3_2_2

Section 3: Comprehensive Standards

3.2.2 The legal authority and operating control of the institution are clearly defined for the following areas within the institution’s governance structure:
          3.2.2.1 the institution’s mission;
          3.2.2.2 the fiscal stability of the institution;
          3.2.2.3 institutional policy, including policies concerning related and affiliated corporate entities and all auxiliary services;
          3.2.2.4 related foundations (athletic, research, etc.) and other corporate entities whose primary purpose is to support the institution and/or its programs.

Judgment of Compliance:
Compliance

Narrative/Justification for Judgment of Compliance:
Christopher Newport University is in compliance with this standard. Section 23-49.23 of the Code of Virginia establishes the Board of Visitors (BOV) of Christopher Newport University as a corporation under the control of the General Assembly and the legal body responsible for carrying out the mission of CNU and for governance of the university. As public trustees, members of the Board have overall responsibility and authority, subject to constitutional and statutory limitations, for the policy-making and continuing operation of the institution. The by-laws of the Board of Visitors appear in Section II of the University Handbook. Formulation of basic policies under which university operations are carried out, as well as the implementation of these policies, is subject to Board review, possible modification, and approval.

As legislated by the Commonwealth, the Board of Visitors is appointed by the governor, subject to confirmation by the General Assembly. Authority is delegated by the Board to the President, who serves as the agent of the Board and chief executive officer of the University, to carry out the operations of the university.

The State Council of Higher Education for Virginia (SCHEV) is the coordinating body for Virginia’s system of colleges and universities.

3.2.2.1 The Board of Visitors is responsible for determining and approving the university mission and assigns to the President (Article IX of the By-Laws) responsibility for the operation of the University in conformity with the purposes and policies determined by the Board. The President, to achieve his charge, has designed an organizational structure specifically to carry out the mission.

3.2.2.2 The Board of Visitors is responsible for the financial management of the University (Handbook Section II.2.D.) including expenditure and reporting practices, annually approving a budget, faculty compensation, controlling all real and personal property of the university. The Board of Visitors has authority and responsibility to establish tuition (Article III of the By-Laws). Finally, to ensure fiscal integrity, the Internal Audit function reports directly to the Board.

Additionally, four standing committees of the Board of Visitors (each of which includes three board members and a number of directors of relevant units at the university) ensure that the Board is always informed. The Committee on Finance and Audit aids the Board in meeting its fiduciary responsibilities to the Commonwealth by making recommendations to the Board concerning fiscal policy and financial and economic operations, by overseeing the entire audit function, and by examining and approving the annual financial statement. The Committee on Development studies and makes recommendations on ways and means of building alumni relationships and general development and fund-raising efforts of the university. It oversees the University’s management of its investment policy. Two additional committees focus on academics and student life—The Committee on Academic Affairs and The Committee on Student Life.

Operationally, the fiscal responsibility is carried out by the Executive Vice President. The Executive Vice President is a member of the State Council of Higher Education of Virginia (SCHEV) Finance Advisory Committee. SCHEV provides the capital outlay guidelines and policies, fixed assets policies, facilities reporting guidelines, and trust fund procedures that must be followed. In addition, as a state organization, CNU must follow the policies of the Virginia Department of Planning and Budget.

3.2.2.3 Under Article IX of the By-Laws, the President has responsibility for the operation of the University in conformity with the purpose and policies determined by the Board. The President has designed an organizational structure to carry out the mission, and the Board has authorized the President the responsibility to appoint personnel (and in most cases subject to Board approval) needed to achieve the mission.

The Board of Visitors has delegated responsibility and authority for the financial management of the institution to the President. Responsibility and authority over the overall financial management of the university, including affiliated corporate entities and auxiliary services, are delegated to the Executive Vice President (EVP). Reporting to the EVP are the offices of Comptroller, Auxiliary Services, Information Technology, University Services and Plant Operations.

The Director of Auxiliary Services reports to the EVP and is responsible for the coordinated fiscal and operational management of all auxiliary services. Auxiliary budgets are authorized annually by the EVP after the Board of Visitors approves the total auxiliary budget and reviews financial performance (Section XVI, III Division of Finance and Business Affairs).

The University, as part of the Commonwealth of Virginia, is governed by Federal and State laws and policies, in addition to University Policies. Financial statements are presented to the Finance Committee of the Board of Visitors at each meeting and a report is made by the University’s Internal Auditor. The University is subject to both internal and external reviews and audits, with reports being issued to the Board of Visitors and presented to the Finance Committee of the Board. The annual audit includes not only an audit of the University’s financial statements, but a review of internal controls and an audit of compliance with applicable laws and regulations.

Board agenda items regularly focus on policy, bound by mission, and financial viability. At each retreat of the Board the mission statement provides a context for discussions. Agendas of several meetings show discussions related to fiscal investment in construction and physical facilities and student policies, as well as tuition and fees and compensation. Both the Committee structure of the Board and the relationship the President has cultivated with the Board ensure that the Board is active, informed, and involved in all major policy and expenditure decisions. Budget control, however, becomes an administrative function operating through the organizational structure in place.

3.2.2.4 The CNU Educational Foundation is a nonprofit corporation which functions as a charitable foundation to assist, support and foster the mission of Christopher Newport University. It achieves its mission by:

• serving as the 'kitchen cabinet' for the President of CNU;
• participating in the formulation of strategies to obtain charitable contributions and promoting and monitoring those strategies all through the Department of University Advancement and in consultation with the President of CNU;
• operating in open communications with the CNU Board of Visitors, which has interlocking appointments on the CNUEF Board;
• creating the investment policy of the Foundation, selecting the fund manager and monitoring the performance of the investments;
• providing the University with advice on matters of real estate;
• serving as an advocate for Christopher Newport University;
• informing and educating potential donors and supporters as to the mission and needs of CNU;
• promoting planned charitable gifts to CNU;
• promoting proper donor stewardship;
• reviewing and approving monthly financial statements of the Foundation's activities.

Board of Visitors Resolution 3, dated July 28, 1993 resolved that the Rector and Visitors enter into an agreement with the Foundation making the Foundation the principal fund-raising body of the University. On March 15, 1994 a Memorandum of Understanding was signed by the University and the Foundation that set forth certain terms and conditions of the relationship between the parties. The agreement states that the University’s President and Vice President for Advancement shall serve on the Executive Committee of the Foundation and that all activities shall be conducted in accordance with policies set forth by the President and Advancement Office of the University.

This agreement further describes in detail that the Commonwealth of Virginia and the University are not liable for any Foundation contracts, torts or other acts or omissions of its trustees, officers, staff or activity participants. The Foundation also agrees to indemnify and hold the University harmless from any claims, suits or demands made upon the University, arising out of any activity, act, or failure to act, whether in contract or in tort, by the Foundation, its Trustees, officers, staff or activity participants. In addition, the University shall have no obligation to provide insurance coverage or legal defense for the Foundation or other parties noted above.

Support Documentation:
Code of Virginia Section 23-49.28
University Handbook 06-07:
          Section II, By-Laws of the Board of Visitors
          Section XVI, Division of Finance and Business Affairs
Board of Visitors Minutes: Examples approving tuition and fees and operating budget:
          April 30, 2003
          May 7, 2004
          April 26, 2005
          February 24, 2006
Christopher Newport University , Board of Visitors Resolution 3, dated July 28, 1993
Memorandum of Understanding between Christopher Newport University and Christopher Newport University Educational Foundation, Inc. dated March 15, 1994
By-laws, Christopher Newport University Educational Foundation, Inc.
By-laws, Christopher Newport University Real Estate Foundation, Inc.

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