School district funds in excess of current needs shall be invested in compliance with this policy. This policy applies to all operating funds, bond proceeds, and other funds.
The goals of the school district's investment portfolio in order of priority are:
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To provide safety of the principal;
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To maintain the necessary liquidity to match expected liabilities; and
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To obtain a reasonable rate of return.
The responsibility for conducting investment transactions resides with the treasurer and those authorized by resolution. It shall be the responsibility of the treasurer to oversee the investment portfolio in compliance with this policy and Iowa Code Chapter 12B. The investment of bond funds or sinking funds shall comply not only with this policy, but also the applicable bond resolution.
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, bond proceeds, and other funds. Operating funds are funds which are reasonably expected to be used during the current budget year or within fifteen months of receipt. When investing operating funds, the investments must mature within three hundred and ninety-seven (397) days or less. When investing funds other than operating funds, the investments mature according to the need for the funds.
The board authorizes the treasurer to invest funds in excess of current needs in the following investments:
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Obligations of the United States government, its agencies and instrumentalities; and
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Certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions approved pursuant to Iowa Code Chapter 12C and authorized as a depository of the district by resolution;
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Prime bankers’ acceptances that mature within two hundred seventy (270) days and that are eligible for purchase by a federal reserve bank, provided that at the time of purchase no more than ten percent (10%) of the investment portfolio shall be in investments authorized by this subparagraph and that at the time of purchase no more than five percent (5%) of the investment portfolio shall be invested in the securities of a single issuer;
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Commercial paper or other short-term corporate debt that matures within two hundred seventy (270) days and that is rated within the two highest classifications, as established by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to Iowa Code chapter 17A, provided that 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, and provided further that at the time of purchase no more than ten percent (10%) of the investment portfolio shall be in investments authorized by this subparagraph and that at the time of purchase no more than five percent (5%) of the investment portfolio shall be invested in the securities of a single issuer;
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Repurchase agreements whose underlying collateral consists of the investments set out in (1) if the political subdivision takes delivery of the collateral either directly or through an authorized custodian. Repurchase agreements do not include reverse repurchase agreements;
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An open-end management investment company registered with the federal Securities and Exchange Commission under the federal Investment Company Act of 1940, 15 U.S.C. §80a-1, and operated in accordance with 17 C.F.R. §270.2a-7.
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A joint investment trust organized pursuant to Iowa Code chapter 28E, provided that the joint investment trust shall be one of the following: (i) Rated within the two highest classifications by at least one of the standard rating services approved by the superintendent of banking by rule adopted pursuant to Iowa Code chapter 17A and operated in accordance with either 17 C.F.R. §270.2a-7, or with the requirements of the governmental accounting standards board for external investment pools. (ii) Registered with the federal securities and exchange commission under the federal Investment Company Act of 1940, and operated in accordance with 17 C.F.R. §270.2a-7. The manager or investment advisor of the joint investment trust shall be registered with the federal Securities and Exchange Commission under the Investment Advisor Act of 1940;
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Warrants or improvement certificates of a levee or drainage district.
It shall be the responsibility of the treasurer 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 treasurer shall also provide the board with information about and verification of the outside person's fiduciary bond. Contracts with outside persons shall include a clause requiring the outside person to notify the school 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 school district and to provide the documents necessary for the performance of the investment portion of the school district audit. The compensation of the outside persons shall 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 including the percent of the investment portfolio by type of investment and by issuer and maturity. The report shall also include trend lines by month over the last year and year-to-year trend lines regarding the performance of the investment portfolio. It shall also be the responsibility of the treasurer to obtain the information necessary to ensure that the investments and the outside persons doing business with the school district meet the requirements outlined in this policy.
It shall be the responsibility of the superintendent to deliver a copy of this policy and any future amendments to the school district's depositories, auditor, and outside persons doing investment business with the school 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 shall be designed to prevent losses, to document the officers' and employees' responsibility for elements of the investment process, and address the capability of any outside party assisting with the management of the district funds.
Approved: 10/21/2019 Reviewed: Revised:
