Cash Management General Information. The Comptroller has the authority to actively to manage all cash and to invest funds not needed in the short-term, using fixed income and cash equivalent securities to yield reasonable rates of return at an acceptable level of risk within prescribed maturities.

A general description of cash management operations follows:

All incoming and outgoing funds are accounted for in the Banner system and on the SunTrust Network Banker system, including capital calls, incoming and outgoing wires, and large distributions from entities like the Bellingrath Foundation. The Assistant Comptroller and the Director of Accounting work closely with the Cashier′s office as well as the Advancement office to accurately record all bank deposits.

The Cash Management Office provides a monthly report on the College’s cash to the Comptroller. Cash reports are also prepared upon request of the Comptroller and when material or unexpected fluctuations in the College’s total cash balance occur. 

The overnight repo amount, invested with our primary banking institution, and current rate of interest paid, are reported to the Comptroller each morning.

Monthly bank reconciliations are completed by the Cash Manager (Assistant Director of Accounting) and reviewed by the Director of Accounting. The Assistant Comptroller reviews bank reconciliations on a random, surprise basis. Controls and limits for wire transfers and the approval to the bank for such transfers are established by contract with the college primary banking entity. Internal audits are periodically performed to monitor adherence to these limits.

I. Purpose

Cash funds not immediately needed for operations in the current year may be invested over a longer horizon. Intermediate cash that may be invested in this program is defined as the combined college cash balance amount that exceeds the lesser of $10,000,000 or 3% of net assets.

II. Prescribed Types of Investment Securities and Limitations

The following investment grade securities may be used in the Intermediate investment program:

1. Obligations of the U. S. Government backed by full faith and credit
2. Obligations of agencies backed by the U.S. Government
3. Investment grade corporate obligations
4. Absolute Return fund of funds selected and recommended by the college’s investment advisory firm, acting as Outsourced Chief Investment Officer

III. General Limitations

1. The investments listed in II. A, B, and C will be investment grade vehicles and will have no less than a AA rating. No single investment in this category will exceed $2,000,000.
2. Investments in corporate obligations will not exceed 20% of the total investments in II. A, B, and C. No single investment in this category will exceed $2,000,000.
3. Total investment in an absolute return strategy will not exceed 15% of the total Cash Management Program.

IV. Investment Review

1. The Comptroller will distribute a monthly performance report on the activities of the Intermediate Cash Management Program to the Vice President for Finance and Business Affairs.
2. The Comptroller may request the Subcommittee on Investments to add specific investment instruments, with appropriate limitations, to Section II. A. as market characteristics change over time.

All available cash (from the current funds, restricted funds, agency funds and endowment income) will be pooled for investment purposes. All interest income will be booked originally in the current fund. The Cash Manager will compute a monthly weighted average yield on the total of cash and cash equivalent securities. The Comptroller will pay from the current fund a portion of this income to specific fund balances, depending on size and permanence of the fund balances in the accounts. The amount will be computed by multiplying the monthly weighted average yield to the monthly weighted average fund balance. For the endowment fund, the yield will be applied to the weighted average of endowment funds held within the current fund during the month.

1. Purpose
   This policy establishes the types of acceptable investments and various limits on these investments which can be purchased in the Short-term Cash Management Program administered by the Administrative Services Division.
   
   Rhodes will purchase acceptable investments which will maintain a high level of return within an acceptable level of risk.
2. Prescribed Types of Investment Securities and Limitations
   1. The following investment securities are acceptable for the Cash Management Program:
      1. U. S. Government Treasury Bills
         • No limit on amount.
         • Current maturities will not exceed 365 days.
      2. U.S. Government Treasury Notes
         • No limit on amount.
         • Current maturities will not exceed two years.
      3. Obligations of Agencies of the U.S. Government
         • No limit on amount.
         • Current maturities will not exceed 365 days.
      4. Certificates of Deposit with Shelby County financial institutions (Deposits Insured)
         • The amount of certificates of deposit from any one institution will not exceed the lesser of $500,000 or 1% of net assets.
         • Total direct obligations of any one institution including certificates of deposit, are subject to the limitations discussed in Section III.
         • Maturities will not exceed one year.
      5. Certificates of Deposit with non-local financial institutions (Deposits Insured)
         • The amount of certificates of deposit from any one institution is not to exceed the amount of federal deposit insurance.
         • The Subcommittee on Investments may approve a select list of major U.S. capital market financial institutions with which the College may invest amounts in excess of federal deposit insurance limits.
         • Total direct obligations of any one institution, including certificates of deposit, are subject to the limitations discussed in Section III.
         • Maturities will not exceed one year.
      6. Repurchase Agreements and Reverses
         • Total amount of repo′s will not exceed the greater of $25,000,000 or 5% of net assets.
         • Direct obligations of any one institution, including repo′s with more than a one day maturity are subject to the limitations discussed in Section III.  Overnight repo’s with a daily maturity are excluded from the limitations discussed in Section III.
         • Maturities will not exceed thirty days for repo′s.
         • No limitations apply to reverses.
         • Actual delivery of collateral to Depository Bank will be required on each transaction.
      7. Domestic Bankers Acceptances
         • Total amount of banker′s acceptances from any one bank will not exceed the lesser of $2,000,000 or 2% of net assets.
         • Purchases are limited to the fifty largest domestic banks (ranked according to deposits).
         • Other domestic banks may be specifically approved by the Subcommittee on Investments.
         • Total direct obligations of any one institution, including bankers′ acceptances, are subject to the limitations discussed in Section III.
         • Current maturities will not exceed six months.
      8. Commercial Paper
         • The total amount of paper which can be purchased from any one institution will not exceed $2,000,000 or 2% of net assets.
         • Paper will only be purchased that is rated by Moody′s as P-l or by Standard & Poor′s as either A-l or A-2.
         • The Subcommittee on Investments may specially approve certain institutions which will be exempted from (b) above.
         • Current maturities will not exceed thirty days.
   2. Investment in equity securities is prohibited.
   3. Deposit rankings and amount of equity as referenced above in II. A., will be determined as of the latest available audited financial statements.
3. General Limitations
   1. The College will not purchase investment securities from any one organization that will cause the total cost of all securities issued by that organization and held by the College to exceed the greater of $3,000,000 or 25% of the total cash and cash equivalents as of the beginning of the month.
   2. Total direct obligations of any one institution shall not exceed the lesser of $1,000,000 or 2% of net assets.
   3. There is no limitation on the amount of U.S. Government or Agency securities.
   4. Net assets are defined as the combined net assets in the audited financial statements for the preceding fiscal year.
4. Investment Review
   1. The Comptroller will distribute a monthly performance report on the activities of the Short-term Cash Management Program to the Vice President for Finance and Business Affairs.
   2. The Comptroller may request the Subcommittee on Investments to add specific investment instruments, with appropriate limitations, to Section II. A. as market characteristics change over time.