Repository: UIHistories Project: Board of Trustees Minutes - 1994 [PAGE 481]

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1996]

UNIVERSITY OF ILLINOIS

469

approved and updated these uniform rules on January 17, 1985. The staffs of the universities have again collaborated to develop updated amendments to the uniform rules. The recommended revisions will make the Joint Rules Governing Procurement and Bidding at State Systems Universities in Illinois consistent with changes made to the Illinois Purchasing Act over the past several years with respect to terminology, dollar thresholds, terms, and conditions of the competitive selection process and construction awards. The rules also reflect the recent change in governance for the universities that had been part of the Board of Governors and Board of Regents systems. The vice president for business and finance, with the concurrence of appropriate administrative officers, recommends that the board approve and adopt the amendments to the Joint Rules Governing Procurement and Bidding at State Systems Universities in Illinois, authorize the submission of these revised rules for approval by the State Department of Central Management Services, and file in accordance with the Illinois Administrative Procedure Act. (A copy of the amendments proposed has been filed with the secretary of the board for the record.) I concur.

On motion of Ms. Reese, this recommendation was approved. Revision of Investment Policies and Manager Guidelines (Short-Term and Endowment Funds)

(8) In response to concerns raised by the securities lending loss at The Common Fund for Intermediate Term Investments, the University engaged the financial consulting firm, Ennis, Knupp & Associates, to review the investment policies, risk controls, and investment management guidelines of the University's investment programs. The consultant recommended certain revisions to the investment policies and investment manager guidelines. The major revisions to the policies and guidelines are summarized below: 1. The addition of explicit language regarding the use of derivative securities. 2. Tighter policy asset allocation ranges which govern how far asset allocation can deviate from policy targets. 3. The addition of specific language regarding the use of pooled investment vehicles. 4. Clear and more consistent investment guidelines for all external investment managers. Accordingly, the vice president for business and finance recommends the recision of the current short-term funds and endowment funds policies and adoption of new short-term and endowment investment policies (a copy is filed with the secretary of the board for the record). I concur.

On motion of Ms. Reese, this recommendation was approved. Authorization for Investment Manager — Short-Term Funds (Hotchkis and Wiley)

(9) Since 1986, the University has transferred 90 percent of the investment management responsibilities for the University's short-term investment program from internal to external management. In order to complete the transition to external management the University engaged the financial consulting firm, Ennis, Knupp & Associates, to conduct a manager search to locate a manager or managers to replace the last remaining internally managed portfolio. The search process evaluated a broad array of investment managers and recommended three managers that, in the consultant's opinion, best met the selection criteria and needs of the University.