FILE: DFE
Cf: DG
CASH MANAGEMENT AND INVESTMENTS
Strategies for proper cash management and investment of available funds shall be reviewed and evaluated on an annual basis to ensure that investment rules and guidelines expressed in this policy are being followed according to current statutory provisions. The monetary assets of the St. Martin Parish School shall be held in trust by the fiduciary (fiduciaries) designated by the School Board. Cash management and the investment of funds shall be managed by the Superintendent and/or his/her designee.
CASH MANAGEMENT
All aspects of cash management operations shall be designed to ensure the absolute safety and integrity of the School Board’s financial assets.
Cash management activities shall be conducted in full compliance with prevailing local, state and federal regulations. Furthermore, such activities shall be designed to adhere to guidelines and standards promulgated by applicable professional organizations.
Operating within appropriately-established administrative and procedural parameters, the School Board shall aggressively pursue optimum financial rewards, while simultaneously controlling its related expenditures. Therefore, cash management functions which engender interaction with outside financial intermediaries shall be conducted in the best financial and administrative interests of the school system. In pursuit of these interests, the School Board shall utilize competitive bidding practices whenever practicable, affording no special financial advantage to any individual or corporate member of the financial or investment community.
The School Board shall authorize the Superintendent and staff to design and enforce written administrative regulations, guidelines, and procedures relating to a variety of cash management issues such as the eligibility or selection of various financial intermediaries, documentation and safekeeping requirements, philosophical and operational aspects of the investment function, and such other functional and administrative aspects of the cash management program which necessitate standard setting in pursuit of appropriate prudent, enhanced protection of assets or procedural improvements.
DEPOSITORY BANK
Louisiana statutes require School Boards to select a fiscal agent for purposes of receiving or depositing funds of the School Board. The bank selected as fiscal agent shall be asked to enter into a fiscal agency contract or such other necessary instruments setting forth the duties, responsibilities, and agreements pertaining to said fiscal agency.
The fiscal agency bank, when selected, shall serve for a term as agreed to by the School Board and until its successor shall have been duly selected and qualified, and shall pledge approved securities, as provided for in the fiscal agency contract subject to the regulations under state law.
PLEDGED SECURITIES
Funds on deposit shall be collateralized in an amount at all times equal to 100% by pledged "approved securities" in accordance with state law to adequately protect the funds of the School Board.
The School Board shall periodically monitor the amount of approved securities to assure that an amount not less than 100% on deposit with the depository bank, less any applicable Federal Deposit Insurance Corporation (FDIC) insurance is pledged.
The bank shall have the right and privilege of substituting approved securities only upon obtaining the prior written approval of the School Board. Such approval may be granted by facsimile transmission. The approved securities shall be valued at their market value.
INVESTMENT OPTIONS
The St. Martin Parish School Board recognizes its duty to manage public funds prudently. The goals of the School Board place emphasis on safety of principal first and foremost, next, the availability of funds when needed, or liquidity, and finally, the yield on its investments. Each investment shall be governed by these goals.
The School Board shall not intend to invest in derivatives, which are defined to mean any financial instrument created from or whose value depends on the value of one or more underlying assets or indexes of asset value. The types of investments that are considered prudent and proper, and contemplated by the School Board, are outlined below.
The St. Martin Parish School Board, consistent with La. Rev. Stat. Ann. §33:2955, hereby authorizes and directs the Chief Financial Officer to initiate, evaluate, and approve investment transactions as allowed by this policy and to invest such monies in any general fund or special fund of the School Board, and any other funds under the control of the School Board which, in the School Board's discretion, may determine to be available for investment in any of the following obligations:
Direct United States Treasury obligations, the principal and interest of which are fully guaranteed by the government of the United States.
A. Bonds, debentures, notes, or other evidence of indebtedness issued or guaranteed by federal agencies and provided such obligations are backed by the full faith and credit of the United States of America, which obligations include but are not limited to:
B. Bonds, debentures, notes, or other evidence of indebtedness issued or guaranteed by U.S. government instrumentalities, which are federally sponsored, and such obligations include but are not limited to:
Notwithstanding the foregoing list of investments, in no instance shall the School Board invest in obligations described in Items (A) and (B) of this Subparagraph which are collateralized mortgage obligations that have been stripped into interest only or principal only obligations, inverse floaters, or structured notes. For the purposes of this Item "structured notes" shall mean securities of U.S. government agencies, instrumentalities, or government-sponsored enterprises which have been restructured, modified, and/or reissued by private entities.
Bonds, debentures, notes or other evidence of indebtedness issued by the state of Louisiana or any other state of the United States, or any of the political subdivisions of any state, or any domestic U.S. corporation, with limited exceptions noted in La. Rev. Stat. Ann. §33:2955.
Direct security repurchase agreements of any federal book entry only securities enumerated in Subparagraphs 1 and 2. "Direct security repurchase agreement" means an agreement under which the School Board buys, holds for a specified time, and then sells back those securities and obligations enumerated in Subparagraphs 1 and 2.
Time certificates of deposit of any bank domiciled or having a branch office in the state of Louisiana, savings accounts or shares of savings and loan associations and savings banks, as defined by La. Rev. Stat. Ann. §6:703, or share accounts and share certificate accounts of federally or state-chartered credit unions issuing time certificates of deposit. For those funds made available for investment in time certificates of deposit, the rate of interest paid by the banks shall be established by contract between the bank and the School Board; however, the interest rate at the time of investment shall be a rate not less than fifty (50) basis points below the prevailing market interest rate on direct obligations of the United States Treasury with a similar length of maturity.
Mutual or trust fund institutions which are registered with the Securities and Exchange Commission under the Securities Act of 1933 and the Investment Act of 1940, and which have underlying investments consisting solely of and limited to securities of the United States government or its agencies.
Funds invested in accordance with the provisions of La. Rev. Stat. Ann. §33:2955 shall not exceed at any time the amount insured by the Federal Deposit Insurance Corporation in any one banking institution, or in any one savings and loan association, or National Credit Union Administration, unless the uninsured portion is collateralized by the pledge of securities in the manner provided in La. Rev. Stat. Ann. §39:1221.
Guaranteed investment contracts issued by a bank, financial institution, insurance company, or other entity having one of the two (2) highest short-term rating categories of either Standard & Poor's Corporation or Moody's Investors Service, provided that no such investment may be made except in connection with a financing program for School Boards which financing program is approved by the State Bond Commission and offered by a public trust having the state as its beneficiary, provided further that no such investment shall be for a term longer than eighteen months, and provided further that any such guaranteed investment contract shall contain a provision providing that in the event the issuer of the guaranteed investment contract is at any time no longer rated in either of the two highest short-term rating categories of Standard & Poor's Corporation or Moody's Investors Service, the investing unit of local government may either be released from the guaranteed investment contract without penalty, or be entitled to require that the guaranteed investment provider collateralize the guaranteed investment contract with any bonds or other obligations which as to principal and interest constitute direct general obligations of, or are unconditionally guaranteed by, the United States of America, including obligations set forth in Subparagraphs 1 and 2 to the extent unconditionally guaranteed by the United States of America.
Investment grade (A-1/P-1) commercial paper of domestic United States corporations.
Investment of funds in such mutual or trust fund institutions shall be limited to twenty-five percent (25%) of the monies considered available for investment as provided by this policy.
In no event shall monies be considered available for investment under the authority of this policy unless and until such funds are determined by the Superintendent/Treasurer or the Chief Financial Officer of the School Board, in the exercise of prudent judgment, to be in excess of the immediate cash requirements of the fund to which the monies are credited. As a criteria in making such a determination, any amount of money exceeding ten thousand dollars which is on demand deposit to the credit the School Board, or to the credit of any fund and which is not required to meet an obligation for at least forty-five days, or any amount of money exceeding one hundred thousand dollars which is on demand to the credit of the School Board or to the credit of any fund and which is not required to meet an obligation for at least fifteen (15) days shall be construed available for investment.
Nothing in this policy shall be construed as to abrogate, impair, or supersede the ability of the School Board from combining monies from several funds in order to invest such monies at a better rate of return.
INTEREST EARNINGS
The interest earned on bonds, notes or certificates, time certificates of deposit, or mutual or trust fund investments, so purchased shall be credited by the School Board to the respective fund from which the bonds, notes or certificates, time certificates of deposit, or mutual or trust fund investments, were acquired, or it may be applied to the payment of the principal and interest of the outstanding bonded indebtedness of the School Board.
LIQUIDATION OF INVESTMENTS
At any time that may be deemed advisable the School Board may cash and liquidate any of the investments authorized herein which are purchased for any particular fund. The proceeds of any such liquidation shall be credited to the fund from which the authorized investments were originally purchased.
SAFEKEEPING OF INVESTMENTS
Safekeeping of investments will be either through the School Board's safe deposit box, or, alternatively, placed in the custody of a broker/dealer who is a member of the New York Stock Exchange, Inc. who offers such safekeeping services to its clients and for which the School Board has executed a safekeeping agreement.
Periodically, the Superintendent/Treasurer (or a designee) will prepare, and the School Board will receive a report regarding the status of the School Board's investment program.
A copy of this policy will be provided to any broker/dealers through whom the School Board purchases investment securities.
| Revised: June, 2005 | Revised: January 5, 2011 |
| Revised: February 3, 2010 | Revised: January 7, 2015 |
Ref: La. Rev. Stat. Ann. §§6:703, 17:99, 33:2955, 39:1211, 39:1212, 39:1219, 39:1221, 39:1222, 39:1223, 39:1225, 39:1226
Board minutes, 3-2-05, 2-3-10, 1-5-11, 1-7-15
St. Martin Parish School Board