Policy
Purpose: 

To ensure compliance with the University’s disclosure obligations under federal securities laws.

Applies to: 

All Units of the University and all of its affiliated corporations that are considered Component Units as defined by GASB Statement No. 39 (if uncertain see Note 1 of the Annual Financial Report)

Campus: 
Lawrence
Edwards
Parsons
Juniper Gardens
Yoder
Medical Center, Kansas City
Wichita
Salina
Topeka
Policy Statement: 

1.      Introduction

When the University of Kansas or a Related Entity (defined below) (the “University”) requests the Kansas Development Finance Authority or another conduit issuer (the “Authority”) to issue and sell bonds, notes or other obligations (collectively, the “Bonds”) payable pursuant to an obligation of the University, including from a pledge by the University of general or specific revenues, a preliminary official statement and a final official statement (collectively, an “Official Statement”) are typically prepared to provide disclosure information to buyers of the Bonds. The Official Statement contains information regarding the University and the Bonds, typically including (i) an Appendix titled “The University” (ii) an Appendix containing the University’s annual financial report (the “AFR”) and (iii) when applicable, an Appendix containing financial information of a Related Entity, or with respect to a particular revenue source or enterprise, such as parking, housing or student fees (collectively, the “University Appendices”), which University Appendices, in particular, provide disclosure information regarding financial and other information relating to the University.

In connection with each Official Statement, the Chancellor of the University or his/her designee provides a certification stating that the information contained in the Official Statement, as of the date of such Official Statement, does not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements contained in the Official Statement, in light of the circumstances under which they were made, not misleading. The University also includes in such certification a statement that there has been no material adverse change in the financial position and affairs of the University from the date of the Official Statement to the date of issuance of the Bonds which was not disclosed in or contemplated by the Official Statement.

Certain of the information in the University Appendices is filed annually for public market access as part of the University’s continuing disclosure undertakings with respect to outstanding Bonds.

In addition, information of the type included in the Official Statement, including the University Appendices, is from time to time provided by the University to other municipal market participants, including rating agencies. 

In order to ensure compliance with the University’s disclosure obligations under federal securities laws and to provide such certification for future Bonds, the University hereby adopts these policies and procedures for reviewing and updating the University Appendices (collectively, the “Disclosure Policy”). The Chancellor or his/her designee may, from time to time, as may be necessary, review the Disclosure Policy and provide updates. By adopting this Disclosure Policy and by requiring staff to adhere to this Disclosure Policy, the procedures used to comply with the University’s disclosure obligations under federal securities law and to provide a reasonable basis for the certification described above are hereby formalized. 

2.      Key Participants

  1. Office of Business and Financial Planning. The Vice Chancellor and Chief Financial Officer (the “CFO”) oversees the financial operations of the University and is charged with approving the University Appendices that are prepared by the Comptroller’s Office.
  2. Primary Offices.  In order to ensure compliance with the Disclosure Policy, each of the following offices within the University shall be requested to identify one primary person (each a “Primary”) to collect, review and coordinate information for the University Appendices: (i) Comptroller’s Office for the Lawrence Campus and the Controller’s Office for the Medical Center (“Comptroller”), (ii) Budget Offices for the Lawrence campus and the Medical Center (“Budget”), (iii) Office of Enrollment Management, (iv) Office of the Provost, (v) Office of the Executive Vice Chancellor (vi) Office of General Counsel (“OGC”), (vi) Office of Institutional Research and Planning (vii) Vice Chancellor for Research at the Lawrence campus and the Medical Center and (viii) Vice Chancellor for Public Affairs.
  3. Coordination with Related Entities.  To further facilitate compliance with the procedures set forth in this Disclosure Policy, the CFO will collect, review and coordinate information regarding certain entities related to the University for inclusion in the University Appendices from each of the following related entities: Kansas University Endowment Association, Kansas Athletics, Inc., University of Kansas Center for Research, Inc., University of Kansas Medical Center Research Institute, Inc., KU Campus Development Corporation (each a “Related Entity”). If a related entity is the obligor, the Corporation’s Chief Financial Officer is charged with approving the Corporation’s Appendices in connection with the issuance and annual continuing disclosure filings.
  4. Disclosure Team.  To further ensure compliance with the procedures set forth in this Disclosure Policy, the Chancellor will appoint a “Disclosure Team” which will have general oversight of the entire disclosure process.
  1. Composition of the Disclosure Team:  The membership of the Disclosure Team shall consist, at a minimum, of the CFO, KUL Vice Provost for Administration and Finance, the KUMC Vice Chancellor for Finance and the General Counsel.
  2. The duties of the Disclosure Team shall include:
  • maintaining appropriate records of compliance with the Disclosure Policy and decisions made with respect to issues which have been raised;
  • periodically checking to determine that the Disclosure Policy is being followed;
  • evaluating the effectiveness of the procedures contained in the Disclosure Policy and making recommendations to the Chancellor as to whether revisions or modifications to the process are appropriate;
  • reviewing all data and “significant” items referred to the Disclosure Team to determine which are material;
  • serving as the final level of review of the University Appendices before the University Appendices are provided to the Chancellor or his/her designee for review and approval for use in connection with new issues of Bonds or annual continuing disclosure filings; and
  • working in cooperation with the Authority to identify and prepare all material financial and other information in preparation for the sale of obligations and in order to respond to requests for information by rating agencies, regulators and other municipal market participants.
  1. The CFO or his/her designee will retain the records of any Disclosure Team meetings and actions in accordance with the University’s record retention policy.
  1. While this Disclosure Policy focuses on information provided by the University to the public markets in connection with Bonds sold to the public, in the event of a private placement of Bonds by the University or an affiliate, the Disclosure Team will evaluate whether and to what extent this Disclosure Policy should be applied to the disclosure documents for privately placed bonds and any other disclosure information provided to the holder(s) of the privately placed Bonds.     

3.      Bond Financial and Operating Reports

Certain of the information in the University Appendices will be updated, revised and reissued no less frequently than annually at the time the annual continuing disclosure filings are required to be filed for outstanding Bonds. Such annual continuing disclosure filings are required to include updated financial information and operating data in the University Appendices (the “Bond Financial and Operating Reports”), as and to the extent set forth in the “Rule 15c2-12” continuing disclosure undertakings executed by the University at the time of issuance of certain outstanding issues of bonds. This update and filing of the Bond Financial and Operating Reports are normally expected to coincide with the release of the Annual Financial Report (the “AFR”) near the end of the calendar year.

In order to prepare the Bond Financial and Operating Reports the procedures shall be as follows:

  1. The CFO or his/her designee will contact each Primary and Related Entity in writing to ask them to raise potentially significant events of which they may have become aware since the last update of the University Appendices or Bond Financial and Operating Reports.  Responses will be required and appropriate records of the responses will be maintained by the CFO or his/her designee.  Any significant matters should be reported to and reviewed by the Disclosure Team.
  2. A draft of the Bond Financial and Operating Reports will be compiled by the CFO or his/her designee based upon all input received and will be provided to each of the relevant Primaries for review and comment.
  3. The Disclosure Team shall review all data and all “significant” items, and serve as the final level of review of the Bond Financial and Operating Reports before providing it to the Chancellor or his/her designee for review.
  4. Upon approval by the Chancellor or his/her designee, the Bond Financial and Operating Reports may be used.

4.      Updates of University Appendices for the Issuance of Bonds

The information in the University Appendices will be reviewed and updated in connection with each issuance and sale of Bonds. In connection with each issuance and sale of Bonds there is expected to be prepared an Official Statement (including a preliminary official statement and a final official statement, each of which is expected to include the University Appendices). In order to perform updates for an Official Statement, the procedures described above shall be followed as if the preparation of the University Appendices attached to the Official Statement were a Bond Financial and Operating Report pursuant this Disclosure Policy.

In connection with the issuance and sale of Bonds, representations or certifications regarding the information in the University Appendices are made at the time of the pricing and sale of the Bonds and again upon the closing and delivery of the Bonds. The information in the University Appendices for these purposes is, in the usual course of a transaction, finalized at the time the preliminary official statement is printed and distributed to market participants. The printing of the preliminary official statement usually occurs one to two weeks prior to pricing and sale of the Bonds. The closing and delivery of the Bonds usually follows pricing and sale of the Bonds by one to two weeks. While it is not anticipated that any changes will be required to be made to the University Appendices prepared at the time of printing the preliminary official statement pursuant to this section, because of the representations and certifications required at the time of pricing and sale and at the time of closing as described above, it is necessary to have a procedure in place to make sure that there have been no material changes in the financial condition and affairs of the University which would warrant a change to the University Appendices.  In order to determine whether there are any material changes that may require an update to the University Appendices, the procedures below will be followed in connection with the following events:

  1. Printing of a preliminary official statement,
  1. No later than the morning of the expected occurrence of the above-mentioned event, the CFO or his/her designee will contact the Primaries or their designee in writing to ask whether there are any material developments.  Timely responses will be required and appropriate records of the responses will be maintained by the CFO or his/her designee.
  2. The OGC will conduct its internal review to determine if there are any material changes to the “Litigation” section contained in the Preliminary Official Statement.
  3. If necessary, material developments will be raised to the Disclosure Team.
  1. Signing of a purchase contract in a negotiated underwriting or taking of bids for a competitive sale and pre-closing,
  1. No later than the morning of the expected occurrence of the above-mentioned events, the CFO or his/her designee will contact the Disclosure Team or their designee in writing to ask whether there are any material developments.  Timely responses will be required and appropriate records of the responses will be maintained by the CFO or his/her designee.
  2. The OGC will conduct its internal review to determine if there are any material changes to the “Litigation” section contained in the Official Statement.
  3. If necessary, material developments will be raised to the Disclosure Team.

5.      Training

Annual training shall be conducted regarding disclosure obligations for each of the following or his/her designee: (i) the Disclosure Team, (ii) each Primary and (iii) each Related Entity. It is intended that this training shall assist these staff members in identifying significant items that may need to be included in the University Appendices.

6.      General Principles

  1. Everyone involved in the disclosure process is responsible for raising potential disclosure items (matters that might be of sufficient import to affect the information included in the University Appendices) at all times in the process.
  2. Everyone involved in the disclosure process should err on the side of raising issues to the next level of the review chain.
  3. All participants in the process should raise any issue with the Disclosure Team at any time.
  4. The disclosure procedures are a “work in progress” and recommendations for improvement shall be solicited and regularly considered.
  5. The process of revising and updating the University Appendices should not be viewed as a mechanical insertion of more current numbers. While it is not anticipated that there will be major changes in the form and content of the University Appendices at the time of each update, everyone involved in the process should consider the need for revisions in the form and content of the sections for which they are responsible at the time of each update. 
Exclusions or Special Circumstances: 

A copy of this Disclosure Policy shall be distributed annually to the Disclosure Team and all Primaries and any updates to this Disclosure Policy shall be distributed to such group upon issuance.

Contact: 

Vice Chancellor and Chief Financial Officer
Business & Financial Planning
Strong Hall
1450 Jayhawk Boulevard
Lawrence, KS 66045
785-864-4868

Approved by: 
Chancellor
Approved on: 
Friday, October 14, 2016
Effective on: 
Friday, July 1, 2016
Review Cycle: 
Annual (As Needed)
Keywords: 
Kansas Development Finance Authority, bonds, disclosure, federal securities laws,
Review, Approval & Change History: 

10/25/2016: Policy uploaded to the Policy Library. 

Prior to final approval by the Chancellor, this policy was reviewed and endorsed by the Vice Chancellor - Chief Financial Officer, the Capital Financing Committee and by the General Counsel.

Financial Categories: 
Cash Management & Investments
Financial Oversight

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