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Endowment Pool Investment Guidelines

  1. Purpose
    1. To establish university guidelines and procedures related to the investment of the Endowment Pool (the “Pool”) and reporting of such investments.
    2. The goal for the management of endowment funds at an academic institution is to ensure that the endowment provides future students and faculty with the same level of spending resources, adjusted for inflation, as current students and faculty while also providing a stable and increasing cash flow to fund current operating budgets. In order to accomplish this, endowment funds of the University of Utah (the “University”) are invested under the total return concept of the Uniform Prudent Management of Institutional Funds Act (UPMIFA), whereby “net appreciation, realized and unrealized, in the fair value of the assets of an endowment fund” may be appropriated for expenditure. UPMIFA was adopted into state law under Utah Code 51-08 and it is the governing regulation for the University’s endowment funds.
    3. In addition, endowment funds specifically serve two purposes for the University. First, endowment funds provide financial flexibility to the University by allowing the Health Science and Main Campus Senior Administrators and the Academic Deans to strategically manage their colleges and departments to ensure the University continues to achieve its mission of leadership as a research institution on a national level. Second, due to the decentralized private funding structure of the University, endowment funds play a sizeable role in funding scholarships, fellowships, and current initiatives for particular departments.
    4. The Pool was established by the University as a pooled fund for the long term investment of endowment funds. As determined by the University’s spending policy, a percentage of the market value of the endowment funds is distributed annually to provide funding for current operations.
  2. References
    1. Uniform Prudent Management of Institutional Funds Act (UPMIFA), Title 51, Chapter 08, Utah Code Annotated, 2007.
    2. Utah State Board of Regents Investment Policy (R – 541)
  3. Definitions
    1. Endowment funds - As used in these guidelines, “endowment funds” include true endowment funds, term endowment funds, and quasi-endowment funds.
    2. True endowment funds - As used in these guidelines, “true endowment funds” (also known as “permanent endowment funds”) are institutional funds with respect to which a donor has stipulated, as a condition of the gift, that the gift is to be maintained inviolate and in perpetuity. True endowment funds are to be invested for the purpose of producing present and future income that may, also by donor stipulation, be expended or reinvested with the original gift. The principal or corpus of the true endowment must be maintained intact. Income that may be expended according to the donor’s stipulation may be unrestricted or restricted as to the purpose for which it is expended, the time it may be expended, or both. Income that may not be expended but rather added to the principal or corpus in accordance with the donor’s stipulation assumes, or takes on, the same restrictions as the original gift.
    3. Term endowment funds – Term endowment funds are similar to true endowments, except that, upon the passage of a stated period (or time) or the occurrence of a particular event, all or part of the donation may be expended. True and term endowments are collectively referred to as “donor-restricted” transactions.
    4. Quasi-endowment funds - Quasi-endowment funds are institutional funds that the governing board (in this case, the University’s Board of Trustees [the “Board”]), rather than the donor, has determined are to be retained and managed like an endowment. Principal and income of these funds may be utilized at the discretion of the governing board. Funds that the governing board set aside to function as an endowment may be unrestricted or restricted as to the purpose or time of expenditure by any agent outside the institution.
  4. Investment Guidelines
    1. The following standard of care shall apply to the investment of the Pool by the University:
      1. Standard of Care
        1. The University shall invest and manage the Pool as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the endowment funds. In satisfying this standard, the University shall exercise reasonable care, skill, and caution.
        2. The University’s investment and management decisions respecting individual assets must be evaluated, not in isolation, but in the context of the endowment portfolio as a whole, and as a part of an overall investment strategy having risk and return objectives reasonably suited to endowment funds.
        3. The University shall conduct appropriate due diligence and make a reasonable effort to verify facts relevant to the investment and management of endowed assets.
        4. The University shall consider the following, which may be relevant to the endowment(s) and/or its beneficiaries, in investing and managing endowment assets:
          1. general economic conditions,
          2. the possible effects of inflation or deflation,
          3. the role that each investment or course of action plays within the Pool and if it is consistent with the Pool’s investment strategy,
          4. the expected total return from income and the appreciation of capital, and
          5. needs for liquidity, regularity of income, and preservation and/or appreciation of capital.
        5. The University shall not consider previous or potential gifts from donors and/or political interests relating to the University when conducting due-diligence and considering investment opportunities.
      2. Delegation of Investment and Management Functions
        1. The University may delegate investment and management functions that a prudent investor could properly delegate under the circumstances. The University shall exercise reasonable care, skill, and caution in:
          1. Selecting outside investment advisor(s), and/or consultant(s), and/or investment manager(s).
          2. Establishing the scope and terms of the delegation, consistent with the purposes and terms of the endowment. Periodically review the investment advisor(s), and/or consultant(s), and/or investment manager(s) actions in order to monitor their fiduciary duty, compliance with the terms of the delegation, and investment performance;
            1. So long as the University complies with Article IV, Investment Guidelines subsection-(2) requirements; it shall not be liable to the endowment(s) and/or the beneficiaries for the decisions or actions of the investment advisor(s), and/or consultant(s), and/or investment manager(s) to whom a function was given.
      3. Costs
        1. In investing and managing the Pool, the University may only incur costs that are appropriate and reasonable in relation to the assets, the purposes of the endowment, and the skills of designated University administration and/or investment advisor(s), and/or consultant(s), and/or investment manager(s) to whom investment management functions were delegated.
  5. Delegation of Responsibilities
    1. Responsibilities of the Board of Trustees
      1. The Board has the following responsibilities:
        1. Investment oversight responsibilities for the Pool.
        2. Approve the University of Utah Investment Policy.
        3. The Board shall review and approve the monthly investment report and quarterly performance report on the Pool that have been submitted to the Board.
        4. Perform the review as described in Article XVI-(2) of these guidelines.
      2. The Board shall delegate the responsibilities listed below to the Vice President for Administrative Services and the Associate Vice President / Chief Investment Officer, who may act on advice from the University of Utah Investment Advisory Committee (the “Committee”). In delegating such responsibilities the Board will not ordinarily meet with investment managers hired by the University.
        1. Invest and reinvest the funds of the Pool.
        2. Contract with independent investment advisor(s), investment consultant(s), investment manager(s), bank(s), and/or trust companies for the Pool.
        3. Subscribe for an interest as a limited partner or shareholder of a domestic or offshore partnership or corporation.
        4. Make payments of compensation for investment advisory and/or management services for the Pool.
    2. Responsibilities of the Investment Advisory Committee
      1. The Committee is responsible for advising officers of the University administration regarding the prudent and effective investment of the Pool. This Committee is chaired by the Vice President for Administrative Services, and it shall consist of six to ten members who are selected by the President of the University. The Committee shall include not more than two members from the Board of Trustees and not less than two independent investment management professionals.
        1. The Committee shall perform the following duties:
          1. Review current economic conditions and future economic forecasts.
          2. Review the Pool’s current investment portfolio and investment performance.
          3. Review the Pool’s current investment strategy and advise the University administration on investment strategy to be employed.
          4. Advise the University administration on the engagement, termination, or continuation of investment advisor(s), investment consultant(s), independent investment manager(s), bank(s), and/or trust companies.
          5. Advise the University administration as to the adoption of appropriate operating guidelines or practices relating to the administration and investment of endowed funds, and the allocation of investment earnings.
        2. In carrying out these responsibilities, the Committee shall meet at least three times a year. These meetings shall include, at least, the following agendas:
          1. The agenda for one meeting is to be devoted to a review of the quarterly and/or annual performance of the Pool’s investment portfolio and each asset class.
          2. The agenda for one meeting is to be devoted to a review of the Pool’s investment strategy and asset allocation.
          3. The agenda for one meeting is to be topically based on current issues.
          4. External investment advisor(s), investment consultant(s), and/or investment manager(s) may engage the Committee to present investment strategies at any of the meetings as warranted. However, the Committee is not expected to meet with all investment advisor(s) or manager(s) prior to engagement. Additional meetings may be scheduled as needed.
    3. Responsibilities of the Investment Management Office
      1. The responsibilities of the Investment Management Office may include, but are not limited to, the following:
        1. Conduct due diligence searches for external investment advisor(s), investment consultant(s), investment manager(s), alternative investments, bank(s), trust companies, and/or securities custodian(s) and in consultation with the Committee determine their engagement, continuation, or termination.
        2. In consultation with the Committee, develop investment strategies for implementing the Asset Allocation Guidelines.
        3. Manage the day-to-day operational activities, which include:
          1. execute investment strategies,
          2. allocate and reallocate assets in compliance with the targets and ranges of the Asset Allocation Guidelines,
          3. all necessary reporting pertaining to transactions for assets and income; and
          4. all necessary reporting to ensure compliance by University administration and by external investment advisor(s), investment consultant(s), investment manager(s), bank(s), and/or trust companies within the relevant policies, guidelines, and statutes.
        4. Review Pool expenses to ensure only reasonable and necessary expenses are assessed to the Pool.
      2. The Investment Management Office may be assisted by external investment advisor(s), investment consultant(s), and/or investment manager(s) in carrying out any of the responsibilities listed above.
    4. Responsibilities of Investment Advisor(s) and Consultant(s)
      1. Acknowledge in writing acceptance of fiduciary duty to the Pool and to exercise reasonable care under the standard of care defined in Article IV, Investment Guidelines.
      2. Communicate promptly with the University’s Investment Management Office regarding all significant matters such as but not limited to:
        1. changes in the firm’s ownership, organizational structure, or professional staffing (additions and departures),
        2. changes to the firm’s financial stability, solvency, legislative or regulatory oversight, and/or pending litigation proceedings,
        3. changes to fee schedules; and
        4. any other changes of a substantive nature that may effect the firm’s operations.
      3. Review on a quarterly basis, the Pool’s investment policies, guidelines and objectives and recommend appropriate changes to the Investment Management Office.
      4. Provide general advice concerning the allocation of new contributions as well as periodic asset allocation rebalancing.
      5. Monitor and communicate long-term capital market trends and recommend broad-based asset-mix strategies for consideration by the Investment Management Office and the Committee.
      6. Assist in due diligence research and provide recommendations for independent investment management firm(s), which would be appropriate to implement the Pool’s investment guidelines and objectives.
      7. Help monitor and assess service providers (e.g., investment manager(s) and custodian(s)) and report on changes within those organizations.
      8. Help monitor and assess service providers (e.g., investment manager(s) and custodian(s)) to ensure prudent payment of only reasonable and necessary expenses and best execution on trades.
      9. Measure, evaluate, and report on the Pool’s and the investment manager(s)’ performance results on a quarterly basis.
      10. Provide general support to the Investment Management Office and the Committee.
    5. Responsibilities Of External Investment Manager(s) with Separate Account Agreements with the University of Utah
      1. Separate account management firms are expected to act in an ethical manner and with integrity in all phases of the investment process. It is expected that, at a minimum, separate account managers will comply with The Code of Ethics and The Standards of Professional Conduct as established by the CFA Institute.
      2. The external separate account investment manager(s) shall manage assets of the Pool in accordance with the investment guidelines and objectives expressed by these Endowment Pool Investment Guidelines and by any University of Utah investment management agreement(s). Specific responsibilities include but are not limited to:
        1. Acknowledge in writing the acceptance of a fiduciary duty to the Pool, to exercise reasonable care, and to comply with the terms of the delegation as defined in Article IV, Investment Guidelines.
        2. Adhere to the University’s investment policies and guidelines prescribed for the Pool, wherein any specific concerns about the direction and/or appropriateness of an investment(s) should be clarified and agreed to in writing, in advance of any purchase.
        3. Comply with all state and federal laws, legislation, and regulations that involve the Pool as they pertain to the separate account manager’s duties, functions, and responsibilities as a fiduciary.
        4. Signify in writing or in separate account agreements with the University of Utah its agreement to comply with all of the guidelines contained herein or as amended.
        5. Communicate promptly with the University’s Investment Management Office and any University investment advisor(s) and/or consultant(s) regarding all significant matters such as but not limited to:
          1. changes in the firm’s ownership, organizational structure, or professional staffing (additions and departures),
          2. changes to the firm’s financial stability, solvency, legislative or regulatory oversight, and/or pending litigation proceedings,
          3. changes to fee schedules,
          4. directional changes in the firm’s investment outlook and strategy,
          5. shifts in the firm’s portfolio construction (i.e., asset mix, sector emphases, etc.),
          6. significant downgrades of its portfolio assets by any of the rating agencies; and
          7. any other changes of a substantive nature that may effect the firm’s operations.
        6. Effect security trading on a best execution basis. Placement of orders should be based upon the financial viability of the brokerage firm and the assurance of prompt and efficient execution.
        7. All securities shall be delivered versus payment to the University’s custodian bank(s).
        8. Issue monthly and/or quarterly reports to the University’s Investment Management Office, the University’s investment advisor(s), and/or consultant(s) with regards to portfolio asset and income transactions and performance.
        9. Meet with the Committee, the University’s Investment Management Office, the University’s investment advisor(s) and/or consultant(s), as necessary, to report on the management of assets.
        10. Fully disclose all fees and expenses to the Investment Management Office, and/or the University’s investment advisor(s) and/or consultant(s) on an annual basis.
    6. Responsibilities of Securities Custodian(s) for Separate Managed Accounts
      1. Serve as custodian and act in a fiduciary capacity for the University and the Pool.
      2. Acknowledge in writing the acceptance of a fiduciary duty to the Pool, to exercise reasonable care, and to comply with the terms of the delegation as defined in Article IV, Investment Guidelines.
      3. Communicate promptly with the University’s Investment Management Office and any University investment advisor(s) and/or consultant(s) regarding all significant matters such as but not limited to:
        1. changes to the firm’s ownership or organizational structure,
        2. changes to the firm’s financial stability, solvency, legislative or regulatory oversight, and/or pending litigation proceedings,
        3. changes to fee schedules; and
        4. any other changes of a substantive nature that may effect the firm’s operations.
      4. Provide safekeeping of securities entrusted to it, collect dividends and interest payments on held securities, make cash disbursements, and manage cash flows as directed by the Investment Management Office.
      5. May lend securities owned by the Pool, but held in custody by another party, such as a bank custodian, only if such securities lending is pursuant to a separate written agreement.
      6. Issue monthly statements that provide complete and accurate accounting records:
        1. of security holdings and positions priced in accordance with industry standards; and
        2. each asset transaction, including income and cash flows received from each investment manager.
      7. Meet periodically with the University Investment Management staff and/or the University’s investment adviser(s) or consultant(s) to report on the separate investment account.
  6. Conflicts of Interest
    1. The University’s officers, directors, employees, or members of the Committee that are involved with the investment of the Pool (“Access Persons”) have a duty to be free of conflicting interests that might influence their decisions when representing the University. Consequently, as a general matter, the University’s Access Persons are not permitted to maintain any conflict of interest with the University, and should make every effort to avoid even the appearance of any such conflict. A conflict of interest occurs when an individual’s private interests interfere in any way – or even appear to interfere – with the University’s interests as a whole. A conflict of interest can arise when an Access Person takes actions or has interests that may make it difficult to perform his or her assigned duties objectively and effectively, or when an Access Person or a member of his or her family receives any improper personal benefits as a result of his or her position with the University. Any Access Person who believes that he or she may have a potential conflict of interest must immediately report concerns to the appropriate University representative, mechanism, or process. This general prohibition on conflicts of interest includes (but is not limited to) the following:
      1. The University’s dealings with consultant(s), investment adviser(s), investment firm(s), investment fund(s), and others shall be based solely on what is in the University’s best interest, without favor or preference to any third party, including close relatives; and
      2. Access Persons who deal with or influence decisions of individuals or organizations seeking to do business with the University shall not own interests in or have other personal stakes in such organizations that might affect the decision-making process and/or the objectivity of such employee, unless expressly authorized in writing by the Board, and only after the interest or personal stake has been disclosed.
  7. Investment Objectives of the Pool
    1. The Investment Management Office shall invest the Pool in accordance with the following investment objectives, stated in terms of return and risk. These objectives shall be subject to review on an annual basis
      1. Return Objective:
        1. Achieve a total rate of return over a rolling ten-year period, which exceeds the rate of inflation by 5% per year on average.
      2. Risk Objective:
        1. Over a time frame of 10-20 years, construct an investment program that offers a high probability of achieving the stated investment return objective while keeping the frequency and magnitude of temporary declines at acceptable levels. This can be deemed to be a strategic asset allocation program that historically has downside volatility within acceptable ranges over 1, 3 and 5 year rolling periods.
  8. Pool Asset Allocation Guidelines
    1. The following asset allocation targets and ranges will guide the long-term investment activities for the Pool:
    2. Asset Class Target Allocation Allocation Range
      Global Marketable Equities 45% 20% - 60%
      Global Marketable Fixed Income 30% 25% - 50%
      Alternatives 25% 5% - 30%
    3. The Investment Management Office, with the advice of the Committee, will manage the asset allocation mix within the Target Allocations and Allocation Ranges. It is expected that the asset allocation mix will be diversified among asset classes and be designed to meet the rate of return and risk objectives of the Pool.
      1. The University shall diversify assets among multiple investment managers of varying investment styles to the extent that such diversification can be expected to reduce risk without sacrificing expected investment return, or that such diversification may produce greater investment return without incurring any greater risk.
      2. Use of commingled funds (e.g., mutual funds, bank trust funds), domestic and offshore partnerships and corporations, and separate account agreements, which meet the general intent of the guidelines, may be utilized by the Pool.
      3. The Target Allocation for Alternatives is contingent upon available opportunities. When investing in alternative asset classes, strategies, and investments, such investments shall be thoroughly documented describing the asset classes, securities, and/or strategies and provide a detailed explanation of the potential benefits and risks associated with the investment. Documentation shall include maximum limits on each alternative asset class.
      4. Cash inflows and outflows will be allocated in accordance with the Asset Allocation Guidelines.
      5. The Investment Management Office and the Committee will review the Pool’s asset allocations on a regular basis.
      6. Special investment opportunities may necessitate an amendment to the Endowment Investment Guidelines as deemed appropriate.
      7. Rebalancing:
        1. The actual percentage allocations may vary as much as +/- 5% before rebalancing to the Asset Allocation Guideline’s targets is required.
        2. The Investment Management Office with advice from the Committee shall determine the initial weighting and rebalancing parameters for allocation to investment strategies. The Investment Management Office may also accept advice from the University’s investment advisor(s) or consultant(s) regarding asset allocation strategies.
  9. Eligible Pool Investments
    1. The following guidelines shall define eligible Pool investments and their parameters. These guidelines shall be subject to review on an ongoing basis.
      1. 1) Global Marketable Equities
        1. a) The global marketable equity segment may be diversified across a spectrum of market capitalizations by allowing investments in small, medium, and large-capitalization stocks.
        2. b) The global marketable equity segment may be diversified across multiple regions, including the United States, developed foreign markets, and emerging markets.
        3. c) Equity holdings should be readily marketable and diversified by issue, industry, and sector.
        4. d) Equity managers may invest in short term commercial paper, money-market mutual funds, other money market investments, and short term bond investments as a surrogate for cash reserves from time-to-time. The intent is to have the investment manager remain fully invested at all times.
      2. 2) Global Marketable Fixed Income
        1. a) Bond holdings should be diversified by country, issue, sector, coupon, and quality and should be readily marketable.
        2. b) Bond portfolios must have a minimum average quality rating of A or better.
        3. c) Non-investment grade securities shall be limited to 15% of a manager’s portfolio, unless otherwise stated in the Investment Manager’s guidelines.
        4. d) Foreign securities shall be limited to 15% of a manager’s portfolio, unless otherwise stated in the Investment Manager’s guidelines.
        5. e) Average portfolio duration should not exceed +/- 35% of the stated benchmark index, unless otherwise stated in the Investment Manager’s guidelines.
      3. 3) Alternative Investments
        1. In addition to the foregoing investments, The University may invest in alternative investment funds that derive returns primarily from high yield and distressed debt (hedged or non-hedged), private capital (including venture capital, private equity, both domestic and international), natural resources, and private real estate assets or absolute return and long/short hedge funds (each an “Alternative Investment Fund”).
        2. The University may invest up to 30% in Alternative Investment Funds of which no more than 20% may be invested at any time in absolute return and long/short hedge funds.
        3. The alternative investment segment of the portfolio should be diversified among types of investments. The following ranges shall govern the investment of Alternative Investment Funds: 

          Investment Range
          High Yield and Distressed Debt 0% - 10%
          Private Capital , Natural Resources and Private Real Estate 5% - 10%
          Absolute Return and Long/Short Hedge Funds 0% - 15%
          The above percentages are subject to prudent rebalancing standards.
        4. As of the date of the approval of these Guidelines by the Board of Trustees, Alternative Investment Funds that have majority holdings in Private Capital, Natural Resources and Private Real Estate shall only be invested through fund of funds vehicles, subject to reassessment by the Investment Management Office and the Committee under Article XIV.
        5. Due Diligence Criteria for Alternative Investment Funds shall be as stated in Article XIII, Section 1, Due
          Diligence Criteria.
        6. Alternative investments shall be measured against appropriate benchmarks, universes and/or expected rates of return.
  10. Pool Risk Tolerance
    1. Based on the University’s understanding of capital market risk, the following guiding principals and measures shall be followed to control undue portfolio volatility in the Pool:
      1. The University recognizes that the primary fiduciary obligation regarding the Pool is to prudently invest the portfolio to meet investment objectives that will fulfill the purpose of the Pool as described in Article I.
      2. The University fully recognizes the likelihood of periodic market declines and is willing to accept the possibility of some short-term declines in market value in order to achieve potentially higher long-term investment returns.
      3. Assets of the Pool are to be diversified to protect against large investment losses and to reduce the probability of excessive performance volatility.
      4. Diversification of assets is to be achieved by:
        1. allocating monies to various asset classes and investment styles within asset classes, and
        2. retaining investment management firm(s) with complementary investment philosophies, styles, and approaches.
  11. Performance Evaluation and Review Process for the Pool
    1. The Investment Management Office and the Committee will evaluate the Pool’s investment performance on a periodic basis which shall include, but not be limited to, the following:
      1. The overall Pool’s performance and each investment manager’s performance to determine whether the Pools’ objectives are being met.
      2. The Pool’s asset allocation mix relative to its Investment Guidelines and capital markets outlook.
      3. The risk and return profile(s) of the Pool and each investment manager to determine whether the Pool’s goals and objectives are being met.
      4. The extent to how each investment manager has managed their portfolio consistent within that manager’s stated investment philosophy and style.
      5. Each investment manager’s adherence to these guidelines.
      6. A reasonable time horizon for evaluating the Pool’s investment performance shall be on a long term basis (five to ten years).
  12. External Investment Manager Search and Evaluation for the Pool
    1. Due Diligence Criteria
      1. The Investment Management Office and the University’s investment advisor(s) and/or consultant(s) shall consider the following minimum criteria as part of the due diligence process for selecting an external investment manager.
        1. Investment experience and integrity of the investment management team.
        2. Stability of the investment management organization.
        3. Fit within the investment strategy for the Pool.
        4. Focused investment strategy with demonstrated process of implementation.
        5. Performance relative to peer group and to assumed risk.
        6. Investment vehicle structure including:
          1. Expense ratios or fees
          2. Inception date of product
          3. Total assets in product
    2. External Investment Manager Evaluation
      1. Time frames for evaluating the performance of investment managers should approximate a market cycle (three to five years). The Investment Management Office and the Committee will evaluate the Pool’s external investment managers on a periodic basis which shall include, but is not limited to, the following:
        1. Investment Managers (Global Marketable Equities and Fixed-Income)
          1. Outperform a passive, style-specific index over rolling five-year periods.
          2. Rank in the top half (top 50%) in a style-specific peer-group universe over rolling five-year periods (specific style benchmarks and peer groups will be selected for each manager).
        2. The following investment manager guidelines may be used to begin discussions regarding manager termination or probation:
          1. If their most recent one-year ranking is in the bottom quartile of the peer group.
          2. If a distinctive and recognizable departure from the investment style and/or philosophy from which the manager was selected.
          3. Significant organizational events, such as a change in the portfolio manager, firm ownership, etc.
          4. Absence of any extenuating circumstances satisfactory to the Committee to warrant retention.
      2. NOTE: Exceptions to the manager guidelines may exist. Investment manager guidelines are meant to foster discussion and possible action. They are not meant to automatically trigger a termination.
  13. Review of Endowment Pool Investment Guidelines
    1. The Investment Management Office and the Committee will review the Statement of Endowment Pool Investment Guidelines periodically to determine that it continues to be appropriate in view of changes within State and Federal regulations, the University, the Pool, and the capital markets.
  14. Internal Controls and Audits
    1. The University shall establish a system of internal controls, which shall be evaluated annually by the University’s internal auditors and/or by independent auditors. The controls shall be designed to prevent losses of funds from fraud, employee error, or misrepresentation by third parties or by university employees and officers.
    2. The President shall arrange for an audit of the University’s annual report, conducted by either the resident auditors or the Regents' audit staff. The audits shall be conducted in accordance with applicable generally accepted auditing standards for regulatory or prescribed format reports. Reports shall include the auditors' comments based on their examination of investment policy and procedures, the process, the accounting records, and the safekeeping methods.
  15. Reporting to Board of Trustees and to the State Board of Regents
    1. In establishing reports for its Board of Trustees, the University shall implement the following:
      1. All reports shall include the Chief Investment Officer’s assertion that, to the best of his/her knowledge, the institution is in compliance with UPMIFA.
      2. The Chief Investment Officer shall submit monthly investment reports to the Board within 45 days of the month's end. In addition, the Chief Investment Officer shall submit quarterly performance reports to the Board within 60 days of the quarter's end.
      3. Within 7 days of the Board’s approval, the University shall submit to the Board of Regents a copy of the investment reports submitted to the Board. Reports submitted to the Board of Regents shall be accompanied by a transmittal letter to the Commissioner indicating that the President of the University of Utah has reviewed the reports.
    2. Annually, the Board of Trustees Agenda shall include a review of the investments and performance of the Pool. The review shall consist of a presentation by the Vice-President for Administrative Services and the Associate Vice President/Chief Investment Officer, followed by a question and answer period, as needed.
  16. Annual Money Management Report
    1. Annually, the University shall submit, on forms provided by the Commissioner of Higher Education, a summary report of its money management activities for the year. This report shall include an auditor's opinion (as provided in section 4.11 of Regents Policy R541) regarding: the fairness of presentation of the report in accordance with generally accepted accounting principles, UPMIFA, and these guidelines. Draft reports shall be submitted to the Commissioner's Office not later than October 15 of each year. Final reports including the auditor's opinion shall be submitted not later than November 30 of each year.
  17. Managing Institutional Funds of Other Institutions of Higher Education
    1. Nothing in these guidelines shall restrict the ability of the University to manage endowed funds for other institutions of higher education. In delegating all investment management functions to the University of Utah, the other institution’s Board of Trustees shall maintain their fiduciary responsibility for the funds. The terms of any such agreement between the University and other institutions shall govern and should clearly layout the expectations of each party, especially with regard to fees and reporting. The funds shall be managed in accordance with these guidelines and all other governing laws and regulations (such as UPMIFA).

Excerpted and based upon the Utah Uniform Trust Code (Utah Code 75-7-814(2))
Modified from the Uniform Prudent Investor Act § 7.

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Last Updated: 8/4/21