1. Financial Policy
2. Record Retention Policy
3. Conflict of Interest Policy
4. Whistleblower Protection Policy
TPAA FOUNDATION FINANCIAL POLICY
Effective December 14, 2019
This Financial Policy is established to provide a sustainable level of income to support the Foundation’s financial needs and to preserve the real purchasing power of the Chiang Mai Endowment Fund, Chula Endowment Fund, Siriraj Endowment Fund, Rama Endowment Fund, TPAA Foundation Endowment Fund, and Dr. Pipit Chiemmongkoltip Advanced Medical Education Endowment Fund (collectively the “Funds”). The Policy shall also apply for all future endowment funds of the Foundation established after the effective date set forth herein. The terms of this Policy shall not affect any restricted endowments to the extent the terms of the Policy are inconsistent with such restricted endowments.
As set forth below, this Policy provides the standards and guidelines for the use, management, and investment of TPAA Foundation’s financial assets, which shall specifically include the Funds, unless otherwise restricted by their terms. At all times, donor intent shall be respected when decisions are made with respect to the management and expenditure of donor-restricted funds.
RESPONSIBILITY OF THE FINANCE COMMITTEE
The Finance Committee (“Committee”) has the authority delegated to it by the TPAA Foundation Board of Directors. In accordance with the Bylaws, the Committee shall be responsible for the management of the Foundation’s financial affairs. In fulfilling its duties, the Committee shall:
(a) Develop, implement, and maintain all investment policies, guidelines, and allocations consistent with:
(1) The Foundation’s risk tolerance, financial needs, and objectives;
(2) Federal, state, and local laws and regulations on the management of investment assets; and
(3) The duty of care and the duty of loyalty, as defined under state law.
(b) Evaluate such investment policies, guidelines, and the performance of investments to assure adherence to Policy guidelines.
(c) Regularly and timely communicate the Foundation’s financial needs to the Board and any outside experts. Additionally, the Committee shall timely review any reports and recommendations from the Board and any outside experts.
(d) Hire and monitor outside investment managers to manage and invest the Foundation’s financial assets, as needed. The Committee shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in selecting qualified investment managers.
STANDARDS OF CARE, ETHICS, AND CONFLICTS OF INTEREST
The Committee shall act in good faith and with the care that an ordinarily prudent person in a like position would exercise under similar circumstances. The Committee and any outside investment manager shall invest the Foundation’s financial assets with judgment and care, under circumstances then prevailing, utilizing such prudence, discretion, and intelligence as appropriate to the management of funds held by organizations similar to the Foundation; not for speculation, but for investment, considering the probable safety of capital as well as the probable income to be derived.
The Committee and the Foundation’s Board, acting in accordance with written procedures and this Policy and exercising due diligence shall be relieved of personal liability for investment credit risk and/or market price changes, provided that the management of the Foundation’s financial assets is carried out in accordance with the terms of this Policy.
The Committee and the Foundation’s Board shall at all times abide by the Foundation’s Conflict of Interest Policy. Members shall refrain from personal business activity that could conflict with the proper execution and management of the Foundation’s financial affairs or that could impair their ability to make impartial decisions. The Committee and the Board shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. The Committee and the Board shall refrain from undertaking personal investment transactions with the same individual with which business is conducted on behalf of the Foundation.
The Committee shall annually review the percentage of distributions and make adjustments as appropriate according to the financial needs of the Foundation and the current market climate. All distributions are subject to the following conditions:
(a) Generally no more than 3 percent to 5 percent of the net asset value of the Funds can be distributed annually (“Spending Rate”).
(b) The Committee shall use a rolling three-year average value of the Funds taken at the end of the previous 12 quarters to determine the net asset value of the Funds.
(c) The portfolio’s Total Return shall be used to evaluate the Spending Rate for the Funds distributed. The portfolio’s Total Return shall be calculated using a three-year rolling average:
Total Return Rate equals Income received (dividend and interest) plus realized and unrealized gains and losses (market values) divided by the beginning market value,
multiplied by 100.
(d) Requests for distributions may be submitted for the end of any calendar quarter and may include a request for subsequent distribution to remain at a consistent level.
(e) The Spending Rate shall be reviewed annually by the Committee and adjusted as appropriate according to the financial needs of the Foundation, as determined in the sole discretion of the Committee.
(f) An aspirational goal is to have a Spending Rate which will not exceed the Total Return rate for the period in issue. Accordingly, the Committee retains the sole discretion to maintain a Spending Rate which exceeds the Total Return for any period of time which it deems prudent.
INVESTMENT AND MANAGEMENT GUIDELINES
The Foundation’s Board recognizes that over the long-term, asset allocation is the single greatest contributor of return and risk to the Funds. The primary objective of investment activity shall be providing a sustainable level of income and preserving the real purchasing power of the Funds. The Committee shall have the broad discretion to make specific investment decisions for the sole benefit of the Foundation within the limits of this Policy. Notwithstanding, the Committee shall:
(a) Maintain a reasonable diversification among the Foundation’s financial assets between asset classes, investment categories, industries, and sectors in accordance with an asset allocation of 60 percent to 70 percent equities and 30 percent to 40 percent fixed assets. The Committee may rebalance the Foundation’s portfolio as considered appropriate.
(i) The equity component of the portfolio shall consist of high-quality equity securities traded on the New York, NASDAQ, or American Stock Exchanges. The securities should be reviewed for favorable characteristics with respect to price-to-earnings, return-on-equity, and debt-to-capital ratios. The Committee may invest in no-load equity mutual funds that adhere to these investment philosophies.
(ii) Bond investments will consist solely of taxable, fixed income securities that have an investment-grade rating (BBB or higher by Standard & Poor’s and Baa or higher by Moody’s) that possess a liquid secondary market. The maximum average maturity of the fixed income portfolio will be 10 years, with not more than 25 percent of the bond portfolio maturing in more than 10 years.
(iii) In the event the Foundation has liquidity needs, the Committee may invest in quality money market funds whose objective is to seek as high a current income as is consistent with liquidity and stability of principal.
(b) The Funds may not generally be invested in the following:
(1) Short sales;
(2) Purchases of letter stock, private placements, or direct payments;
(3) Initial Public Offerings;
(4) Leveraged transactions;
(5) Purchases of securities not readily marketable;
(6) Commodities transactions;
(7) Puts, calls, straddles, or other option strategies other than hedging purposes;
(8) Purchase of real estate with the exception of REITs;
(9) Purchase of inverse or range floater bonds;
(10) Purchase of interest only/principal only bonds;
(11) Any type of derivative security without the prior written approval of the Committee.
(c) Performance Benchmarks. The performance of the two asset classes described above in (a) shall be:
(i) Equities: S&P 500 Index. The goal is to meet or exceed the average annual return of the S&P 500 Index over a 3 to 5-year time frame.
(ii) Fixed Income: Lehman Brothers Government/Corporate Index. The goal is to meet or exceed the average annual return of the Lehman Brothers Government/Corporate Index over a 3 to 5-year time frame.
This Policy shall be effective December 14, 2019 or at such time as prescribed in the resolution adopting the Policy.
Name: Ped Bunsongsikul, M.D.
Records Retention and Destruction Policy
An organization’s record policies should ensure that necessary records and documents of the organization are adequately protected and maintained and that records that are no longer needed or are of no value are discarded at the proper time. In addition, it can aid employees in understanding their obligations in retaining electronic documents—including email, web files, text files, sound and movie files, PDF documents, and all Microsoft Office or other formatted files.
RECORD RETENTION AND DESTRUCTION POLICY
This Policy represents the policy of TPAA Foundation, an Illinois nonprofit corporation (the “Corporation”), regarding the retention and disposal of records and the retention and disposal of physical records and electronic documents.
Appendix A is a Record Retention Schedule that is approved as the initial maintenance, retention, and disposal schedule for physical records and electronic documents of the Corporation. The Secretary of the Corporation (the “Administrator”) is the officer in charge of the administration of this Policy and the implementation of processes and procedures to ensure that the Record Retention Schedule is followed. The Administrator is also authorized to (i) make modifications to the Record Retention Schedule from time to time to ensure that it is in compliance with local, state, and federal laws and includes the appropriate document and record categories for the Corporation; (ii) monitor local, state and federal laws affecting record retention; (iii) annually review the record retention and disposal program; and (iv) monitor compliance with this Policy.
3) Suspension of Record Disposal In The Event of Litigation or Claims
In the event the Corporation is served with any subpoena or request for documents or any employee becomes aware of a governmental investigation or audit concerning the Corporation or the commencement of any litigation against or concerning the Corporation, such employee shall inform the Administrator and any further disposal of documents shall be suspended until such time as the Administrator, with the advice of counsel, determines otherwise. The Administrator shall take such steps as is necessary to promptly inform all staff of any suspension in the further disposal of documents.
This Policy applies to all physical records generated in the course of the Corporation’s operation, including both original documents and reproductions. It also applies to the electronic documents described herein.
This Policy was adopted effective as of the 18th day of July 2020.
Appendix A — Record Retention Schedule
The Record Retention Schedule is organized as follows:
A. Accounting and Finance
C. Corporate Records
D. Electronic Documents
E. Payroll Documents
F. Personnel Records
G. Property Records
H. Tax Records
I. Contribution Records
The following are some common retention periods. These apply to both physical and electronic documents. If no physical copy of an electronic document is retained, that means to ‘read’ the electronic document must be retained. The Corporation may satisfy the requirements of this Schedule by only retaining an electronic version of the document described herein. The Corporation may in its sole discretion retain paper versions of records described herein but is not required to do so.
A. ACCOUNTING AND FINANCE
Record Type/ Retention Period
Accounts Payable & Accounts Receivable ledgers and schedules: 7 years
Annual Audit Reports and Financial Statements: Permanent
Annual Audit Records, including work papers and other documents that relate to the audit: 7 years after completion of the audit
Bank Statements and Canceled Checks: 7 years
Employee Expense Reports: 7 years
General Ledgers Permanent
Notes Receivable ledgers and schedules: 7 years
Investment Records: 7 years after the sale of investment
Record Type/ Retention Period
Contracts and Related Correspondence (including any proposal that resulted in the contract and all other supportive documentation): 7 years after expiration or termination
C. CORPORATE RECORDS
Record Type/ Retention Period
Corporate Records (minute books, signed minutes of the Board and all committees, corporate seals, articles of incorporation, bylaws, annual corporate reports): Permanent
Licenses and Permits: Permanent
D. ELECTRONIC DOCUMENTS
- Electronic Mail: Not all email needs to be retained, depending on the subject matter. To the extent the Corporation has established email accounts for its officers and employees, the Corporation or its staff will:
· delete all nonessential emails that do not need to be kept on a timely basis;
· save all email deemed vital to the Corporation’s business;
· strive to keep all but an insignificant minority email related to business issues;
· not store or transfer Corporation-related email on non-work computers except as necessary or appropriate for the Corporation’s purposes; and
· will take care not to send confidential/proprietary Corporation information to outside sources.
- Electronic Documents (including Microsoft Office Suite and PDF files): Retention depends on the subject matter outlined above.
In certain cases, a document may be maintained in both paper and electronic form. In such cases, the official document will be the electronic document.
E. PAYROLL DOCUMENTS
Record Type/ Retention Period
Employee Deduction Authorizations: 4 years after termination
Payroll Deductions: Termination + 7 years
W-2 and W-4 Forms: Termination + 7 years
Garnishments, Assignments, Attachments: Termination + 7 years
Payroll Registers (gross and net):7 years
Time Cards/Sheets: 2 years
Unclaimed Wage Records: 6 years
F. PERSONNEL RECORDS
Record Type/ Retention Period
Commissions/Bonuses/Incentives/Awards: 7 years
EEO‑ I /EEO‑2 ‑ Employer Information Reports: 2 years after superseded or filing (whichever is longer)
Employee Earnings Records: Separation + 7 years
Employee Handbooks: 1 copy kept permanently
Employee Personnel Records (including individual attendance records, application forms, job or status change records, performance evaluations, termination papers, withholding information, garnishments, test results, training and qualification records): 6 years after separation
Record Type Retention Period
Employment Contracts — Individual: 7 years after separation
Employment Records – Correspondence with Employment Agencies and Advertisements for Job Openings: 3 years from the date of hiring decision
Employment Records – All Non-Hired Applicants (including all applications and resumes – whether solicited or unsolicited, results of post‑offer, pre‑employment physicals, results of background investigations, if any, related correspondence): 2-4 years (4 years if the file contains any correspondence which might be construed as an offer)
Job Descriptions: 3 years after superseded
Personnel Count Records: 3 years
Forms I‑9: 3 years after hiring, or 1 year after separation if later
G. PROPERTY RECORDS
Record Type/ Retention Period
Correspondence, Property Deeds, Assessments, Licenses, Rights of Way: Permanent
Property Insurance Policies: Permanent
H. TAX RECORDS
Record Type/ Retention Period
Tax-Exemption Documents and Related Correspondence: Permanent
IRS Rulings Permanent
Excise Tax Records: 7 years
Payroll Tax Records: 7 years
Tax Bills, Receipts, Statements: 7 years
Record Type/ Retention Period
Tax Returns – Income, Franchise, Property: Permanent
Tax Workpaper Packages – Originals: 7 years
Sales/Use Tax Records: 7 years
Annual Information Returns ‑ Federal and State: Permanent
IRS or other Government Audit Records: Permanent
I. CONTRIBUTION RECORDS
Record Type/ Retention Period
Records of Contributions: Permanent
Documents evidencing terms, conditions, or restrictions on gifts: Permanent
Conflict of Interest Policy
The purpose of this Conflict of Interest Policy is to protect the interests of TPAA Foundation (the “Corporation”) when it is contemplating entering a transaction or arrangement that might benefit the private interest of an officer or director of the Corporation or might result in a possible excess benefit transaction. This Policy is intended to supplement but not replace any applicable state and federal laws governing conflicts of interest applicable to nonprofit and charitable organizations.
1. Interested Person
2. Any director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.
3. Financial Interest
A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
a) An ownership or investment interest in any entity with which the Corporation has a transaction or arrangement;
b) A compensation arrangement with the Corporation or with any entity or individual with which the Corporation has a transaction or arrangement; or
c) A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Corporation is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
A financial interest is not necessarily a conflict of interest. Under Article III, Section 2, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.
1. Duty to Disclose
In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement.
2. Determining Whether a Conflict of Interest Exists
After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she will leave the governing board or committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining board or committee members shall decide if a conflict of interest exists.
3. Procedures for Addressing the Conflict of Interest
a). An interested person may make a presentation at the governing board or committee meeting, but after the presentation, he/she will leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest.
b) The chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement.
c) After exercising due diligence, the governing board or committee will determine whether the Corporation can obtain, with reasonable efforts, a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest.
d) If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or committee will determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Corporation’s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination, the governing board or committee will make its decision as to whether to enter the transaction or arrangement.
4. Violations of the Conflicts of Interest Policy
a) If the governing board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it will inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose.
b) If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member has failed to disclose an actual or possible conflict of interest, it will take appropriate disciplinary and corrective action.
Records of Proceedings
The minutes of the governing board and all committees with board delegated powers will contain:
a) The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing board’s or committee’s decision as to whether a conflict of interest in fact existed.
b) The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
a) A voting member of the governing board who receives compensation, or whose family member receives compensation, directly or indirectly, from the Corporation for services
is precluded from voting on matters pertaining to that member’s or family member’s compensation.
b) A voting member of any committee whose jurisdiction includes compensation matters and who receives, or whose family member receives compensation, directly or indirectly, from the Corporation for services is precluded from voting on matters pertaining to that member’s or family member’s compensation.
c) No voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Corporation, either individually or collectively, is prohibited from providing information to any committee regarding compensation.
Each director, principal officer, and member of a committee with governing board-delegated powers will annually sign a statement which affirms such person:
a) Has received a copy of the conflicts of interest Policy;
b) Has read and understands the Policy;
c) Has agreed to comply with the Policy; and
d) Understands the Corporation is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
To ensure the Corporation operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews will be conducted. The periodic reviews will, at a minimum, include the following subjects:
a) Whether compensation arrangements and benefits are reasonable, based on competent survey information and the result of arm’s length bargaining.
b) Whether partnerships, joint ventures, and arrangements with management organizations conform to the Corporation’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes, and do not result in inurement, impermissible private benefit, or in an excess benefit transaction.
Use of Outside Experts
When conducting the periodic reviews as provided for in Article VII, the Corporation may, but need not, use outside advisors. If outside experts are used, their use will not relieve the governing board of its responsibility for ensuring periodic reviews are conducted.
The foregoing policy was adopted on the 14th day of December 2019 and to be effective immediately.
Conflict of Interest Policy
Each director, principal officer and member of a committee with governing board-delegated powers will annually sign a statement which affirms such person:
a. Has received a copy of the conflicts of interest Policy;
b. Has read and understands the Policy;
c. Has agreed to comply with the Policy; and
d. Understands the Corporation is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
Title: □ Board of Directors member
□ Executive Committee member
□ Finance Committee member
□ Appropriation Committee Member
□ Other (specify) __________________
Policy On Suspected Misconduct, Dishonesty, Fraud,
And Whistle‑Blower Protection
If any person knows of or has a suspicion about misconduct, dishonesty, or fraud the Chair and President (“President”) or a member of the Board of Directors (the “Board”) should be notified. If the alleged wrongdoing concerns the actions of the President or members of the Board, then another officer or director of the organization or the Illinois Attorney General should be notified instead.
If a member of the Board, President or other officer of the organization receives information about misconduct, dishonesty, or fraud they shall inform the Board. Once informed of these behaviors, the Board shall determine the procedure for investigating all credible allegations.
At all times, the privacy and reputation of individuals involved will be respected. There will be no punishment or other retaliation for the reporting of conduct under this policy. If the person providing the information requests anonymity, this request will be respected to the extent that doing so does not impede any investigation.
The foregoing Policy was adopted effective as of the 14th day of December, 2019.