BASED ON POLICY NUMBER AND TITLE:
2-12-0 EPA 4: FINANCIAL CONDITION
PURPOSE: To establish procedures to invest all surplus funds in order to earn revenue for use as general operating funds.
The Vice President of Finance and Administration is authorized to invest local funds until the funds are needed for cash according to the guidelines within these procedures
1. The Vice President of Finance and Administration or the designee of the Vice President is authorized to invest in financial instruments in compliance with the Code of Laws of South Carolina (SC Code 6-5-10).
2. The primary objectives in priority order of investment activities shall be preservation of capital, liquidity and yield.
A. Preservation of capital – Preservation of capital is the foremost objective of the investment program. Funds shall be invested in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective is to mitigate risk. Risk is defined as limiting investments to the safest types of securities and structuring the investment portfolio so securities mature to meet cash requirements for ongoing operations and would prevent the need to sell securities prior to maturity.
B. Liquidity – The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. The portfolio shall be structured so that securities mature concurrent with cash needs to meet anticipated demands. Because all cash demands cannot be anticipated, a portion of the portfolio may be placed in overnight investments.
C. Yield – The investment portfolio shall be designated to attain the market rate of return throughout the budget cycle based on the current rate environment, risk constraints and liquidity needs.