College funds shall be invested according to the Illinois Community College Act.

1. Scope

   This policy applies to all funds of the College.  These funds are accounted for in the College’s annual financial report and includes all restricted, operating, capital, auxiliary, revolving trust and any other funds that may be created from time to time.  All transactions involving the funds and related activity of any funds shall be administered in accordance with the provisions of this policy and the canons of the “prudent person rule.”  The Illinois State Statutes, and Federal Statute Rules and Regulations will take precedence except where this policy is more restrictive, wherein this policy will take precedence.

2. Objectives
   1. Safety of Principal – Investments shall be undertaken in a manner that seeks to ensure the preservation of principal in the overall portfolio.  To attain this objective only appropriate (identified within this policy, Section 3) investment instruments will be purchased and insurance or collateral may be required to ensure the return of principal.
   2. Liquidity – The College’s investment portfolio shall be structured in such manner as to provide sufficient liquidity to pay obligations as they come due.
   3. Return on Investments – The investment portfolio should strive to provide a rate of return which approximates an average rate or return equaling U.S. Treasury Bills, Illinois, Funds or other stable market rate for a given period of time for the College’s average weighted maturity.
   4. Maintaining the Public’s Trust – The investment officers shall seek to act responsibly as custodians of the public trust and shall avoid any transaction that might impair public confidence in the College, the Board, or the college Treasurer.
   5. Local Considerations – The investment officers shall have preference to depositories located within the College’s district provided that the afore described objectives are met, and such investments would be in compliance with all other conditions and limitations of this investment policy; however, the Board of Trustees may approve qualified depositories regardless of location.
   6. Competitive Quotations – The investment officers shall solicit competitive interest rate quotations from District 507 financial institutions for time deposit investments.  Funds shall then be invested based upon the highest quoted interest rate for investments that meet the requirements of this policy, unless otherwise approved by the Board.

3. Investment Instruments

   The College may invest in any type of security allowed by the Public Funds Investment Act (Illinois Compiled Statutes, 30 ILCS 235/0.01 et. Seq.) of the State of Illinois as may be amended from time to time.  The College has chosen to limit its allowable investments to those instruments listed below:

   1. Bonds, notes, certificates of indebtedness, treasury bills or other securities now or hereafter issued by the United States of America, its agencies and allowable instrumentalities.
   2. Interest bearing savings accounts, interest bearing certificates of deposit or interest bearing time deposits, or any other investments constituting direct obligations of any bank as defined by the Illinois Banking Act.
   3. Certificates of deposit with federally insured institutions that are collateralized or insured in excess of the 250,000 provided by the Federal Deposit Insurance Corporation coverage limit.
   4. The Illinois Funds.
   5. The Illinois School District Liquid Asset Fund Plus.
   6. Investments may be made only in those savings banks or savings and loan associations the shares, or investment certificates of which are insured by the Federal Deposit InsuranceCorporation.
   7. Money Market Mutual Funds provided that the portfolio is limited to obligations described this section A thru HI.
   8. Collateralized repurchase agreements of government securities which conform to therequirements stated in 30ILCS235 2(g) 2(h).
   9. Investment products that are considered as derivatives are specifically excluded from approved investments.

4. Diversification

   It is the policy of the College to diversify its investment portfolio.  Investments shall be diversified to reduce to a minimum, the risk of loss resulting in over concentration in a specific maturity, issuer, class of securities, and third party intermediary.  Diversification strategies shall be determined, reviewed and revised periodically by the College Treasurer.

   The maximum funds invested in one bank shall not exceed 75% of the capital stock and surplus of that institution based upon the most current official and legal report of condition submitted by that bank.  In the case of savings and loan institutions, the maximum funds invested in one institution shall not exceed 75% of the undivided profits based upon the most current report to the FDIC or commissioner of savings and residential finance.

5. Collateralization
   1. It is the policy of the College to require that time deposits in excess of FDIC insurable limits be secured by collateral to protect public deposits in a single financial institution if it were to default equal to 110% of the investment principal.
   2. Eligible collateral instruments are investment instruments acceptable under Investment Instruments, Section 3A listed above.  The collateral must be placed in safekeeping and must secure the investment by the College in occurrence with applicable Federal or State laws, rules and regulations.
   3. Safekeeping of Collateral
      1. Third party safekeeping is required for all collateral.  To accomplish this, the securities can be held at the following locations:
         1.  A Federal Reserve Bank or its branch office.
         2.  At another custodial facility in a trust or safekeeping department through book-entry at the Federal Reserve.
         3.  By an escrow agent agreed upon by the College and the pledging institution.
         4.  By the trust department of the issuing bank.
      2. Safekeeping will be documented by a College Board and Bank Board approved written agreement that complies with FDIC regulations.  This shall be in a form approved by the College including a safekeeping agreement.  This documentation will be on file in the Business Office.
      3. Substitution or exchange of securities held in safekeeping for the College can be approved exclusively by either the Treasurer or Controller provided the market value of the replacement securities is equal to or greater than the market value of the securities being replaced.
6. Safekeeping of Securities
   1. Securities, unless held physically by the investment officer, require third party safekeeping.  To accomplish the third party safekeeping, the securities can be held at the following locations:
      1. A Federal Reserve Bank or its branch office.
      2. At another custodial facility – generally in a trust or safekeeping department through book-entry at the Federal Reserve unless physical securities are involved.
   2. Safekeeping will be documented by an approved written agreement.  This may be in the form of a safekeeping agreement, trust agreement, escrow agreement or custody agreement.
   3. Original certificates of deposits may be held by the originating bank.  A safekeeping receipt must be in a form approved by the College.
7. Qualified Financial Institutions and Intermediaries
   1. Depositories – Demand Deposits
      1. Financial institutions authorized by the Board of Trustees and selected by the Treasurer for banking services shall be chartered to conduct business in Illinois and listed with the Illinois Department of Banks and at least maintain a branch office within the college District.  To maintain the College’s banking services, the institution must provide checking accounts, wire transfers, automated clearing house accounts, trust department services, on-line account services, safekeeping services and other financial services which benefit the College as determined by the Treasurer.
      2. The College will maintain funds only in financial institutions that are members of the FDIC system.
      3. A selected financial institution must be capable of posting all insurance and collateral as required within this policy including FDIC insurance and any amounts greater than that provided by FDIC insurance at any time the College has funds on deposit with that institution.

   2. Banks, and Savings and Loans – Certificates of Deposit

      Any financial institution selected to be eligible for the College’s competitive certificate of deposit purchase program must meet the following requirements:

      1. Shall provide wire transfer, automated clearing house, and certificate of deposit safekeeping services.
      2. Shall be a member of FDIC system and shall be willing and capable of posting required 110% collateral for funds in excess of FDIC insurable amounts.
      3. Shall have met the financial criteria as established in the investment policy of the College.

   3. Intermediaries

      Any financial intermediary selected to be eligible for the College’s competitive investment program must meet the following requirements:

      1. Shall provide wire transfer, automated clearing house, and deposit safekeeping services.
      2. Shall be a member of a recognized U.S. Securities and Exchange Commission Self- Regulatory Organization such as the New York Stock Exchange, National Association of Securities Dealers, Municipal Securities Rule Making Board, etc.
      3. Shall provide an annual audit upon request.
      4. Shall have an office of Supervisory Jurisdiction within the State of Illinois and be licensed to conduct business in this State.
      5. Shall be familiar with the College’s investment policy and all investments shall be in strict compliance with the policy.  Shall also accept financial responsibility for any investment not appropriate according to the policy.
      6. Furnish written reports/statements at least monthly that describe all investments held by the intermediary.
8. Management of Program

   1. The following individuals are authorized to purchase and sell investments, authorize wire transfers, authorize the release of pledged collateral, and to execute any documents required under this policy:

      1. College Treasurer
      2. College Controller

      These documents include:

      1. Wire transfer agreement
      2. Depository agreement
      3. Safekeeping agreement
      4. Custody agreement
      5. Automated clearing house agreement
   2. Management responsibility for the investment program is hereby delegated to the Treasurer and Controller, who shall establish a system of internal controls and written operational procedures designed to prevent losses of funds that might arise from fraud, employee error, misrepresentation by third parties, or imprudent actions by employees of the entity.  Such procedures shall include explicit delegation of authority to persons responsible for investment transactions; check signing, check reconcilement, deposits, bond payments, report preparation and wire transfers.  No person may engage in any investment transaction except as provided for under the terms of this policy.  The Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinates.
   3. The wording of agreements necessary to fulfill the investment responsibilities is the responsibility of the Treasurer who shall periodically review them for their consistency with College policy and State law and who shall be assisted in this function by the College Legal Counsel and external auditors.  These agreements include but are not limited to:
      1. Wire transfer agreement
      2. Depository agreement
      3. Safekeeping agreement
      4. Custody agreement
      5. Automated clearing house agreement
   4. The Treasurer may use financial intermediaries, and/or financial institutions to solicit bids for securities and certificates of deposit.  These intermediaries shall be approved by the Board of Trustees.
   5. All wire transfers made shall require authorization by the Treasurer, or Controller.

9. Performance

   The Treasurer will seek to earn a rate of return appropriate for the type of investments being managed given the portfolio objectives defined in Section 1 of this document for all funds.  In general, the Treasurer will strive to earn an average rate of return equaling U.S. Treasury Bills, Illinois Funds, or other stable market rate for a given period of time for the College’s average weighted maturity.

10. Bonding

    The Treasurer and Controller shall be bonded for the benefit of the College for an amount determined to be reasonable or legally required.  The surety shall be a corporate surety company.

11. Ethics and Conflicts of Interest

    The College Board of Trustees, College Officers, and employees shall refrain from personal business activity that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions, and shall comply with all requirements of the Illinois Community College Act governing interest held by members of the Board.

12. Indemnification

    Investment officers and employees of the College acting in accordance with this investment policy and written operational procedures as have been or may be established and exercising due diligence shall be relieved of personal liability for an individual security’s credit risk or market changes.

13. Reporting

    The Treasurer shall submit to the Board of Trustees monthly, investment reports which shall include information regarding securities in the portfolio by class or type, book value, income earnings and market values as of the report date.  Generally accepted accounting principles shall be used for valuation purposes.  The report shall indicate any areas of policy or procedure concern and planned revision of investment strategies.

14. Amendment

    This policy shall be reviewed from time to time by the Treasurer with regards to the policy’s effectiveness in meeting the College’s needs for safety, liquidity, rate of return, diversification, and general performance.  Any substantive changes will be approved by the Board of Trustees.