RVCC 2019 NECHE Self-Study

Subject to the intent of a donor expressed in the gift instrument, the System may appropriate for
expenditure or accumulate so much of an endowment fund as the System determines is prudent for
the uses, benefits, purposes, and duration for which the endowment fund is established. Endowment
assets are invested in a well-diversified asset mix, which includes equity and debt securities that is
intended to result in a consistent inflation-protected rate of return that has sufficient liquidity to make
an annual distribution of 4% while growing the funds, if possible. Cumulative appreciation on these
funds was $3,872,147 and $3,162,386 at June 30, 2018 and 2017, respectively and is reported in
restricted expendable net position.
The System manages interest rate risk according to its investment policy by maintaining
investments that are both liquid, as determined by a readily available market, and highly
diversified, using institutional class mutual funds or exchange-traded funds.
Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty
to a transaction, CCSNH will not be able to recover the value of the investment or collateral
securities that are in possession of an outside party. Investment securities are exposed to
custodial credit risk if the securities are uninsured, are not registered in the name of CCSNH,
and are held by either the counterparty or the counterparty's trust department or agency, but not
in CCSNH’s name. As of June 30, 2018 and 2017, CCSNH's investments included in the
statements of net position were not exposed to custodial credit risk. The investments were held
by the counterparty, in the name of CCSNH.
Investments held by CCSNH were comprised of the following at June 30, 2018:
Level 1 Level 2 Level 3
Equity mutual funds $ 11,522,367 $ - $ -
Fixed-income mutual funds 15,467,666 - -
Total $ 26,990,033 $ - $ -
Investments held by CCSNH were comprised of the following at June 30, 2017:
Level 1
Level 2 Level 3
Equity mutual funds
$ 10,238,067 $ - $ -
Fixed-income mutual funds 14,366,476 - -
Total $ 24,604,543 $ - $ -
A summary of fixed-income mutual fund maturities as of June 30, 2018 and 2017 is as follows:
Amount
2018
Maturities
2017
Amount
Maturities
$ 88,862 2.7 years $ 4,202,850 5.4 years
226,041 2.5 years 315,543 3.5 years
8,788,528 Less than a year 179,276 3.0 years
6,364,235 N/A 9,668,807 Less than a year
$ 15,467,666 $ 14,366,476
The maturities are the weighted averages of the debt securities in which the funds invest.
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