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702.05 Investments

702.05            

INVESTMENTS

School district funds in excess of current needs shall be invested in compliance with this policy.  The goals of the school district’s investment portfolio in order of priority are:

  • to provide safety of the principal;
  • to maintain the necessary liquidity to match expected liabilities; and
  • to obtain a reasonable rate of return

In making investments, the school district shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use to meet the goals of the investment program.

School district funds are monies of the school district, including operating funds.  “Operating funds” of the school district are funds that are reasonably expected to be used during a current budget year or within fifteen months of receipt.  When investing operating funds, the investments must mature within three hundred and ninety-seven days or less.  When investing funds other than operating funds, the investments must mature according to the need for the funds.

The Board authorizes the Director of Finance to invest funds in excess of current needs in the following investments.

  • Interest bearing savings, money market, and checking accounts at the school district’s authorized depositories;
  • Iowa Schools Joint Investment Trust Program (ISJIT);
  •  Obligations of the United States government, its agencies and instrumentalities;
  • Certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions;
  • Repurchase agreements in which underlying collateral consists of investments in government securities.  The school district must take delivery of the collateral
  • Prime bankers’ acceptances that mature within two hundred seventy days and that are eligible for purchase by a federal reserve bank.  At the time of purchase no more than 10 percent of the investment portfolio can be in these investments and no more than 5 percent of the investment portfolio can be invested in the securities of a single issuer;
  • Commercial paper or other short-term corporate debt that matures within two hundred seventy days and that is rated within the two highest classifications, as established by at least one of the standard rating services, with no more than 5 percent at the time of purchase placed in the second highest classification.  At the time of purchase no more than 10 percent of the investment portfolio can be in these investments and no more than 5 percent of the investment portfolio can be invested in the securities of a single issuer; and
  • An open-ended management investment company registered with the federal securities exchange commission and commonly referred to as a money market mutual fund.  The money market mutual funds shall use only the investments individually authorized by law for school districts.

It shall be the responsibility of the Director of Finance to oversee the investment portfolio in compliance with this policy and the law.

It shall be the responsibility of the Director of Finance to bring a contract with an outside person to invest school district funds, to advise on investments, to direct investments, to act in a fiduciary capacity or to perform other services to the Board for review and approval.  The Director of Finance shall also provide the Board with information about and verification of the outside clause requiring the outside person to notify the school district within 30 days of any material weakness in internal structure or regulatory orders or sanctions against the outside person regarding the services being provided to the school district and to provide the documents necessary for the performance of the investment portion of the school district audit.  Contracts with outside persons shall not be based on the performance of the investment portfolio.

Approved:           10/26/92           Reviewed:        7/08/13            Revised:       4/26/99____

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