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|Re-formatted on August 15, 2016|
Approved on June 11, 2004
|Signatures and dates
on archival copy
Associate Vice President for Finance
|Herman ("Butch") Hill, Chair
Policy and Procedure Review Committee
Vice President for Administration and Finance
This policy provides units within the university an opportunity to borrow money from the university's diversified investment pool of funds for purposes that advance the educational mission.
Funds from the diversified investment pool may be loaned to planning units in original principal amounts for periods conforming to the nature of the investment.
The terms and conditions of a loan must be consistent with this policy and approved by the president after review and recommendation by the provost and associate vice president for finance. The following guidelines apply:
All loans will be for an amount greater than twenty-five thousand dollars and for no more than fifty per cent of this loan pool.
All loans will be charged an interest rate of prime or 5.5 per cent, whichever is greater. The prime interest rate is defined as the rate reported in the "Wall Street Journal" on the final approval date of the loan.
Information on any and all outstanding loans will be included in quarterly reports to the budget and finance committee of the university's board of trustees.
A loan will not be approved if it causes the total outstanding dollar amount (of all loans made to planning units) to exceed twenty-five per cent of the diversified investment pool.
The amount of funds available to be loaned will be determined based on the most current investment balances of the university.
The president may approve exceptions to this policy, in consultation with the board of trustees as appropriate.
A loan request must be initiated from the planning unit head to the associate vice president for finance, copying the provost. The finance staff is available to assist with the development of the necessary information to prepare the request, which shall include:
Project description, cost, and loan draw schedule (if the loan amount is not intended to be spent all at once, in what amounts will the loan be drawn down, and when).
Explanation as to why the project merits consideration (related to the university's mission of teaching, research, and service, student health and well being, etc.).
Amortization schedule (based on monthly repayment with interest calculated at prime on the average daily outstanding balance of the loan).
Identification of the funding source for repayment of the loan and the university account(s) to be charged for payment.
Identification of an alternative source to fund repayment in the event the primary source of funding is not adequate to meet the repayment schedule.
To develop the loan request in concert with the planning unit, so that it meets this policy's requirements, and to provide a recommendation as to its financial worthiness (to the president, the provost, and the requestor).
To forward the completed loan request to the provost for review and recommendation to the president.
To maintain the official file on the loan request, and to insure compliance with its terms and conditions.
To review the request and to recommend approval or disapproval to the president.
To approve or disapprove the loan request. The decision shall be final with no right of appeal.
To return the loan request to the associate vice president for finance for notification and disposition as appropriate.
To avoid conflict-of-interest, should a loan request be made by the fnance area or the provost's area, the review and recommendation responsibilities shown above will be assigned to less-interested parties, as needed.
|Administrative Policy Manual
Dick Piccard revised this page
(https://www.ohio.edu/policy/50-002.html) on August 15, 2016.
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