, to include the composition of portfolio assets and the performance of all portfolios.

Approved by the Board of Visitors, March 24, 2007.
Revised and approved by the Board of Visitors, June 15, 2012.