Summary of Report 95-028

Report Number 95-028

The Board of Odessa College did not exercise proper oversight over the investment function. The College invested millions of dollars over a four-year period in high-risk derivative investments without implementing investment management controls. Developing the following investment management controls could have prevented the 50 percent decline in the College's investment portfolio and the loss of $3 million in public funds:

• Developing a written investment policy which clearly outlines the College's liquidity needs and the Board's expectations for portfolio diversification, allowable investments, allowable risk levels, and expected rates of return
  
  
• Requiring written investment reports to allow for periodic monitoring of the investment portfolio
  
  
• Establishing conflict of interest policies and requiring annual financial disclosures from key employees and the Board

Odessa College's investment cash flows have declined significantly as interest rates have risen and investment maturities have extended.

Odessa College's operating budget for fiscal years 1994-1995 is $20 million. The College employs 333 full-time employees and 461 part-time employees. The College has an enrollment of 4,577 credit students and 4,420 non-credit students.

Contact the SAO about this report.

Download the Acrobat version of this report. (.pdf)

If you prefer an HTML version, follow this link to an Adobe site which converts PDF files to HTML.