The external auditor

Management is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the [entity] are protected from loss, theft, or misuse. Specifics for the internal controls shall be documented in an investment procedures manual that shall be reviewed and updated periodically by the Investment Officers.

The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the valuation of costs and benefits requires estimates and judgments by management. The internal controls shall address the following points at a minimum:

•    Control of collusion

•    Separation of transaction authority from accounting and recordkeeping

•    Custodial safekeeping

•    Avoidance of physical delivery securities

•    Clear delegation of authority to subordinate staff members

•    Written confirmation of transactions for investments and wire transfers

•    Dual authorizations of wire transfers

•    Staff training, and