Investment Monitoring Checklist

Locate the most recently board-approved Investment Policy Statement. Confirm the version date matches what's on file with the custodian. Stale IPS versions floating in shared drives are a common audit finding.

Re-validate the stated risk tolerance band, liquidity needs, and investment horizon against the organization's current operating reality — recent draws on the reserve, planned capital projects, or restricted-fund obligations all change the picture.

Common triggers: new restricted gift requiring segregated treatment, change in spending policy, UPMIFA-related update for endowment funds, or material change in the organization's liquidity profile.

Redline the existing IPS with proposed changes. Include rationale memo for the investment committee — they will not approve changes without one. Route through legal counsel if the amendment touches restricted or endowed funds.

Download statements from each custodian (Schwab, Fidelity, Vanguard, etc.) and the consolidated performance report from the advisor. Confirm period-end market values tie to the GL investment subledger before running any returns analysis.

Use TWR (not money-weighted) for benchmark comparison; cash flows in and out distort dollar-weighted returns. Calculate at total portfolio, asset class, and individual manager level over QTD, YTD, 3-year, and 5-year windows.

Match each sleeve to the benchmark named in the IPS — S&P 500, Russell 3000, Bloomberg US Agg, MSCI ACWI ex-US, etc. A blended benchmark applies to the total portfolio. Note managers underperforming benchmark by more than 100 bps over 3 years for the watchlist.

Roll up all-in cost: fund expense ratios, advisor wrap fee, custodian fees, transaction costs. Compare to prior period and to peer benchmarks (e.g., Morningstar category averages). Fee creep from share-class drift is a recurring finding — confirm institutional share classes where AUM qualifies.

Build the allocation table: equity vs. fixed income vs. alternatives vs. cash, then drill into sub-asset-class targets. Highlight any sleeve outside its IPS-stated tolerance band — those are the rebalance candidates.

Specify trades to bring each sleeve back to target. Prefer rebalancing through new contributions or distributions before placing taxable trades (for taxable accounts). For tax-exempt entities, use the simplest path back to target.

Most IPS documents cap any single non-government issuer at 5% of portfolio. Check both directly held positions and look-through holdings in mutual funds and ETFs. Flag any line items above policy limits for committee discussion.

Review manager tenure, strategy drift, AUM changes, and any SEC actions or news on each fund. Manager turnover at a long-tenured shop is a watchlist trigger even if recent performance is fine.

Confirm with the controller that liquid reserves cover the next 12 months of operating outflows plus any committed capital calls. For nonprofits, layer in restricted-fund draw schedules and grant timing.

Apply standard scenarios: 2008-style equity drawdown, 2022-style rates shock, sustained inflation. Compare resulting portfolio value against minimum reserve thresholds and any debt-covenant requirements.

Verify SIPC coverage, FDIC limits on cash sweeps, and any uninsured balance at each custodian. Document the latest SOC 1 report from the custodian and advisor for the audit workpapers.

Walk the prohibited-investments list (e.g., direct commodities, leveraged ETFs, private placements where excluded) and verify no restricted holdings appear. Document any exceptions with the date the committee granted them.

Draft an exception memo: what's out of policy, why it occurred, recommended remediation, and proposed timeline. Exceptions left undocumented are the most common finding from external auditors reviewing investment compliance.

Save trade confirmations, advisor recommendations, and committee approvals to the secured document repository. Audit teams will sample these for the year-end fieldwork; missing approvals require management-letter comments.

Standard package: executive summary, performance vs. benchmark, allocation vs. target, fee summary, watchlist managers, compliance status, and recommended actions. Keep it under 15 pages — committees do not read 60-page decks.

Post to the board portal (Diligent, BoardEffect, OnBoard) and email the committee chair. Five business days lead time gives members real review time and reduces meeting-time questions about basic numbers.

Walk through performance, allocation, and any rebalance or watchlist recommendations. Capture motions, votes, and any direction to the advisor in the minutes — these are the audit trail for next cycle.