- 1 Policy Statement
- 2 Principles
- 3 Procedures
- 3.1 Daily Cash Flow Report
- 3.2 At Call Operating Funds
- 3.3 Short Term Investments (less than 12 months)
- 3.4 Long Term Investments (greater than 1 year)
- 3.5 Investment Calendar
- 3.6 Investment Register
- 3.7 Monthly Report
- 3.8 Report to the Finance and Facilities Standing Committee of the University Council
- 3.9 Interest Earned on Investments
- 3.10 Review of the Investment Procedures
- 4 References
- 5 Definitions
- 6 Other Policy Information
Scope and Application:
Responsible Officer (Policy)*:
Financial and Business Services Contacts:
Treasury & Trade Receivables Officer
Manager, Financial Operations
Director, Financial Operations
The University has a passive, risk averse, conservative approach to investing funds.
The University’s investment strategy will be reviewed annually by the Finance and Facilities Standing Committee of the University Council.
The University shall maximise the return on investment, balanced against an acceptable level of capital risk (preservation of capital), whilst maintaining sufficient liquidity to meet daily operating requirements.
The University will not leverage their investment portfolio or use it for speculative purposes.
All University investments will operate under the control of Financial and Business Services.
The Treasury & Trade Receivables Officer will prepare a Daily Cash Flow Report each working day. The report will detail the anticipated flow of funds into and out of the University’s daily operating bank account (total funds available), and make recommendations to senior management, to ensure daily cash balances are kept to a minimum.
The report will be checked and signed by a University cheque signatory (refer to the University’s Financial Delegations).
The report will be countersigned by a University Financial Delegate, with the authority to invest or mature funds, where:
at call funds are invested or withdrawn.
short term investments are invested or reinvested.
short term investments are matured.
The University’s at call money market facility is provided by the Queensland Treasury Corporation, Capital Guaranteed Cash Fund. (QTC Cash Fund).
The University will retain a reasonable level of funds in the QTC Cash Fund to meet short term (monthly) and/or unforeseen needs, and access these funds daily as required, to ensure the University maintains a positive, total funds available, balance in their daily operating bank account.
All QTC Cash Fund principal transactions will clear through the University’s daily operating bank account and interest earned on the QTC Cash Fund will be automatically capitalised back into that fund.
To invest or withdraw funds from the QTC Cash Fund, the Treasury & Trade Receivables Officer will:
in accordance with QTC requirements, telephone the QTC Customer Support Team advising if funds will be invested or withdrawn and the amount of the transaction;
prepare a USQ Cash Fund Transaction Form indicating the amount of the investment or withdrawal of funds and the resulting balance in the fund after the transaction;
send the signed USQ Cash Fund Transaction Form to the QTC Customer Support Team; and
match the QTC Cash Fund Transaction Confirmation details to the USQ Cash Fund Transaction Form and retain both.
The Banking Officer will confirm the investment transaction the following day, and prepare the general ledger journal accordingly.
The University’s short term investments will be held in a bank, financial institution or an investment arrangement managed or offered by QIC or QTC, as prescribed under the regulation for Section 44(1)(e) of the .
The University currently holds Term Deposits for their short term investment arrangements.
The University will engage the services of a selection of banks and financial institutions (counterparties) to enable the establishment of the Term Deposits.
The Chief Financial Officer will periodically review the list of approved banks and financial institutions and this list will be reflected on the Term Deposit Rate Sheet.
From the list of approved banks and financial institutions, the Treasury & Trade Receivables Officer will prepare alternative investment options on a Term Deposit Rate Sheet. A University Financial Delegate will select and initial the appropriate investment(s) given the current circumstances, in accordance with Section 47 of the , based on the:
prevailing market rates of return for the principal invested.
principal currently held with the investment counterparty ( % of portfolio).
maturity date of the investment (this may be a range of alternatives).
known future commitments.
The Treasury & Trade Receivables Officer will prepare the documentation to create the investment including:
allocating a unique, sequential number to the investment.
a payment request for signature by a University Financial Delegate.
a Term Deposit instruction letter.
updating the Investment Register and Investment Calendar.
The Banking Officer will confirm the investment transaction the following day.
On receipt of the investment confirmation, the Treasury & Trade Receivables Officer will match the details against the University records.
A Financial Delegate may elect to reinvest a short term investment if the funds are not required immediately and the roll-over rate of return is comparable to the prevailing market rate for the same investment period.
The Treasury & Trade Receivables Officer will contact the bank or financial institution and request a roll-over return rate with a new maturity date option (s).
The Treasury & Trade Receivables Officer will prepare alternative investment options on a Term Deposit Rate Sheet. A University Financial Delegate will select and initial the appropriate investment (s).
The Treasury & Trade Receivables Officer will prepare the documentation to reinvest the funds in accordance with 3.3.1 above, including preparing a general journal noting the principal maturity and reinvestment.
The Banking Officer will confirm the investment transaction the following day, and prepare the general journal for the maturing investment interest.
On receipt of the reinvestment confirmation, the Treasury & Trade Receivables Officer will match the details against the University records.
The Treasury & Trade Receivables Officer will contact the bank or financial institution and confirm the maturity details and the standing instructions, that is, the principal and interest will be deposited into the University’s daily operating bank account on that day.
The Treasury & Trade Receivables Officer will prepare the documentation to mature the investment including:
a Term Deposit maturity instruction letter.
updating the Investment Register.
The Banking Officer will confirm the investment transaction the following day, and prepare the general ledger journal for the capital and interest.
The following table indicates the acceptable credit ratings and counterparty limits (diversification), for University investments, at the date of purchase or investment.
Short Term Ratings (Standard & Poor’s) or equivalent
Individual Counterparty Limit
(% total of principal)
A2 (Financial Institutions only)
A3 (Financial Institutions only)
QTC Capital Guaranteed Cash Fund
Where counterparty credit ratings fall below the above ratings, the Chief Financial Officer will, where applicable and, in accordance with Section 52 of the , within 28 days after the change becomes known to the University, consider the early redemption of the short term investment (s) or seek the Treasurer’s approval to continue with the arrangement.
The University’s current investment strategy does not include investments beyond 12 months based on its ability to absorb low or negative returns in years of poor investment returns, and the scale of the funds available for long term investment.
The Chief Financial Officer is responsible for reviewing, the University’s long term cash and liquidity requirements, availability of surplus funds, loss appetite and prevailing market conditions.
Periodically, the Chief Financial Officer will prepare a summary report and recommendations regarding the current investment strategy, for consideration and approval by the Finance and Facilities Standing Committee of the University Council.
The Treasury & Trade Receivables Officer will maintain an Investment Calendar, indicating the planned fund requirements for the University for a minimum future period of 12 months, to assist with daily investment decision making.
The calendar will indicate major known cash requirements, investment maturities and external impacts on the accessibility of funds. The Investment Calendar will include:
public and bank holidays that potentially restrict fund movements.
University pay dates.
PAYG, Q Super, UniSuper due dates.
Payroll tax due dates.
direct debit dates for University Corporate AMEX cards.
direct debit dates for QTC Loan – Debt Service Payments.
term deposit maturity dates and amounts.
government grant dates.
other known funding requirements such as capital purchases or significant progress payments.
The Treasury & Trade Receivables Officer will maintain an Investment Register for Short Term and Long Term Investments. The Register shall contain:
the unique, sequential number of the investment.
the date of the investment.
type of investment.
the bank or financial institution (counterparty).
the amount of the principal invested (purchase price).
the rate of return (% interest) on the investment.
the total amount of interest to be received on the investment.
days to maturity.
date of maturity.
Within five working days of the end of each calendar month the Treasury & Trade Receivables Officer will prepare a Monthly Reconciliation for all At Call, Short Term and Long Term Investments of the University held during, and at the end of, that month.
The Monthly Reconciliation will include, as a minimum:
a copy of the investments register at the end of the month.
total new principal invested during the month.
total principal matured during the month and interest earned on those investments.
accrual of interest earned but not received on current investments.
a summary of all sources and amounts of interest for the month.
a copy of the QTC Monthly Statement for the month and the NAB bank statement showing interest earned for the month on the daily operating account.
copies of general journals prepared for QTC interest earned and fees charged.
a Trial Balance extract from the General Ledger confirming all investment categories and interest earned or due reconcile against the University’s financial records.
A University Financial Delegate authorised to invest University funds will check and sign the Monthly Reconciliation.
The Treasury & Trade Receivables Officer will prepare a report for each regular meeting of the Finance and Facilities Standing Committee. The report will contain the following information:
An extract from the Investments Register showing the principal amount of each investment held, the name of the counterparty and the credit rating of the counterparty for that type of investment.
A chart indicating the spread of investment and total funds held with each counterparty.
All interest earned on University funds will be pooled and returned to the University’s general funds unless provided for otherwise under contract with the University.
Where, under contract (including bequests) or as authorised by the Chief Financial Officer, the University is required to report, capitalise or otherwise isolate interest earned on the principal invested, that principal will be allocated a unique project code within the University’s Chart of Accounts. Interest earned on those funds will be recognised as:
the average rate of return received for the previous three month period (the quarter), on the pooled returns for At Call, Short Term and Long Term Investments, calculated on the principal balance at the end of each quarter.
The Treasury & Trade Receivables Officer will prepare general journals, recognising the interest earned each quarter, against these projects.
The Chief Financial Officer shall review the investment operations of the Financial and Business Services department on a regular basis, and at least annually, to ensure:
investment arrangements comply with this policy and procedures.
the adequacy of the existing internal controls.
the Investment Register is kept up-to-date.
records indicate that the University has invested in a way most appropriate in all the given circumstances at the time of the investment.
no officer involved with the investment process is engaged in a business activity that could interfere with the investment process or impair their decision to make an impartial investment decision.
Definition (with examples if required)
Financial and Business Services staff member (s) charged with the duties of balancing, reconciling and recording daily banking transactions.
Is a legal and financial term referring to the other party or institution to an agreement or contract.
An authorised deposit-taking institution within the meaning of the Banking Act 1959 (Cwlth), section 5.
Payment received, by the lender, for the use of a sum of money.
Refers to investment arrangements authorised under sections 44, 45 and 46 of the Statutory Bodies Financial Arrangements Act 1982, as appropriate.
Preservation of Capital
An investment strategy with the primary goal of preventing losses in an investment’s total value. In modern portfolio theory terms, it refers to a guaranteed investment of principal, which would provide a return of at least inflation.
Original capital sum or money invested and/or balance of funds held in a project at the end of a quarter.
Treasury & Trade Receivables Officer
Financial and Business Services staff member (s) charged with the duties of preparing the daily Cash Flow Report and the daily investment recommendations.
Peak Approval Authority:
Chief Financial Officer
Related Legislation / guidelines:
Strategic Plan/Goal & Objectives:
Supporting documents, forms:
Associated USQ policies:
Next Review Date*:
Expiry Date of Policy:
Consultation and Agreement:
Financial and Business Services:
Other Faculties / Departments: