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Category Finance
Type Procedure
Approved by University Council, 13 September 2016
Date Procedure Took Effect 13 September 2016
Last Approved Revision 12 September 2017
Sponsor Chief Financial Officer
Responsible Officer Treasury Accountant
Review Date 12 September 2022

Purpose

To provide guidance to staff on the application of the University’s Investment Policy.

Organisational Scope

This procedure applies to the University and its subsidiaries.

Definitions

  • Working Capital - Cash available for day to day operations
  • Bank Term Deposits - Funds invested with a registered bank for a specified term

Policy Content

1. All University of Otago investments must comply with the University of Otago Investment Policy.

2. Accurate cash flow forecasts must be maintained to ensure sufficient levels of liquidity to meet both planned and unforeseen cash requirements, and to assist borrowing decisions.

3. As regards investment of working capital:

(a) Any investments of University working capital in bank term deposits up to and including 1 year must be approved by any one of the Chief Financial Officer, the Financial Controller or the Treasury Accountant.

(b) Any investments of University working capital in bank term deposits in excess of 1 year must be proposed by one of the Financial Controller or the Treasury Accountant and approved by the Chief Financial Officer, Vice-Chancellor or Deputy Vice-Chancellor on the Request for CFO, VC or DVC approval and signature form.

(c) Investments held in working capital should be managed so that the balance held matches future expected outgoings as far as practicable with surplus funds being invested in term deposits.

(d) The total exposure (working capital plus term deposits) to banks listed under Tier 2 investments in the University Investment Policy (Clause 4 (f)) should be no more than 5% of the University total cash held at any one point in time.

(e) Investment instructions provided to the banks must follow the format on the Term Deposit Instructions Form

4. Term deposit rates should be sought from the registered banks meeting the ratings set out in the Investment Policy and the best rate shall be accepted for the University within the framework for investment in bank deposits as set out in Clause 4 of the Investment Policy.

5. To ensure appropriate separation of duties, staff members placing funds on deposit should not be responsible for reconciliations of bank funds on hand.

Related Policies, Procedures and Forms

Contact for Further Information

If you have any queries concerning this Policy or require further information, contact the Treasury Accountant on treasury.accountant@otago.ac.nz