The Canadian Association of Research Administrators - Use of Reserve Funds and Investment Policy
The Canadian Association of Research Administrators’ (CARA) accumulates reserve funds from each annual budget surplus. The policy outlines the process for the use and investment of these funds. Reserve funds can be used to support CARA’s goals and strategies and are considered for one-time, unique, or special activities.
2.0 Policy Statement
2.1 CARA's reserve funds are intended to provide an internal source of funds to address one-time unbudgeted expenses, uninsured losses, sudden increases in expenses, or unanticipated revenue loss. Reserves are not to be used to replace a permanent loss of funds or to address an ongoing budget gap. Reserve funds shall be invested annually to earn income to support operating expenses. Reserve funds shall be invested annually to earn income to support operating expenses.
2.2 Reserve funds shall only be invested in no risk portfolios.
2.3 The fund shall be invested in a mix of cashable and non-cashable investments.
2.4 The funds shall be invested annually in late May after the association’s financial position in the new fiscal year is known. The Treasurer shall recommend the investment to the core executive (President, Vice President, Treasurer, Past President, Executive Director).
2.5 The investments will be reviewed by the core executive and adjusted in response to both internal and external changes.
2.6 When reserve funds are used, CARA will aim to replenish them in a reasonably short period of time (i.e., within two years).
1. The reserves (“operating reserve fund”) are designated funds set aside by Board of Directors vote.
2. The minimum target amount of the reserve funds will be calculated by the Treasurer annually after the approval of the annual budget, reported to the CARA core executive and the Board of Directors, and included in regular financial reports. The minimum target amount will be established in an amount sufficient to maintain ongoing operations and programs measured for a four (4) month period and shall include all recurring, standard expenses such as salaries, benefits, travel, office, program and professional services. In-kind, depreciation and other non-cash expenses shall not be included in the calculation. The operating reserve fund shall not exceed the amount of two year’s budget.
2.9 The operating reserve fund will be reviewed by the Treasurer and the core executive and adjusted in response to both internal and external changes.
In the event of inconsistency between the French and English version, the English language version shall prevail.
Approved by the CARA Executive Board: 30 April 2016