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PPM 40-000-6 Debt (Procedure) on www.olc.edu

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                                                                                                 40-000-6

                                                 DEBT (PROCEDURE)

     Debt agreements and lease documents shall be kept in the custody of a responsible official and updated for
     any changes.

     All borrowing (including interfund) shall be authorized by the governing board.

     There shall be established policies with respect to legal or donor prohibitions against interfund borrowings
     of restricted funds.

     There shall be adequate accounting records to reflect debt transactions, including source, description,
     maturity, interest rate, debt-service payment dates, collateral, etc.

     There shall be periodic review procedures to determine compliance with debt agreement restrictions and
     procedures.

     There shall be adequate procedures for control over interest payments and accruals, including interest, if
     any, on interfund borrowings.

     There shall be periodic review of the collectibility of interfund borrowings and the propriety of
     classification as borrowings versus transfers.

     Interfund borrowings and receivables shall be periodically reconciled between the funds involved.

     Detailed records shall be kept of periodic payments due to beneficiaries under life income and annuity gifts
     and the termination of such payments.

     Effective procedures shall be in place to identify on a timely basis material contingent or other liabilities
     that should be recorded.  Example:  A contingent liability would be recorded if the probability of an
     unfavorable outcome for a pending litigation suit was probable.  No liability would be recorded if the
     possibility of unfavorable outcome were merely possible or remote.

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