2.2 Business Procedures

Page index:

  1. Authority
  2. Code of Business and Fiduciary Conduct
  3. General Policies
  4. Investment Policy
  5. Financing
  6. Purchasing
  7. Risk Management
  8. Compliance and Reporting
  9. Audit Activities

 

Authority, Code of Business and Fiduciary Conduct, General Policies

Below are the provisions of the current Authority, Code of Business and Fiduciary Conduct, and General Policies and the proposed policies for these areas.

  1. Authority

    A business office shall be maintained at each of the institutions of higher learning, with such organizations, powers, and duties as the Board may prescribe and delegate. (Iowa Code §262.20 (PDF))


  2. Code of Business and Fiduciary Conduct

    1. Purpose

      All employees of the Board of Regents and its institutions play a role in ensuring that the resources entrusted are protected, preserved, and enhanced. This is the Board of Regents’ statement of the underlying principles by which it expects those with business and fiduciary responsibilities to carry out their duties.

      1. Fairness, integrity, respect

        The Regents value fairness, integrity, and respect, and strive to integrate these values into their business practices. All faculty, staff, students, and administrators are expected to act at all times with fairness, integrity, and respect for others.


      2. Accountability

        Employment by the Board of Regents and its institutions requires a commitment to work in a manner that promotes and protects the institution’s best interests, including the treatment of confidential information as well as full, fair, accurate, timely, and understandable reporting. Employees should not use their positions to advance their own personal interests.


      3. Compliance with law
        1. Persons acting on behalf of the Board of Regents and its institutions are individually accountable for their own actions and, as members of the Regent community, are collectively accountable for upholding these standards of behavior and for compliance with all applicable laws and policies.

        2. Employees should take no action to influence, coerce, manipulate or mislead an auditor engaged in the performance of an audit for the purpose of rendering the institution’s financial statements materially misleading.

    2. Senior Management

      By virtue of their leadership status, members of senior management shall be responsible for complying with this Code of Business and Fiduciary Conduct as well as “setting the tone” for the Board of Regents and its institutions. This ethical responsibility requires senior management to:

      1. Provide leadership and vision and serve as role models and stewards of the institution’s finances, assets, resources and business processes

      2. Avoid actual or apparent conflicts of interest involving personal and professional relationships

      3. Work to promote, by personal example, ethical behavior among employees

      4. Create realistic expectations and clearly indicate that integrity is not to be compromised to achieve results

      5. Create an environment encouraging employees and others to report policy and law violations promptly, and protects them from retaliation.

  3. General Policies

    1. Regent Fiscal Policy

      Sound fiscal policy serves to provide transparency, promote public accountability, demonstrate support for strategic priorities, delegate fiscal responsibilities, and identify parameters for stewardship of resources.

      The Board emphasizes that maximizing available resources is imperative to providing high quality public education for Iowans; cutting-edge research and creative activities to enhance the quality of life; and needed public services that help fuel the state’s economy in the best interest of all Iowans.

      Higher education in Iowa is a partnership among students and their parents, Iowa taxpayers, Iowa public policy makers, the Board of Regents, and the Regent universities. Education and independent living skills are provided at no cost to Iowa students at the two special schools

      1. Institutional Funding
        1. Board reviews institutional requests for state appropriations and takes action annually to authorize state appropriations requests in compliance with Iowa Code §8.23 (PDF).

        2. For higher education institutions:
          1. Board sets tuition rates annually to provide operational revenues (See Section 1.6 of this Policy Manual),

          2. Board annually establishes mandatory fees, residence and dining rates, parking fees, building fees, etc. (See Section 1.6 of this Policy Manual),

        3. As allowed by Iowa Code §262.9(18) (PDF), Regent universities may utilize non-tuition components of the general university funds first. Accordingly, general university funds remaining at the close of the fiscal year are comprised solely of student fees and charges.

        4. Budget Approvals – All institutional budgets are to be approved by the Board on an annual basis.

        5. Comprehensive Fiscal Report – An annual report is completed each fiscal year, for Board review and receipt, comparing actual revenues and expenditures with the Board-approved budget that identifies significant variances and accomplishments.

    2. Collection of Delinquent Accounts
      1. Iowa Code §262.15 (PDF) provides that the Board shall have charge of the foreclosure of all mortgages and of all collections from delinquent debtors for the use and benefit of the appropriate institution.

      2. A collection policy shall be established at the Regent institutions to ensure responsible fiscal management of receivables in accordance with state and federal law. The objectives of the collection policy are to combine both internal and external collection resources in a manner consistent with best practices of each institution.

    3. Indirect Cost Rate
      1. The policy of the Board of Regents is to provide services to federal agencies, nonprofit foundations/organizations, other state agencies, and other sponsoring agents based on grant or contract agreements that include clearly specified tasks related to the missions of the institutions and established payment for both direct and indirect costs.

      2. For federal programs, the provisions of Office of Management and Budget (OMB) Administrative Requirements, Cost Principles, and Audit Requirements (2 CFR 200 (opens in new window)) will be followed which requires the use of the institutions Federally negotiated indirect cost rate unless restricted by Federal statute or regulation.

    4. Accounting Issues
      1. The Board shall direct the expenditure of all appropriations made to the institutions and any other moneys belonging thereto (Iowa Code §262.9(10) (PDF))

      2. Iowa Code §262.23 (PDF) requires a number of specific items for compliance by the treasurer of each Regent institution. The chief business officer of each institution shall maintain accounting records and supporting documentation in accordance with accepted business standards for accountability and auditability and shall prepare reports as required, including an annual financial report.

    5. Payroll Withholding
      1. Payroll withholding programs are permitted according to the following guidelines:
        1. Withholdings authorized by federal or state laws.

        2. Withholdings in connection with employee retirement and insurance plans approved by the Board of Regents.

        3. Withholdings authorized by individual employees for institution-wide contributive programs of direct benefit.

        4. Withholdings authorized by individual employees for United States savings bonds.

        5. Withholdings for amounts due the institution from and authorized by its employees.

        6. Withholdings for amounts authorized by individual employees for dues for the convenience of organizations which relate to employment conditions, such as union organizations or university-wide professional organizations. Payroll withholding programs in this category shall not be initiated without 100 participants at Iowa State University and the State University of Iowa, 50 participants at the University of Northern Iowa, and 25 participants at Iowa School for the Deaf and Iowa Braille and Sight Saving School, unless justification exists for fewer participants; payroll programs in this category may be discontinued if the number of participants falls below 25.

        7. Insurance deductions in accordance with 681 IAC 8.7 (PDF).

      2. Each Regent institution shall require the employee or eligible organization to submit written authorization for payroll withholding for each withholding program, including the assent of the spouse of the employee, as required.

    6. Reimbursement of Travel Expenses for Employees of Regent Institutions
      1. It is the intent of the Board of Regents that employees of Regent institutions be reimbursed for reasonable expenses associated with work-related travel following policies set forth by the IRS.

      2. It is the further intent of the Board that the Regent institutions adopt cost effective or as otherwise deemed appropriate institutional policies consistent with this statement, along with any other provisions relating to travel reimbursements which are more specific or restrictive.

      3. Some travel reimbursements may be taxable. Travel advances must be substantiated with receipts and travel reimbursements completed within a “reasonable time frame” as defined by IRS policy or the amounts are reportable as taxable income in accordance with reimbursement guidelines. As an example, meal reimbursement when not associated with overnight travel is reported as taxable income.

      4. Travel expenses should be submitted promptly on return from the trip. Reimbursement for mileage, lodging, and meals will be based on the following:
         
        1. The use of institution provided vehicles is encouraged. However, transportation reimbursement for official travel by private automobile when the use of a personal car is authorized by the appropriate institutional official, per this policy, reimbursement shall be paid at no more than:
           
          1. At the standard mileage rate for business use as established by the U.S. Internal Revenue Service, for travel when a motor pool vehicle is not available and the employee must use his/her personal vehicle or an employee is traveling less than 100 miles round trip or when the travel is to/from local airports or when travel is to/from airports designated by each Regent institution and the lower airfare cost justifies use of a designated airport.

          2. At 50% of the rate in 1) above for travel if a motor pool vehicle is available, but the employee chooses to use his/her own vehicle. The 50% is formula- based to promote optimal use of institution provided vehicles.

          3. At a rate to be determined by the appropriate institutional official on a case- by-case basis when an individual must use a substantially modified or specially equipped privately owned vehicle.

        2. Air or rail transportation should be by common carriers. Use of university or chartered aircraft is permitted when it is justifiable.

        3. Each institution must develop clearly delineated travel policies for meals and incidentals. Such policies may be based on actual and reasonable costs for reimbursement, or on full or partial per diem rates, or on some combination of these. The maximum daily meal and incidental rates may not exceed the U.S. published per diem rates (General Services Administration for domestic rates, the Department of Defense for Hawaii, Alaska and other US territories and possessions; and the State Department rates for foreign destinations).

        4. The individual amounts for each meal would apply only in the case of persons in travel mode for partial days. Otherwise, the total amounts for each day would apply, thus allowing some discretion in adjusting meal allowances within the day. In the case of a partial day, meal allowance will be distributed:

          Breakfast 20%

          Lunch 30%

          Dinner 50%


        5. Exceptions to these meal and incidental standards in advance of travel must be approved by senior institutional officials (e.g., vice presidents, business officers, collegiate deans, and major directors of administrative units).

        6. Lodging reimbursement is limited to the actual/reasonable cost for a standard single room. Lodging rates set by Federal agencies will be used as a guide.

    7. Awards to Private Agencies

      Iowa Code §11.24 (PDF) allows the Auditor of the State, at the request of the Board of Regents, to review working papers prepared by a certified public accountant covering the receipt and expenditure of state or federal funds provided by the Board of Regents to any other entity to determine if the receipt and expenditure of those funds by the entity is in substantial compliance with the laws, rules, regulations, and contractual agreements governing those funds. If an entity has not been audited by a certified public accountant, the Auditor of State may, at the request of the Board of Regents review the records covering the receipt and expenditure of state and federal funds to determine the same.


    8. Inventory
      1. Pursuant to Iowa Code §7A.30 (PDF), a written, detailed inventory is required to be maintained. All equipment valued at $5,000 or more and held for one year or more shall be included in the institution's equipment inventory.

      2. Each institution and the Board Office shall adopt appropriate surplus property disposal procedures.

      3. See Chapter 2.3 of the Policy Manual for disposal, transfer, or sale of buildings.

    9. University of Iowa Hospitals and Clinics

      Rate schedules will be presented to the Board annually for approval prior to submission of final budgets.


  4. Investment Policy

    1. Introduction
      1. The State of Iowa delegates to the Board of Regents (Board) the authority to govern the University of Iowa, Iowa State University, University of Northern Iowa, Iowa Braille & Sight Saving School, and Iowa School for the Deaf. In carrying out this responsibility, the Board establishes a framework for the investment management of all institutional funds.

      2. The Board delegates to its Audit/Compliance and Investment Committee (hereafter the Investment Committee) the authority for monitoring institutional investment activities and recommending investment policy. The Board delegates management and oversight authority for investment program activities to the universities. The Board appoints the treasurers for each institution who are delegated authority to manage the investment and treasury activities of the institution within the policies defined by the Board of Regents.

    2. General Policy Statement

      In accordance with Iowa Code §262.14(3) (PDF), the Board’s objective is to preserve principal, ensure liquidity sufficient for anticipated needs, and maintain purchasing power of investable assets while obtaining a reasonable return for a prudent level of risk. The institutions, and any designated investment advisor or investment manager shall exercise the judgment and care which persons of prudence, discretion and intelligence exercise in accordance with applicable state law.


    3. Roles and Responsibilities
      1. Board of Regents

        The Board shall exercise its investment responsibilities through its Investment Committee. In consultation with the Investment Committee, the Board shall:

        1. approve investment policies, investment objectives, and asset allocations for the institutional investment programs.

        2. appoint investment advisors.

        3. receive periodic reports on investment performance results.

      2. Investment Committee

        The Board delegates to its Investment Committee the responsibility of reviewing this investment policy as deemed necessary. The Investment Committee shall keep the Board informed regarding investment activities. The Committee shall:

        1. monitor and evaluate performance of investment managers, and each institutional investment pool on a regular basis.

        2. maintain sufficient knowledge about the investment program and the individual investment managers so as to be reasonably assured of investment manager compliance with Board investment policy.

        3. submit periodic investment performance reports to the Board.

        4. periodically review and recommend to the Board for approval investment policies, investment objectives, and asset allocations for institutional investment programs.

        5. select investment advisor and individual investment managers as necessary.

        6. consider other investment related matters.

      3. Investment Advisor

        The investment advisor shall regularly communicate with the universities and Investment Committee and advise on:

        1. Investment policy and investment opportunities and strategies that include:
          1. periodic review and evaluation of investment objectives and asset allocation of institutional investment pools and specific recommendations with regard to maintaining or modifying investment strategies and rebalancing of investment pools.

          2. recommendations and advice on matters regarding investment manager selection, retention, and termination.

          3. development of written investment guidelines specific to each investment manager including the use of derivatives for a particular manager and mandate where applicable.

          4. recommend performance benchmarks for individual investment managers and for institution investment pools.

        2. Investment performance that includes:
          1. on-going reports on the performance of the institutional fund investment pools and performance of individual investment managers.

          2. periodic evaluation of investment manager ability to exceed the established benchmark over a full market cycle in comparison with investment markets and other investment managers.

          3. evaluation of investment manager adherence to the terms and conditions of the investment manager agreement, including compliance with Board policy and the guidelines provided to each investment manager.

          4. monitoring of investment manager soft dollar policies and practices to ensure an appropriate relationship to the management of the Board’s investment account.

          5. reviewing of investment and management fees and report on reasonableness.

        3. The investment advisor shall provide immediate notification to the universities and Investment Committee of any major change in its confidence in a particular asset class or individual managers or funds. Responsibilities include:
          1. notice of any regulatory actions against the investment manager firms, its principals, owners or employees.

          2. Recommendations of corrective action to avoid imminent losses, to prevent further losses, or to correct a substantial policy violation.

      4. External Investment Managers

        Each external investment manager (including each comingled vehicle, mutual fund, and exchange traded fund) is authorized to execute investment transactions within established investment guidelines, subject to any restrictions established by the Board. External investment managers shall exercise the judgment and care which persons of prudence, discretion, and intelligence exercise in accordance with applicable state law. Investment managers are directed to:

        1. adhere to stated objectives, guidelines and restrictions.

        2. seek best price/execution when purchasing or selling securities at all times.

        3. provide monthly and quarterly reports on performance and other appropriate matters including:
          1. the investment manager’s current outlook for the economy and capital markets and how the firm intends to adapt to these expectations.

          2. investment portfolio structure, past investment manager performance, and the appropriateness of the present investment portfolio given these expectations and the Board’s investment policies.

          3. recommended changes to investment guidelines.

          4. any substantive changes expected in the portfolio or in the organization.

        4. meet with the Investment Committee upon request
          1. Investment manager use of soft dollar trades to acquire products or services to be used in the administration of the fund are permissible only if the trade provides best execution and price. Investment managers shall report soft dollar policies and practices to the Board’s investment advisor.

          2. Investment managers shall provide immediate written notification to the universities and investment advisor of any extraordinary losses or conditions which could reasonably be expected to lead to an extraordinary loss or substantial violation of the Board’s investment policies or any of the following circumstances:
            1. any material change in the investment outlook, strategy, portfolio structure, and ownership or senior personnel.

            2. any noncompliance with any provision of the Board investment policy and investment guidelines, or the terms and conditions established in its contract with the Board, and a recommended plan of action and timetable to correct any violations.

            3. any regulatory authority’s citation of the existence of a material weakness in internal control structure, or regulatory orders or sanctions against the investment entity or investment professional, with regard to the type of services being performed under the contracts or agreements.

      5. University Treasurers
        1. Under the direction of the Investment Committee, the Board delegates to the individual institution treasurers, the responsibility for the general management of investment activities and the investment program and oversight of the investment advisor in accordance with Board policy. General investment management activities include execution of investment transactions, on-going collaboration with the investment advisor and investment managers, investment portfolio account reconciliation, and policy compliance.

        2. In collaboration with the investment advisor, the treasurers shall regularly communicate with the Investment Committee and advise the Investment Committee on institutional fund investment activities and investment program matters. The treasurers shall:
          1. monitor and review investment advisor and investment manager reports, the actions of the investment managers, and the status of the institution’s investment strategies and investment pools.

          2. notify the Investment Committee of investment manager terminations.

          3. appoint knowledgeable and capable staff to carryout the investment, trust and custody, banking and cash management functions of the institution.

          4. execute and monitor contracts with approved investment managers

          5. receive audit reports from the Auditor of State and the Regents Chief Audit Executive and inform the Investment Committee of any material events or non-compliance with the investment policy.

          6. maintain systems of internal control to prevent losses.

        3. c.In consultation with the investment advisor, the treasurers shall:
          1. make recommendations concerning investment policies, objectives, and strategies.

          2. rebalance investment pools as deemed appropriate to stay within the asset allocation parameters of the investment pool asset allocations.

      6. vi. Nature of Assets for Investment

        Institutional funds include non-endowment funds and endowment funds, both restricted and unrestricted. Restricted funds are defined as those funds existing within both the non- endowment and endowment funds which are restricted for investment and spending purposes as imposed by contractual or legal requirements, such as bond indentures, loan or grant agreements, or donor instructions.

        1. Non-endowment funds include state appropriations, student tuition, fees, university sales and services, patient care sales and services, government and other sponsored research grants, federal appropriations, bond issue proceeds, gifts, and other income sources.
          1. Short-term operating funds have investment restrictions that limit effective weighted average life maturities to 63 months or less.

          2. Quasi-endowment funds are longer-term in nature but have no externally imposed restriction that the principal remain intact in perpetuity.

        2. Endowment funds are primarily donor gifts and other funds received for specific purposes. The purpose of endowment funds is to provide intergenerational equity of income in perpetuity. These endowment funds are to provide a stable income sufficient to meet the reasonable spending needs of the component endowments by keeping pace with inflation and not degrading the real value of the corpus over time. Endowment funds are synonymous with the term “institutional funds” as defined by Iowa Code section 540A.

      7. Asset Classes

        Individual asset class performance will be measured against appropriate benchmarks as determined by the Investment Committee in consultation with the investment advisor and the vice presidents for finance/treasurer.

        1. Fixed Income

          Fixed income assets provide stability, generate income, and diversify the market risk of an investment portfolio.


        2. U.S. Equities

          The purpose of equity investments is primarily to provide capital appreciation. This asset class consists of marketable equity securities of primarily U.S.-based companies. These may include equity securities of non-U.S. based companies which are traded as “American depository receipts (“ADR’s”) on U.S. stock exchanges.


        3. International Equities (excluding U.S. Equities)

          International equities earn an equity risk premium and diversify the equity exposure within the investment portfolio. This asset class includes both developed and emerging markets. Currency hedging transactions are allowable for investment and not speculative purposes, and intended only to protect expected earnings.


        4. Private Equity

          Private equities enhance the investment portfolio return through long-term capital appreciation. This asset class utilizes private equity investments that are typically long duration investments with substantial illiquidity such as venture capital, leveraged buyouts and mezzanine debt. The primary strategic role for private equity is to increase the expected investment return of an institutional investment fund. Private markets typically provide higher returns than traditional asset classes, such as stocks and bonds, due to the market inefficiencies and the premium paid for illiquidity. The key factors to be considered in managing the risk and return characteristics of the private equity portfolio are partnership selection, diversification and illiquidity. Investments in private equity may be made through a fund of funds vehicle and will be diversified over time (i.e., vintage years).


        5. Real Assets

          The Board invests in real assets to generate a rate of return that exceeds the rate of inflation. Real assets offer diversification since they tend to perform better than traditional asset classes such as fixed income and equities during periods of high unexpected inflation. Most real assets are physical assets having intrinsic value and have potential to generate returns with some degree of correlation to inflation, thereby serving as an inflation hedge. Types of real assets may include TIPS (Treasury Inflation Protected Securities), commodities, REITs (Real Estate Investment Trusts), equities (natural resource and infrastructure), private real estate, timberland, farmland, infrastructure, and oil and gas investments. Investments shall be in limited liability investment vehicles, such as limited partnerships, limited liability corporations, private REITs and other pooled investment vehicles including fund of funds. Investment shall be primarily equity oriented, but may also include debt instruments secured by real assets with equity like returns.


      8. Permitted Investments
        1. It is the intent of the Board that all investment pools be broadly diversified among asset classes as much as possible. Diversification by the number of individual securities, industry, economic sector, and within governmental issues is viewed as desirable. Iowa Code Section 12B.10 provides a framework of permitted investments including investments authorized for the Iowa public employees retirement system further defined in Iowa Code Section 97B.7A that provides for investments in assets of every kind of property and investment which persons of prudence, discretion, and intelligence acquire or retain for their own account. However, short-term operating funds consisting of cash which is needed to meet underlying cash requirements of the institutions have investment restrictions that limit effective maturities (weighted average life) to 63 months.

        2. Certain derivative instruments can be useful tools in managing portfolio risk and in efficiently replicating cash market positions. A derivative instrument (derivative) is defined as a financial instrument with a return or value that is obtained from the return or value of another underlying financial instrument. Mortgage-backed securities and asset-backed securities are not considered derivatives for the purposes of this policy. However, derivatives can introduce unique risks into the portfolio that must be controlled. The following guidelines shall apply to the use of derivatives by investment managers, and are designed to provide general risk controls that apply to all managers. The investment advisor shall establish specific guidelines in each manager’s contract to control the various risks associated with the use of derivatives for a particular manager and mandate.
           
          1. Under no circumstances shall a manager use derivatives for the purpose of leveraging its portfolio.

          2. Prior to utilizing any derivative, a manager shall take all steps necessary to fully understand the instrument, its potential risks and rewards, and the impact adverse market conditions could have on the instrument and the overall portfolio, and to ensure that it has all of the operational and risk management capabilities required to prudently monitor and manage the derivative.

          3. Institutional staff are prohibited from directly investing in futures or option contracts

      9. Other Provisions
        1. Financial Reporting of Investments

          To appropriately reflect the Board’s overall investment strategy and as outlined in the relevant accounting standards (GASB Statement 9, section 11), the Board sets forth that all funds held by external investment managers, as defined in section 2.4.C.iv of the Board’s investment policy, shall be reported on the audited financial statements of the Regent institutions as investments.

          Investments purchased by the institutions through Board-authorized brokerage firms that meet the definition of cash equivalents, investments with original purchase dates to maturity of three months or less shall be reported on the audited financial statements of the Regent institutions as cash equivalents.


        2. Fees

          The institutions may charge a reasonable fee to offset management and donor development related expenses.


        3. Applicable State Laws/Regulations

          Public Funds Investment Standards: Iowa Code 12C.10, 10A, 14, 15 (PDF)

          Public Investment Maturity and Procedural: Iowa Code 12B.10A.6d (PDF)

          Deposit of Public Funds: Iowa Code 12C (PDF)

          Restrictions on Sudan Related Investments: Iowa Code 12F (PDF)

          Restrictions on Iran Related Investments Iowa Code 12 12H (PDF)

          Restrictions Regarding Companies Boycotting Israel Iowa Code 12J (PDF)

          Loans, Conditions, Other Investments: Iowa Code 262.14 (PDF)

          Uniform Prudent Management of Institutional Funds Act: Iowa Code 540A.101-109 (PDF)

          Uniform Prudent Management of Institutional Funds Act: Iowa Code 633A.4301-4309 (PDF)

          Investment Management of Retirement Fund Standards: Iowa Code 97B.7A (PDF)

          Annual Settlements (Auditor of State): Iowa Code 11.2 (PDF)

          Procurement Policy: Iowa Code I.A.C. 681-8.1(1) (PDF)


  5. Financing

    1. Mortgages and Loans
      1. The Board of Regents may invest funds belonging to the institutions under its jurisdiction, subject to Iowa Code §§262.14 (PDF) and Iowa Trust Code 633A.4301-4309 (PDF), the State’s Uniform Prudent Investor Act and the investment policies adopted by the Board through the use of mortgages and loans.

      2. The Board shall have charge of the foreclosure, release, deeds, and recovery of all mortgages and loans issued in accord with Iowa Code §§262.15-19 (PDF).

    2. Lease Financing of Equipment and Facilities
      1. Upon the recommendation of the chief business officer of an institution the Executive Director may execute lease agreements on behalf of the institution with a third-party leasing agent with which the Board has approved master lease documents.

        Master lease drawdowns shall be reported to the Board at its next meeting following the drawdown.


      2. Vendor installment purchase agreements may be executed by the chief business officer of an institution under the delegated purchasing authority as outlined in Section 2.2.6, Purchasing. All vendor installment purchase agreements of $50,000 or more shall be reported to the legislative fiscal committee as required by Iowa Code §8.46 (PDF).

    3. Parietal Rules and Dormitories
      1. Students may choose to live in university residence halls, university apartments, fraternities, sororities, or off-campus housing.

      2. When and if a requirement for a parietal rule requiring students to live in university housing is needed, in the university's judgment, to carry out the responsibility of the Board under its bond covenants to assure maximum occupancy of the dormitories, the university shall first present a recommendation to the Board.

      3. If the above parietal rule for any of the three Regent universities is to be invoked, the Board will publish notice before any enforcement of the parietal rule.

      4. The Board encourages the directors of student housing and dining services to meet regularly to exchange information and to discuss policies, practices, and procedures and for the three universities to prepare appropriate information that will enable analysis trends in occupancy by class, sex, and age.

      The Board covenants and agrees that, so long as any of the dormitory bonds remain outstanding, it will continuously operate and maintain the system; will adopt such rules and regulations for occupancy, including parietal rules, as will assure maximum occupancy of the buildings; and will fix, maintain, and adjust periodically such rates, rents, fees, and charges for the use of the system that will provide revenues sufficient at all times to pay the reasonable cost of operating and maintaining the system and to provide and maintain the “Dormitory Revenue Bond Sinking Fund” and the required reserve fund. It will collect and account for and apply the rents, profits, income, and revenues in accordance with its bond resolutions.


    4. Selection of Agents Utilized in the Issuance of Bonds or Notes (Iowa Code §262.9(18) (PDF) and 681 IAC 8.8 (PDF))
      1. The IAC provides specific guidelines for the open selection process of municipal advisors and bond counsel necessary to carry out the issuance of bonds or notes by the Board. Agreements are to provide for annual renewals during a period not to exceed five years.

      2. Requests for proposals (RFP) for these will be made available to all qualified firms.

      3. Representatives of the Board Office and the universities will review the submissions received in response to each of the RFP’s, and recommend finalist firms to be interviewed by a selection committee. The selection committee will be comprised of representatives of the Board Office and the universities.

      4. The Board will make the final selection of service providers.

  6. Purchasing

    The Regents affirm that the best interests of the State of Iowa and the Regent institutions are served through implementation of a fully competitive purchasing system.

    1. Authority
      1. The Board of Regents is authorized by statute to contract for goods, services, and capital improvements. (Iowa Code Chapter 262 and §§8A.122 and 8A.302 (PDF); capital improvements are addressed in Chapter 2.3 of this Policy Manual.)

      2. The Board delegates authority to approve agreements and contracts for all goods and services purchased by the institutions, except for capital improvements, fire protection, legal services, and engineers. (681 IAC 8.2(3) (PDF))

      3. Remedies for breach of contract shall be in accordance with Iowa Code Chapter 554 (PDF).

    2. Organization
      1. The Board Office and institutions shall meet regularly to ensure coordination of purchasing policies and procedures.

      2. The Regents Chief Operations Officer (COO) position will be responsible for setting the direction and prioritization of sourcing initiatives across the five Regents.

      3. Each institution shall appoint a designee from the Purchasing Department to be a member of the Procurement Council.

      4. The COO along with Procurement Council will be responsible for ensuring the coordination of regent strategic sourcing activities as well as the monitoring of compliance with campus utilization of the resulting master agreements.

      5. Goods and services are purchased through the institutional purchasing designee, on the basis of competitive procedures and vendor negotiations. Such purchases need not be reported to or approved by the Board of Regents, provided that the Director of Purchasing/Manager of Purchasing has determined that there is no unusual circumstance which requires the special attention of the Board and provided the purchase does not involve a lease which must be approved or reported.

        Policies related to capital projects, including bidding, bid security, selection of architects/engineers for Regent institutions are in Chapter 2.3 of this Policy Manual.


    3. Policies and Procedures
      1. Competitive Bid Thresholds: Each Regent institution, through an institutional purchasing department, shall be responsible for purchasing goods and services in compliance with all applicable state and federal laws and regulations. Institutions may delegate purchasing responsibility to departments. Low dollar procurement authority may also be delegated to institutional units through the use of credit cards or other appropriate procurement instruments, consistent with prudent, contemporary business and audit practices.
        1. Regent Master Agreements shall be used whenever possible. Exceptions to the use of such agreements must be supported with sufficient justification – ie. Lower price, emergency need, etc.

        2. Iowa State University will process purchases of $15,000 or more for the special schools.

        3. Purchases less than or equal to twenty five thousand dollars ($25,000) may be delegated to individual department purchasers.

        4. Purchases of goods and services between twenty five thousand and one ($25,001) and fifty thousand ($50,000) per transaction, may be purchased through an informal competitive bid with an adequate number of vendors.

        5. Purchases of goods and services over fifty thousand dollars and above, shall be purchased through a formal competitive bid process.

      2. Equipment Procurement:

        Equipment purchases, except those included in a capital project, are subject to the following review procedures prior to the issuance of a purchase order or any other purchase commitment by the institution.

        1. Equipment with a unit cost of less than $1,000,000, will be purchased by the Director of Purchasing of each institution, acting through the purchasing agent, as outlined in section C of this chapter.

        2. Equipment with a unit cost greater than $1,000,000 and less than $2,000,000 will be submitted to the COO for approval.

        3. Equipment costing more than $2,000,000 will be submitted to the COO for approval. At the discretion of the COO, the equipment purchase may be submitted to the Board for approval.

        4. The COO will provide a summary of all equipment purchases of $1,000,000 or more to the Board on a quarterly basis.

      3. Purchases Exempt From Competition:
        1. Emergency Purchase - An emergency includes but is not limited to one of these conditions:
          1. In which an immediate or emergency need exists for the item or service because of events and circumstances not reasonably foreseeable.

          2. Critical to sustaining patient care or human life, maintaining critical equipment or services, or similar.

          3. In which there is a need to protect the health, safety, or welfare of persons occupying or visiting a public property.

          4. In which an institution must act to preserve critical services or programs.

          5. Purchases that are considered time sensitive and would result in increased costs due to delay or the inability to continue to provide necessary services to patients, students, public, etc.

          6. Each institution will submit a quarterly summary of emergency purchases over $50,000 to the COO.

        2. Sole Source Purchase - In some instances equipment, supplies or services may be required which are obtainable only from a sole source. Sole source purchases must be documented and reviewed/approved by the institutional purchasing designee.

        3. Negotiation - Competitive and non-competitive negotiation may replace competitive bidding when in the best interest of the institutions. Justification for such use must be documented and available upon request.

      4. Evaluation and Award Process
        1. Each institution will evaluate and award based on pre-defined criteria.

        2. Scoring and assignment of points will be done in a consistent and defendable manner to ensure the integrity of the process. Both objective and subjective criteria may be used.

        3. The names of the bidders and the amounts bid shall be supplied once the evaluation of the bids is completed and the award is made via a formal request for information. Information will not be released in situations in which the release would provide a competitive advantage to any of the bidders.

        4. Nothing contained in these conditions shall be construed to mean that the lowest priced goods or inferior or substandard goods must be purchased. The Regent institutions are to purchase goods at the lowest cost consistent with the quality and service required.

        5. Should a buyer recommend an award to other than the low compliant and responsible bidder, a review of the recommendation shall be conducted by the institutional purchasing director or designee including a documented rationale for the recommendation. It shall be the responsibility of the chief business officer or his/her designee to monitor the low bid rejections.

      5. Withdrawal of Bids. Bids may be withdrawn prior to the time set for receipt of bids. Bids shall not be withdrawn after that time, except as noted herein, without penalty. Only in the event of an obvious and documented error where it would be a manifest injustice to require the vendor to perform, can a vendor withdraw a bid after the time set for receipt of bids. Such withdrawal of bids can be done only upon the recommendation of the institution under procedures approved by the CPO/COO.

      6. Bid Security. Regent institutions have discretion to use bid security as an incentive to vendors to enter into contractual requirements.

      7. Iowa Prison Industries. Regent institutions are encouraged to include Iowa Prison Industries in competing for Regent’s business.

      8. Iowa Products. All state agencies shall use those products produced within the State of Iowa when they are of a quality reasonably suited to the purpose intended and can be secured without additional cost over foreign products or products of other states. (I.C. §73.1 (PDF))

      9. Targeted Small Business. It is the policy of the Board of Regents, State of Iowa to provide contract opportunities to targeted small businesses. All laws and rules pertaining to solicitations, bid evaluations, contract awards, and other procurement matters apply to targeted small businesses. (681 IAC7.7 (PDF))

      10. Professional Service Contracts.
        1. “Professional service agreements” are contracts for unique, technical and/or infrequent functions performed by an independent contractor qualified by education, experience and/or technical ability to provide services. In most cases these services are of a specific project nature, and are not a continuing, on-going responsibility of the institution. The services rendered are predominately intellectual in character even though the contractor may not be required to be licensed. Professional service agreements may be with partnerships, firms or corporations as well as with individuals.

        2. Selection of a Provider. Professional service agreements for greater than $50,000 must be selected through a competitive Request for Proposal (RFP) process unless the service is a sole source purchase that is appropriately documented and approved by the COO. The $50,000 threshold is not based on a one-time cost, but rather on a cumulative cost for on-going services under the terms of the project engagement or extension of the project engagement. Professional service agreements, which are less than $50,000 over the course of service, may be entered into without using the required competitive bidding process. Total payment to a professional services provider for services provided to any one university department may not exceed $50,000 in a fiscal year, unless subject to competitive bidding or review and approval by the institutional purchasing department and COO. Selection of a professional service provider shall be based on a variety of criteria including, but not limited to, demonstrated competence, knowledge, references and unique qualifications to perform the services, in addition to offering a fair and reasonable price that is consistent with current market conditions. Additional criteria may be used as appropriate to the circumstances.

        3. Provider Accountability. Work requirements should clearly define all performance objectives, work expectations, project milestones, and specific final deliverables and hold the contractor accountable for successful completion of the resultant agreement. Requirements may include, but not be limited to, reports, training sessions, assessments, evaluations or other tangible services.

        4. Provisions of Professional Service Agreements. The following terms and conditions must be addressed:

        5. Performance Requirements. Performance requirements should be precise and written in such a way that it can easily be determined if and when the contractor has successfully fulfilled his/her obligations under the Agreement. Consequences for noncompliance such as non-payment and/or termination of the contract must also be defined. Scheduled due dates that specify milestone targets must be clearly identified and may include, but not be limited to, regular meetings scheduled to evaluate progress, identification of problem areas to determine actions to be taken to resolve any concerns, dates for formal written reports, required oral progress reports, and contract monitoring requirements.

        6. Period of Performance. The resultant agreement must specify a start date and a completion date. While there may be exceptions, in most circumstances an end date to the agreement will be required. If an end date cannot be determined, a maximum time limit or maximum number of hours must be stated. Agreements with organizations are typically written for a specific term of successive years. In some instances, these agreements are annually renewable. Other provisions of an agreement may include a renewal clause beyond the original term of the agreement. Extended term agreements for individuals are discouraged.

        7. Compensation and Payment. Compensation and payment terms include elements relating to cost and payment, such as maximum cost, (i.e. not to exceed cost), cost per deliverable, hourly rates for individuals providing services, number of hours required, allowable expenses and total authorized for expenses, payment and invoicing procedures. Compensation and payment terms should also include a statement as to whether the Regent institution will pay expenses incurred by the contractor and if so, which ones. Such expenses may include, but not be limited to, airfare (economy or coach class), lodging and subsistence necessary during periods of required travel; expenses incurred during travel for telephone, copying and postage, and private vehicle mileage. If other types of expenses are allowed, they must be clearly defined.

        8. Performance Monitoring. The institution shall monitor the compliance with the terms and conditions of the agreement and applicable laws and regulations.

        9. Provision of Liability. The provider may be required to show proof of insurance coverage and workers compensation in compliance with statutory requirements, in the form specified by the institution.

      11. Qualified Vendors of Goods and Services
        1. Each institutional purchasing department shall maintain an electronic master list of prospective suppliers. Any person, agency, or firm wishing to supply goods or services may request to be added to the institutional master vendor list. The name is added to the institutional master list if, in the professional judgment of the Purchasing agent, the addition would aid in fostering a competitive situation. The Purchasing agent may require the requesting party to furnish information on qualifications to supply the item(s) indicated and financial responsibility prior to determining whether to add a vendor’s name to the institution’s master list.

        2. Exceptions to Policy: Third party bid subscription services, who themselves do not supply goods or services utilized by Regent institutions, are not approved vendors.

        3. Nonresponsive and Nonresponsible Vendors - Once a supplier is added to the master list, the name shall not be removed from the list by an institution except for good and sufficient reasons. Removal for cause is not to exceed three years, except upon specific authorization of the COO. Each institutional purchasing designee shall report such vendors to the COO. Reinstatement requires application to the institution. Such reasons shall include, but not be limited to, the following:
          1. Delivery of goods and services that do not comply with specifications;

          2. Refusal to deliver after submitting a quotation, bid, or proposal and after receiving an order;

          3. Withdrawal of quotations, bids, or proposals prior to the placing of an order;

          4. Failure to comply with state and federal laws and regulations;

          5. Illegal purchasing practices;

          6. Consistent failure to respond bid opportunities requested in the last consecutive two-year period;

          7. Failure to timely cure contract compliance issues;

          8. Removal from an institutional master list of another Regent institution.

      12. Vendor Appeal Procedures

        The following procedures shall be used by any Vendor who wishes to file a complaint regarding a Purchasing action made pursuant to Chapter 2 of this policy manual, with the exception of disputes involving the terms, conditions, obligations and interpretations of executed contracts or purchase orders; including, but not limited to, change orders. If an executed contract or purchase order contains a dispute resolution clause, that clause shall apply and not the procedure outlined in this section. The filing of a complaint shall not delay the award process if it is determined to be in the best interest of the institution. Failure to raise a timely complaint in accordance with the following procedure shall be deemed a waiver of the right to contest the matter further.

        1. Informal Dispute Resolution with the University Department

          A Vendor who has a concern with a decision made by a Purchasing Agent shall contact the Purchasing Agent within five (5) working days of when the Vendor became aware, or reasonably should have become aware, of the decision or action which forms the basis of the concern. The Purchasing Agent shall discuss the issue(s) with the Vendor in an attempt to resolve the dispute.


        2. Initiation of Complaint to University Administration
          1. Within five (5) working days of discussing the matter with the Purchasing Agent, a Vendor (hereinafter “Complainant”) shall outline the concern in writing to the institutional Purchasing Director or Purchasing Designee.

          2. The complaint shall be in writing and shall include the following information:
            1. Name, address, and contact information of the Complainant;

            2. Identification of the purchasing action complained of, including the RFQ/RFP number if available;

            3. A detailed statement of the legal and factual grounds of the complaint, including copies of relevant documents;

            4. The specific relief requested; and

            5. Signature of the Complainant

          3. Upon receipt of the complaint, the Purchasing Director or Purchasing Designee shall conduct a review of the complaint and render a decision within ten (10) working days. Where information needed for the decision must be obtained from sources outside the Purchasing Department, the university’s response may be delayed up to ten (10) additional working days.

          4. The Purchasing Director’s or Purchasing Designee decision shall be in writing and shall contain the name and contact information of the individual to whom the decision may be appealed.

          5. The decision of the Purchasing Director or Purchasing Designee is final unless written appeal is filed with the individual identified in the written decision to receive the appeal. The appeal must be filed within five (5) working days of receipt of the Purchasing Director’s or Purchasing Designee written decision, and shall contain the specific grounds upon which appeal is made.

        3. Appeal to University Administration
          1. Upon receipt of the appeal, the institution’s Business Vice President, or his/her designee, shall conduct a review of the written record of the complaint and render a decision in writing within ten (10) working days.

          2. Copies of the decision of the institution’s Business Vice President, or his/her designee, shall be provided to the Complainant and the institution’s Purchasing Director.

          3. The written decision of the institution’s Business Vice President shall be final unless written appeal is filed with the General Counsel for the Board of Regents.

          4. Should the complaint be affirmed at any stage of institutional review, the institutional representative responsible for reviewing the complaint may, in his/her discretion, grant the requested relief or fashion an alternate remedy as deemed appropriate. The issuance of a specific remedy shall not be subject to appeal under this procedure.

          5. Copies of any written complaint received by the institution and any decision rendered pursuant to this procedure shall be forwarded to the Office of the Board of Regents.

        4. Appeal to the Board of Regents
          1. Written appeal to the Board of Regents must be filed with the General Counsel for the Board of Regents within five (5) working days of receipt of the final decision of the institution’s Business Vice President. The appeal must state the specific grounds on which appeal is made and include copies of all relevant documents and written institutional decisions.

          2. Upon receipt of an appeal to the Board of Regents, the COO, or his/her designee, shall take steps to assist the Complainant and the Institution in resolving the issue(s)

          3. If the issue(s) remain unresolved, and in the opinion of the COO the complaint involves serious questions of law or allegations of procedural error having a material impact on the award process, the appeal maybe reviewed by the Executive Director. The Executive Director shall notify the parties in writing of the date on which the appeal will be heard.

          4. If a right of review is granted, the parties may submit additional written argument for review by the Executive Director. The Executive Director shall notify the parties of the deadline for submission of additional written materials. Oral argument before the Executive Director shall not be permitted.

          5. Following review and determination by the Executive Director and in consultation with the COO, the appeal may be docketed for the next regularly scheduled Board Meeting. The Board, if docketed, may affirm, reverse, modify or remand all or any part of the final institutional decision. The decision of the Board of Regents is considered final agency action.

      13. Cooperative Purchasing
        1. Regent institutions are encouraged to participate in interagency cooperative purchasing agreements. It is the Regents’ intent that such cooperative purchasing continue to provide the lowest competitive price consistent with quality and service requirements of Regent institutions.

        2. Regent institutions may purchase from state central purchasing contracts if it is in the best interest of the institution.

        3. State agencies, by prior agreement, may purchase items through Regent institutions providing that such purchases shall not jeopardize educational discounts accruing to Regent institutions.

        4. Regent institutions are encouraged to participate in interinstitutional cooperatives with other universities, health care organizations, and similar affinity groups to gain better prices and choices.

      14. Reporting

        An annual report on purchasing shall be submitted by each institution to the COO.


  7. Risk Management

    1. Risk Management is responsible for minimizing the risk of loss to the Board of Regents and its institutions through the identification and analysis of risk, implementation of loss control programs and contractual transfer or other risk reduction and financing techniques.
      1. Each institution shall develop its own policies and procedures with respect to risks of loss to:
        1. Protect the institutions’ resources

        2. Minimize the total cost of risk

      2. When risks of a catastrophic nature exist, they will be eliminated or reduced to the extent practical. Funding will be arranged when the potential loss is large. Funding will be obtained from:
        1. Commercial Insurance, or

        2. Self-insurance

        3. State General Fund

      3. Risks that do not present a significant loss potential will not be insured unless the purchase is indicated by other factors, such as a need required by contract, bond or statute.

      4. The Regent institutions shall work with the Board Office to develop appropriate protocols to implement Regent-wide risk management programs, in accordance with the Board’s policies and procedures.

    2. Liability
      1. Iowa Code Chapter 669 (PDF), also known as the “Iowa Tort Claims Act” provides for the defense and indemnification of state employees, volunteers and agents for monetary claims for property damage, personal injury or wrongful death, caused by the negligent or wrongful act or omission of the covered individuals while acting within the scope of their authorized responsibilities.

      2. Under the provisions of an interagency 28E Agreement for Settlement of Small Tort Liability Claims, the Regent Institutions are authorized to settle small tort liability claims, including motor vehicle claims.

      3. Motor Vehicles

        The Board has established a self-insurance program for automobile liability, including expanded coverage for comprehensive and collision for vehicles owned by the institutions.


    3. Property
      1. Auxiliary and Self-Supporting Property

        The Regent institutions shall self-insure or purchase insurance for auxiliary and self-supporting operations consistent with applicable bond covenants.


      2. General Fund Supported Property
        1. Each Regent institution shall purchase catastrophic property insurance with a single incident deductible for general fund property of up to $5 million for each university and $1 million for each special school.

        2. A Regent institution may seek reimbursement of General Fund property losses over $5,000 from the State of Iowa under the provisions of Iowa Code §29C.20 (PDF).

        3. General Fund - State Property Loss Program
          1. Losses in excess of $5,000 shall be promptly reported to the Board Office under procedures established administratively. Such notification shall occur within the time frame established for Executive Council notice following the loss.

          2. The institution should prepare a preliminary loss report including cost estimates, and submit to the Board Office within five working days of the loss. Within 45 days of the loss, the institution should submit a formal loss report including proposed plans and specifications for repairs or replacement of equipment, and buildings

          3. The Executive Council of Iowa prescribes the protocol for written notice and request for allocation of Disaster Aid Contingent funds (Iowa Code §29C.20), required documentation for review by the State Auditor, the process for approval, payment, resolution of differences, and appeal.

      3. Type of Coverage and Valuation Basis

        To the extent practical and when available at a reasonable cost, property shall be insured for:

        1. ‘All risk’ or perils of fire; windstorm; lightning; earthquake and flood and extended coverage including theft, vandalism, and malicious mischief.

        2. Replacement cost or on a 90 percent coinsurance basis.

    4. Purchase of Insurance

      Purchasing terms and bid requirements are provided in 681 IAC 8.4 (PDF).


  8. Compliance and Reporting

    1. Financial Reports
      1. The business officers for each institution shall report to the Board in such detail and form as it may prescribe, funds available for capital projects, income, expenses, human resources, enrollment, and account balances as described in Iowa Code §262.25 (PDF).

      2. The Board shall, at the time provided by law, report to the Governor and the Legislature facts, observations, and conclusions that in the judgment of the Board, should be considered by the Legislature. The report shall contain the receipts and expenditures of the Board, and shall submit budgets for appropriations deemed necessary for the support of the institutions in accord with Iowa Code §262.26 (PDF).

    2. Claims Activity Reports
      1. Each Regent institution shall prepare and submit periodically to the Executive Director a Claims Activity Report of pending and resolved litigation, tort and contract claims; administrative agency complaints; workers’ compensation claims, Faculty and Professional and Scientific staff grievances and disciplinary cases, including formal ethical complaints and investigations; and internal grievances/claims and investigations of merit employees.

      2. Each Regent institution shall also report promptly to the Executive Director on the receipt, initiation, change in status and settlement of all significant litigation; tort and contract claims; administrative agency complaints; internal discrimination claims; Faculty and Professional and Scientific staff grievances and disciplinary cases, including formal ethical complaints and investigations; and internal grievances and investigations of merit employees.

    3. Gifts and Grants
      1. The Board shall accept and administer trusts and may authorize nonprofit foundations acting solely for the support of institutions governed by the Board to accept and administer trusts deemed by the Board to be beneficial. Notwithstanding the provisions of Iowa Code §633.63 (PDF), the Board and such nonprofit foundations may act as trustee in such instances. (Iowa Code § 262.9(9) (PDF))

      2. The chief executive officer of each institution is authorized to accept and approve all gifts, grants, and service contracts except gifts of real estate. Gifts, grants, and service contracts are to be accepted only if supportive of the mission of the institution.

      3. Each institution, on or before the 15th day of each month, shall send the report of gifts and grants that was received during the preceding month to the Executive Director for transmittal to the director of the Department of Management and the director of the Legislative Services Agency. The members of the Board of Regents shall receive an annual report detailing amounts, sources, and purposes of these gifts and grants. The Board Office shall retain an electronic copy of each report. The institution will make this report in the form currently used to comply with Iowa Code §8.44.

      4. Each university, on or before the last day of the month following the end of the quarter, shall send, electronically to the Board Office, the detail of gifts and grants for the quarter for transmittal to the designated individual of the Legislative Services Agency. The Board Office shall retain an electronic copy of each report.

    4. Competition with Private Enterprise
      1. 681 IAC 9.4 (PDF) implements Iowa Code Chapter 23A (PDF), which restricts government entities from competing with private enterprise, unless specifically authorized by statute, rule, ordinance, or regulation.

      2. Regent institutions shall not engage in competition with private enterprise unless the activity will assist in the education, research, extension, or service mission of the institutions.

      3. To fulfill their missions effectively, institutions under the control of the Board occasionally provide goods and services which enhance, promote, or support the instructional, research, public service, and other functions to meet the needs of students, faculty, staff, patients, visitors, and members of the public participating in institutional events.

      4. Each institution has established written policies regarding competition with private enterprise. These policies ensure that:
        1. Activities provided by the institutions are consistent with Board policy.

        2. Processes are identified to handle inquiries about activities carried out by the institution.

        3. There is a means for community businesses to interact with the institutions including discussion of complaints.
      5. Annually, a report will be provided to the Board of institutional activities which may compete with private enterprises, including any formal complaints related to competition with private enterprise, during the past calendar year. 

    5. Traffic and Parking Regulations
      1. Iowa Code §262.68 (PDF) authorizes the Board to establish speed limits for all vehicles on the institutional roads and streets.

      2. Iowa Code §262.69 (PDF) authorizes the Board to make rules for the policing, control, and regulation of traffic and parking of vehicles and bicycles on the property of any institution under its control.

      3. All traffic and parking regulations shall be subject to Board approval prior to enforcement. Changes in existing regulations, general or specific, shall be brought to the Board annually for approval.

      4. If any change in traffic and parking regulations include an increase in monetary sanctions, notification of students is to be consistent with Chapter 1.8 of this Policy Manual.

      5. General traffic and parking regulations for each university shall be filed in accordance with Iowa Code Chapter 17A (PDF), Iowa Administrative Procedure Act. (Regulations are in 681 IAC 4 (PDF))

    6. Records Management and Examination of Public Records
      1. Records Management

        Iowa Code §305.15 (PDF) requires the Board of Regents to adopt rules for their employees, agencies, and institutions for records management. The Board's rules are in 681 IAC 10 (PDF). Records are the property of the state and shall not be mutilated, destroyed, removed, or disposed of, except as provided by law, rule, or policy. Records should be archived or disposed of in accordance with University or Board Office disposal requirements after the retention period, subject to the exceptions stated in this policy regarding retention for audit and litigation purposes. 

      2. Examination of Public Records

        Every person shall have the right to examine and copy public records and to publish or otherwise disseminate public records or the information contained therein as provided by law in Iowa Code Chapter 22 (PDF). The administrative rules adopted by the Board related to the examination of public records are provided in 681 IAC 17 (PDF).


    7. Administrative Procedure Act
      1. The Board of Regents operates in compliance with the Iowa Administrative Procedure Act, pursuant to Iowa Code Chapter 17A (PDF).

      2. Each Regent institution establishes institutional procedures to administer rules established in 681 IAC 19 (PDF) and adopted by the Board in accordance with Iowa Code Chapter 17A (PDF), subject to Board approval as necessary.

      3. When a timely request for making an oral presentation in regard to a rule is presented to the Board as provided by Iowa Code §17A.4 (PDF), the Executive Director will set a time and place for the presentation. The time will be not less than 20 days after notice is published in the Iowa Administrative Bulletin. The notice will state whom the Executive Director has designated to conduct the presentation, the subject matter, and the location.
        1. In accordance with the rules adopted by the Board in 681 IAC 19 (PDF), the presiding officer has the authority to take any reasonable action necessary to conduct an orderly meeting as provided in 681 IAC 19.5(3d.4) (PDF).

    8. Deposit of Public Funds
      1. Demand deposit accounts and other similar accounts can only be established at banks approved pursuant to Iowa Code Chapter 12C (PDF) and previously approved by the Board. Proposed changes in the Investment relationships shall be reviewed by the Audit/Compliance and Investment Committee and approved by the Board. (Iowa Code §12C.2 (PDF))

      2. A deposit of public funds in a depository pursuant to this chapter shall be secured as follows (Iowa Code §12C.1.3 (PDF)):
        1. If a depository is a credit union, then public deposits in the credit union shall be secured pursuant to Iowa Code §§ 12C.16 through 12C.19 and 12C.23 and 12C.24 (PDF).

        2. If a depository is a bank, public deposits in the bank shall be secured pursuant to Iowa Code §§12C.23A and 12C.24 (PDF).

    9. Post-Issuance and Continuing Disclosure Compliance Policies for Tax-Exempt Obligations
      1. General Policy
        1. The Board’s objective is to ensure that tax-exempt obligations retain tax- exempt status pursuant to post-issuance requirements which include the following:
          • Tracking proceeds of a debt issuance to ensure dollars are spent on qualified tax-exempt purposes.
          • Maintaining detailed records of all expenditures and investments related to tax-exempt funds.
          • Monitoring that the financed project is used in a manner consistent with applicable legal requirements.
          • Providing required disclosure information on an annual basis.

        2. Each university shall adopt specific internal policies and procedures (copies of which shall be filed with the Board Office) for post-issuance and continuing disclosure compliance.

      2. Compliance Coordinator
        1. The business officer at each university shall identify the coordinator of post-issuance and continuing disclosure compliance for tax-exempt obligations (the "Coordinator") who shall be accountable for post-issuance compliance at his/her particular university.

        2. The Coordinator will ensure such records are maintained as necessary to meet the requirements of this policy.

        3. The Coordinator will consult with the Regents bond counsel, rebate consultant, municipal advisor, IRS publications and other resources as necessary to understand and meet the requirements of this policy.

        4. With the assistance of bond counsel, the Coordinator will monitor that training and information is obtained to adequately update all pertinent university staff regarding new developments and/or requirements for tax-exempt obligations.

  9. Audit Activities

    1. The Board of Regents, through its Audit/Compliance and Investment Committee, expects to enhance accountability and fulfill its audit oversight responsibility by:
      1. Reviewing all external financial, bond-specific, and other audit reports conducted on the Regents office and any part of its institutions and Regent- associated regional study centers.

      2. Reviewing the annual audit plans proposed by the Board’s Chief Audit Executive.

      3. Reviewing all reports prepared by internal auditors of the Regent institutions.

      4. Encouraging continued evaluation, improvement, and adherence to all Board and institutional policies, procedures, and practices at all levels.

      5. Encouraging an open avenue of communication among the independent auditors, financial and senior management, internal auditors, Committee, and Board of Regents.

      6. Reporting to the Board of Regents regularly regarding the execution of the Committee’s duties and responsibilities.

    2. External Audits
      1. State Audits
        1. As established by law, the auditor of state shall annually make a complete audit of the books and accounts of every department of the state, the educational institutions, and audit testing of the Board's investments. (Iowa Code §11.2 (PDF))

          Each department and institution of the state shall keep its records and accounts in such form and by such methods as to be able to exhibit in its reports the matters required by the auditor of state, unless otherwise specifically prescribed by law. (Iowa Code §11.5 (PDF))


        2. The institutions will send all draft state audit comments, recommendations, and responses to the Board Office for approval before they are submitted to the State Auditor’s Office.

        3. A copy of all state audits related to a Regent institution shall be, upon completion, sent to the Board Office for docketing on the Audit/Compliance and Investment Committee agenda.

        4. The Regent institutions and/or Board Office shall immediately notify the Auditor of State regarding any suspected embezzlement or significant financial irregularities in accord with Iowa Code §11.2(2) (PDF).

        5. The State Auditor’s Office or the Audit/Compliance and Investment Committee may request a discussion of financial and audit related issues.

      2. General Provisions
        1. For audit services other than statutorily required from the Auditor of State, the institutions are to select external auditors through a competitive Request for Proposal (RFP) process in accordance with the Board’s policies on professional services contracts in the Purchasing section of this Chapter. Competitive RFP process shall occur every five years.

        2. All external audit firms must be currently and appropriately licensed and have a current permit to practice as a Certified Public Accounting firm in the state of Iowa.

        3. Audit managers for each engagement must be rotated at least every five years.

        4. Institutions must comply with all state, Board, and institutional conflict of interest policies.

        5. External auditors for an institution are restricted from providing any of the following services for that institution:
          1. Bookkeeping or other services related to the accounting records or financial statements of the institution

          2. Financial information systems design and implementation

          3. Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

          4. Actuarial services

          5. Internal auditing outsourcing services

          6. Management functions or human resources

          7. Broker or dealer, investment advisor, or investment banking services

          8. Legal services and expert services unrelated to the audit

          9. Any other service that the Board determines is impermissible
             
        6. Any exceptions to the restrictions above must be approved by the Audit/Compliance and Investment Committee prior to the performance of the proposed services, unless the aggregate amount of all such non-audit services provided to the institution constitutes less than 5 percent of the total amount paid by the institution to its auditor during the fiscal year in which the non-audit services are provided. Each institution is responsible for notifying the Board Office of all such non-audit services received under this exception.

        7. Institutions should carefully consider and document the benefits and risks of employing an individual who has worked for the auditing firm within the previous year and consider how the position may relate to the institution’s external audit.

      3. Hospital Audits
        1. The University of Iowa Hospitals and Clinics will arrange for an annual external audit of hospital accounts, in accordance with the general provisions of subsection 2 and shall submit, upon completion, a copy of the audit and management letter to be docketed on the Audit/Compliance and Investment Committee agenda.

        2. The UIHC external auditor may request to discuss financial and audit related issues with the Audit/Compliance and Investment Committee.

        3. The Audit/Compliance and Investment Committee may request the UIHC external auditor to discuss financial and audit related issues with the Committee.

      4. Other External Audits
        1. Copies of all external audits conducted on a Regent institution or regional study center shall be submitted, upon completion, to the Board Office for docketing on the Audit/Compliance and Investment Committee’s agenda.

        2. External auditors or the Audit/Compliance and Investment Committee may request a discussion of financial and audit related issues.

      5. Internal Audits
        1. Objective and Scope. The objective of internal auditing is to assist the Board of Regents and institutional administrators in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations and pertinent comments concerning the activities reviewed. The attainment of this objective involves such activities as:
          1. Reviewing and appraising the soundness, adequacy and application of accounting, administrative and other operating controls, and promoting effective control at reasonable cost.

          2. Ascertaining the extent of compliance with established policies, plans and procedures.

          3. Ascertaining the extent to which assets are accounted for and safeguarded from losses of all kinds. Ascertaining the reliability of management data developed within the organization.

          4. Conducting special examinations and reviews at the request of the Audit/Compliance and Investment Committee, the Board of Regents or institutional heads.

          5. Evaluating the economy and efficiency with which resources are employed and recommending improvements in operations, including reviews of administrative and support services with the objective of reducing operating costs.

        2. Authority. The internal audit staffs are authorized by the Board of Regents to conduct a comprehensive program of internal auditing. To accomplish their objectives, the internal auditors are authorized to have unrestricted access to university functions, records, properties and personnel.

        3. Reporting. Audit activities related to the offices of President and Superintendent are to be reported directly to the President of the Board of Regents. The ultimate reporting responsibility of internal auditors is to the Audit/Compliance and Investment Committee.

        4. Annual Report. Each year, the Board’s Chief Audit Executive will develop and execute a comprehensive audit plan to be conducted in accordance with applicable professional auditing standards. A comprehensive report on the internal audit function will be made to the Board through the Audit/Compliance and Investment Committee each year and will include.
          1. An annual audit plan containing:
            • Methods for audit focuses, including internal control evaluation and risk assessment.

            • High-risk areas routinely included in the internal audit cycle.

            • Administrative and support services review.

            • Cooperative plans among Regent University internal audit departments.

            • Internal audits planned for the special schools

          2. Review of all previous fiscal year audits completed and in progress, including any follow-up reviews;

          3. Any audits which were scheduled but not completed; and

          4. A list of all audits completed within the last three fiscal years.

        5. A copy of each internal audit report and follow-up review, upon its completion, will be sent to the Board Office for docketing on the Audit/Compliance and Investment Committee agenda.

        6. Any activity which is illegal or the legality of which is questioned by the audit staff (e.g. conflict of interest, embezzlement or theft) shall be reported to the appropriate institutional administrator or President of the Board immediately upon discovery by audit staff. The Auditor of State and other appropriate authorities should also be notified.

        7. In the performance of their functions, internal audit staff will have neither direct responsibility for, nor authority over, any of the activities and operations reviewed.

        8. Internal auditors may request to discuss financial and audit related issues with the Audit/Compliance and Investment Committee.

        9. The Audit/Compliance and Investment Committee may request the internal auditors to discuss financial and audit related issues with the Committee.