CHAPTER I

Rotary Code of Policies 459
January 2013
69.030. Cash Management
69.030.1. Investments from Cash Accounts
Cash deposits wherever held shall be invested in such a way as to develop the best rate of
return consistent with liquidity and safety. Temporary cash surplus funds held in the
U.S.A. shall be invested in short term investments of appropriate term and amount in
accordance with the quarterly cash flow statement when such investments will provide a
greater return than ordinary savings accounts. The general secretary is instructed to
request from depositories of RI funds, wherever located, a monthly statement of accounts
held by RI. (June 2001 Mtg., Bd. Dec. 310)
Source: April-May 1978 Mtg., Bd. Dec. 374; June 2001 Mtg., Bd. Dec. 310
69.030.2. Foreign Currency Management Policy
RI has adopted a “Foreign Currency Management Policy” as follows:
1.0 Purpose
1.1 To mitigate foreign exchange exposure wherever possible in order to reduce the
unexpected increases and decreases to earnings that are caused by significant
fluctuations in currency rates.
2.0 Definition of Exposures
2.1 Transaction - transaction exposure is the exposure of balance sheet accounts such as
accounts receivable or accounts payable to a change in foreign exchange rates
between the time a transaction is booked and the time it is paid. An example of
transaction exposure is scholarship payments that are booked at the RI rate when
committed, and then charged at the RI rate in effect when the payments are made.
2.2 Translation - exposure that arises due to the need to translate foreign financial
statements into U.S. dollars. Currency exchange rates from the prior quarter are
compared to those of the current quarter and the change in value is applied to the
balances held at quarter-end. Month-end non-U.S. investment balances and bank
balances are translated.
2.3 Economic exposure - anticipated - exposure of anticipated cash flows to unexpected
rate changes in the future. An example would be the transfer of funds between the
international offices and World Headquarters.
2.4 Internal exposure - an intra-company exposure resulting from the use of the RI
exchange rate instead of the actual exchange rate. Examples are dues paid in local
currency at the prior month’s RI rate but booked at the current month’s RI rate, or
program-related expenses paid in local currency and booked at the budgeted RI rate,
but paid at the prevailing market rate.