ARMA InternationalARMA International Governance Current Policies and Procedures

POL1-021 Exhibit A

OPERATING AND SHORT RESERVE FUNDS

INVESTMENT POLICY STATEMENT

 

 

Purpose

 

The purpose of the Operating Fund is to provide sufficient cash to meet the financial obligations of ARMA International in a timely manner.  The purpose of the Short Term Reserve Fund is to meet the expenses occurring as the result of unanticipated activities during the current twelve-month budget cycle.

 

Investment Objectives

 

The investment objectives of the Operating Fund and Short Term Reserve Fund are as follows:

 

1.                   Preservation of Capital

2.                   Liquidity

3.                   To optimize the investment return within the constraints of 1 and 2 above.

 

Investment Guidelines

 

Allowable investments – Operating Fund

 

Designated ARMA International staff (Chief Executive Officer (CEO) and the Chief Financial Officer (CFO)) are authorized to invest the ARMA Operating Fund as follows:

 

1.                   Money Market accounts which offer check writing services and pay interest. Use of a regular checking account should be restricted to a “just-in-time” balance to cover monthly expenses such as rent, payroll, utilities, etc.

 

2.                   Federally-insured Certificates of Deposit not to exceed $250,000 including interest at commercial banks or saving and loan institutions;

 

3.                   Money Market Funds that invest in government-backed securities;

 

4.                   Direct Obligations of the U.S. government, its agencies and instrumentalities;

 

5.                   United States Government Discount Notes;

 

6.            Repurchase agreements with financial institutions for the purchase of government-backed or agency obligations of the United States government, where physical delivery of the collateral is made to a third party; and


7.            Banker’s Acceptances.

 


 

Maturity

 

It is the responsibility of the CEO and the CFO to have sufficient allowable investment maturing to meet ARMA International’s financial obligations in a timely manner.

Allowable investments – Short Term Reserve Fund only

 

The CEO and the CFO are authorized to invest up to 50% of the Short Term Reserve Fund, in addition to the investments allowed above, as follows:

 

1.                   Mutual funds consisting of a portfolio of the following securities, provided that 100% of the securities in the fund are obligations of the U.S. government, its agencies or instrumentalities or collateralized by obligations of the U.S. government, its agencies and instrumentalities.

 

(a)          Adjustable and floating rate mortgage securities which are issued or guaranteed by the U.S. government, its agencies or instrumentalities.  Investment in these securities may be through collateralized mortgage obligations, real estate mortgage investment conduits, or stripped mortgage securities.

(b)          Other securities collateralized by or representing an interest in real estate mortgages whose interest rates reset at periodic intervals and are issued or guaranteed by the U.S. government, its agencies or instrumentalities.

 

Maturity

 

The portion of the Short Term Reserve Fund designated above may have a weighted average maturity of 2.5 years or less.  For purposes of determining maturity, the reset period on adjustable rate bonds shall be used to determine maturity.

 

DIVERSIFICATION

 

No more than 10% at time of purchase of the Operating Fund and Short Term Reserve Fund combined may be in the securities of any one issuer with the exception of obligations of the U.S. government, its agencies and instrumentalities, repurchase agreements collateralized by obligation of the U.S. government, its agencies and instrumentalities, and federally insured certificates of deposit.

 

REPORTING

 

The CEO and the CFO prepare a schedule of investments and their performance for presentation on a monthly basis for the financial planning task force, and on a quarterly basis for the task force that oversees financial planning.

 

An annual report is presented to the Board of Directors at the time the Association’s audit is presented, outlining in detail the reserve fund portfolio, and a performance measurement for the concluding fiscal year to include, but not be limited to, the following indices:

 

1.    Consumer Price Index;

2.    United States Treasury Bills;

3.    Bill 30 day Index 

4. Standard & Poor (S&P) 500 index

5.  Dow Jones Industrial Index

6.  Merrill Lynch, U.S. Corporation, and U.S. Government one to ten year A rated and above Index

7.      MSCI EAFE Index


 

 

 

 


 

 

 

 


 

 

 

 


 

 

 

 


 

 

 

 


 

 

 

 


 

 

 

 


 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Questions about previous Policies & Procedures? Contact Connie Hardy, Corporate Secretary.