Previous Story
New law allows NMC to invest donations, fed grants
|
Posted on Jul 26 1999
The Northern Marianas College can now invest the federal grants and other outside financial assistance it receives every year into income-generating activities to meet its mounting obligations.
According to a recently-signed law, the NMC Board of Regents will be granted authority to tap Land Grant Endowment Funds and other contributions donated or raised by the college for investments, such as bonds and loans.
Acting Gov. Jesus R. Sablan said Public Law 11-85 would help the CNMI’s lone higher learning institution deal with the dwindling budget provided by the government.
“This measure is timely in light of the current economic situation, which has also affected (NMC),” he said in his letter to the presiding officers of the Legislature.
“The legislation would enable NMC to maximize the investment of funds received from various grants and donors,” added Sablan.
Offered by Rep. Heinz S. Hofschneider, the new law — the Postsecondary Amendment Act of 1999 — provided broad powers to NMC’s policy-making body to handle financial affairs of the college.
The Board of Regents shall be allowed to negotiate loan guarantees and issue bonds, subject only to the approval of the Commonwealth Development Authority, to raise much-needed funds for the cash-strapped college.
The endowment provided by the U.S. Department of Agriculture each year to the college under the Land Grant Program as well as other source of funding shall be invested by the board to yield “a fair and reasonable rate of return,” the law said.
These grants will be put in a college trust fund for future investments “with care, skill, prudence and diligence,” into fixed income and/or equity holdings.
To pay back loans and bonds, the interest derived from such capital investments will be specifically set aside to meet these obligations.
An annual financial report shall also be submitted to the Legislature and the governor to keep track of the investments, according to PL 11-85 which came on the heels of financial difficulties facing NMC and allegations of mismanagement.
