Code Number: 804.3
District funds in excess of current needs shall be invested as authorized by applicable law and in compliance with this policy. The goals of the 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 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.
District funds are monies of the District, including operating funds. “Operating funds” of the District are funds that are reasonably expected to be used during a current budget year or within fifteen months of receipt. Operating funds must be identified and distinguished from all other funds available for investment. When investing in operating funds, the investments must mature within three hundred and ninety-seven (397) days or less. If such an investment is made, then if, during the current budget year, the District has, or expects to accrue, a number of public funds that will exceed operating funds by at least thirty-three percent (33%), the District may invest amounts exceeding thirty-three percent (33%) of operating funds in certificates of deposit which mature within sixty-three (63) months or less, at federally insured depository institutions approved by the Board as required by law. When investing funds other than operating funds, the investments must mature according to the need for the funds.
The Board authorizes the Treasurer to invest funds in the following investments:
- Interest-bearing savings accounts, interest-bearing money market accounts, and interest-bearing checking accounts at any bank, savings and loan association, or credit union in the State of Iowa. Each financial institution having District funds on deposit shall be properly declared as a depository by the Board. Deposits in any financial institution shall not exceed the dollar amount approved by the Board.
- Obligations of the United States government, its agencies, and instrumentalities.
- Certificates of deposit and other evidence of deposit at federally insured Iowa depository institutions approved and secured pursuant to Chapter 12C.
- Iowa Schools Joint Investment Trust (lSJIT).
- Prime bankers’ acceptance that mature with 270 days of purchase and that are eligible for purchase by a federal reserve bank.
- Commercial paper or other short-term corporate debt that matures within 270 days of purchase and is rated within the two highest classifications as established by at least one of the standard rating services approved by the superintendent of banking.
- Repurchase agreements provided that the underlying collateral consists of obligations of the United States government, its agencies and instrumentalities and the District takes delivery of the collateral through an authorized custodian.
- An open-end management investment company registered with the federal Securities and Exchange Commission and commonly referred to as a money market fund, which funds shall use only the investments individually authorized by law for school districts.
Investments of the District are subject to the following diversification requirements:
Prime bankers’ acceptances:
- At the time of purchase, no more than ten percent (10%) of the investment portfolio of the District shall be invested in prime bankers’ acceptances, and
- At the time of purchase, no more than five percent (5%) of the investment portfolio of the District shall be invested in the securities of a single issuer.
Commercial paper or other short-term corporate debt:
- At the time of purchase, no more than ten percent (10%) of the investment portfolio of the District shall be in commercial paper or other short-term corporate debt,
- At the time of purchase, no more than five percent (5%) of the investment portfolio of the District shall be invested in the securities of a single issuer, and
- At the time of purchase, no more than five percent (5%) of all amounts invested in commercial paper and other short-term corporate debt shall be invested in paper and debt rated in the second-highest classification.
It shall be the responsibility of the Treasurer to oversee the investment portfolio in compliance with this policy and the law.
It is the responsibility of the Treasurer to bring a contract with an outside person to invest 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 Treasurer will also provide the Board with information about and verification of the outside person’s fiduciary bond. Contracts with outside persons will include a clause requiring the outside person to notify the District within thirty days of any material weakness in internal structure or regulatory orders or sanctions against the outside person regarding the services being provided to the District and to provide the documents necessary for the performance of the investment portion of District audit. Contracts with outside persons will not be based on the performance of the investment portfolio.
The Treasurer shall be responsible for reporting to and reviewing with the Board at its regular meetings the investment portfolio’s performance, transaction activity, and current investments, as often and in such detail as deemed appropriate by the Treasurer for the nature of the investment vehicles, or as otherwise requested by the Board.
It shall be the responsibility of the Superintendent or his/her designee to deliver a copy of this investment policy to the District’s depositories, auditor, and outside persons doing investment business with the District.
It shall also be the responsibility of the Superintendent, in conjunction with the Treasurer, to develop a system of investment practices and internal controls over the investment practices. The investment practices and goals shall be designed to prevent losses, to document the officers’ and employees’ responsibility for elements of the investment process, and address diversification, maturity, quality, and the capability of investment management.
- First Adoption:
- 1998-01-27
- Revision Adoption:
- January 9, 2001/ January 25, 2010/ September 28, 2015/ August 10, 2020
- Reviewed Dates:
- June 23, 2020
- Legal Reference:
- Iowa Code Chapter 11. 6; 12.62; 12B.10, .10A, .10B, .10C; 12C 28E; 279.29