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EASTON AREA
SCHOOL DISTRICT
No. 609
SECTION:
FINANCES
TITLE:
INVESTMENT OF DISTRICT
FUNDS
ADOPTED:
September 21, 2006
REVISED:
609. INVESTMENT OF DISTRICT FUNDS
1.
Purpose
It shall be the policy of the Board to optimize its return through investment of cash
balances in such a way as to minimize non-invested balances and to maximize return
on investments.
The primary objectives of investment activities, in priority order, shall be:
Legality - All investments shall be made in accordance with applicable laws of
Pennsylvania.
Safety - Safety of principal shall be of highest priority. Preservation of capital in
the portfolio of investments shall be ensured through the mitigation of credit
risk and interest rate risk.
Liquidity - Investments shall remain sufficiently liquid to meet all operating
requirements that are reasonably anticipated. A fiscal year operations
anticipated cash flow shall be developed so that investments can be made as
early as possible, with maturities concurrent with anticipated cash demands.
Yield - Investments shall be made with the objective of attaining a market-
average rate of return throughout the budgetary and economic cycles, taking
into account the investment risk constraints and liquidity needs.
2.
Authority
SC 440.1, 621,
622, 623
All investments of the school district made by an officer and/or employee of the
district shall be made in accordance with this policy and a Board approved
investment program.
3.
Definitions
Short-term - any period twelve (12) months or less.
Long-term - any period exceeding forty-eight (48) months' duration.
Mid-range - any period between short-term and long-term.
609. INVESTMENT OF DISTRICT FUNDS - Pg. 2
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Credit risk - the risk of loss of principal due to the failure of the security issue or
backer of the issue.
Interest rate risk - the risk that the market value of securities will fall due to
changes in general interest rates.
Investment program - the specifically enumerated and Board-approved investment
strategy.
4.
Delegation of
Responsibility
SC 440.1
The Board shall delegate to a designated individual the responsibility to manage the
district's investment program, in accordance with written, Board-approved
procedures for operation of the investment program.
An annual review of the investment program shall be prepared by the designated
individual, based upon the anticipated cash flow of all district funds, i.e. general,
capital reserve, bond, etc. The investment program shall be submitted to the Board.
SC 440.1
The designated individual responsible for investments shall report monthly to the
Board the following:
1.
Amount of funds invested.
2.
Interest earned and received to date.
3.
Types and amounts of each investment and the interest rate on each.
4.
Names of the institutions where investments are placed.
5.
Current market value of the funds invested.
The Board directs the Superintendent to have developed written procedures that will
ensure compliance with this policy. Such procedures shall include a disclosure form
for designated individuals involved in the investment process and/or required written
statements for advisors and bidders.
5.
Guidelines
SC 440.1
Investments permitted by this policy are those defined in Section 440.1 of the School
Code, as amended, which are collateralized in accordance with applicable laws.
All securities shall be purchased in the name of the school district, and custody of
the securities shall be specified within the district's investment program.
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SC 440.1
All investment advisors or bidders shall verify in writing that they have received a
copy of this policy. Such written statement shall indicate that they have read and
understand this policy and all applicable statutes related to school district
investments, along with their intent to comply fully with these requirements.
The district shall require all investment advisors/bidders to submit annually any or
all of the following, as appropriate:
1.
Audited financial statements.
2.
Proof of National Association of Securities Dealers (NASD) certification.
3.
Proof of state registration.
Disclosure
65 P.S.
1101 et seq
Designated officers and employees involved in the district's investment process shall
disclose any personal business activity that could conflict with the proper execution
and management of the investment program or could impair their ability to make
impartial decisions.
Audit
The Board directs that all investment records be subject to annual audit by the
district's independent auditors.
The audit shall include but not be limited to independent verification of amounts and
records of all transactions, as deemed necessary by the independent auditors.
It shall be the responsibility of the investment advisor and/or bidder to maintain
necessary documents to permit independent audit of the district's investments.
53 Pa. C.S.A.
Sec. 8001 et seq
Sec. 8224
Bond Proceeds
Bond proceeds shall be invested in accordance with the Local Government Unit
Debt Act and applicable federal and state laws, subject to approval by the solicitor
and/or bond counsel and the School Board.
Investment transactions arising from bond proceeds shall be reported monthly to the
Board, in accordance with this policy.