11.0 Diversification The purpose of diversification is to reduce the overall portfolio risks while attaining market average rates of return. The College will diversify its investments by security type and institution. Limitations by Type of Security Maximum % of Portfolio US Government Securities 100% Certificates of Deposit 40% Repurchase Agreement/Investment Sweep 100% Local Government Investment Pool 100% 12.0 Maximum Maturities To the extent possible, the College will attempt to match its investments with anticipated cash flow requirements. Unless marched to a specific cash flow, the College will not directly invest in securities maturing more than one (1) year from the date of purchase. 13.0 Internal Control The Director of Finance will establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures. 14.0 Performance Standards The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles commensurate with the investment risk constraints and the cash flow requirements. The College’s investment strategy is passive. Given this strategy, the basis used to determine whether market yields are being achieved shall be the three-month US Treasury Bill rate. 15.0 Reporting The Vice President of Administration and Finance and Director of Finance are charged with the responsibility of including a report on investment activity and returns in the College’s Annual Financial Report. The College will comply with reporting requirements of the State of Maryland. Such reports will be reviewed by the President of the College and forwarded to the Maryland State Office of the Treasurer ifrequired.
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