The University System of Georgia (USG) shall comply with applicable laws, rules, and regulations and encourage ethical conduct as detailed in the USG Ethics Policy. The Chancellor shall designate an individual with overall responsibility for the USG compliance and ethics program.

An institution-wide approach to compliance shall be adopted by all USG institutions and compliance processes shall be embedded into the institution’s management systems. An institution’s compliance program shall incorporate best practices as outlined by the federal guidelines for an effective Ethics & Compliance Program. Implementation of each institution’s compliance program shall be in accordance with the procedures outlined by the University System Office.

Proper management of risk is a core leadership function that must be practiced throughout the University System of Georgia (USG). Enterprise Risk Management (ERM) is a process-driven tool that enables management to visualize, assess, and manage major risks that may adversely impact the attainment of key organization objectives. The University System Office and USG institution presidents are responsible for identifying, assessing, and managing risks using the ERM process. The Chancellor shall designate an individual with overall responsibility for the USG risk management program.

7.1.1 Appropriation and Allocation of Funds

The Board of Regents shall be the only medium through which formal requests shall be made for appropriations from the General Assembly and the Governor of the State of Georgia. The request shall be in full compliance with the instructions issued by the Governor’s Office of Planning and Budget. The Board shall annually allocate funds to the University System of Georgia (USG) institutions at a meeting following the approval of the Appropriations Act and approve the budgets of the USG institutions, the University System Office, and pass-through and other attached organizations.

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7.1.2 Accounting and Reporting

7.1.2.1 Procedures

Accounting and reporting procedures of the Board of Regents shall comply with accounting principles generally accepted in the United States of America (GAAP) applicable to public colleges and universities engaged in business-type activities, as prescribed by the Governmental Accounting Standards Board; federal, state, and local laws; Board of Regents’ policies; and regulations approved by the Chancellor and published by the USG chief fiscal officer.

7.1.2.2 Deficits

When a situation develops that would create a deficit at an institution, the President of the institution shall take appropriate corrective action. If the President cannot take adequate corrective action to eliminate the deficit within the current fiscal year, he or she shall inform the Chancellor and the USG chief fiscal officer immediately.

7.1.2.3 Financial Report

The USG shall annually publish a USG consolidated financial report.

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The University System of Georgia (USG) Budget shall be comprised of all funds received by USG institutions, the University System Office, and pass-through and other attached organizations used to provide services to support the goals, objectives, and mission of the System.

7.2.1 Educational and General Revenues and Expenditures

Education and general revenues and expenditures shall be defined as revenues received and expenditures made to support the teaching, research, and public service missions of USG institutions. Revenue and expenditures are classified as outlined in the USG Business Procedures Manual Section 2 in accordance with guidelines developed by the National Association of College and University Business Officers.

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7.2.2 Auxiliary Enterprises and Student Activities Revenues and Expenditures

Auxiliary enterprises and student activities are functions and activities that relate to the mission of the USG institution including, but not limited to:

1. Housing;
2. Food Services;
3. Student Health Services;
4. Student Activities;
5. Intercollegiate Athletics (excluding intercollegiate athletics activity which is operated under the authority of a separately incorporated athletic association);
6. Parking;
7. Transportation;
8. Stores and Shops;
9. Vending and Other Services; and,
10. Student Activities (fee-based student activities and functions).

Auxiliary enterprise operations shall operate on a self-supported basis with revenues derived from student fees and other non-state sources, except as provided below. In no instance may Fund 10000 state appropriations be used to fund athletic auxiliary operations.

Each institution shall develop and update annually a five-year plan for each auxiliary enterprise operation that defines the level and manner of service to be provided, planned expenditures, and sources of revenue, including projected fee requirements. The format and content of each plan shall be determined by the USG chief fiscal officer.

Auxiliary enterprises shall be accounted for on the accrual basis of accounting. Section 15 of the USG Business Procedures Manual, Auxiliary Enterprise Funds, provides additional accounting criteria necessary for determining if auxiliary enterprises are functioning on as self-supporting basis.

Exceptions to the requirement that institutions operate their auxiliary enterprises on a self-supporting basis shall be recognized as follows:

1. Institutions may choose to operate some auxiliary enterprise activities on a loss basis, but must indicate in their five-year plans how the costs of such activities will be covered by revenues generated through other auxiliary operations and must also provide an alternative plan reflecting, rightsizing of operations, or the elimination or privatization of the auxiliary. Institutions that choose to operate auxiliary enterprise activities on a loss basis and use revenues generated through other auxiliary operations to subsidize these operations must annually reflect non-mandatory transfers to avoid auxiliary enterprise deficits. The Board of Regents may, upon recommendation of the Chancellor, direct the institution to eliminate or privatize the auxiliary.

2. Institutions may apply Education & General Fund resources (unrestricted institutional funds), excluding Fund 10000 state appropriations for athletics, to auxiliary enterprise operations where such expenditures can be justified as supporting the primary mission of the institution; however, use of general fund resources for auxiliary enterprise operations should be limited and must be approved in advance by the Chancellor under procedures established by the USG chief fiscal officer. The Board of Regents has determined that intercollegiate athletics supports the overall mission of the institution and has authorized the use of Education & General Fund resources in support of intercollegiate athletics as outlined in Board Policies 4.5 and 7.2.2. Use of Education & General Fund resources for intercollegiate athletics, excluding Fund 10000 state appropriations, is authorized as outlined in Board Policy 4.5 and as further defined in the USG Business Procedures Manual. In no instance may Education & General Fund resources be used to support athletic scholarships. The use and amount of Education & General Fund resources applied to the support of auxiliary enterprise operations shall be included in the five-year plan.

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7.2.3 Operating Budgets

Each USG institution shall prepare and submit to the Chancellor an annual operating budget within the limit of funds allocated by the State plus estimated internal revenue of the institution from all other sources. Operating budgets of separately incorporated athletic organizations are specifically excluded from this process, although the transfer of student fees to those separately incorporated organizations must be reflected as a single item in the budget submitted to the Chancellor.

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7.2.4 Budget Amendments

Each USG institution is authorized to maintain and update its annual operating budgets throughout the fiscal year. Such updates may be made without prior approval of the Board of Regents.

Institutions shall report all budget amendments to the USG chief fiscal officer on a quarterly basis under procedures developed by his or her staff. The Chancellor and the USG chief fiscal officer reserves the right to require prior approval of the budget amendments at any USG institution that he or she determines has failed to manage its budget within available resources or in a manner consistent with Board of Regents’ goals and priorities. The Chancellor or the USG chief fiscal officer may direct that the institution develop a remediation plan to assure more appropriate decisions on future budget changes.

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7.2.5 Liability for Expenditure of Budgets

Bonds of public officials authorizing expenditures for any purpose whatsoever that are in excess of budget amounts approved by the Board shall be liable for such unauthorized expenditures.

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7.3.1 Tuition

7.3.1.1 Definitions

7.3.1.2 Graduate Tuition

USG institutions that offer graduate programs may request Board approval for graduate tuition rates as follows:

1. Each institution that offers graduate programs shall request a “core” graduate tuition rate that shall apply to all graduate courses and programs, based on market comparators for in-state and out-of-state tuition.
2. Each institution may request separate graduate tuition rates for specialized programs, subject to the provisions of Section 7.3.1.3 of this policy manual.

The regular graduate tuition rates normally shall be charged to all graduate students. However, where a graduate student is classified as a research, teaching, or graduate assistant, the institution may waive all or part of the graduate tuition and/or waive the differential between in-state and out-of-state graduate tuition or the differential between in-state and out-of-country graduate tuition. A registration fee of no less than $25 shall be charged to all students for whom a full waiver is provided.

7.3.1.3 Professional Program Tuition

Board approval shall be required for in-state, out-of-state and and out-of-country differential tuition rates for nationally competitive graduate and professional programs, as deemed appropriate by the institution based upon the academic marketplace and the tuition charged by peer institutions with similar missions.

An institution seeking such approval from the Board shall provide the Board with an impact analysis and a plan for enhancing the quality of the program.

The professional program tuition rates normally shall be charged to all program students. However, the institution, on a degree program basis, may waive the graduate tuition in accordance with such policies noted or limit the waiver to the amount associated with the regular graduate tuition where a graduate student is:

1. Classified as a graduate assistant under Section 7.3.1.2 of this Policy Manual; or,
2. Eligible for an out-of-state tuition waiver under Section 7.3.4.1 of this Policy Manual.

7.3.1.4 Tuition for Distance Learning Courses and Programs

Board approval is required to charge special tuition rates for distance education courses and programs. For purposes of this policy, distance learning courses and programs that qualify for a special distance learning tuition rate shall be defined by the Board Treasurer, Chief Fiscal Officer. (BoR Minutes, Jan. 2017)

7.3.1.5 Tuition Agreements with Corporations, Organizations, and Other Legal Entities

USG institutions may enter into agreements with “customers,” defined as corporations, organizations, agencies, or other legal entities, for the delivery of credit courses and programs. These agreements enhance relationships between the USG, local businesses within the service area surrounding the institution, students, and faculty by allowing course delivery to be tailored to meet the needs of the customers and their employees or members so that students receive skills that are aligned with the needs of the customer and providing flexibility with respect to the location of the course delivery.

The course and program delivery shall be restricted to employees or members of the customer group and their dependents, except upon agreement between the institution and the customer to permit non-members or non-employees to enroll in courses or programs on a space-available basis. Participating students are required to meet the minimum requirements for admission to the institution.

The amount institutions may charge for the course and program delivery shall be agreed upon between the institution and the customer and shall represent the reasonable and fair market value of the instruction, provided that the charges are not less than the total direct and indirect costs to the institution for the delivery of instruction and related services. Such costs may include, but are not limited to, course development, direct instruction, textbooks, consumables, non-instructional services, hardware, software, and indirect costs such as administrative overhead, maintenance, and security. Additionally, the amount charged must reflect all required mandatory fees to include, at a minimum, the Technology Fee.

The charges agreed upon between the institution and the customer shall be assessed to the customer on a per-seat, per-student, or per-agreement (flat-rate) basis to be levied and collected in either of the following manners as applicable:

1. The institution may directly charge and collect all agreed-upon tuition and other charges from the customer; or
2. The institution may directly charge and collect all agreed-upon tuition and other charges from a customer’s participating employees in instances where the customer’s internal policy requires its employees to pay tuition and all other charges directly to an institution in order for the employee to be eligible for possible future reimbursement by the customer.

In all cases, the collection of agreed-upon tuition and other charges must be in accordance with Board Policy 7.3.3, Tuition and Fee Payment and Deferral. The agreement, description of program content and delivery, and the pricing model must be approved by the Chancellor or designee(s) before any such agreement may be executed.

7.3.1.6 Tuition for Georgia’s “Dual Enrollment” Program

Tuition for high school students participating in Georgia’s “Dual Enrollment” program shall be charged on a per-credit-hour basis at all institutions. Institutions are to accept the amount reimbursed by the Georgia Student Finance Authority (GSFA) for Dual Enrollment tuition charges as full payment. Any tuition amount for Dual Enrollment not covered by the GSFA reimbursement shall be waived.

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7.3.2 Student Fees and Special Charges

7.3.2.1 Mandatory Student Fees

“Mandatory student fees” are defined as fees that are assessed to all students, all undergraduate students, or all full-time undergraduate students on one or more campuses of a USG institution, including those fees due prior to registration that may be refunded later in the semester and fees for which the student receives a cash equivalent in the amount of the fee. Mandatory student fees may be required by the Board of Regents or by the institution subject to approval by the Board of Regents.

Mandatory student fees shall include, but not be limited to:

1. Intercollegiate athletic fees;
2. Student health service fees;
3. Transportation or parking fees (if the latter are charged to all students);
4. Student activity fees;
5. Technology fees;
6. Facility fees; and
7. Mandatory food service fees.

Purposes and rates for all mandatory fees shall be approved by the Board of Regents to become effective the following fall semester. All mandatory fees assessed to students enrolled in 12 credit hours or more shall be assessed at the Board-approved rate. Institutions may reduce mandatory fees on a per-credit-hour basis or on a tiered structure for students taking fewer than 12 credit hours or for students enrolled in summer courses.

All mandatory student fees collected by an institution, as well as any proposals to increase or create a mandatory student fee or to change the purpose of an existing mandatory student fee, shall be proposed and administered by the President of the institution and presented to an advisory committee composed of at least 50 percent students for advice, counsel, and a vote prior to the institution submitting the request to the Board of Regents. The advisory committee must include at least four students and institutions and Student Government Associations should make a concerted effort to include broad representation among the students appointed to the advisory committee. These procedures do not apply to special circumstances in which a general purpose fee is instituted system-wide by the Board of Regents.

Mandatory student fees shall be used exclusively to support the institution’s mission to enrich the educational, institutional, and cultural experience of students. All payments from funds supported by student mandatory fees shall be made according to approved business procedures and the appropriate business practices of the institution.

7.3.2.2 Elective Fees and Special Charges

Institution presidents are authorized to approve elective fees and special charges outlined below; however, any fee or special charge that is required to be paid by any subgroup of students categorized solely by grade level or previous credit hours earned shall undergo the same approval process as mandatory student fees. Any elective fee or special charge that is required to be paid by all students in a specific degree program or in a specific course, with the exception of laboratory fees and supplemental course material fees, shall be approved by the Board, but shall not require review or vote by a mandatory student fee advisory committee.

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7.3.3 Tuition and Fee Payment and Deferral

All tuition and fees are due and payable on or before the last day of the drop/add period for the specific academic term. Exceptions to the time of payment are as follows:

1. An institution may defer tuition and fees up to the amount authorized for a specific academic term for students whose fees are guaranteed and will be paid by an outside agency under a documented agreement with the institution;
2. An institution may defer tuition and fees up to the amount of the aid granted for a specified academic term for students who have an institution-administered loan or scholarship in process;
3. An institution may defer tuition and fees up to the limit stated in the certificate or other document for a specified academic term for foreign students who have a certificate or other acceptable documented evidence that payment will be made after a statement of charges from the student has been presented for payment;
4. An institution may elect to collect fees specifically for housing and dining on an installment basis, in advance of service provided;
5. An institution filing an approved plan with the Office of Fiscal Affairs may elect to collect tuition and fees on an installment basis, in advance of services provided.

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7.3.4 Out-of-State and Out-of-Country Tuition Waivers and Waiver of Mandatory Fees

7.3.4.1 Out-of-State and Out-of-Country Tuition Waivers

A USG institution may award out-of-state tuition and out-of-country differential waivers and assess in-state tuition for certain non-Georgia residents under the conditions listed below. Notwithstanding any provision in this policy, no person who is unable to show by the required evidence that they are lawfully in the United States shall be eligible for any waiver of tuition differential. Institutions shall comply with the procedures governing the award of out-of-state and out-of-country tuition waivers as established by the Executive Vice Chancellor for Academic Affairs and Chief Academic Officer. The policy regarding student classification status is contained in Board of Regents’ Policy 4.3.

Presidential Waivers
Presidential waivers may be awarded to out-of-state students or out-of-country students selected by the institution President or an authorized representative. The total number of Presidential Waivers in effect shall not exceed four percent for Augusta University, Georgia Institute of Technology, Georgia State University, and the University of Georgia, and two percent for all other USG institutions of the equivalent full-time students enrolled at the institution in the fall term immediately preceding the term for which the out-of-state or out-of-country tuition is to be waived. Institutions awarding presidential waivers in the spring term semester may use either the fall term one year prior or the fall term immediately prior when calculating the number of allowable waivers. The proportionate percentage of out-of-state and out-of-country tuition waived shall be used when determining the number of waivers in effect such that a full waiver of out-of-state or out-of-country tuition counts as one waiver, while a 50 percent waiver of out-of-state or out-of-country tuition counts as a 0.5 waiver.

Institution presidents may award Presidential Waivers at their discretion to students within the following categories:

1. Academic: Students who have demonstrated the potential to excel within a particular program of study offered by the institution as evidenced by scoring within the top half of students matriculating at the institution or the top half of students matriculating within the particular program of study to which the student has applied. Institutions shall determine the top half using the academic criteria (e.g., Freshman Index, standardized test scores, GPA, artistic ability) applicable either for general admission to the institution or for the particular program of study to which the student has applied.

2. Athletic: Students selected to participate in the institution’s intercollegiate athletics program and who have demonstrated the potential to succeed within a particular program of study offered by the institution. The percentage of waivers offered within the Athletic category shall not exceed 1/3 of the total number of Presidential Waivers which the institution is eligible to offer, i.e., four percent or two percent.

3. International: Non-citizen students, classified as out-of-state or out-of-country, who are not otherwise ineligible for a tuition differential waiver under this policy and who have demonstrated the potential to succeed within a particular program of study offered by the institution.

Institution presidents shall define institution-specific criteria and procedures for the awarding of and maintaining eligibility for Presidential Waivers and shall submit the institution-specific criteria and procedures for approval to the Chief Academic Officer no later than June 30 prior to the semester in which those criteria and procedures shall take effect. Extraordinary circumstances may arise justifying award of a Presidential Waiver under criteria not specified in this Policy but consistent with the policy intent and in support of the institution’s mission. Presidents may offer an Academic Presidential Waiver in these circumstances but must first seek approval, on a one-time or standing basis, from the Chief Academic Officer. A student may be eligible under one or more Presidential Waiver categories but shall only be granted a waiver under one specific category and will only be counted within the category assigned by the institution. Institutions shall maintain evidence of said approval. Institutions shall maintain adequate documentation of waiver awards to validate that waiver recipients met the institutional criteria and complied with Board of Regents Policy.

Students receiving a Presidential Waiver must achieve a specified level of academic performance to maintain eligibility for the Presidential Waiver. Students receiving an Academic or International Presidential Waiver must maintain a 2.5 GPA calculated on a cumulative basis at the conclusion of each academic year as specified in the respective institution’s approved procedures and using the same GPA method used to calculate Satisfactory Academic Progress (SAP). Students receiving an athletic Presidential Waiver must maintain SAP.

Failure to maintain the specified level of academic performance at the conclusion of the respective academic year shall result in the student being placed in a two-semester probationary period for waiver purposes. The student shall be eligible to maintain a waiver during this probationary period but shall be ineligible for the waiver if the student is not able to achieve the specified level of academic performance for the student’s specific Presidential Waiver sub-category. The student is eligible to re-gain the waiver, subject to the institution’s discretion and consistent with this Policy, should the student achieve the specified level of academic performance for the student’s specific Presidential Waiver sub-category.

Border Residents

1. Border County Waivers: Graduate or undergraduate students domiciled in an out-of-state county bordering Georgia and enrolling in a program offered at a location approved by the Board of Regents for which the offering institution has been granted permission to award Border County Waivers; or,

2. Border Residents Waivers: Undergraduate students domiciled in another state bordering Georgia subject to the following conditions. Each year, the Chancellor shall review the enrollment levels at each USG institution to determine whether any USG institutions have sufficient excess capacity to increase recruitment of students from neighboring states. Should the Chancellor determine that cause exists to activate the Border Residents Waiver, the Chancellor or his designee will present the list of institutions to the Board of Regents’ Committee on Academic Affairs for approval. If an institution is given permission to award the Border Residents Waiver, it will be allowed to do so for the next three academic years. Any undergraduate students receiving the Border Residents Waiver will remain qualified for the waiver so long as he or she is continuously enrolled during fall and spring semesters at the institution that awarded the waiver.

Economic Development

1. Students who are certified by the Commissioner of the Georgia Department of Economic Development as being part of a competitive economic development project.

2. As of the first day of classes for the term, an Economic Advantage Waiver may be granted under the following conditions:

   U.S. Citizens, Permanent Residents, and Other Eligible Non-Citizens

   A. Dependent Students
   Dependent students providing clear and convincing evidence that the student’s parent or U.S. court-appointed legal guardian relocated to the state of Georgia to accept full-time, self-sustaining employment. The relocation must be for reasons other than enrolling in an institution of higher education and appropriate steps to establish domicile in the state must be taken. The employment upon which the relocation was based must be held at the time the waiver is awarded.

   B. Independent Students
   Independent students providing clear and convincing evidence that they, or their spouse, relocated to the state of Georgia to accept full-time, self-sustaining employment. The relocation to the state must be for reasons other than enrolling in an institution of higher education and appropriate steps to establish domicile in the state must be taken. The employment upon which the relocation was based must be held at the time the waiver is awarded.

   C. U.S. refugees, asylees, and other eligible noncitizens as defined by the federal Title IV regulations may be extended the same consideration for the economic advantage waiver as citizens and lawful permanent residents of the United States.

   Waiver eligibility for the above qualifying students expires twelve (12) months from the date the waiver is awarded.

   Non-Citizens

   A. Dependent Students
   Non-citizen dependent students providing clear and convincing evidence that the student’s parent or U.S. court-appointed legal guardian relocated to the state of Georgia to accept full-time, self-sustaining employment and entered the state in a valid, employment-authorized status. The relocation must be for reasons other than enrolling in an institution of higher education and appropriate steps to establish domicile in the state must be taken. The employment upon which the relocation was based must be held at the time the waiver is awarded. Additionally, the non-citizen dependent student must provide clear evidence that the parent, or U.S. court-appointed legal guardian, is taking legally permissible steps to obtain lawful permanent resident status in the United States.

   B. Independent Students
   Non-citizen independent students must provide clear and convincing evidence that they, or their spouse, relocated to the state of Georgia to accept full-time, self-sustaining employment and entered the state in a valid, employment authorized status. The relocation must be for reasons other than enrolling in an institution of higher education and appropriate steps to establish domicile in the state must be taken. The employment upon which the relocation was based must be held at the time the waiver is awarded. Additionally, non-citizen independent students must provide clear evidence that they, or their spouse, are taking legally permissible steps to obtain lawful permanent resident status in the United States.

   Waiver eligibility for the above qualifying students may continue provided full-time, self-sustaining employment in Georgia and the employment-authorized status are maintained. Furthermore, there must be continued evidence of Georgia domicile and efforts to pursue an adjustment to United States lawful permanent resident status.

3. Students who are employees of Georgia-based corporations or organizations that have contracted with the Board of Regents through USG institutions to provide out-of-state or out-of-country tuition differential waivers.

4. Students enrolled in a USG institution based on a referral by the Vocational Rehabilitation Program of the Georgia Department of Labor or the Department of Veterans Affairs.

5. Career consular officers, their spouses, and their dependent children who are citizens of the foreign nation that their consular office represents and who are stationed and living in Georgia under orders of their respective governments.

Employee

1. Full-time USG employees, their spouses, and their dependent children.

2. Full-time employees of the public schools of Georgia or the Technical College System of Georgia (TCSG), their spouses, and their dependent children.

3. Teachers employed full-time on military bases in Georgia

Military

1. Active duty military personnel, their spouses, and their dependent children who meet one of the following criteria:
   A. The military sponsor is currently stationed in or assigned to Georgia;
   B. The military sponsor previously stationed in or assigned to Georgia is reassigned outside of Georgia, and the student or students remain continuously enrolled in a Georgia high school, TCSG institution, or a USG institution;
   C. The military sponsor is reassigned outside of Georgia and the spouse and dependent children remain in Georgia;
   D. The military sponsor is stationed in a state contiguous to the Georgia border and resides in Georgia;
   E. Dependent children of a military sponsor previously stationed in or assigned to Georgia within the previous five years;
   F. Dependent children of a military sponsor if the child completed at least one year of high school in Georgia; or,
   G. Any student utilizing VA educational benefits transferred from a currently serving military member, even if the student is no longer a dependent of the transferor.

2. Active members of the Georgia National Guard stationed or assigned to Georgia or active members of a unit of the U.S. Military Reserves based in Georgia, and their spouses and their dependent children.

3. Separated military members from a uniformed military service of the United States who meet one of the following:
   A. Individuals who within 36 months of separation from such service enroll in an academic program and demonstrate intent to become domiciled in Georgia. This waiver may also be granted to their spouses and dependent children.
   B. Any separated service member or any student utilizing transferred VA educational benefits and physically residing in the state.
   C. Any individual as described in 38 U.S.C. 3679(c).

Reciprocal

1. Students selected to participate in programs offered through the Academic Common Market.

2. Any student who enrolls in a USG institution as a participant in an international or domestic direct exchange program that provides reciprocal benefits to USG students.

3. Any student who enrolls in a USG study-abroad program to include programs outside the State of Georgia but within the United States and study abroad programs outside the United States. Tuition and fees charged study abroad students shall be consistent with the procedures established in the USG Business Procedures Manual and as determined by the institution President.

Research and Comprehensive University Graduate Students

1. Graduate students attending a Research or Comprehensive University and as determined by the respective institution’s approved procedures. The number of students currently receiving waivers under this category shall not exceed the number assigned below:

   University of Georgia	160
   Georgia Institute of Technology	140
   Georgia State University	140
   Augusta University	40
   Georgia Southern University	20
   Kennesaw State University	20
   University of West Georgia	20
   Valdosta State University	20

2. Medical and dental residents and medical and dental interns at Augusta University.

Non-Resident Students
As of the first day of classes for the term, a non-resident student can be considered for this waiver under the following conditions:

1. Students under 24.

   • If the parent or United States court-appointed, legal guardian has maintained domicile in Georgia for at least 12 consecutive months and the student can provide clear and legal evidence showing the relationship to the parent or United States court-appointed, legal guardian has existed for at least 12 consecutive months immediately preceding the first day of classes for the term. Under Georgia Code, legal guardianship must be established prior to the student’s 18th birthday; or
   • If the student can provide clear and legal evidence showing a familial relationship to the spouse and the spouse has maintained domicile in Georgia for at least 12 consecutive months immediately preceding the first day of classes for the term.

2. Students 24 and Older.

   • If the student can provide clear and legal evidence showing a familial relationship to the spouse and the spouse has maintained domicile in Georgia for at least 12 consecutive months immediately preceding the first day of classes for the term. This waiver can remain in effect as long as the student remains continuously enrolled.

This waiver can remain in effect as long as the student remains continuously enrolled regardless of the domicile of the parent, spouse, or United States court-appointed, legal guardian.

7.3.4.2 Waiver of Mandatory Fees

An institution may waive or reduce mandatory fees for:

1. Students who are enrolled for fewer than six credit hours;
2. Students enrolled in summer semesters;
3. Students who reside or are jointly enrolled at another institution;
4. Students enrolled in practicum experiences (e.g., student teachers) or internships located at least 50 miles from the institution;
5. Students enrolled in distance learning courses or programs who are not also enrolled in on-campus courses nor residing on campus. Such students shall be charged an Online Learning Fee that must equal or exceed the institution’s Technology Fee plus fifty percent (50%) of all other Board approved institutional mandatory fees;
6. Students enrolled at off-campus centers, except that the institution shall be authorized to charge select fees to these students for special services subject to approval by the Board of Regents;
7. Students enrolled in a study abroad program and not enrolled on campus during that same semester; and,
8. Members of the armed services utilizing the military’s tuition assistance programs or paying their own way to attend the institution.

Each USG institution shall document its student fee waiver strategy or plan. Upon request, USG institutions shall provide the student fee waiver plans to the Chancellor or his or her designee.

7.3.4.3 [Reserved]

7.3.4.4 Waiver of Fees for Georgia’s “Dual Enrollment” Program

USG institutions shall waive any fee defined by the Board of Regents as a mandatory fee not covered by the per student state funds amount reimbursed by the Department of Education for high-school students participating in Georgia’s Dual Enrollment program.

Additionally, institutions shall waive all fees defined by the Georgia Student Finance Commission as mandatory fees or noncourse related fees. The amount for student fees reimbursed to institutions by the Georgia Student Finance Authority under the Dual Enrollment program shall be accepted as full payment of the waived fees. As such, students are to be provided full access to the services supported by the waived fees. Dual Enrollment students participating in this program are specifically exempted and shall not be charged for health fees and mandatory commuter food service fees. As such, providing these Dual Enrollment students access to these services is not required. Institutions are required to provide Dual Enrollment student participants with all required books for the courses in which they are enrolled. Any fee associated with providing required textbooks shall be waived by the institution.

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7.3.5 Refunds

The policy for determining refunds to be made on institutional charges and other mandatory fees and elective fees and special charges (non-mandatory fees) at USG institutions, except for those institutions for which special refund policies have been approved by the Board of Regents follows the “institutional refunds” procedures, as defined in the 1998 Amendments to the Higher Education Act of 1965, P.L. 105-244, TITLE IV—STUDENT ASSISTANCE, PART G—GENERAL PROVISIONS, SEC. 485.

Tuition and fees awarded by scholarship or grant from an agency or authority of the State of Georgia on behalf of a student receiving a refund under this policy shall be reimbursed to such agency or authority.

The Chancellor is authorized and empowered to take or cause to be taken any and all such other and further action as, in the judgment of the Chancellor, may be necessary, proper, convenient or required in connection with the execution of this policy. Such authority may be further delegated to the President of the institution.

USG institution presidents are authorized and empowered to take or cause to be taken any and all such other and further action as may be necessary, proper, convenient, or required in connection with the execution of this policy.

7.3.5.1 Students Withdrawing from an Institution

The refund amount for students withdrawing from an institution shall be based on a pro rata percentage determined by dividing the number of calendar days in the semester that the student completed by the total calendar days in the semester. The total calendar days in a semester includes weekends, but excludes scheduled breaks of five or more days and days that a student was on an approved leave of absence.

The unearned portion shall be refunded up to the point in time that the amount earned equals 60 percent. Students who withdraw from the institution when the calculated percentage of completion is greater than 60 percent are not entitled to a refund of any portion of institutional charges.

7.3.5.2 Death of a Student

A refund of all nonresident fees, matriculation fees, and other mandatory fees shall be made in the event of the death of a student at any time during the academic session.

7.3.5.3 Military Service Refunds

Subject to institutional policies, full refunds of tuition and mandatory fees and pro rata refunds of elective fees are hereby authorized for students who are:

1. Military reservists (including members of the National Guard) who, after having enrolled in a USG institution and paid tuition and fees, receive orders to active duty or are reassigned for temporary duty or mandatory training that prevents completion of the term;

2. Commissioned officers of the United States Public Health Service Commissioned Corps (PHSCC) who receive deployment orders in response to a public health crisis or national emergency after having enrolled in a USG institution and paid tuition and fees;

3. Active duty military personnel who, after having enrolled in a USG institution and paid fees, receive reassignment or a temporary duty assignment or a training assignment that would prevent completion of the term; or,

4. Otherwise unusually and detrimentally affected by the activation of members of the reserve components or the deployment of active duty personnel of the Armed Forces of the United States who demonstrate a need for exceptional equitable relief.

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The Board of Regents, recognizing that public institutions are dependent, in part, on private funding (just as private institutions are partially dependent on public funding), encourages the institutions under its control to seek the support of alumni, friends, corporations, and other private individuals and organizations that might be interested in contributing to the welfare of the institutions, their students, and their faculties.

Funds raised from private donations may be used in support of the mission and objectives of the institution, including funds for student scholarships, salary supplements, construction of physical facilities, and gifts and grants for other purposes as may be designated by the donor. However, institutions are not authorized to commit any state funds for challenge or matching grants or gifts for the construction of facilities or for other purposes without prior approval of the Chancellor. The Board of Regents shall not consider gifts, contributions, or income from endowments held for the benefit of any University System of Georgia (“USG”) institution in determining the allocation of state funds to that institution.

Private donations to a separately incorporated Cooperative Organization established pursuant to Board of Regents’ Policy shall not be subject to control by the Board of Regents or the institution administration except as otherwise provided in Board Policy or by the Memoranda of Understanding established between institution and the Cooperative Organization.

A USG institution may not accept gifts of real property except as provided in Board of Regents’ Policy 9.9, Real Property Ownership and Asset Management. A USG institution may otherwise accept gifts, bequests, agreements, or declarations of trust that do not carry obligations to the institution that may conflict with state law or Board of Regents’ Policy and that do not impose a financial burden on the institution beyond that which can be managed within the institution’s current budget. If acceptance of the gift or donation would require the institution to incur additional cost that cannot be borne within the institution’s current resources, the institution must obtain the approval of the Board of Regents before accepting the gift or donation.

Each institution must maintain a report of all gifts received by the institution and its cooperative organizations through private donations under procedures established by the USG Chief Fiscal Officer.

Each President is authorized to execute those documents necessary to provide proper fiscal management of those funds accepted under this authorization and, at his or her discretion, to further delegate the authority to execute such documents to the Chief Business Officer of the institution.

Regulations on banking and investments will be published and distributed periodically to the various operating units in Section 9.0, Banking and Investments, of the University System of Georgia (USG) Business Procedures Manual.

7.5.1 Banking

All banking services for the Board of Regents are subject to the review and approval of the USG chief fiscal officer in accordance with the State of Georgia Depository Board and the Office of the State Treasurer Bank Policy. Banking includes establishing bank accounts, domestic and international; bank services provided; and bank fees. Merchant card services or stored value cards are not included in banking services. Service providers are subject to the State Depository Board’s published Banking Guidelines, the State of Georgia Banking Agreement, and related statutory requirements for banking. All new bank accounts and expansion of services using a Board of Regents FEI# must be approved by the USG chief fiscal officer. The USG chief fiscal officer shall notify the Office of the State Treasurer (OST) of all approved banking providers for review and recommendation to the State Depository Board for inclusion in the State Bank Registry.

All depositories where funds of the Board of Regents are held in time and demand deposits shall be collateralized in accordance with OCGA §§ 45-8-12 and 45-8-13 with either a dedicated or pooled methodology as prescribed by the OST.

For domestic bank accounts, the President of each USG institution shall determine the recommended bank or banks where funds are deposited through a best value competitive contract bid process to be undertaken every five years. This competitive bid process should include a pro forma analysis by the OST. Based on competitive bid results, the President shall request banking approval from the USG chief fiscal officer for the selected bank or banks.

For foreign bank accounts, institutions must verify and provide documentation that foreign banks: 1) are financially strong and stable, 2) offer security of deposits, 3) are convenient to the institution’s foreign location, and 4) have fees and compensation terms that are rational to their marketplace. When possible, it may be prudent to consider competitive bids if multiple bank options that meet these criteria are available. Establishment of all foreign bank accounts should include a pro forma review by the OST. Once determined, the President shall request banking approval from the USG chief fiscal officer for the selected bank or banks. All foreign bank accounts of a USG institution must be in the name of the state entity (institution). A cap of $100,000 is set on consolidated foreign bank accounts of a USG institution’s depositories in a particular foreign bank and, in any event, shall not exceed the lower of the State Depository Board’s prescribed limit or the limit of the FDIC equivalent organization that applies to the specific USG institution in that particular country. If a foreign country does not have a deposit insurance program, lower balances may be appropriate. When necessary, just in time funding or international wire transfers may be required for processing deposits.

Once established, bank providers are required to report and document activities as defined in the OST Bank Policy and State of Georgia Banking Agreement, which may be found at OCGA § 50-17-51.

The USG chief fiscal officer shall appoint a person or persons at each USG institution with authority to sign checks drawn on banks where funds of the respective institutions are deposited. Persons so appointed shall be authorized to sign any documents that may be required by the banks concerned.

The chief business officer of each USG institution and any other officer or employee who participates in the selection of the institution’s depository (bank) are prohibited from serving on the governing boards of banks and other financial institutions if such banks or other financial institutions have or seek a commercial relationship with that institution.

A President of an institution may serve on the governing board of a bank or financial institution that does not have a commercial relationship with the institution. However, such a bank or financial institution will not be considered by the institution for establishment of a commercial relationship with that USG institution for not less than two years after the termination of the President as a member of the board.

7.5.1.1 Electronic Transfer of Funds

Payments to vendors for goods and services should be electronic to avoid the associated costs of issuing paper checks when practical in accordance with Statewide Accounting Policy and Procedures – Vendor Management issued by the State Accounting Office.

When possible, USG institutions may participate in the statewide electronic payment agreement using one of the approved providers for merchant services. If not, the institution President may submit justification to and request approval to obtain another provider from the USG chief fiscal officer. The USG chief fiscal officer shall determine whether to submit the proposed card service agreement and fee schedule to the OST for an exemption approval by the State Depository Board. Institutions not participating in the statewide agreement must provide an annual report of transaction activities as required by OST.

Electronic funds transfer is the required method for payroll payments to employees, making funds available to the employee by the authorized pay date, unless the employee can provide documentation of having an “un-bankable” status; i.e., the employee is unable to obtain a bank account. Direct deposit is defined as the electronic transfer of funds from the employer to a depository institution designated by the employee, which makes the funds available to the employee by the authorized pay date.

Electronic withdrawal of funds (auto-debit) is the required method of payment from retirees for benefit premiums; i.e., the payment is electronically withdrawn from an account at a depository institution that is designated by the retiree to the employer, occurring on a specified date each month. Where auto-debit is not possible, the University System Office may review and authorize appropriate alternative method of benefits premium payment.

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7.5.2 Investments

7.5.2.1 General

The Board of Regents requires that each USG institution develop and maintain an investment policy that fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility each institution has to the citizens of Georgia and that conforms with donor intent, Board of Regents’ policies and procedures, and applicable law.

Each institution is required to have a written investment policy statement on file with the USG chief fiscal officer. The policy should be reviewed and updated at least once every two years. The defined investment policy must contain, at a minimum, the following items:

1. Investment objectives;
2. Investment type;
3. Asset allocation;
4. Diversification, including interest rate risk, custodial credit risk, credit quality risk, concentration of credit risk, and foreign currency risk;
5. Spending policy;
6. Monitoring; and,
7. Utilization of investment manager.

Each USG institution shall submit an annual report on its investment performance for all investment outside of the Board of Regents’ Pooled Investment Program to the USG chief fiscal officer that asserts that investments have been made in accordance with the institution’s written investment policy.

7.5.2.2 Board of Regents’ Pooled Investment Program

The USG serves as fiscal agent for various units of the USG and its affiliated organizations. The USG pools the monies of these units and affiliated organizations for investment purposes. The investment pool is not registered with the SEC as an investment company and does not issue shares. The fair value of the investments is determined daily. Each participant is allocated a pro rata share of each pooled investment fund balance at fair value along with a pro rata share of the pooled fund’s investment returns.

The USG will maintain investment guidelines on file with the USG chief fiscal officer for each pooled investment fund that is offered to qualified University System participants. These guidelines are intended to foster sound and prudent responsibility that each institution has to the citizens of Georgia and which conforms to the Board of Regents’ investment policy. All investments must be consistent with donor intent, Board of Regents’ policies and procedures, and applicable laws. Units of the USG and their affiliated organizations may participate in the Pooled Investment Program. The overall character of the pooled fund portfolio should be one of above-average quality, possessing at most an average degree of investment risk.

Investments in the Board of Regents’ Pooled Investment Program shall be undertaken in a manner that seeks to ensure the preservation of capital in each pooled investment fund in line with the investment objectives outlined in investment guidelines for each fund. This will be accomplished through mitigating interest rate risk, credit quality risk, custodial quality risk, concentration of credit risk, and foreign currency risk, as set forth below.

Interest Rate Risk: The USG will minimize interest rate risk by:

• Structuring the investment portfolio so that security maturities match cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity.
• Investing funds necessary for operating needs primarily in shorter-term securities, money market mutual funds, or similar investment pools and limiting individual security maturity as well as the average maturity of the portfolio.

Credit Quality Risk: The USG will minimize credit risk by:

• Limiting investments to the types of securities listed in the investment guidelines for each pooled investment fund.
• Pre-qualifying and conducting ongoing due diligence of the financial institutions, brokers, dealers, intermediaries, and advisers with which the USG will do business in accordance with Board Policy 7.5.1.
• Diversifying the investment portfolio so that the impact of potential losses from any one type of security or any one individual issuer will be minimized.

Custodial Credit Risk: The USG will minimize custodial credit risk by:

• Appointing a federally-regulated banking institution as custodian. The custodian must perform its duties to the standards of professional custodian and should be liable to the USG for claims, losses, liabilities, and expenses arising from its failure to exercise ordinary care, its willful misconduct, or its failure to otherwise act in accordance with the contract. The custodian shall annually provide a copy of his, her, or their most recent report on internal controls, i.e., Statement on Standards for Attestation Engagements No. 16 or equivalent report.
• All securities transactions should be settled on a delivery versus payment basis through an approved depository institution such as the Depository Trust Company or the Federal Reserve.
• Repurchase agreements should be collateralized by United States Treasury securities at 102 percent of the market value of the investment at all times.

Concentration of Credit Risk: The USG’s investment guidelines should establish diversification of investments to reduce overall portfolio risk while maintaining market rates of return.

Foreign Currency Risk: Exposure to foreign currency credit risk should be limited to funds maintained in foreign accounts for the study abroad program.

Ethics and Conflicts of Interest: Officers and employees involved in the Board of Regents’ Pooled Investment Program shall refrain from personal business activity that could conflict with the proper execution and management of the investment program or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interests in financial institutions with which they conduct business in accordance with applicable law, as well as any personal financial or investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the USG.

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7.5.3 Loan Funds for Matching Purposes

USG institutions are authorized to administer student loan funds in accordance with federal, state, and private regulations or gift documents. USG institutions are authorized to use money in student loan funds of the respective institutions for the purpose of matching funds available under federal loan programs for loans to students when terms of the gift to the institution permit such use for matching purposes. USG institutions are not authorized to establish loan funds utilizing institutional resources.

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7.5.4 Georgia Eminent Scholars Endowment Trust Fund

The Board of Regents shall serve as trustees of the Georgia Eminent Scholars Endowment Trust Fund, which shall, as provided by law (OCGA § 20-3-82), be a budget unit for the purpose of appropriation of state funds.

The funds appropriated to the Board of Regents under this program shall be used exclusively to endow academic chairs in an effort to attract eminent scholars to join the faculties of USG institutions. The criteria for persons selected to hold such chairs shall be established by the President of the institution concerned.

A total sum of not less than $1,000,000 shall be required to endow a chair under this program. The respective foundations of the institutions concerned shall be required to contribute not more than 75 percent of such amount ($750,000) and the fund shall contribute not less than 25 percent of such amount ($250,000). No funds shall be granted to a foundation except upon the express written condition that the funds and the earnings therefrom shall be used to endow an academic chair as provided herein.

Approved grants may be made to foundations previously established to enhance the educational purposes of the USG institution concerned. The income from the grant funds and the foundation funds contributed shall be used to endow academic chairs that shall be known as the Eminent Scholars Chair.

The funds received by a foundation for this purpose, together with the funds contributed by the foundation, shall be managed and invested by the governing board of directors of the foundation of the institution concerned and kept separate from other funds of the foundation.

Funds raised by the respective foundations to qualify for the grants may come from more than one donor, but the gifts of not more than ten donors shall be aggregated to raise the minimum sum required ($750,000). All donations must be accompanied by a statement from the donor acknowledging that the funds donated will be used to endow a chair authorized under this program. USG institutions having chairs endowed by the fund may petition the Board to add the name of the donor or benefactor to the name of the chair.

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The Georgia Statewide Travel Policy, which is issued by the State Accounting Officer, applies to all state agencies, including units of the University System of Georgia (USG). The Board of Regents may develop and approve new travel regulations as permitted by the Statewide Travel Policy. Any such regulations will be published in Section 4.0, Travel, of the Business Procedures Manual.

The University System of Georgia (USG) operates in a complex purchasing and contracting environment, which is governed by laws of the State of Georgia, policies of the Board of Regents, and regulations of the Georgia Department of Administrative Services (DOAS), Georgia Technology Authority (GTA), and Georgia Office of the State Treasurer (OST). Purchasing and contracting regulations will be published in Section 3.0, Purchasing and Contracts, of the Business Procedures Manual.

Except for the contracts for which authority is reserved by the Board or designated to the Chancellor by this Policy Manual, all contracts necessary for the daily operation of each USG institution and all contracts for goods and services not regulated by DOAS may be executed by the head of each institution or his or her designee.

7.7.1 General Policy

The USG and all of its institutions shall use DOAS for all purchases unless granted permission by DOAS to make purchases directly. USG institutions shall comply with the various statutes, rules, and regulations governing purchases with state-appropriated funds and purchases from funds to which the USG has title. All purchasing by USG institutions shall be centralized under the direct management and control of the chief business officer of the institution concerned.

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7.7.2 Employee Purchasing

Absent a specific and approved exemption in state law or as approved by the Chancellor, USG employees shall not purchase goods or services for personal use through channels used in the purchase of goods and services for USG operations.

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7.8.1 Property Insurance

All USG institutions shall participate in the self-insured State Insurance Plan, a section within the Fiscal Division of the Department of Administrative Services, to the fullest extent possible. For lines of insurance not available under the self-insured plan, USG institutions shall purchase additional coverages only when authorization to do so has been secured in advance from the State Insurance Plan.

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7.8.2 Liability Insurance

7.8.2.1 Automotive

Vehicles titled to the Board of Regents or vehicles on long-term lease arrangements and the drivers of those vehicles shall be insured by the State Insurance Plan.

7.8.2.2 Professional Liability

The Board of Regents shall establish or participate in a program of self-insurance whereby employees of the Board, as defined by the self-insurance plan adopted by the Board, are insured against losses incurred in and arising out of, or in the course of, their employment. USG institutions shall bear the cost of the program as determined by the Board.

7.8.2.3 Cyber Insurance

The Board of Regents shall establish or participate in a program of cyber insurance administered by the University System Office (USO) whereby the USO, all USG institutions, the Georgia Public Library Service, and the Georgia Archives are insured against financial loss sustained from not less than cybercrime, privacy and security liability, regulatory liability, payment card industry liability, multimedia liability, business income loss, digital asset restoration, investigation costs and crisis management expenses.

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7.8.3 Fidelity Bond

A blanket position fidelity bond shall cover all employees in an amount which shall be determined from time to time by the Board of Regents. This bond shall be purchased through the State Insurance Program with the cost distributed to the various USG institutions. This coverage shall indemnify the Board of Regents from any loss it suffers from all acts of its employees that can be described as anything other than the full and faithful performance of the employee’s duty to the employer.

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Regulations on auditing shall be published and distributed periodically to the various operating units by the University System Office.

7.9.1 State Audits

The University System Office may request that the State Auditor perform financial statement audits or other attestation engagements at the University System Office or select USG institutions. The President of each USG institution and the USG chief fiscal officer shall make available all information to the State Auditing Department so that such engagements may be performed.

The foregoing shall not apply to separate corporate entities that are organized to provide support services to the institution.

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7.9.2 Internal Audits

The Board of Regents shall establish and support an internal audit function to assist the Board, the Chancellor, and institution presidents in the effective discharge of their responsibilities. The internal audit function shall be governed by an audit charter approved by the Board, which shall describe the purpose of an internal audit, reporting requirements, responsibility, authority, and scope of work. Responsibility for approving an annual audit plan; reviewing audit results, reports, and recommendations; and approving the Chancellor’s appointment and termination of the USG chief audit officer shall be assigned to the Board of Regents’ Committee on Internal Audit, Risk, and Compliance.

Internal audit leads at USG institutions shall have a direct reporting relationship to the President of that institution and the USG chief audit officer. The President of each institution that has an internal auditor shall determine the organizational and operating reporting relationships of the internal auditors at the institution and exercise oversight of institutional risk management as defined in Board Policy. The USG chief audit officer may direct the internal auditors to audit specific functions at their institutions as needed to address system-wide issues or directives. The President of each institution having an internal auditor shall coordinate with the USG chief audit officer on significant personnel actions involving the institutional internal auditor, to including appointment, performance evaluations, and termination. The President may also consult with the Committee on Internal Audit, Risk, and Compliance as to proposed personnel actions involving the institutional internal auditor.

The internal audit lead of each USG institution shall meet at least annually with the USG chief audit officer to discuss audits, audit findings, audit department independence, and a proposed audit schedule.

The USG chief audit officer shall provide a system-wide annual report to the Board of Regents’ Committee on Internal Audit, Risk, and Compliance.

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7.10.1 Investment Policy

The Board of Regents’ Retiree Health Benefit Fund (“the Benefit Fund”) is established by Georgia state law to provide a steady stream of support for the mission of the Benefit Fund. Its assets are to be invested in a prudent manner that seeks to ensure that the Benefit Fund assets grow to support the spending requirements of the Benefit Fund. This policy provides a set of guidelines that govern the investment of these assets.

The minimum funding requirements of OCGA § 47- 20-10 shall not apply to prefunding, in whole or in part, of anticipated future costs of providing other post-employment benefits as defined by Governmental Accounting Standards Board Statements for retired employees of a political subdivision, including those presently retired and those anticipated to retire in the future, as provided in OCGA § 47-20-10.1.

7.10.1.1 General Investment Objectives

Investments shall be made for the sole benefit of the Board of Regents’ Retiree Health Insurance Benefit Fund. The portfolio should be guided by the following objectives:

1. The assets must be invested with the skill, care, and diligence that a prudent investor would use in a similar capacity.
2. The Benefit Fund should seek to earn the projected spending rate plus inflation over a full market cycle.
3. The Benefit Fund should seek to outperform relevant market indices over a full market cycle.

7.10.1.2 Responsibilities

The Board of Regents has oversight regarding all trust fund decisions and has delegated the oversight role to the Board Committee on Finance and Business Operations, which has the responsibility to ensure that the Benefit Fund assets are managed:

1. For the exclusive benefit of the Benefit Fund;
2. Prudently and in compliance with applicable laws and regulation; and,
3. Effectively so that the assets will increase over time, on an inflation adopted basis.

Responsibilities include:

1. Developing investment goals, objectives, and performance measurement standards that are consistent with the needs of the Benefit Fund;
2. Determining how the Benefit Fund assets should be allocated among asset classes; and,
3. Communicating the investment goals, objectives, and standards to the professional money managers, as noted below, including any material changes that may subsequently occur.

The Committee, with the consent of the Board, has the power to appoint professional money managers to execute the Benefit Fund’s investment strategy. The Committee will also review and evaluate the results of the professional money managers in the context of mutually accepted standards of performance.

7.10.1.3 Monitoring of Objectives

The Benefit Fund shall be monitored for adherence to investment philosophy, returns relative to objectives, and investment risk as measured by asset concentration, exposure to extreme economic conditions, and volatility. The Committee will conduct periodic reviews of the professional money manager in order to confirm that the factors underlying the performance expectations remain in place. The Committee shall meet with the professional money managers at least semi-annually.

7.10.1.4 Short-term Investment Portfolio

The Benefit Fund’s short-term portfolio should seek to provide preservation and enhancement of capital. The Benefit Fund will need liquidity and income annually and, therefore, will only accept minimal short-term volatility in those assets providing income. However, a portion of short-term assets may be invested for the longer term and volatility in these asset categories is to be expected and managed.

The short-term investment objective is to consistently outperform selected weighted market indices and is expected to rank at or above the median when compared to a universe of its peers managing similar portfolios and following a similar investment style such as the Georgia One Fund or the Georgia Extended Asset Pool.

The long-term investment objective for the Fund’s short-term portfolio is to achieve an average annual total rate of return in excess of the inflation rate (as measured by the Consumer Price Index) plus one percent for the aggregate investments under this investment policy evaluated over rolling three- to five-year periods, net of investment management and advisory fees. This is based on targeting allocations in fixed income assets and cash equivalents to meet the current period plan obligations, as outlined in the investment statement. A secondary objective to be considered is diversification and risk management. A third objective is to invest principally in liquid and marketable instruments consistent with anticipated cash requirements.

7.10.1.5 Long-term Investment Portfolio

The Benefit Fund’s long-term investment portfolio should seek to provide annual income growing in line with inflation with the secondary investment objective to seek growth of principal over time. The Benefit Fund will need liquidity and income annually and, therefore, will only accept minimal short-term volatility in those assets providing income. However, the majority of assets are to be invested for the long-term and some volatility in these asset categories is to be expected and managed.

The long-term investment objective for the Benefit Fund’s long-term portfolio is to achieve an average annual total rate of return in excess of the inflation rate (as measured by the Consumer Price Index) plus five percent for the aggregate investments under this Investment Policy Statement evaluated over rolling three- to five-year periods. This return, which is to be net of investment management and advisory fees, is based on targeting allocations in equities, fixed income, and other assets and cash equivalents, as outlined in the investment statement.

The short-term investment objective is to consistently outperform selected weighted market indices. The overall short-term objective is the preservation and enhancement of capital. A secondary objective to be considered is diversification and risk management. A third objective is to invest principally in liquid and marketable instruments.

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7.10.2 Other Post-Employment Benefits Funding Policy

The Board of Regents establishes this Funding Policy to state the intent for accumulation of reserve funding for the Other Post-Employment Benefits (OPEB) liability of the Board of Regents’ Health Benefit Plan and to help ensure the systematic funding of future benefit payments for members of the Board of Regents’ Health Benefit Plan. The plan’s OPEB liability (the actuarially calculated liability for retiree benefits) is a significant liability that will increase absent control strategies such as advance funding. Therefore, the Funding Policy outlined herein shall be implemented and remain unchanged unless changed by subsequent Board action.

7.10.2.1 General Fund Objectives

The general objectives for the Benefit Fund (OPEB Trust Fund) are as follows:

1. To achieve long-term funding of the cost of benefits provided by the Board of Regents’ Health Benefit Plan;
2. To seek reasonable and equitable allocation of the cost of benefits over time;
3. To minimize volatility of employer contributions to the extent reasonably possible, consistent with other policy goals; and,
4. To maintain a policy that is both transparent and accountable to the stakeholders of the Board of Regents’ Health Benefit Plan.

7.10.2.2 Sources of Funding

Organizational units of the University System of Georgia pay the employer portion for group insurance for eligible retirees. The employer portion of the health insurance for its eligible retirees and retiree premium rate is based on the rates that are established annually by the Board of Regents for the upcoming plan year. With regard to life insurance, the employer covers the total costs for $25,000 basic life insurance.

Assets are to accumulate under the guidelines described in the Reserve Funding Levels and OPEB Trust Fund Allocation Section so that investment income can be earned on assets not needed to pay current year retiree health benefit payments.

7.10.2.3 Reserve Funding Levels and OPEB Trust Fund Allocation

Any reserve funds in the Board of Regents’ Health Benefit Plan remaining after allowing for the plan’s Incurred But Not Reported (IBNR) liability plus 20 percent of plan benefit claims expense shall be transferred to the Benefit Fund (OPEB Trust Fund) annually upon completion of the financial audit. Additional one-time contributions may be made on a discretionary basis in connection with derisking and other objectives upon approval of the Board of Regents.

7.10.2.4 Monitoring of Objectives

On an annual basis, the University System Office of Fiscal Affairs shall report to the Board of Regents the amounts accumulated in the Benefit Fund (OPEB Trust Fund). The policy should be periodically reviewed in conjunction with the most recent version of the Report of the Actuary on the Retiree Medical Valuations that has been submitted to the Board of Regents and any revisions to governmental accounting standards or statutory changes.

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7.11.1 Definition of Risk

“Risk” refers to the probability of an event and potential consequences to an organization associated with that event’s occurrence. Risk is inherent to any activity and it is neither possible nor advantageous to entirely eliminate risk from an activity without ceasing that activity.

Risks are defined broadly, are not limited to traditional risks, but also include:

1 Strategic Risks, which affect the ability to carry out goals and objectives as articulated in the USG Strategic Plan and institution strategic plans;
2. Compliance Risks, which affect compliance with laws and regulations and student, faculty, and staff safety, environmental issues, litigation, conflicts of interest, and related matters;
3. Reputational Risks, which affect reputation, public perception, political issues, and related matters;
4. Financial Risks, which affect loss of or ability to acquire assets, technology, and related matters; and,
5. Operational Risks, which affect on-going management processes and procedures.

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7.11.2 Management of Risk

Management of risk within the USG is fundamentally a leadership responsibility. The Board of Regents and the Chancellor will define the USG’s ability (risk tolerance) and willingness (risk appetite) to absorb the impact of certain risks. The Chancellor, through senior staff and institutional presidents, shall ensure that USG risks are effectively managed; each institution president performs a similar role within his or her institution.

Certain institutional risks rise to a level such that the institution President shall make the Chancellor and the appropriate System Office department aware of the risk. Acceptance of those risks are at the discretion of the Board and the Chancellor. Risks rising to this level includes those where the combination of an event’s probability and the potential consequences is likely to:

1. Impair the achievement of a USG strategic goal or objective;
2. Result in substantial financial costs either in excess of the impacted institution’s ability to pay or in an amount that may jeopardize the institution’s core mission;
3. Create significant damage to an institution’s reputation or damage to the USG’s reputation; or,
4. Require intervention in institutional or USG operations by the Board of Regents or an external body.

Some level of risk is not only expected in normal everyday activities but can be beneficial. However, acceptance of risk shall not include:

1. Willful exposure of students, employees, or others to unsafe environments or activities;
2. Intentional violation of federal, state, or local laws;
3. Willful violation of contractual obligations; or,
4. Unethical behavior.

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7.11.3 Institution Implementation of Risk Management Procedures

An institution-wide approach to risk management shall be adopted by all USG institutions and embedded into the institution’s management systems and processes. All risk management efforts shall be focused on supporting the institution’s objectives. Each institution President shall develop a campus risk management framework and associated procedures that include:

1. Formal and ongoing identification of risks that impact the institution’s goals;
2. Development of risk management plans;
3. Monitoring the progress of managing risks;
4. Periodic updates of risk management plans; and,
5. Reporting of risks so that significant risks are reported to the Chancellor and appropriate System Office Department.

Each USG institution President shall designate in writing a Risk Management Policy coordinator to assist campus administrators in maintaining the campus risk management framework and procedures. The Risk Management Policy coordinator shall have sufficient authority to ensure high-level management of the institution’s risk management efforts.

At the System level, the Chancellor shall designate an employee or employees to oversee implementation of the Risk Management Policy across the USG and assist University System Office administrators in maintaining the USO risk management framework and procedures. The Committee on Internal Audit, Risk and Compliance shall provide oversight to implementation of the Risk Management Policy and review major risks on behalf of the Board of Regents.

Institution risk management framework and procedures shall be reviewed annually. Periodic reviews for compliance with the system wide guidelines shall also be conducted by internal audit or a similar accountability function. Additional procedures for risk management policy reporting and implementation shall be established in a System-level procedures manual.

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7.4.1 Naming of Places, Colleges, or Schools

The Board of Regents considers the naming of a place or an academic unit in honor of an individual, corporation, foundation, or organization to be one of the highest and most distinct honors that it can bestow. Namings may be authorized for outstanding and distinguished service, for philanthropic giving, or for both. The President of each institution should ensure that the proposed naming is consistent with the interest of the institution and the USG and is commensurate with the level of service or philanthropic giving from the person, persons, group, or groups for which the naming will be made. Namings authorized without associated fund raising should be the exception.

Naming of colleges and schools of all USG institutions and all real estate, facilities, and property owned or leased by the USG, including facilities constructed, donated, or acquired by affiliated organizations of the institutions, requires prior authorization by the Chancellor, the USG Chief Operating Officer, and the Board of Regents. All proposed namings shall be submitted to the USG Chief Operating Officer who shall distribute the proposal for integrated review and, in conjunction with the Chancellor, submit the request to the Board of Regents for approval.

Namings authorized by the Board of Regents shall not be modified without approval of the Board. If a situation occurs that may warrant the removal of a name that was previously approved by the Board of Regents, the decision whether to remove the name lies in the sole discretion of the Board in consultation with the Chancellor.

The President of an institution is authorized to name and to remove the name of interior spaces and academic units subordinate to colleges and schools, such as departments, without prior approval of the Board. Institutions shall maintain a report on interior namings and naming removals.

The namings of facilities and features of an institution will endure only for the useful life of the facility or feature and not in perpetuity. If a facility or feature is substantially changed, a named facility or feature may no longer exist and the President, in his or her discretion, may seek Board of Regents’ approval to transfer the name to a new facility or feature.

The Board of Regents will authorize external namings (places, colleges, and schools) to honor a living person only when that person has been disassociated from employment by the USG or from local, state, or federal government employment for at least two years prior to seeking Board of Regents’ approval.

Institution Naming Policy:

Institutions shall also maintain their own naming policy, which should establish minimums for financial commitments corresponding to such naming opportunity that are benchmarked against institutions similar in size, scope, and mission. Each institution shall provide a copy of its naming policy to the USG Chief Operating Officer for approval.

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7.7.3 Construction Contracts

Unless otherwise provided by these policies, major construction contracts entered into by the Board of Regents require prior approval by the Board.

Construction contracts that involve expenditures of $25,000 or more shall require certification by the contractor that a drug-free workplace is provided to the contractor’s and subcontractor’s employees in accordance with laws of the State of Georgia. All such construction contracts shall contain a certification that the contractor will not engage in the unlawful manufacture, sale, distribution, dispensation, possession, or use of a controlled substance or marijuana during the performance of the contract.

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7.7.4 Contracts with Veterans Administration

The Chancellor or USG institution presidents shall negotiate, execute, and sign in the name of the Regents, all contracts between USG institutions and the Veterans Administration or other agencies of the United States Government with respect to education and training, vocational rehabilitation, advisement, and guidance of veterans and otherwise under the provisions of Public Laws 16 and 346, 78th Congress, as amended, and subsequent laws passed by the Congress providing for education and training of veterans.

The USG institution covered by such contracts shall submit to the Veterans Administration or other agencies of the United States Government vouchers for services rendered under the provisions of the contract in the name of the institution concerned. Such vouchers will be certified by an official of the institution. Checks drawn on the Treasury of the United States of America in payment of such services shall be made payable to the institution concerned and mailed directly to the institution.

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7.7.5 Background Checks of Supplier and Contractor Employees

7.7.5.1 Background Check Requirements for Selected Suppliers

Each USG institution shall review services provided by its suppliers and assess the risk when the services require regular interaction with students, employees, monies, sensitive or confidential data, or regular access to secured facilities containing critical institutional-level infrastructure. When an institution determines that background checks of suppliers’ employees should be required, the institution must seek appropriate contractual protections, including requiring that the supplier obtain appropriate background checks for all such supplier employees and defend, indemnify, and hold harmless the Board of Regents of the University System of Georgia for failing to do so. Suppliers shall be fully responsible for implementing and enforcing all appropriate background check requirements. Additionally, suppliers maintain full responsibility for the actions of their employees and contractual provisions shall provide that suppliers shall defend, indemnify, and hold harmless the Board of Regents of the University System of Georgia for the actions of the suppliers’ employees.

7.7.5.2 Background Check Requirements for Construction Contractors and Subcontractors

If required pursuant to law or regulation, as determined by the construction contractor, construction contractors whose employees or whose subcontractors’ employees provide on-site construction services to a USG institution shall conduct background checks of their employees and subcontractors’ employees.

USG institutions shall not require that the construction contractor perform additional background checks. However, on a specific project basis upon written request by a USG institution, or on his or her own initiative, the University System of Georgia chief operating officer or his or her designee may require background checks of contractors’ and subcontractors’ employees for a specific project and may disqualify certain individuals from working on-site for the specific project. In such instances, the chief operating officer or his or her designee shall provide the construction contractor with specifications on what background checks are required and what the disqualification criteria will be.

USG institutions must seek appropriate contractual protections from the contractor, including requiring that the construction contractor conducts and takes appropriate action on any required background checks and defends, indemnifies, and holds harmless the Board of Regents of the University System of Georgia for any failure of the construction contractor to do so and for the actions of the construction contractors’ employees and subcontractors’ employees consistent with the current terms of the USG construction contract.

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The Board of Regents of the University System of Georgia (USG) engages in covered functions as defined by the Health Insurance Portability and Accountability Act of 1996, including the subsequent amendment under the Health Information Technology for Economic and Clinical Health of 2009 and any regulations promulgated under those laws, (HIPAA) and is a covered entity. Because some portions of USG are not engaged in covered functions, USG designates itself as a Hybrid Entity as defined by the HIPAA regulations.

Any portion of USG engaged in a covered function or performing business associate activities for another component of USG engaged in a covered function, as those terms are defined by HIPAA, is hereby deemed part of the Health Care Component (HCC) of the USG Hybrid Entity. The University System Office (USO) and each USG Institution will be responsible for identifying the components, business units, colleges, or schools that are part of the HCC.

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