annual investment report · 2017. 1. 10. · 2009-2010 annual investment report tab: title revised...

2009-2010 ANNUAL INVESTMENT REPORTTab: TitleRevised 9/9/2010

for the year ended June 30, 2010

NORTH EAST I.S.D.

ANNUAL INVESTMENTREPORT

i

2009-2010 ANNUAL INVESTMENT REPORTTab: TOC (2) 9/9/2010

TABLE OF CONTENTS

Review of Activities………………………………………………………………………………………… 1

Investment Controls………………………………………………………………………………………… 2

Investment Policies………………………………………………………………………………………… 2

Investment Strategies………………………………………………………………………………….. 3

Market Strategy……………………………………………………………………………………………… 3

Enhancements and Recommended Improvements…………………………………………………………… 3

Investment Plan for 2010-2011……………………………………………………………………………… 4

Portfolio Composition……………….…………………………………………….………………………… 5

Maturity Aging/Portfolio Performance……………………………………………………………………… 6

Cash Receipts and Investment Pool Performance…………………………………………………………… 9

Purchases (by fund)………………………………………………………………………………………… 10

Maturities/Calls/Sales (by fund)…………………………………………………………………………… 12

Changes in Managed Pool Balances (by fund)……………………………………………………………… 14

Changes in Values (by fund)………………………………………………………………………………… 16

Earnings/Yields (by fund)…………………………………………………………………………………… 18

2009-10 Cash Budget (General Operating)…………...…………………………………………………… 23

2009-10 Actual Cash Flow (General Operating)…………………………………………………………… 24

2009-10 Cash Transactions (Debt Service)………………………………………………………………… 25

Local Investment Policies………………………………………………………………………………. 26

Legal Investment Policies………………………………………………………………………………. 31

Investment Officers Certification…………………………………………………………………………… 43

Resolution of the Board Regarding Review of the Investment Program…………………………………… 44

ANNUAL INVESTMENT REPORT

As required by NEISD’s investment policies, the District’s investment officers are required to prepare annually a comprehensive report on the investment program and in-vestment activity to the Board of Trustees. This report is required to include NEISD’s portfolio performance and recommendations of policies, strategies and improvements necessary to enhance the investment program. Finally, this report is required to include an investment plan for the ensuing year.

During fiscal year 2009-2010 NEISD’s general operating fund received approx-imately $452.7 million in local, state, and federal cash receipts. These funds were active-ly managed throughout the year and invested in pools, agency bonds and discount notes, and highly rated commercial paper. The weighted average maturity of the General Fund as of June 30, 2010 was 70 days. The yield earned by this fund over the fiscal year was .50%.

Review of Activities

As of June 30, 2010, the ending book value of North East’s portfolio was $356,752,936.03. The yield earned for the District’s portfolio was 2.87% with total in-terest earnings of $13,638,787.07, while the investment pools earned an average rate of .26% during the fiscal year. A comprehensive benchmark analysis of NEISD’s portfolio begins on page 6 of this report.

During February 1999, NEISD received the proceeds from the $211 million bond sale. One-third of the proceeds were placed in a flexible repurchase agreement, which allowed for fixed yield and daily liquidity. The brokerage firm of Salomon Smith Barney managed another one-third and NEISD staff managed the funds that were part of the final one-third. As of June 30, 2010, projects were closed and all funds were depleted.

During August 2000, NEISD received the proceeds from the $155 million bond sale. The proceeds were invested in pools and in flexible re-purchase agreements with Societe Generale and Salomon Smith Barney. The re-purchase agreements allowed for a fixed yield with daily liquidity. As of June 30, 2010, projects were closed and all funds were depleted.

During February 2004, NEISD received the proceeds from the $300 million bond sale. The proceeds were invested in pools, agency bonds and discount notes, commercial paper, and municipal bonds. The fixed income securities were purchased with maturity dates to match the expected draw down schedule of the funds. As of June 30, 2010, $1.7 million was in the investment pools.

During August 2005, NEISD received the proceeds from the $149 million bond sale. The proceeds were invested in pools, agency bonds and discount notes, and com-mercial paper. The fixed income securities were purchased with maturity dates to ensure availability of funds when payments are due as well as to maximize investment earnings. As of June 30, 2010, $632 thousand was in the investment pools.

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During July 2007, NEISD received the proceeds from the $498 million bond sale. The proceeds were invested in pools, agency bonds and discount notes, and commercial pa-per. The fixed income securities were purchased with maturity dates to match the ex-pected draw down schedule of the funds. As of June 30, 2010, $4.9 million was in in-vestment pools and the book value of the fixed income securities was $165.5 million.

Many investment controls are in place to ensure the safety of NEISD’s invest-ments. The Board has adopted policies and strategies that comply with the Public Funds Investment Act and also provides management the flexibility needed to make day-to-day investment decisions. NEISD also has cash management and investment management procedures documented for the use and training of NEISD staff. These procedures are continually updated to account for changes in technology and processes. Contracts are in place between NEISD and its depository bank and safekeeping bank. Certifications are executed with each change in investment policies with the entities NEISD uses to invest securities -- such as the pools and brokers/dealers. NEISD keeps its investments at a third-party safekeeping bank. All trades settle on a DVP (delivery versus payment) basis which ensures that no funds leave the District’s possession until a security is placed in the District’s safekeeping account. Cash flow analyses are conducted to ensure funds are available when needed. The Office of the Treasurer receives and files original confirma-tions and receipts from each investment purchase and wire transaction. The Office of the Treasurer and the Accounting Services Office also ensure that clear separation of duties is provided for investment and cash management functions. Competitive bidding is al-ways utilized, and usually bids from three to five brokers/dealers are received before a purchasing decision is made. Monthly investment reports are prepared by the District’s investment officers and provided to the Board of Trustees on a timely basis.

Investment Controls

The policies included in the report continue to be the recommended investment policies for NEISD. The investment policies comply with the Public Funds Investment Act (PFIA). Per the PFIA, NEISD Investment Policy emphasis safety of principal, li-quidity and address investment diversification, yield, and maturity and the quality and capability of investment management. Additionally, as required per the PFIA the policies include:

Investment Policies

1. A list of the types of authorized investments in which the District’s funds may be invested;

2. The maximum allowable stated maturity of any individual investment owned by the District;

3. For pooled fund groups, the maximum dollar-weighted average maturity allowed based on the stated maturity date of the portfolio;

4. Methods to monitor the market price of investments acquired with public funds; and

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5. A requirement for settlement of all transactions, except investment pool funds and mutual funds, on a delivery versus payment basis.

During 2010, the Government Treasurers’ Organization of Texas (GTOT) awarded the Investment Policy Certification to NEISD. The District received this award for develop-ing comprehensive written investment policies that meet the criteria set forth in GTOT’s Investment Policy Review Checklist.

Each fund has a general strategy outlined within the investment policies of the District. The primary objectives of the District’s operating funds are safety, liquidity, and maturity sufficient to meet anticipated cash flow requirements. The investment officers of the District will utilize a weekly cash budget to anticipate the cash flow requirements during the year for the general operating fund (see page 23). The cash budget enables the investment officers of the District to develop strategies based on interest rate forecasts to earn a higher yield than if the anticipated cash flows were not forecasted. Reasonable market yields will be earned by purchasing quality securities. All securities will be pur-chased with the intent to hold to maturity.

Investment Strategies

The agency and debt service funds also have safety, liquidity, and maturity suffi-cient to meet anticipated cash flow requirements as their primary objectives. The debt service funds have limited cash outflows annually and the dates and amounts are known; therefore, investments of these funds are more easily matched to the actual cash outflow requirements. Diversification can be met through the use of an authorized investment pool. All securities will be purchased with the intent to hold to maturity.

Investment strategies for capital projects fund portfolios primary objective is the assurance that anticipated cash flows are matched with adequate investment liquidity for the safety of the fund and the completion of the targeted projects. A diversified portfolio structured with maturities to match anticipated cash flow is used to provide a reasonable market yield. Maturities may extend beyond one year.

The main goal of NEISD’s investment program is to ensure its safety, as well as to obtain a reasonable financial return under current market conditions, in accordance with policies. The investment officers observe financial market indicators, study finan-cial trends, and utilize available educational tools in order to maintain appropriate in-vestment strategies. Investments are purchased with the expectation of holding to maturi-ty, thereby ensuring the preservation of capital.

Market Strategy

The recommendation for the 2010-2011 fiscal year is to continue to maintain an active management philosophy for the District’s funds. Interest earnings can be gained by actively managing the portfolio. Evaluating and modifying cash flow forecasts can

Enhancements and Recommended Improvements

3

improve the yield of a portfolio when current and anticipated market conditions are taken into account. In a normal yield curve environment, with low interest rates at the short end of the curve, the investment officers will have to evaluate the value of marketable securities over investment pools that may be currently earning higher rates but have non-guaranteed yields, that over time, could fall below what could be earned in fixed income securities. The treasury staff is continuing to work with other offices in the Finance De-partment to implement processes and procedures that, when implemented, will improve cash flow positions and payment terms. Ultimately, these projects should increase effi-ciency and aid investment performance.

The investment plan for fiscal year 2010-2011 is a continuation of the 2009-2010 plan and includes the monitoring of market information, interest rates, forecasted and actual cash flows, and managing every fund in the portfolio on an individual, consistent, and frequent basis. Investment Officers must evaluate the market on an ongoing basis to determine where the District’s funds are best utilized in the existing market. Monitoring changes in the District’s cash flow forecast will also be important in the coming year. The effective and efficient management of the portfolio can ensure a reasonable yield on the portfolio without exposing the District to unacceptable levels of risk.

Investment Plan for 2010-11

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Legend:CDs Fully insured and collaterallized Certificates of DepositCOMMERCIAL PAPER Short-term promissory notes issued by a corporation, Rated at least A-1, P-1 or F-1FFCB Federal Farm Credit Bank BondsFHLB Federal Home Loan Bank BondsFHLB DISCOUNT Federal Home Loan Bank Discount NotesFHLMC Federal Home Loan Mortgage Corporation (Freddie Mac) BondsFHLMC DISCOUNT Federal Home Loan Mortgage Corporation (Freddie Mac) Discount NotesFNMA Federal National Mortgage Association (Fannie Mae) BondsFNMA DISCOUNT Federal National Mortgage Association (Fannie Mae) Discount NotesMUNICIPAL Municipal Bonds issued by state and local governmentsPOOLS Various Investment Pools and Bank of America Sweep Account

Note: Due to rounding, porfolio composition may not equal 100.0%

PORTFOLIO COMPOSITIONNORTH EAST I.S.D.

As of 06/30/09 & 06/30/10

POOLS35.4%

FAMCA1.4%

FFCB11.1%

FNMA13.7% FHLMC

16.0

MUNICIPAL BOND.87%

FHLB16.9%

FHLB DISCOUNT, 1.8%

BLACKROCK MMF1.4%

FHLMC Pass-Thru1.0%FDIC Floater, .4%

Portfolio Composition - 06/30/09Book Value $566,492,955

POOLS46.4%

FAMCA2.2%

FFCB10.6% FNMA

11.5%

FHLMC12.1%

MUNICIPAL BOND1.4%

FHLB12.9%

COMMERCIAL PAPER2.8%

BLACKROCK MMF0.1%

Portfolio Composition - 06/30/10Book Value $356,753,492

5

NORTH EAST I.S.D.As of 06/30/09 & 06/30/10

Weighted Average Maturity: 151.8 days

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

0 - 30 Days 31 - 60 Days 61 - 90 Days 91 - 180 Days 181 - 364 Days 1 - 4 Years

Maturity Aging - 06/30/09 vs. 06/30/10

Previous Period Current Period

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

7/31

/200

58/

31/2

005

10/1

/200

511

/1/2

005

12/1

/200

51/

1/20

062/

1/20

063/

1/20

064/

1/20

065/

1/20

066/

1/20

067/

1/20

068/

1/20

069/

1/20

0610

/1/2

006

11/1

/200

612

/1/2

006

1/1/

2007

2/1/

2007

3/1/

2007

4/1/

2007

5/1/

2007

6/1/

2007

7/1/

2007

8/1/

2007

9/1/

2007

10/1

/200

711

/1/2

007

12/1

/200

71/

1/20

082/

1/20

083/

1/20

084/

1/20

085/

1/20

086/

1/20

087/

1/20

088/

1/20

089/

1/20

0810

/1/2

008

11/1

/200

812

/1/2

008

1/1/

2009

2/1/

2009

3/1/

2009

4/1/

2009

5/1/

2009

6/1/

2009

7/1/

2009

8/1/

2009

9/1/

2009

10/1

/200

911

/1/2

009

12/1

/200

91/

1/20

102/

1/20

103/

1/20

104/

1/20

105/

1/20

106/

1/20

10

NEISD Total Portfolio versus Investment PoolsYield Spread

7/31/05 - 06/30/10

-2.00%-1.00%0.00%1.00%2.00%3.00%4.00%5.00%

7/31

/200

58/

31/2

005

10/1

/200

511

/1/2

005

12/1

/200

51/

1/20

062/

1/20

063/

1/20

064/

1/20

065/

1/20

066/

1/20

067/

1/20

068/

1/20

069/

1/20

0610

/1/2

006

11/1

/200

612

/1/2

006

1/1/

2007

2/1/

2007

3/1/

2007

4/1/

2007

5/1/

2007

6/1/

2007

7/1/

2007

8/1/

2007

9/1/

2007

10/1

/200

711

/1/2

007

12/1

/200

71/

1/20

082/

1/20

083/

1/20

084/

1/20

085/

1/20

086/

1/20

087/

1/20

088/

1/20

089/

1/20

0810

/1/2

008

11/1

/200

812

/1/2

008

1/1/

2009

2/1/

2009

3/1/

2009

4/1/

2009

5/1/

2009

6/1/

2009

7/1/

2009

8/1/

2009

9/1/

2009

10/1

/200

911

/1/2

009

12/1

/200

91/

1/20

102/

1/20

103/

1/20

104/

1/20

105/

1/20

106/

1/20

10NEISD Total Portfolio versus T-Bills

Yield Spread07/31/05 - 6/30/10

30-Day T-bill 90-Day T-bill 180-Day T-bill

6

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

7/31

/200

58/

31/2

005

10/1

/200

511

/1/2

005

12/1

/200

51/

1/20

062/

1/20

063/

1/20

064/

1/20

065/

1/20

066/

1/20

067/

1/20

068/

1/20

069/

1/20

0610

/1/2

006

11/1

/200

612

/1/2

006

1/1/

2007

2/1/

2007

3/1/

2007

4/1/

2007

5/1/

2007

6/1/

2007

7/1/

2007

8/1/

2007

9/1/

2007

10/1

/200

711

/1/2

007

12/1

/200

71/

1/20

082/

1/20

083/

1/20

084/

1/20

085/

1/20

086/

1/20

087/

1/20

088/

1/20

089/

1/20

0810

/1/2

008

11/1

/200

812

/1/2

008

1/1/

2009

2/1/

2009

3/1/

2009

4/1/

2009

5/1/

2009

6/1/

2009

7/1/

2009

8/1/

2009

9/1/

2009

10/1

/200

911

/1/2

009

12/1

/200

91/

1/20

102/

1/20

103/

1/20

104/

1/20

105/

1/20

106/

1/20

10

NEISD Total Portfolio versus T-NotesYield Spread

7/31/05 - 06/30/10

1 Year T-Note 2 Year T-Note

7

MATURITY AGING/PORTFOLIO PERFORMANCE

NORTH EAST I.S.D.As of 06/30/09 & 06/30/10

Weighted Average Maturity: 69.6 days

GENERAL FUND ONLY

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

0 - 30 Days 31 - 60 Days 61 - 90 Days 91 - 180 Days 181 - 364 Days 1 - 4 Years

Maturity Aging - 06/30/09 vs. 06/30/10

Previous Period Current Period

-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%

Jul-0

5A

ug-0

5S

ep-0

5O

ct-0

5N

ov-0

5D

ec-0

5Ja

n-06

Feb-

06M

ar-0

6A

pr-0

6M

ay-0

6Ju

n-06

Jul-0

6A

ug-0

6S

ep-0

6O

ct-0

6N

ov-0

6D

ec-0

6Ja

n-07

Feb-

07M

ar-0

7A

pr-0

7M

ay-0

7Ju

n-07

Jul-0

7A

ug-0

7S

ep-0

7O

ct-0

7N

ov-0

7D

ec-0

7Ja

n-08

Feb-

08M

ar-0

8A

pr-0

8M

ay-0

8Ju

n-08

Jul-0

8A

ug-0

8S

ep-0

8O

ct-0

8N

ov-0

8D

ec-0

8Ja

n-09

Feb-

09M

ar-0

9A

pr-0

9M

ay-0

9Ju

n-09

Jul-0

9A

ug-0

9S

ep-0

9O

ct-0

9N

ov-0

9D

ec-0

9Ja

n-10

Feb-

10M

ar-1

0A

pr-1

0M

ay-1

0Ju

n-10

NEISD General Fund versus Investment PoolsYield Spread

7/31/05 - 06/30/10

8

CASH RECEIPTSNORTH EAST I.S.D.

For FY08, FY09, & FY10

INVESTMENT POOL PERFORMANCENORTH EAST I.S.D.

07/01/09 - 06/30/10

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

July August September October November December January February March April May June

Fiscal Year to Date General Operating Cash Reciepts

FY07-08 FY08-09 FY 09-10

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

7/1/

09

7/15

/09

7/29

/09

8/12

/09

8/26

/09

9/9/

09

9/23

/09

10/7

/09

10/2

1/09

11/4

/09

11/1

8/09

12/2

/09

12/1

6/09

12/3

0/09

1/13

/10

1/27

/10

2/10

/10

2/24

/10

3/10

/10

3/24

/10

4/7/

10

4/21

/10

5/5/

10

5/19

/10

6/2/

10

6/16

/10

6/30

/10

Daily Rates of Investment PoolsFiscal Year 2009-2010

TexPool TP Prime LOGIC Lone Star CLASS TexSTAR TexasDaily BlackRock MMF

9

Investment Investment Purchase Maturity Face Value Principal Yield toNumber Description Date Date Invested Maturity

1999 - GENERAL OPERATING10-0001 FCAR Owner 07/01/09 07/23/09 30,000,000.00$ 29,981,666.67$ 1.01%10-0002 FCAR Owner Trust 1 07/09/09 07/24/09 30,000,000.00 29,988,125.00 0.9610-0004 FCAR Owner TR 1 08/03/09 08/21/09 45,000,000.00 44,978,625.00 0.9610-0007 FCAR Owner TR 1 09/03/09 09/23/09 22,500,000.00 22,487,500.00 1.0110-0010 AutoBahn Funding Co 10/01/09 10/14/09 30,000,000.00 29,992,958.33 0.6610-0013 FCAR Owner TRI I 11/02/09 11/18/09 42,000,000.00 41,990,480.00 0.5210-0014 Silver Tower US 12/01/09 12/16/09 10,000,000.00 9,997,083.33 0.7110-0016 Silver Tower US 12/04/09 12/14/09 12,000,000.00 11,998,000.00 0.6110-0017 AMSTEL Funding 01/07/10 01/19/10 82,000,000.00 81,982,506.67 0.6510-0018 GIRBAL 01/07/10 01/20/10 66,000,000.00 65,990,466.67 0.4110-0019 Hannover Funding 01/26/10 02/18/10 100,000,000.00 99,978,916.67 0.3310-0020 Hannover Funding 02/01/10 02/18/10 69,000,000.00 68,989,573.34 0.3210-0022 Silver Tower 03/01/10 03/19/10 30,000,000.00 29,993,550.00 0.4410-0023 Anglesea Funding 03/01/10 03/24/10 100,000,000.00 99,977,638.89 0.3510-0024 Silver Tower US Funding 03/01/10 03/18/10 23,895,000.00 23,890,035.15 0.4510-0026 Anglesea Funding LLC 03/31/10 04/22/10 85,000,000.00 84,977,663.89 0.4410-0028 Anglesea Funding LLC 04/30/10 05/20/10 62,000,000.00 61,986,222.22 0.4110-0029 Gen Elec Cap Corp 06/24/10 03/21/11 4,000,000.00 3,979,300.00 0.7010-0027 FHLB 04/01/10 09/09/11 10,000,000.00 10,421,160.00 0.801999 - GENERAL OPERATING TOTAL 853,395,000.00 853,581,471.83 0.53

2409 - SCHOOL NUTRITION SERVICES10-0007 FCAR Owner TR 1 09/03/09 09/23/09 4,500,000.00 4,497,500.00 1.0110-0029 Gen Elec Cap Corp 06/24/10 03/21/11 2,000,000.00 1,989,650.00 0.702409 - SCHOOL NUTRITION SERVICES TOTAL 6,500,000.00 6,487,150.00 0.97

5119 - DEBT SERVICE10-0003 FCAR Owner TR 1 07/28/09 08/24/09 5,000,000.00 4,996,137.50 1.0510-0005 FCAR Owner TR 1 08/04/09 08/21/09 10,000,000.00 9,995,750.00 0.9110-0007 FCAR Owner TR 1 09/03/09 09/23/09 19,000,000.00 18,989,444.44 1.0110-0013 FCAR Owner TRI I 11/02/09 11/18/09 15,000,000.00 14,996,600.00 0.5210-0015 FCAR Owner TR I 12/01/09 12/16/09 15,000,000.00 14,998,000.00 0.3210-0018 GIRBAL 01/07/10 01/20/10 10,000,000.00 9,998,555.55 0.4110-0021 Silver Tower US 02/10/10 02/26/10 25,000,000.00 24,995,333.33 0.4310-0025 Belmont Funding LLC 03/02/10 03/25/10 25,000,000.00 24,994,409.72 0.3510-0026 Anglesea Funding LLC 03/31/10 04/22/10 55,000,000.00 54,985,547.22 0.4410-0028 Anglesea Funding LLC 04/30/10 05/20/10 64,000,000.00 63,985,777.78 0.415119 - DEBT SERVICE TOTAL 243,000,000.00 242,935,555.54 0.50

6719 - CAPITAL PROJECTS $498 MILLION10-0008 FCAR Owner TR 1 09/03/09 09/23/09 3,000,000.00 2,998,333.33 1.0110-0012 FCAR Owner TRI I 11/02/09 11/18/09 10,000,000.00 9,997,733.33 0.526719 - CAPITAL PROJECTS $498 MILLION TOTAL 13,000,000.00 12,996,066.66 0.65

PURCHASESNORTH EAST I.S.D.

07/01/09 - 06/30/10

10

Investment Investment Purchase Maturity Face Value Principal Yield toNumber Description Date Date Invested Maturity

PURCHASESNORTH EAST I.S.D.

07/01/09 - 06/30/10

6729 - CAPITAL PROJECTS $498 MILLION10-0009 FCAR Owner TR 1 09/03/09 09/23/09 3,000,000.00 2,998,333.33 1.016729 - CAPITAL PROJECTS $498 MILLION TOTAL 3,000,000.00 2,998,333.33 1.01

7539 - HEALTH INSURANCE10-0006 FCAR Owner TR 1 08/04/09 08/21/09 5,000,000.00 4,997,875.00 0.9110-0007 FCAR Owner TR 1 09/03/09 09/23/09 8,000,000.00 7,995,555.56 1.0110-0011 AutoBahn Funding Co 10/01/09 10/14/09 10,000,000.00 9,997,652.78 0.6610-0013 FCAR Owner TRI I 11/02/09 11/18/09 13,000,000.00 12,997,053.33 0.5210-0015 FCAR Owner TR I 12/01/09 12/16/09 5,000,000.00 4,999,333.33 0.3210-0018 GIRBAL 01/07/10 01/20/10 12,000,000.00 11,998,266.67 0.4110-0020 Hannover Funding 02/01/10 02/18/10 5,000,000.00 4,999,244.44 0.3210-0021 Silver Tower US 02/10/10 02/26/10 5,000,000.00 4,999,066.67 0.4310-0025 Belmont Funding LLC 03/02/10 03/25/10 8,000,000.00 7,998,211.11 0.3510-0026 Anglesea Funding LLC 03/31/10 04/22/10 10,000,000.00 9,997,372.22 0.4410-0028 Anglesea Funding LLC 04/30/10 05/20/10 12,000,000.00 11,997,333.33 0.4110-0029 Gen Elec Cap Corp 06/24/10 03/21/11 3,000,000.00 2,984,475.00 0.707539 - HEALTH INSURANCE TOTAL 96,000,000.00 95,961,439.44 0.52

7939 - WORKERS' COMPENSATION10-0029 Gen Elec Cap Corp 06/24/10 03/21/11 1,000,000.00 994,825.00 0.707939 - WORKERS' COMPENSATION TOTAL 1,000,000.00 994,825.00 0.70

SUAMMARY TOTALS: 1,215,895,000.00$ 1,215,954,841.80$

11

Investment Investment Purchase Maturity Call Face Value Principal Yield toNumber Description Date Date Date Invested Maturity

1999 - GENERAL OPERATING10-0001-01 FCAR Owner 07/01/09 07/23/09 Open 30,000,000.00$ 29,981,666.67$ 1.01%10-0002-01 FCAR Owner Trust 1 07/09/09 07/24/09 Open 30,000,000.00 29,988,125.00 0.96 10-0004-01 FCAR Owner TR 1 08/03/09 08/21/09 Open 15,000,000.00 14,992,875.00 0.96 10-0004-02 FCAR Owner TR 1 08/03/09 08/21/09 Open 30,000,000.00 29,985,750.00 0.96 10-0007-01 FCAR Owner TR 1 09/03/09 09/23/09 Open 22,500,000.00 22,487,500.00 1.01 10-0010-01 AutoBahn Funding Co 10/01/09 10/14/09 Open 30,000,000.00 29,992,958.33 0.66 10-0013-01 FCAR Owner TRI I 11/02/09 11/18/09 Open 42,000,000.00 41,990,480.00 0.52 10-0014-01 Silver Tower US 12/01/09 12/16/09 Open 10,000,000.00 9,997,083.33 0.71 10-0016-01 Silver Tower US 12/04/09 12/14/09 Open 12,000,000.00 11,998,000.00 0.61 10-0017-01 AMSTEL Funding 01/07/10 01/19/10 Open 82,000,000.00 81,982,506.67 0.65 10-0018-01 GIRBAL 01/07/10 01/20/10 Open 66,000,000.00 65,990,466.67 0.41 10-0019-01 Hannover Funding 01/26/10 02/18/10 Open 100,000,000.00 99,978,916.67 0.33 10-0020-01 Hannover Funding 02/01/10 02/18/10 Open 69,000,000.00 68,989,573.34 0.32 10-0022-01 Silver Tower 03/01/10 03/19/10 Open 30,000,000.00 29,993,550.00 0.44 10-0023-01 Anglesea Funding 03/01/10 03/24/10 Open 100,000,000.00 99,977,638.89 0.35 10-0024-01 Silver Tower US Funding 03/01/10 03/18/10 Open 23,895,000.00 23,890,035.15 0.45 10-0026-01 Anglesea Funding LLC 03/31/10 04/22/10 Open 85,000,000.00 84,977,663.89 0.44 10-0028-01 Anglesea Funding LLC 04/30/10 05/20/10 Open 62,000,000.00 61,986,222.22 0.41 09-0019-01 FHLB Discount Note 10/29/08 08/14/09 Open 10,000,000.00 9,755,152.78 3.15 09-0030-01 Bank of Amer CRP 02/12/09 12/02/11 Open 2,500,000.00 2,550,942.50 0.38 1999 - GENERAL OPERATING TOTAL 851,895,000.00 851,487,107.11 0.57

2409 - SCHOOL NUTRITION SERVICES10-0007-02 FCAR Owner TR 1 09/03/09 09/23/09 Open 4,500,000.00 4,497,500.00 1.01 2409 - SCHOOL NUTRITION SERVICES TOTAL 4,500,000.00 4,497,500.00 1.01

5119 - DEBT SERVICE10-0003-01 FCAR Owner TR 1 07/28/09 08/24/09 Open 5,000,000.00 4,996,137.50 1.05 10-0005-01 FCAR Owner TR 1 08/04/09 08/21/09 Open 10,000,000.00 9,995,750.00 0.91 10-0007-02 FCAR Owner TR 1 09/03/09 09/23/09 Open 19,000,000.00 18,989,444.44 1.01 10-0013-01 FCAR Owner TRI I 11/02/09 11/18/09 Open 15,000,000.00 14,996,600.00 0.52 10-0015-01 FCAR Owner TR I 12/01/09 12/16/09 Open 15,000,000.00 14,998,000.00 0.32 10-0018-01 GIRBAL 01/07/10 01/20/10 Open 10,000,000.00 9,998,555.55 0.41 10-0021-01 Silver Tower US 02/10/10 02/26/10 Open 25,000,000.00 24,995,333.33 0.43 10-0025-01 Belmont Funding LLC 03/02/10 03/25/10 Open 25,000,000.00 24,994,409.72 0.35 10-0026-01 Anglesea Funding LLC 03/31/10 04/22/10 Open 55,000,000.00 54,985,547.22 0.44 10-0028-01 Anglesea Funding LLC 04/30/10 05/20/10 Open 64,000,000.00 63,985,777.78 0.41 5119 - DEBT SERVICE TOTAL 243,000,000.00 242,935,555.54 0.50

6719 - CAPITAL PROJECTS $498 MILLION10-0008-01 FCAR Owner TR 1 09/03/09 09/23/09 Open 3,000,000.00 2,998,333.33 1.01 10-0012-01 FCAR Owner TRI I 11/02/09 11/18/09 Open 10,000,000.00 9,997,733.33 0.52 08-0073-01 FFCB 08/29/07 10/23/09 Open 2,100,000.00 2,113,891.50 4.67 08-0085-01 FFCB 08/30/07 05/03/10 Open 10,905,000.00 10,928,718.16 4.69 08-0090-01 FFCB 09/04/07 03/04/10 Open 11,833,000.00 11,805,429.11 4.85

MATURITIES/CALLS/SALESNORTH EAST I.S.D.

07/01/09 - 06/30/10

12

Investment Investment Purchase Maturity Call Face Value Principal Yield toNumber Description Date Date Date Invested Maturity

MATURITIES/CALLS/SALESNORTH EAST I.S.D.

07/01/09 - 06/30/10

08-0040-01 FHLB 08/27/07 09/11/09 Open 12,120,000.00 12,219,747.60 4.82 08-0058-01 FHLB 08/28/07 08/05/09 Open 11,430,000.00 11,527,832.46 4.78 08-0059-01 FHLB 08/28/07 12/11/09 Open 12,120,000.00 12,178,831.09 4.77 08-0080-01 FHLB 08/29/07 10/02/09 Open 7,465,000.00 7,501,429.20 4.75 08-0082-01 FHLB 08/29/07 03/12/10 Open 11,410,000.00 11,496,046.64 4.68 09-0018-01 FHLB 10/28/08 06/11/10 Open 5,500,000.00 5,575,900.00 3.37 08-0009-01 FHLMC 08/24/07 01/18/11 Open 9,940,000.00 9,930,258.80 4.78 08-0035-01 FHLMC 08/27/07 07/15/09 Open 11,251,000.00 11,165,252.19 4.68 08-0048-01 FHLMC 08/28/07 02/09/10 Open 18,675,000.00 18,724,862.25 4.76 08-0049-01 FHLMC 08/28/07 11/03/09 Open 1,950,000.00 1,950,674.08 4.73 08-0070-01 FHLMC 08/29/07 10/28/09 Open 3,000,000.00 2,966,238.00 4.75 08-0071-01 FHLMC 08/29/07 07/06/10 Open 3,000,000.00 2,983,202.00 4.71 09-0039-01 FHLMC Pass-Thru 06/29/09 06/01/14 Open 2,744,702.73 3,502,187.50 1.98 08-0037-01 FNMA 08/27/07 11/09/09 Open 10,000,000.00 9,822,000.00 4.86 08-0042-01 FNMA 08/27/07 06/21/10 Open 11,880,000.00 11,726,154.00 4.87 08-0051-01 FNMA 08/28/07 11/16/09 Open 2,000,000.00 1,964,140.00 4.86 08-0084-01 FNMA 08/30/07 01/19/10 Open 11,885,000.00 11,765,086.27 4.70 08-0086-01 FNMA 08/30/07 05/17/10 Open 725,000.00 724,038.45 4.70 6719 - CAPITAL PROJECTS $498 MILLION TOTAL 184,933,702.73 185,567,985.96 4.59

6729 - CAPITAL PROJECTS $498 MILLION10-0009-01 FCAR Owner TR 1 09/03/09 09/23/09 Open 3,000,000.00 2,998,333.33 1.01 6729 - CAPITAL PROJECTS $498 MILLION TOTAL 3,000,000.00 2,998,333.33 1.01

7539 - HEALTH INSURANCE10-0006-01 FCAR Owner TR 1 08/04/09 08/21/09 Open 5,000,000.00 4,997,875.00 0.91 10-0007-01 FCAR Owner TR 1 09/03/09 09/23/09 Open - - 1.01 10-0007-02 FCAR Owner TR 1 09/03/09 09/23/09 Open 8,000,000.00 7,995,555.56 1.01 10-0011-01 AutoBahn Funding Co 10/01/09 10/14/09 Open 10,000,000.00 9,997,652.78 0.66 10-0013-01 FCAR Owner TRI I 11/02/09 11/18/09 Open 13,000,000.00 12,997,053.33 0.52 10-0015-01 FCAR Owner TR I 12/01/09 12/16/09 Open 5,000,000.00 4,999,333.33 0.32 10-0018-01 GIRBAL 1/7/2010 1/20/2010 Open 12,000,000.00 11,998,266.67 0.41 10-0020-01 Hannover Funding 2/1/2010 2/18/2010 Open 5,000,000.00 4,999,244.44 0.32 10-0021-01 Silver Tower US 2/10/2010 2/26/2010 Open 5,000,000.00 4,999,066.67 0.43 10-0025-01 Belmont Funding LLC 3/2/2010 3/25/2010 Open 8,000,000.00 7,998,211.11 0.35 10-0026-01 Anglesea Funding LLC 3/31/2010 4/22/2010 Open 10,000,000.00 9,997,372.22 0.44 10-0028-01 Anglesea Funding LLC 4/30/2010 5/20/2010 Open 12,000,000.00 11,997,333.33 0.41 09-0040-01 FHLMC Pass-Thru 6/29/2009 6/1/2014 Open 1,568,401.56 2,001,250.00 1.98 7539 - HEALTH INSURANCE TOTAL 94,568,401.56 94,978,214.44 0.74

SUMMARY TOTALS: 1,381,897,104.29$ 1,382,464,696.38$

13

Investment Beginning Ending Change inDescription Book Balance Book Balance Book Balance

1999 - GENERAL OPERATINGBlackRock - General Fund 37,799.09$ 37,864.19$ 65.10$ TexPool-General Operating 4,581,137.11 4,353,344.62 (227,792.49) LOGIC-General Operating 1,093,761.09 1,479,685.18 385,924.09 MBIA CLASS-1999 249.30 9,914,318.03 9,914,068.73 TexPool-State Payments 204.89 140.90 (63.99) TexSTAR-General Operating 1,568.58 1,571.86 3.28 TexPool Prime-Gen. Fund 77,666,276.59 46,401,769.34 (31,264,507.25) TexPool-General Operating 406,118.59 407,533.56 1,353.04 1999 - GENERAL OPERATING TOTAL 83,787,115.24 62,596,227.68 (21,190,949.49)

2409 - SCHOOL NUTRITION SERVICESBlackRock - Food Service 879.77 880.61 0.84 TexPool-Food Service 179.36 179.40 0.04 LOGIC-Food Service 333,414.84 95,365.01 (238,049.83) TexPool Prime-Food Svc 5,524,434.14 1,433,135.40 (4,091,298.74) TexSTAR-Food Service 3.48 3.48 - MBIA Class - 2409 73.33 2,212,294.43 2,212,221.10 2409 - SCHOOL NUTRITION SERVICES TOTAL 5,858,984.92 3,741,858.33 (2,117,126.59)

5119 - DEBT SERVICEBlackRock - Debt Service 298,660.52 155,482.82 (143,177.70) TexPool-Debt Service 18.10 18.10 - LOGIC-Debt Service 36,784,682.80 23,852.22 (36,760,830.58) TexPool Prime-Debt Svc 27,195,495.10 66,466,884.33 39,271,389.23 TexSTAR-Debt Service 27,662.20 25,494.03 (2,168.17) MBIA CLASS-5119 582.18 1,386,130.67 1,385,548.49 5119 - DEBT SERVICE TOTAL 64,307,100.90 68,057,862.17 3,750,761.27

6289 - CAPITAL PROJECTS $211 MILLIONBlackRock - $211M 3,137.93 - (3,137.93) TexPool-CP $211 Million 254.94 - (254.94) TexPool Prime-6289 4,773,728.73 - (4,773,728.73) MBIA Class-6289 6.57 - (6.57) 6289 - CAPITAL PROJECTS $211 MILLION TOTAL 4,777,128.17 - (4,777,128.17)

6299 - CAPITAL PROJECTS $155 MILLIONTexPool-CP $155 Million 46.19 - (46.19) TexPool Prime-6299 161,160.50 - (161,160.50) 6299 - CAPITAL PROJECTS $155 MILLION TOTAL 161,206.69 - (161,206.69)

6319 - CAPITAL PROJECTS $300 MILLIONBlackRock - $300M 3,442,788.19 160,535.12 (3,282,253.07) TexSTAR - Capital Project 444.35 445.28 0.93 MBIA CLASS-6319 0.31 1,500,103.70 1,500,103.39 LOGIC-Bond $300 Million 11,340.42 11,371.20 30.78 6319 - CAPITAL PROJECTS $300 MILLION TOTAL 3,454,573.27 1,672,455.30 (1,782,117.97)

6329 - CAPITAL PROJECTS $149 MILLIONBlackRock - $149M 16,335.79 1,637.62 (14,698.17) TexPool-CP $149Million 793.76 794.97 1.21

CHANGES IN MANAGED POOL BALANCESNORTH EAST I.S.D.

07/01/09 - 06/30/10

14

Investment Beginning Ending Change inDescription Book Balance Book Balance Book Balance

CHANGES IN MANAGED POOL BALANCESNORTH EAST I.S.D.

07/01/09 - 06/30/10

TexPool Prime-6329 2,307,508.98 629,179.72 (1,678,329.26) TexSTAR-Capital Projects 159.05 159.37 0.32 MBIA Class 6329 6.61 6.61 - 6329 - CAPITAL PROJECTS $149 MILLION TOTAL 2,324,804.19 631,778.29 (1,693,025.90)

6719 - CAPITAL PROJECTS $498 MILLIONBlackRock - $498M Constru 20,701.60 737.20 (19,964.40) TexPool-CP $498 Million 20,366.82 411.42 (19,955.40) TexPool Prime - 6719 5,140,718.52 2,894,791.20 (2,245,927.32) MBIA Class - 6719 1.79 1.79 - 6719 - CAPITAL PROJECTS $498 MILLION TOTAL 5,181,788.73 2,895,941.61 (2,285,847.12)

6729 - CAPITAL PROJECTS $498 MILLIONBlackRock - $498M Purchas 36,406.28 7,670.12 (28,736.16) TexPool Prime - 6729 10,939,901.67 2,077,580.64 (8,862,321.03) MBIA CLASS 6729 0.28 0.28 - 6729 - CAPITAL PROJECTS $498 MILLION TOTAL 10,976,308.23 2,085,251.04 (8,891,057.19)

7539 - HEALTH INSURANCEBlackRock - Health Insura 7,179.63 6,584.82 (594.81) TexPool-Health Insurance 119.04 119.04 - LOGIC-Health Insurance 14,614,562.60 436,114.20 (14,178,448.40) TexPool Prime-Health Ins. 7,837,135.41 12,556,591.05 4,719,455.64 TexSTAR-Health Insurance 246.67 247.17 0.50 MBIA CLASS-7539 44.87 6,800,384.46 6,800,339.59 7539 - HEALTH INSURANCE TOTAL 22,459,288.22 19,800,040.74 (2,659,247.48)

7739 - DENTALBlackRock - Dental 1,718,758.17 476.89 (1,718,281.28) TexPool-Dental 500,164.99 179,096.23 (321,068.76) TexPool Prime-Dental 31.89 1,965,313.60 1,965,281.71 TexSTAR-Dental 88.43 88.59 0.16 7739 - DENTAL TOTAL 2,219,043.48 2,144,975.31 (74,068.17)

7939 - WORKERS' COMPENSATIONBlackRock - Workers' Comp 2,489,942.87 4,728.78 (2,485,214.09) TexPool-Workers' Comp 303.28 303.53 0.25 LOGIC-Workers' Comp 3,519.82 3,529.37 9.55 TexPool Prime-Work Comp 383,522.88 2,199,114.50 1,815,591.62 TexSTAR-Workers Compensat 182.58 182.96 0.38 7939 - WORKERS' COMPENSATION TOTAL 2,877,471.43 2,207,859.14 (669,612.29)

SUMMARY TOTALS: 208,384,813.47$ 165,834,249.61$ (42,550,625.79)$

15

Investment Investment Purchase Maturity Face Value Beginning Ending Change in Beginning Ending Change in Int/Div AccruedNumber Description Date Date Market Value Market Value Market Value Book Value Book Value Book Value in the Period

1999 - GENERAL OPERATING10-0029 Gen Elec Cap Corp 06/24/10 03/21/11 4,000,000.00$ -$ 3,991,320.24$ 3,991,320.24$ -$ 3,979,836.67$ 3,979,836.67$ -$ 10-0027 FHLB 04/01/10 09/09/11 10,000,000.00 - 10,384,400.00 10,384,400.00 - 10,347,985.48 10,347,985.48 93,750.00 09-0019-01 FHLB Discount Note 10/29/08 08/14/09 10,000,000.00 9,999,000.00 - (9,999,000.00) 9,962,722.22 - (9,962,722.22) - 09-0030-01 Bank of Amer CRP 02/12/09 12/02/11 2,500,000.00 2,558,500.00 - (2,558,500.00) 2,544,020.69 - (2,544,020.69) - 08-0103 NEISD Municipal Discount 12/11/07 08/01/10 5,145,000.00 5,052,698.70 5,143,610.85 90,912.15 4,967,705.47 5,131,361.96 163,656.49 - 1999 - GENERAL OPERATING TOTAL 31,645,000.00 17,610,198.70 19,519,331.09 1,909,132.39 17,474,448.38 19,459,184.11 1,984,735.73 93,750.00

2409 - SCHOOL NUTRITION SERVICES10-0029 Gen Elec Cap Corp 06/24/10 03/21/11 2,000,000.00 - 1,995,660.12 1,995,660.12 - 1,989,918.33 1,989,918.33 - 2409 - SCHOOL NUTRITION SERVICES TOTAL 2,000,000.00 - 1,995,660.12 1,995,660.12 - 1,989,918.33 1,989,918.33 -

6719 - CAPITAL PROJECTS $498 MILLION08-0069 FAMCA 08/28/07 07/15/11 7,846,000.00 8,369,877.42 8,244,341.42 (125,536.00) 7,928,264.60 7,887,916.84 (40,347.76) 198,983.28 08-0063 FFCB 08/28/07 01/03/12 2,315,000.00 2,487,907.35 2,457,511.40 (30,395.95) 2,305,820.23 2,309,484.00 3,663.77 53,798.03 08-0064 FFCB 08/28/07 03/09/11 7,888,000.00 8,385,969.44 8,129,609.44 (256,360.00) 7,886,726.01 7,887,480.35 754.34 119,021.16 08-0065 FFCB 08/28/07 08/09/11 7,989,000.00 8,603,194.32 8,393,483.07 (209,711.25) 8,022,170.71 8,006,416.81 (15,753.90) 160,712.05 08-0073-01 FFCB 08/29/07 10/23/09 2,100,000.00 2,130,849.00 - (2,130,849.00) 2,102,010.14 - (2,102,010.14) - 08-0074 FFCB 08/29/07 08/16/10 11,775,000.00 12,349,031.25 11,844,943.50 (504,087.75) 11,809,766.07 11,778,862.90 (30,903.17) 220,781.25 08-0075 FFCB 08/29/07 09/19/11 7,950,000.00 8,620,821.00 8,414,598.00 (206,223.00) 8,043,563.81 8,001,354.57 (42,209.24) 120,508.75 08-0085-01 FFCB 08/30/07 05/03/10 10,905,000.00 11,296,925.70 - (11,296,925.70) 10,912,438.09 - (10,912,438.09) - 08-0090-01 FFCB 09/04/07 03/04/10 11,833,000.00 12,176,866.98 - (12,176,866.98) 11,825,555.86 - (11,825,555.86) - 08-0014 FHLB 08/24/07 09/10/10 11,500,000.00 12,143,310.00 11,615,000.00 (528,310.00) 11,540,827.41 11,506,566.65 (34,260.76) 181,723.96 08-0040-01 FHLB 08/27/07 09/11/09 12,120,000.00 12,233,685.60 - (12,233,685.60) 12,129,512.71 - (12,129,512.71) - 08-0057 FHLB 08/28/07 12/09/11 2,300,000.00 2,467,463.00 2,432,963.00 (34,500.00) 2,294,889.25 2,296,984.78 2,095.53 6,676.39 08-0058-01 FHLB 08/28/07 08/05/09 11,430,000.00 11,483,606.70 - (11,483,606.70) 11,434,772.32 - (11,434,772.32) - 08-0059-01 FHLB 08/28/07 12/11/09 12,120,000.00 12,373,792.80 - (12,373,792.80) 12,131,437.39 - (12,131,437.39) - 08-0061 FHLB 08/24/07 06/10/11 7,830,000.00 8,446,612.50 8,192,137.50 (254,475.00) 7,906,047.41 7,866,881.36 (39,166.05) 24,550.31 08-0062 FHLB 08/24/07 06/08/12 1,320,000.00 1,450,350.00 1,437,150.00 (13,200.00) 1,336,590.73 1,330,940.15 (5,650.58) 4,532.92 08-0068 FHLB 08/24/07 03/09/12 2,235,000.00 2,425,667.85 2,397,730.35 (27,937.50) 2,240,808.98 2,238,648.61 (2,160.37) 34,766.67 08-0080-01 FHLB 08/29/07 10/02/09 7,465,000.00 7,553,684.20 - (7,553,684.20) 7,469,402.47 - (7,469,402.47) - 08-0082-01 FHLB 08/29/07 03/12/10 11,410,000.00 11,773,750.80 - (11,773,750.80) 11,433,655.76 - (11,433,655.76) - 09-0007 FHLB 09/29/08 06/08/12 2,905,000.00 3,150,123.90 3,134,669.30 (15,454.60) 2,980,826.58 2,955,001.07 (25,825.51) 9,047.86 09-0009 FHLB 09/29/08 09/14/12 3,250,000.00 3,485,625.00 3,502,882.50 17,257.50 3,306,345.10 3,288,752.52 (17,592.58) 43,468.75 09-0017 FHLB 10/28/08 09/10/10 4,000,000.00 4,223,760.00 4,040,000.00 (183,760.00) 4,081,185.70 4,013,057.84 (68,127.86) 63,208.33 09-0018-01 FHLB 10/28/08 06/11/10 5,500,000.00 5,694,205.00 - (5,694,205.00) 5,544,264.15 - (5,544,264.15) - 08-0009-01 FHLMC 08/24/07 01/18/11 9,940,000.00 10,520,893.60 - (10,520,893.60) 9,935,567.12 - (9,935,567.12) - 08-0010 FHLMC 08/24/07 12/08/10 9,870,000.00 10,419,068.10 10,064,340.30 (354,727.80) 9,865,819.50 9,868,730.49 2,910.99 29,952.71 08-0011 FHLMC 08/24/07 04/18/11 9,700,000.00 10,372,986.00 10,063,750.00 (309,236.00) 9,751,057.36 9,722,648.32 (28,409.04) 100,805.90 08-0035-01 FHLMC 08/27/07 07/15/09 11,251,000.00 11,268,551.56 - (11,268,551.56) 11,249,229.40 - (11,249,229.40) - 08-0048-01 FHLMC 08/28/07 02/09/10 18,675,000.00 19,176,984.00 - (19,176,984.00) 18,687,338.22 - (18,687,338.22) - 08-0049-01 FHLMC 08/28/07 11/03/09 1,950,000.00 1,979,854.50 - (1,979,854.50) 1,950,104.76 - (1,950,104.76) - 08-0050 FHLMC 08/28/07 10/18/10 12,255,000.00 12,814,195.65 12,396,667.80 (417,527.85) 12,161,280.63 12,233,526.83 72,246.20 102,507.97 08-0070-01 FHLMC 08/29/07 10/28/09 3,000,000.00 3,037,680.00 - (3,037,680.00) 2,994,929.20 - (2,994,929.20) - 08-0071 FHLMC 08/29/07 07/06/10 3,000,000.00 3,116,760.00 - (3,116,760.00) 2,994,029.92 - (2,994,029.92) 65,625.00 08-0071-01 FHLMC 08/29/07 07/06/10 3,000,000.00 3,116,760.00 3,013,872.00 (102,888.00) 2,994,029.92 2,999,362.10 5,332.18 - 08-0072 FHLMC 08/29/07 11/15/11 5,750,000.00 6,135,020.00 6,059,350.00 (75,670.00) 5,714,348.51 5,729,377.24 15,028.73 33,062.50 09-0008 FHLMC 09/29/08 04/27/12 2,415,000.00 2,576,177.10 2,569,560.00 (6,617.10) 2,461,863.00 2,445,258.00 (16,605.00) 18,676.00 09-0039-01 FHLMC Pass-Thru 06/29/09 06/01/14 2,744,702.73 3,459,169.07 - (3,459,169.07) 3,276,417.25 - (3,276,417.25) - 08-0012 FNMA 08/24/07 10/15/11 6,000,000.00 6,485,640.00 6,343,140.00 (142,500.00) 6,019,729.58 6,011,109.86 (8,619.72) 63,333.33 08-0013 FNMA 08/24/07 02/07/11 8,075,000.00 8,582,190.75 8,299,565.75 (282,625.00) 8,096,070.72 8,082,901.52 (13,169.20) 163,115.00 08-0037-01 FNMA 08/27/07 11/09/09 10,000,000.00 10,128,100.00 - (10,128,100.00) 9,971,232.32 - (9,971,232.32) - 08-0041 FNMA 08/27/07 07/14/10 5,000,000.00 5,137,500.00 5,004,700.00 (132,800.00) 4,925,382.02 4,997,399.37 72,017.35 77,005.56 08-0042-01 FNMA 08/27/07 06/21/10 11,880,000.00 12,314,332.80 - (12,314,332.80) 11,826,897.34 - (11,826,897.34) -

07/01/09 - 06/30/10NORTH EAST I.S.D.

CHANGES IN VALUES

16

Investment Investment Purchase Maturity Face Value Beginning Ending Change in Beginning Ending Change in Int/Div AccruedNumber Description Date Date Market Value Market Value Market Value Book Value Book Value Book Value in the Period

07/01/09 - 06/30/10NORTH EAST I.S.D.

CHANGES IN VALUES

08-0051-01 FNMA 08/28/07 11/16/09 2,000,000.00 2,026,880.00 - (2,026,880.00) 1,993,933.46 - (1,993,933.46) - 08-0053 FNMA 08/28/07 02/16/12 2,300,000.00 2,495,500.00 2,460,287.00 (35,213.00) 2,309,488.79 2,305,874.01 (3,614.78) 43,125.00 08-0054 FNMA 08/28/07 05/18/12 2,300,000.00 2,499,824.00 2,477,537.00 (22,287.00) 2,303,128.69 2,302,042.55 (1,086.14) 13,392.71 08-0076 FNMA 08/29/07 05/15/11 7,609,000.00 8,270,069.92 7,982,297.54 (287,772.38) 7,776,815.16 7,687,180.95 (89,634.21) 58,335.67 08-0078 FNMA 08/29/07 11/15/10 9,675,000.00 10,443,001.50 9,907,780.50 (535,221.00) 9,899,834.96 9,735,987.62 (163,847.34) 81,901.56 08-0084-01 FNMA 08/30/07 01/19/10 11,885,000.00 12,126,384.35 - (12,126,384.35) 11,857,359.82 - (11,857,359.82) - 08-0086-01 FNMA 08/30/07 05/17/10 725,000.00 749,693.50 - (749,693.50) 724,689.00 - (724,689.00) - 6719 - CAPITAL PROJECTS $498 MILLION TOTAL 336,985,702.73 352,580,296.21 170,879,867.37 (181,700,428.84) 338,407,458.13 165,489,747.31 (172,917,710.82) 2,092,618.62

7539 - HEALTH INSURANCE10-0029 Gen Elec Cap Corp 06/24/10 03/21/11 3,000,000.00 - 2,993,490.18 2,993,490.18 - 2,984,877.50 2,984,877.50 - 09-0040-01 FHLMC Pass-Thru 06/29/09 06/01/14 1,568,401.56 1,976,668.04 - (1,976,668.04) 1,872,238.43 - (1,872,238.43) - 7539 - HEALTH INSURANCE TOTAL 4,568,401.56 1,976,668.04 2,993,490.18 1,016,822.14 1,872,238.43 2,984,877.50 1,112,639.07 -

7939 - WORKERS' COMPENSATION10-0029 Gen Elec Cap Corp 06/24/10 03/21/11 1,000,000.00 - 997,830.06 997,830.06 - 994,959.17 994,959.17 - 7939 - WORKERS' COMPENSATION TOTAL 1,000,000.00 - 997,830.06 997,830.06 - 994,959.17 994,959.17 -

SUMMARY TOTALS: 376,199,104.29$ 372,167,162.95$ 196,386,178.82$ (175,780,984.13)$ 357,754,144.94$ 190,918,686.42$ (166,835,458.52)$ 2,186,368.62$

17

Investment Investment Purchase Maturity Face Value Year to Date YieldNumber Description Date Date Earnings Earned

1999 - GENERAL OPERATING08-0103 NEISD Municipal Discount 12/11/07 08/01/10 5,145,000.00$ 163,656.49$ 3.26%09-0019-01 FHLB Discount Note 10/29/08 08/14/09 10,000,000.00 37,244.45 3.1309-0030-01 Bank of Amer CRP 02/12/09 12/02/11 2,500,000.00 11,612.65 3.4210-0001-01 FCAR Owner 07/01/09 07/23/09 30,000,000.00 18,333.33 1.0010-0002-01 FCAR Owner Trust 1 07/09/09 07/24/09 30,000,000.00 11,875.00 0.9510-0004-01 FCAR Owner TR 1 08/03/09 08/21/09 15,000,000.00 6,416.67 0.9610-0004-02 FCAR Owner TR 1 08/03/09 08/21/09 30,000,000.00 14,250.00 0.9510-0007-01 FCAR Owner TR 1 09/03/09 09/23/09 22,500,000.00 8,750.00 1.0010-0010-01 AutoBahn Funding Co 10/01/09 10/14/09 30,000,000.00 7,041.67 0.6510-0013-01 FCAR Owner TRI I 11/02/09 11/18/09 42,000,000.00 9,520.00 0.5110-0014-01 Silver Tower US 12/01/09 12/16/09 10,000,000.00 2,916.67 0.7010-0016-01 Silver Tower US 12/04/09 12/14/09 12,000,000.00 2,000.00 0.6010-0017-01 AMSTEL Funding 01/07/10 01/19/10 82,000,000.00 17,493.33 0.6410-0018-01 GIRBAL 01/07/10 01/20/10 66,000,000.00 9,533.34 0.4010-0019-01 Hannover Funding 01/26/10 02/18/10 100,000,000.00 21,083.33 0.3310-0020-01 Hannover Funding 02/01/10 02/18/10 69,000,000.00 10,426.66 0.3210-0022-01 Silver Tower 03/01/10 03/19/10 30,000,000.00 6,450.00 0.4310-0023-01 Anglesea Funding 03/01/10 03/24/10 100,000,000.00 22,361.11 0.3510-0024-01 Silver Tower US Funding 03/01/10 03/18/10 23,895,000.00 4,964.85 0.4410-0026-01 Anglesea Funding LLC 03/31/10 04/22/10 85,000,000.00 22,336.11 0.4310-0027 FHLB 04/01/10 09/09/11 10,000,000.00 20,575.48 0.7910-0028-01 Anglesea Funding LLC 04/30/10 05/20/10 62,000,000.00 13,777.78 0.4010-0029 Gen Elec Cap Corp 06/24/10 03/21/11 4,000,000.00 536.67 0.69AR-0001 TexPool-General Operating NA Open 4,353,344.62 6,215.06 0.20AR-0009 LOGIC-General Operating NA Open 1,479,685.18 53,522.43 0.26AR-0032 MBIA CLASS-1999 NA Open 9,914,318.03 23,127.99 0.23AR-0034 TexPool-State Payments NA Open 140.90 2,838.46 0.24AR-0043 TexSTAR-General Operating NA Open 1,571.86 3.28 0.21AR-0044 TexPool Prime-Gen. Fund NA Open 46,401,769.34 91,601.40 0.24AR-0054 TexPool-General Operating NA Open 407,471.63 1,228.72 0.19AR-0083 BlackRock - General Fund NA Open 37,864.19 65.10 0.17SEC LEND Securities Lending - 1999 GF NA Open - 2,988.34 NA1999 - GENERAL OPERATING TOTAL 933,636,165.75 624,746.37 0.50

2409 - SCHOOL NUTRITION SERVICES10-0007-02 FCAR Owner TR 1 09/03/09 09/23/09 4,500,000.00 2,500.00 1.0010-0029 Gen Elec Cap Corp 06/24/10 03/21/11 2,000,000.00 268.33 0.69AR-0004 TexPool-Food Service NA Open 179.40 0.04 0.02AR-0012 LOGIC-Food Service NA Open 95,365.01 2,613.74 0.27AR-0045 TexPool Prime-Food Svc NA Open 1,433,135.40 10,620.84 0.29AR-0061 TexSTAR-Food Service NA Open 3.48 - 0.00AR-0078 MBIA Class - 2409 NA Open 2,212,294.43 3,371.02 0.24AR-0084 BlackRock - Food Service NA Open 880.61 0.84 0.102409 - SCHOOL NUTRITION SERVICES TOTAL 10,241,858.33 19,374.81 0.30

EARNINGS/YIELDSNORTH EAST I.S.D.

07/01/09 - 06/30/10

18



07/01/09 - 06/30/10

5119 - DEBT SERVICE10-0003-01 FCAR Owner TR 1 07/28/09 08/24/09 5,000,000.00 3,862.50 1.0310-0005-01 FCAR Owner TR 1 08/04/09 08/21/09 10,000,000.00 4,250.00 0.9010-0007-02 FCAR Owner TR 1 09/03/09 09/23/09 19,000,000.00 10,555.56 1.0010-0013-01 FCAR Owner TRI I 11/02/09 11/18/09 15,000,000.00 3,400.00 0.5110-0015-01 FCAR Owner TR I 12/01/09 12/16/09 15,000,000.00 2,000.00 0.3210-0018-01 GIRBAL 01/07/10 01/20/10 10,000,000.00 1,444.44 0.4010-0021-01 Silver Tower US 02/10/10 02/26/10 25,000,000.00 4,666.67 0.4210-0025-01 Belmont Funding LLC 03/02/10 03/25/10 25,000,000.00 5,590.28 0.3510-0026-01 Anglesea Funding LLC 03/31/10 04/22/10 55,000,000.00 14,452.78 0.4310-0028-01 Anglesea Funding LLC 04/30/10 05/20/10 64,000,000.00 14,222.22 0.40AR-0005 TexPool-Debt Service NA Open 18.10 - 0.00AR-0013 LOGIC-Debt Service NA Open 23,852.22 23,553.39 0.46AR-0046 TexPool Prime-Debt Svc NA Open 66,466,884.33 52,106.68 0.24AR-0054 TexPool-General Operating NA Open - 77.08 0.28AR-0055 TexSTAR-Debt Service NA Open 25,494.03 53.33 0.21AR-0079 MBIA CLASS-5119 NA Open 1,386,130.67 - 0.00AR-0085 BlackRock - Debt Service NA Open 155,482.82 390.80 0.195119 - DEBT SERVICE TOTAL 311,057,862.17 140,625.73 0.35

6289 - CAPITAL PROJECTS $211 MILLIONAR-0017 TexPool-CP $211 Million NA Open - 0.15 0.09AR-0049 TexPool Prime-6289 NA Open - 9,987.65 0.31AR-0086 BlackRock - $211M NA Open - 3.75 0.226289 - CAPITAL PROJECTS $211 MILLION TOTAL - 9,991.55 0.31

6299 - CAPITAL PROJECTS $155 MILLIONAR-0050 TexPool Prime-6299 NA Open - 373.04 0.286299 - CAPITAL PROJECTS $155 MILLION TOTAL - 373.04 0.28

6319 - CAPITAL PROJECTS $300 MILLIONAR-0056 TexSTAR - Capital Project NA Open 445.28 0.93 0.21AR-0057 MBIA CLASS-6319 NA Open 1,500,103.70 103.39 0.28AR-0082 LOGIC-Bond $300 Million NA Open 11,371.20 30.78 0.27AR-0087 BlackRock - $300M NA Open 160,535.12 4,777.40 0.186319 - CAPITAL PROJECTS $300 MILLION TOTAL 1,672,455.30 4,912.50 0.18

6329 - CAPITAL PROJECTS $149 MILLIONAR-0059 TexPool-CP $149Million NA Open 794.97 1.21 0.15AR-0060 TexPool Prime-6329 NA Open 629,179.72 3,535.89 0.33AR-0063 TexSTAR-Capital Projects NA Open 159.37 0.32 0.20AR-0077 MBIA Class 6329 NA Open 6.61 - 0.00AR-0088 BlackRock - $149M NA Open 1,637.62 11.80 0.226329 - CAPITAL PROJECTS $149 MILLION TOTAL 631,778.29 3,549.22 0.33

19



07/01/09 - 06/30/10

6719 - CAPITAL PROJECTS $498 MILLION08-0009-01 FHLMC 08/24/07 01/18/11 9,940,000.00 695,746.07 5.2508-0010 FHLMC 08/24/07 12/08/10 9,870,000.00 471,735.98 4.7808-0011 FHLMC 08/24/07 04/18/11 9,700,000.00 468,715.96 4.8108-0012 FNMA 08/24/07 10/15/11 6,000,000.00 291,380.28 4.8408-0013 FNMA 08/24/07 02/07/11 8,075,000.00 394,618.30 4.8808-0014 FHLB 08/24/07 09/10/10 11,500,000.00 555,114.23 4.8108-0035-01 FHLMC 08/27/07 07/15/09 11,251,000.00 20,366.00 4.6608-0037-01 FNMA 08/27/07 11/09/09 10,000,000.00 169,314.34 5.2508-0040-01 FHLB 08/27/07 09/11/09 12,120,000.00 113,378.02 5.9008-0041 FNMA 08/27/07 07/14/10 5,000,000.00 238,017.36 4.8108-0042-01 FNMA 08/27/07 06/21/10 11,880,000.00 558,415.16 4.8508-0048-01 FHLMC 08/28/07 02/09/10 18,675,000.00 536,115.41 6.3008-0049-01 FHLMC 08/28/07 11/03/09 1,950,000.00 30,984.41 6.5708-0050 FHLMC 08/28/07 10/18/10 12,255,000.00 577,764.94 4.7408-0051-01 FNMA 08/28/07 11/16/09 2,000,000.00 35,593.87 5.5208-0053 FNMA 08/28/07 02/16/12 2,300,000.00 111,385.22 4.8308-0054 FNMA 08/28/07 05/18/12 2,300,000.00 111,038.86 4.8208-0057 FHLB 08/28/07 12/09/11 2,300,000.00 111,345.52 4.8508-0058-01 FHLB 08/28/07 08/05/09 11,430,000.00 51,901.43 4.8108-0059-01 FHLB 08/28/07 12/11/09 12,120,000.00 253,667.41 5.2508-0061 FHLB 08/24/07 06/10/11 7,830,000.00 381,696.45 4.8308-0062 FHLB 08/24/07 06/08/12 1,320,000.00 65,299.42 4.8908-0063 FFCB 08/28/07 01/03/12 2,315,000.00 112,468.76 4.8808-0064 FFCB 08/28/07 03/09/11 7,888,000.00 383,322.34 4.8608-0065 FFCB 08/28/07 08/09/11 7,989,000.00 391,685.10 4.8908-0068 FHLB 08/24/07 03/09/12 2,235,000.00 109,589.64 4.8908-0069 FAMCA 08/28/07 07/15/11 7,846,000.00 391,182.24 4.9408-0070-01 FHLMC 08/29/07 10/28/09 3,000,000.00 46,020.80 4.7308-0071 FHLMC 08/29/07 07/06/10 3,000,000.00 140,888.30 4.7008-0071-01 FHLMC 08/29/07 07/06/10 3,000,000.00 142,092.08 5.2408-0072 FHLMC 08/29/07 11/15/11 5,750,000.00 273,778.73 4.7908-0073-01 FFCB 08/29/07 10/23/09 2,100,000.00 30,656.53 4.6908-0074 FFCB 08/29/07 08/16/10 11,775,000.00 557,846.83 4.7308-0075 FFCB 08/29/07 09/19/11 7,950,000.00 383,115.76 4.7708-0076 FNMA 08/29/07 05/15/11 7,609,000.00 366,905.79 4.7308-0078 FNMA 08/29/07 11/15/10 9,675,000.00 477,121.41 4.8408-0080-01 FHLB 08/29/07 10/02/09 7,465,000.00 88,437.25 4.7508-0082-01 FHLB 08/29/07 03/12/10 11,410,000.00 370,853.87 4.7508-0084-01 FNMA 08/30/07 01/19/10 11,885,000.00 300,976.71 4.7508-0085-01 FFCB 08/30/07 05/03/10 10,905,000.00 429,470.72 4.7708-0086-01 FNMA 08/30/07 05/17/10 725,000.00 29,903.08 4.7008-0090-01 FFCB 09/04/07 03/04/10 11,833,000.00 386,536.85 5.0509-0007 FHLB 09/29/08 06/08/12 2,905,000.00 115,793.24 3.8909-0008 FHLMC 09/29/08 04/27/12 2,415,000.00 88,447.50 3.6009-0009 FHLB 09/29/08 09/14/12 3,250,000.00 128,657.43 3.9009-0017 FHLB 10/28/08 09/10/10 4,000,000.00 136,872.14 3.37

20



07/01/09 - 06/30/10

09-0018-01 FHLB 10/28/08 06/11/10 5,500,000.00 176,000.46 3.5109-0039-01 FHLMC Pass-Thru 06/29/09 06/01/14 2,744,702.73 (6,752.12) (0.49)10-0008-01 FCAR Owner TR 1 09/03/09 09/23/09 3,000,000.00 1,666.67 1.0010-0012-01 FCAR Owner TRI I 11/02/09 11/18/09 10,000,000.00 2,266.67 0.51AR-0067 TexPool-CP $498 Million NA Open 411.42 44.60 0.22AR-0068 TexPool Prime - 6719 NA Open 2,894,791.20 26,666.70 0.27AR-0076 MBIA Class - 6719 NA Open 1.79 - 0.00AR-0089 BlackRock - $498M Constru NA Open 737.20 35.60 0.17SEC LEND Securities Lending - 6719 CP NA Open - 415,443.94 NA6719 - CAPITAL PROJECTS $498 MILLION TOTAL 352,881,644.34 12,741,590.26 4.93

6729 - CAPITAL PROJECTS $498 MILLION10-0009-01 FCAR Owner TR 1 09/03/09 09/23/09 3,000,000.00 1,666.67 1.00AR-0071 TexPool Prime - 6729 NA Open 2,077,580.64 14,100.92 0.33AR-0080 MBIA CLASS 6729 NA Open 0.28 - 0.00AR-0090 BlackRock - $498M Purchas NA Open 7,670.12 47.07 0.196729 - CAPITAL PROJECTS $498 MILLION TOTAL 5,085,251.04 15,814.66 0.35

7539 - HEALTH INSURANCE09-0040-01 FHLMC Pass-Thru 06/29/09 06/01/14 1,568,401.56 (3,858.36) (0.49)10-0006-01 FCAR Owner TR 1 08/04/09 08/21/09 5,000,000.00 2,125.00 0.9010-0007-01 FCAR Owner TR 1 09/03/09 09/23/09 - - 0.0010-0007-02 FCAR Owner TR 1 09/03/09 09/23/09 8,000,000.00 4,444.44 1.0010-0011-01 AutoBahn Funding Co 10/01/09 10/14/09 10,000,000.00 2,347.22 0.6510-0013-01 FCAR Owner TRI I 11/02/09 11/18/09 13,000,000.00 2,946.67 0.5110-0015-01 FCAR Owner TR I 12/01/09 12/16/09 5,000,000.00 666.67 0.3210-0018-01 GIRBAL 01/07/10 01/20/10 12,000,000.00 1,733.33 0.4010-0020-01 Hannover Funding 02/01/10 02/18/10 5,000,000.00 755.56 0.3210-0021-01 Silver Tower US 02/10/10 02/26/10 5,000,000.00 933.33 0.4210-0025-01 Belmont Funding LLC 03/02/10 03/25/10 8,000,000.00 1,788.89 0.3510-0026-01 Anglesea Funding LLC 03/31/10 04/22/10 10,000,000.00 2,627.78 0.4310-0028-01 Anglesea Funding LLC 04/30/10 05/20/10 12,000,000.00 2,666.67 0.4010-0029 Gen Elec Cap Corp 06/24/10 03/21/11 3,000,000.00 402.50 0.69AR-0006 TexPool-Health Insurance NA Open 119.04 - 0.00AR-0014 LOGIC-Health Insurance NA Open 436,114.20 19,258.23 0.36AR-0051 TexPool Prime-Health Ins. NA Open 12,556,591.05 19,237.41 0.25AR-0054 TexPool-General Operating NA Open 61.93 109.17 0.14AR-0064 TexSTAR-Health Insurance NA Open 247.17 0.50 0.20AR-0073 MBIA CLASS-7539 NA Open 6,800,384.46 8,835.82 0.24AR-0091 BlackRock - Health Insura NA Open 6,584.82 11.96 0.187539 - HEALTH INSURANCE TOTAL 117,368,504.23 67,032.79 0.30

7739 - DENTALAR-0007 TexPool-Dental NA Open 179,096.23 1,298.68 0.22AR-0052 TexPool Prime-Dental NA Open 1,965,313.60 1,281.71 0.22AR-0065 TexSTAR-Dental NA Open 88.59 0.16 0.18

21



07/01/09 - 06/30/10

AR-0092 BlackRock - Dental NA Open 476.89 1,718.72 0.207739 - DENTAL TOTAL 2,144,975.31 4,299.27 0.21

7939 - WORKERS' COMPENSATION10-0029 Gen Elec Cap Corp 06/24/10 03/21/11 1,000,000.00 134.17 0.69AR-0008 TexPool-Workers' Comp NA Open 303.53 0.25 0.08AR-0016 LOGIC-Workers' Comp NA Open 3,529.37 9.55 0.27AR-0053 TexPool Prime-Work Comp NA Open 2,199,114.50 2,749.25 0.27AR-0066 TexSTAR-Workers Compensat NA Open 182.96 0.38 0.21AR-0093 BlackRock - Workers' Comp NA Open 4,728.78 3,583.27 0.187939 - WORKERS' COMPENSATION TOTAL 3,207,859.14 6,476.87 0.21

SUMMARY TOTALS: 1,737,928,353.90$ 13,638,787.07$ 2.87%

NOTE: NA (Not Applicable) refers to an investment account with daily liquidity and no maturity date. A purchase datefor this account does not exist. The date the account was opened is not applicable.Open refers to an investment account with daily liquidity and no maturity date. Funds can be fully withdrawn at any time.

22

NORTH EAST INDEPENDENT SCHOOL DISTRICT CASH BUDGET (M&O) FISCAL YEAR 2009-10

FORECASTED STATE & LOCAL M&O TAX RECEIPTS AND INVESTMENT INTEREST RECEIPTS

JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS1st WK 6,623,566$ 20,804$ 111,686$ 391,023$ 2,177,919$ 6,314,944$ 29,600,767$ 10,809,977$ 1,034,310$ 1,171,737$ 272,772$ 479,469$ 59,008,973$ 2nd WK 3,674,796$ 355,560$ 108,481$ 2,997,149$ 3,562,248$ 17,668,154$ 41,513,133$ 3,730,088$ 7,544,136$ 812,851$ 765,080$ 1,545,009$ 84,276,685$ 3rd WK 891,989$ 523,293$ 655,761$ 3,648,726$ 6,699,375$ 9,523,883$ 21,268,266$ 9,696,640$ 505,014$ 924,544$ 824,789$ 3,264,235$ 58,426,515$ 4th WK 680,391$ 230,853$ 514,508$ 2,955,823$ 4,459,836$ 10,130,761$ 5,118,759$ 2,482,581$ 1,044,745$ 446,516$ 889,676$ 4,847,532$ 33,801,980$ 5th WK 113,820$ 52,743,856$ 65,138,331$ 27,794,312$ 13,716,514$ 35,196,014$ 6,880,397$ 2,459,545$ 1,069,933$ 803$ 382,368$ 7,078,650$ 212,574,543$ TOTAL 11,984,562$ 53,874,366$ 66,528,767$ 37,787,033$ 30,615,893$ 78,833,755$ 104,381,322$ 29,178,831$ 11,198,138$ 3,356,450$ 3,134,685$ 17,214,895$ 448,088,696$

Amended Budget = 475,458,761$

FORECASTED A/P AND PAYROLL CASH DISBURSEMENTSJULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS

1st WK (4,345,708)$ (3,099,483)$ (40,854)$ (7,857,295)$ (2,691,593)$ (1,887,770)$ (1,544,782)$ (1,042,931)$ (399,229)$ (11,609,575)$ (3,095,642)$ (2,365,365)$ (39,980,226)$ 2nd WK (2,970,454)$ (1,363,929)$ (9,802,255)$ (6,804,267)$ (9,590,892)$ (8,758,693)$ (7,438,091)$ (4,864,804)$ (5,515,485)$ (814,493)$ (4,840,819)$ (5,165,447)$ (67,929,629)$ 3rd WK (361,380)$ (8,371,273)$ (2,031,352)$ (2,487,503)$ (20,364,756)$ (26,797,272)$ (20,023,796)$ (1,621,799)$ (4,500,326)$ (1,756,316)$ (4,284,706)$ (4,422,505)$ (97,022,983)$ 4th WK (24,010,374)$ (11,546,552)$ (6,347,091)$ (25,276,002)$ (5,142,450)$ (3,610,665)$ (6,389,155)$ (10,134,596)$ (2,542,760)$ (23,891,162)$ (26,234,983)$ (2,838,516)$ (147,964,306)$ 5th WK (2,294,441)$ (10,054,850)$ (10,886,484)$ (810,493)$ 84,821$ (3,231,131)$ (3,162,078)$ (15,138,056)$ (23,022,628)$ (1,019,959)$ (876,857)$ (24,911,067)$ (95,323,224)$ TOTAL (33,982,357)$ (34,436,086)$ (29,108,037)$ (43,235,562)$ (37,704,869)$ (44,285,531)$ (38,557,901)$ (32,802,186)$ (35,980,428)$ (39,091,504)$ (39,333,007)$ (39,702,900)$ (448,220,368)$

Amended Budget = (476,388,438)$

FORECASTED CASH EXCESS (DEFICIENCY) OF CASHJULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS

1st WK 2,277,858$ (3,078,678)$ 70,832$ (7,466,273)$ (513,673)$ 4,427,174$ 28,055,985$ 9,767,045$ 635,081$ (10,437,838)$ (2,822,870)$ (1,885,897)$ 19,028,747$ 2nd WK 704,342$ (1,008,368)$ (9,693,775)$ (3,807,119)$ (6,028,645)$ 8,909,461$ 34,075,043$ (1,134,715)$ 2,028,651$ (1,642)$ (4,075,739)$ (3,620,438)$ 16,347,056$ 3rd WK 530,609$ (7,847,980)$ (1,375,592)$ 1,161,223$ (13,665,381)$ (17,273,390)$ 1,244,470$ 8,074,841$ (3,995,312)$ (831,772)$ (3,459,917)$ (1,158,269)$ (38,596,468)$ 4th WK (23,329,983)$ (11,315,699)$ (5,832,583)$ (22,320,179)$ (682,613)$ 6,520,095$ (1,270,396)$ (7,652,015)$ (1,498,015)$ (23,444,645)$ (25,345,307)$ 2,009,016$ (114,162,326)$ 5th WK (2,180,621)$ 42,689,006$ 54,251,847$ 26,983,819$ 13,801,335$ 31,964,883$ 3,718,319$ (12,678,511)$ (21,952,696)$ (1,019,157)$ (494,489)$ (17,832,417)$ 117,251,319$ TOTAL (21,997,795)$ 19,438,280$ 37,420,730$ (5,448,529)$ (7,088,977)$ 34,548,223$ 65,823,421$ (3,623,355)$ (24,782,290)$ (35,735,053)$ (36,198,322)$ (22,488,005)$ (131,672)$ CUM. (21,997,795)$ (2,559,515)$ 34,861,215$ 29,412,686$ 22,323,709$ 56,871,933$ 122,695,354$ 119,071,999$ 94,289,709$ 58,554,655$ 22,356,333$ (131,672)$

COMPARISON OF ACTUAL RECEIPTS VERSUS FORECAST RECEIPTS (IN $)

JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS1st WK 688,527$ 877,591$ 679,684$ (322,184)$ 3,437,369$ 26,516,404$ (29,600,767)$ 27,055,716$ 1,579,265$ (948,287)$ 311,057$ 1,331,876$ 31,606,252$ 2nd WK 4,840,001$ 44,712$ 370,872$ 95,200$ 2,286,113$ (4,601,675)$ 37,270,650$ 6,328,990$ (6,261,402)$ 1,499,723$ 194,749$ 1,470,186$ 43,538,119$ 3rd WK 907,106$ (104,463)$ (167,445)$ (1,912,055)$ 4,074,544$ 1,644,041$ (15,015,976)$ (3,083,519)$ 313,070$ 274,318$ (722,158)$ (1,391,834)$ (15,184,370)$ 4th WK (35,289)$ 18,505,761$ 61,111,630$ 2,066,608$ 2,810,160$ (982,115)$ 8,109,779$ (27,155,041)$ (8,946,880)$ 191,173$ 2,037,834$ 3,142,603$ 60,856,223$ 5th WK (3,850,925)$ (49,604,131)$ (61,243,200)$ 24,818,854$ (7,746,306)$ 856,178$ (18,286,180)$ (2,459,545)$ (17,003)$ 1,389,516$ (368,464)$ 327,505$ (116,183,702)$ TOTAL 2,549,419$ (30,280,530)$ 751,543$ 24,746,423$ 4,861,879$ 23,432,832$ (17,522,493)$ 686,601$ (13,332,951)$ 2,406,443$ 1,453,018$ 4,880,335$ 4,632,521$ CUM. 2,549,419$ (27,731,111)$ (26,979,568)$ (2,233,144)$ 2,628,735$ 26,061,567$ 8,539,074$ 9,225,675$ (4,107,275)$ (1,700,832)$ (247,814)$ 4,632,521$

COMPARISON OF ACTUAL DISBURSEMENTS VERSUS FORECAST DISBURSEMENTS (IN $)JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS

1st WK 3,326,505$ (3,825,096)$ (11,116,773)$ 1,943,539$ (4,205,080)$ (1,308,356)$ 1,544,782$ (3,527,642)$ (10,624,320)$ 6,048,700$ (2,585,708)$ (3,731,025)$ (28,060,475)$ 2nd WK (6,549,041)$ (7,988,651)$ 6,379,978$ (150,760)$ 790,514$ (7,939,532)$ (733,341)$ 232,063$ (3,980,910)$ (4,798,982)$ (4,789,813)$ (617,614)$ (30,146,090)$ 3rd WK (6,702,729)$ (4,818,304)$ (18,164,878)$ (9,571,853)$ (5,685,788)$ 10,659,594$ 14,669,929$ (7,932,887)$ (1,907,640)$ (6,777,025)$ (2,658,142)$ (1,328,571)$ (40,218,294)$ 4th WK 9,895,770$ (19,989,721)$ (19,998,585)$ 17,343,786$ 230,807$ (251,130)$ (25,187,109)$ (1,042,346)$ (15,021,265)$ 19,513,380$ 5,038,761$ (30,138,750)$ (59,606,402)$ 5th WK (8,191,427)$ 32,874,971$ 28,977,375$ (10,092,557)$ (337,464)$ 8,947,381$ 10,828,602$ 15,138,056$ 32,405,157$ (12,869,179)$ 3,359,052$ 32,848,297$ 133,888,266$ TOTAL (8,220,922)$ (3,746,801)$ (13,922,883)$ (527,844)$ (9,207,012)$ 10,107,957$ 1,122,862$ 2,867,245$ 871,022$ 1,116,894$ (1,635,850)$ (2,967,663)$ (24,142,995)$ CUM. (8,220,922)$ (11,967,723)$ (25,890,607)$ (26,418,450)$ (35,625,462)$ (25,517,505)$ (24,394,643)$ (21,527,399)$ (20,656,376)$ (19,539,482)$ (21,175,332)$ (24,142,995)$

23

NORTH EAST INDEPENDENT SCHOOL DISTRICTACTUAL CASH RECEIPTS AND CASH DISBURSEMENTS for F1999 (General Operating)FISCAL YEAR 2009-2010

STATE & LOCAL M&O TAX RECEIPTS AND INVESTMENT INTEREST RECEIPTSJUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTALS

1st WK 7,312,093$ 898,395$ 791,371$ 68,839$ 5,615,288$ 32,831,348$ -$ 37,865,693$ 2,613,575$ 223,450$ 583,829$ 1,811,345$ 90,615,225$ 2nd WK 8,514,797$ 400,272$ 479,353$ 3,092,349$ 5,848,361$ 13,066,479$ 78,783,784$ 10,059,078$ 1,282,734$ 2,312,574$ 959,829$ 3,015,195$ 127,814,804$ 3rd WK 1,799,096$ 418,831$ 488,316$ 1,736,671$ 10,773,920$ 11,167,923$ 6,252,289$ 6,613,121$ 818,084$ 1,198,862$ 102,631$ 1,872,401$ 43,242,145$ 4th WK 645,101$ 18,736,614$ 61,626,138$ 5,022,431$ 7,269,996$ 9,148,645$ 13,228,538$ (24,672,460)$ (7,902,135)$ 637,689$ 2,927,510$ 7,990,134$ 94,658,203$ 5th WK (3,737,106)$ 3,139,725$ 3,895,132$ 52,613,166$ 5,970,208$ 36,052,192$ (11,405,782)$ -$ 1,052,930$ 1,390,318$ 13,904$ 7,406,155$ 96,390,841$ TOTAL 14,533,981$ 23,593,837$ 67,280,309$ 62,533,456$ 35,477,772$ 102,266,587$ 86,858,829$ 29,865,432$ (2,134,813)$ 5,762,893$ 4,587,703$ 22,095,230$ 452,721,217$ CUM. 14,533,981$ 38,127,818$ 105,408,128$ 167,941,584$ 203,419,356$ 305,685,943$ 392,544,772$ 422,410,204$ 420,275,391$ 426,038,284$ 430,625,987$ 452,721,217$

Amended Budget = 475,458,761$ % collected to date= 95.22%

A/P AND PAYROLL DISBURSEMENTSJUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTALS

1st WK (1,019,203)$ (6,924,579)$ (11,157,627)$ (5,913,756)$ (6,896,673)$ (3,196,126)$ -$ (4,570,573)$ (11,023,548)$ (5,560,875)$ (5,681,350)$ (6,096,391)$ (68,040,701)$ 2nd WK (9,519,495)$ (9,352,580)$ (3,422,278)$ (6,955,027)$ (8,800,379)$ (16,698,226)$ (8,171,432)$ (4,632,741)$ (9,496,395)$ (5,613,475)$ (9,630,632)$ (5,783,061)$ (98,075,720)$ 3rd WK (7,064,109)$ (13,189,577)$ (20,196,230)$ (12,059,356)$ (26,050,544)$ (16,137,678)$ (5,353,867)$ (9,554,685)$ (6,407,966)$ (8,533,341)$ (6,942,848)$ (5,751,075)$ (137,241,277)$ 4th WK (14,114,604)$ (31,536,273)$ (26,345,676)$ (7,932,216)$ (4,911,643)$ (3,861,795)$ (31,576,264)$ (11,176,942)$ (17,564,025)$ (4,377,781)$ (21,196,222)$ (32,977,265)$ (207,570,708)$ 5th WK (10,485,868)$ 22,820,121$ 18,090,891$ (10,903,050)$ (252,643)$ 5,716,250$ 7,666,524$ -$ 9,382,529$ (13,889,138)$ 2,482,195$ 7,937,230$ 38,565,042$ TOTAL (42,203,280)$ (38,182,887)$ (43,030,920)$ (43,763,406)$ (46,911,881)$ (34,177,575)$ (37,435,039)$ (29,934,941)$ (35,109,406)$ (37,974,610)$ (40,968,857)$ (42,670,563)$ (472,363,363)$ MOV AV (42,203,280)$ (40,193,083)$ (41,139,029)$ (41,795,123)$ (42,818,475)$ (41,378,325)$ (40,814,998)$ (39,454,991)$ (38,972,148)$ (38,872,394)$ (39,062,982)$ (39,363,614)$

Amended Budget = (476,388,438)$ % disbursed to date= 99.16%

ACTUAL CASH EXCESS (DEFICIENCY) OF CASH JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTALS

1st WK 6,292,890$ (6,026,183)$ (10,366,256)$ (5,844,917)$ (1,281,385)$ 29,635,222$ -$ 33,295,119$ (8,409,973)$ (5,337,425)$ (5,097,521)$ (4,285,046)$ 22,574,524$ 2nd WK (1,004,698)$ (8,952,308)$ (2,942,925)$ (3,862,678)$ (2,952,018)$ (3,631,747)$ 70,612,352$ 5,426,337$ (8,213,661)$ (3,300,901)$ (8,670,803)$ (2,767,866)$ 29,739,085$ 3rd WK (5,265,013)$ (12,770,746)$ (19,707,914)$ (10,322,685)$ (15,276,624)$ (4,969,755)$ 898,422$ (2,941,564)$ (5,589,882)$ (7,334,479)$ (6,840,217)$ (3,878,675)$ (93,999,132)$ 4th WK (13,469,503)$ (12,799,659)$ 35,280,462$ (2,909,785)$ 2,358,353$ 5,286,850$ (18,347,726)$ (35,849,402)$ (25,466,160)$ (3,740,092)$ (18,268,712)$ (24,987,131)$ (112,912,505)$ 5th WK (14,222,974)$ 25,959,846$ 21,986,023$ 41,710,116$ 5,717,564$ 41,768,442$ (3,739,258)$ -$ 10,435,458$ (12,498,820)$ 2,496,100$ 15,343,385$ 134,955,882$ TOTAL (27,669,298)$ (14,589,051)$ 24,249,390$ 18,770,051$ (11,434,109)$ 68,089,012$ 49,423,790$ (69,509)$ (37,244,218)$ (32,211,717)$ (36,381,154)$ (20,575,333)$ (19,642,146)$ CUM. (27,669,298)$ (42,258,349)$ (18,008,959)$ 761,091$ (10,673,018)$ 57,415,994$ 106,839,785$ 106,770,275$ 69,526,057$ 37,314,341$ 933,187$ (19,642,146)$

*NOTE: Beginning cash balance in the bank at 7/1/09 was $157,090.10. Balance in the investment pools at 7/1/09 was $83,786,908.92. Fixed Income Securities face value as of 7/1/09 was $45,145,000.00.

INVESTMENTS MATUREDJUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL

1st WK -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 2nd WK -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 3rd WK 129,010$ 9,999,967$ 22,363,907$ 30,000,000$ 42,000,000$ 22,000,000$ 148,000,000$ 169,000,000$ 53,895,000$ -$ 62,000,000$ -$ 559,387,883$ 4th WK 60,000,000$ 47,550,004$ -$ -$ -$ -$ -$ -$ 100,000,000$ 85,000,000$ -$ -$ 292,550,004$ 5th WK -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ TOTAL 60,129,010$ 57,549,971$ 22,363,907$ 30,000,000$ 42,000,000$ 22,000,000$ 148,000,000$ 169,000,000$ 153,895,000$ 85,000,000$ 62,000,000$ -$ 851,937,888$

INVESTMENTS PURCHASEDJUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN TOTAL

1st WK (30,000,000)$ (45,000,000)$ (22,500,000)$ (30,000,000)$ (42,000,000)$ (22,000,000)$ (148,000,000)$ (69,000,000)$ (153,895,000)$ (10,000,000)$ -$ -$ (572,395,000)$ 2nd WK (30,000,000)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (30,000,000)$ 3rd WK -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 4th WK -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (4,000,000)$ (4,000,000)$ 5th WK -$ -$ -$ -$ -$ -$ (100,000,000)$ -$ (85,000,000)$ (62,000,000)$ -$ -$ (247,000,000)$ TOTAL (60,000,000)$ (45,000,000)$ (22,500,000)$ (30,000,000)$ (42,000,000)$ (22,000,000)$ (248,000,000)$ (69,000,000)$ (238,895,000)$ (72,000,000)$ -$ (4,000,000)$ (853,395,000)$

24

NORTH EAST INDEPENDENT SCHOOL DISTRICT CASH TRANSACTIONS (DEBT SERVICE) FISCAL YEAR 2009-2010

STATE & LOCAL DEBT SERVICE TAX RECEIPTS AND INVESTMENT INTEREST RECEIPTS

JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS1st WK -$ -$ -$ -$ 178,594$ 3,100,778$ -$ -$ -$ -$ 1,283,559$ -$ 4,562,932$ 2nd WK 6,173,460$ -$ 388,367$ -$ -$ -$ -$ 26,757,343$ 101,989$ -$ -$ -$ 33,421,159$ 3rd WK -$ -$ -$ -$ -$ -$ 10,142,814$ -$ -$ -$ 813,139$ -$ 10,955,953$ 4th WK -$ 2,889,863$ -$ -$ -$ -$ 37,470,756$ -$ 9,110,072$ -$ -$ 971,183$ 50,441,873$ 5th WK 25,345$ 4,191$ 2,190$ 3,637$ 1,467$ 2,198$ 4,423$ 2,697$ 6,041$ 3,841$ 5,265$ 15,389$ 76,683$ TOTAL 6,198,805$ 2,894,055$ 390,557$ 3,637$ 180,061$ 3,102,976$ 47,617,992$ 26,760,040$ 9,218,102$ 3,841$ 2,101,963$ 986,572$ 99,458,600$

47,132,978DEBT SERVICE CASH DISBURSEMENTS

JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS1st WK -$ (52,884,386)$ (769)$ (5,719,188)$ -$ -$ -$ -$ -$ (246,938)$ -$ -$ (58,851,280)$ 2nd WK -$ -$ -$ -$ -$ -$ -$ (36,917,405)$ -$ -$ -$ -$ (36,917,405)$ 3rd WK -$ -$ -$ -$ -$ -$ -$ (800)$ -$ -$ -$ -$ (800)$ 4th WK -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 5th WK (2,222)$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ (2,222)$ TOTAL (2,222)$ (52,884,386)$ (769)$ (5,719,188)$ -$ -$ -$ (36,918,205)$ -$ (246,938)$ -$ -$ (95,771,706)$

DEBT SERVICE INVESTMENTS MATURED (PURCHASED)JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS

1st WK -$ (9,995,750)$ (18,989,444)$ -$ (14,996,600)$ (14,998,000)$ (9,998,556)$ -$ (24,994,410)$ -$ -$ -$ (93,972,760)$ 2nd WK -$ -$ -$ -$ -$ -$ -$ (24,995,333)$ -$ -$ -$ -$ (24,995,333)$ 3rd WK -$ -$ -$ -$ 15,000,000$ 15,000,000$ -$ -$ -$ -$ -$ -$ 30,000,000$ 4th WK -$ 5,000,000$ 19,000,000$ -$ -$ -$ 10,000,000$ 25,000,000$ 25,000,000$ 55,000,000$ 64,000,000$ -$ 203,000,000$ 5th WK (4,996,138)$ 10,000,000$ -$ -$ -$ -$ -$ -$ (54,985,547)$ (63,985,778)$ -$ (113,967,463)$ TOTAL (4,996,138)$ 5,004,250$ 10,556$ -$ 3,400$ 2,000$ 1,444$ 4,667$ (54,979,957)$ (8,985,778)$ 64,000,000$ -$ 64,444$

(46,168,606)CASH EXCESS (DEFICIENCY) OF CASH

JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE TOTALS1st WK -$ (62,880,136)$ (18,990,213)$ (5,719,188)$ (14,818,006)$ (11,897,222)$ (9,998,556)$ -$ (24,994,410)$ (246,938)$ 1,283,559$ -$ (148,261,108)$ 2nd WK 6,173,460$ -$ 388,367$ -$ -$ -$ -$ (35,155,396)$ 101,989$ -$ -$ -$ (28,491,579)$ 3rd WK -$ -$ -$ -$ 15,000,000$ 15,000,000$ 10,142,814$ (800)$ -$ -$ 813,139$ -$ 40,955,153$ 4th WK -$ 7,889,863$ 19,000,000$ -$ -$ -$ 47,470,756$ 25,000,000$ 34,110,072$ 55,000,000$ 64,000,000$ 971,183$ 253,441,873$ 5th WK (4,973,014)$ 10,004,191$ 2,190$ 3,637$ 1,467$ 2,198$ 4,423$ 2,697$ (54,979,506)$ (63,981,937)$ 5,265$ 15,389$ (113,893,001)$ TOTAL 1,200,446$ (44,986,082)$ 400,344$ (5,715,551)$ 183,461$ 3,104,976$ 47,619,437$ (10,153,499)$ (45,761,855)$ (9,228,875)$ 66,101,963$ 986,572$ 3,751,338$ CUM. 1,200,446$ (43,785,636)$ (43,385,292)$ (49,100,843)$ (48,917,382)$ (45,812,406)$ 1,807,031$ (8,346,468)$ (54,108,323)$ (63,337,198)$ 2,764,766$ 3,751,338$

Note: Beginning cash balance of $64,306,524 on 07/01/09

25

REVIEW OF CDA(LOCAL)

BY THE NORTH EAST ISD BOARD OF TRUSTEES

SEPTEMBER 13, 2010

26

North East ISD 015910 OTHER REVENUES CDAINVESTMENTS (LOCAL)

DATE ISSUED: 11/25/2008 1 of 4UPDATE 84 CDA(LOCAL)-X

The Superintendent or other person designated by Board resolu-tion shall serve as the investment officer of the District and shall invest District funds as directed by the Board and in accordance with the District’s written investment policy and generally accepted accounting procedures. All investment transactions except invest-ment pool funds and mutual funds shall be executed on a delivery versus payment basis.

In compliance with the Public Funds Investment Act 2256.008 and District policies, the District shall provide for investment personnel periodic training in investments through courses and seminars of-fered by professional organizations and associations.

From those investments authorized by law and described further in CDA(LEGAL), the Board shall permit investment of District funds in only the following investment types, consistent with the strategies and maturities defined in this policy:

1. Obligations of, or guaranteed by, governmental entities as permitted by Government Code 2256.009.

2. Certificates of deposit and share certificates as permitted by Government Code 2256.010.

3. Fully collateralized repurchase agreements permitted by Government Code 2256.011.

4. A securities lending program as permitted by Government Code 2256.0115.

5. Banker’s acceptances as permitted by Government Code 2256.012.

6. Commercial paper as permitted by Government Code 2256.013.

7. No-load money market mutual funds and no-load mutual funds as permitted by Government Code 2256.014.

8. A guaranteed investment contract as an investment vehicle for bond proceeds, provided it meets the criteria and eligibility requirements established by Government Code 2256.015.

9. Public funds investment pools as permitted by Government Code 2256.016.

Upon awareness by investment staff of a downgrade in a District investment, prudent measures shall be taken to liquidate an in-vestment that is downgraded to less than the required minimum rating.

INVESTMENT

AUTHORITY

TRAINING OF

PERSONNEL

APPROVED

INVESTMENT INSTRUMENTS

EFFECT OF LOSS OF REQUIRED RATING

27



The main goal of the investment program is to ensure its safety and maximize financial returns within current market conditions in accordance with this policy. Investments shall be made in a man-ner that ensures the preservation of capital in the overall portfolio, and offsets during a 12-month period any market price losses re-sulting from interest-rate fluctuations by income received from the balance of the portfolio. No individual investment transaction shall be undertaken that jeopardizes the total capital position of the overall portfolio.

Except for cash in certain restricted and special funds, the District may consolidate cash balances from all funds to maximize invest-ment earnings.

Any internally created pool fund group of the District shall have a maximum weighted maturity of one year. The holding periods of investment funds shall match liquidity needs of the District. In no case shall the average maturity of investments of the District’s op-erating funds exceed two years. The maximum final stated matur-ity of any investment shall not exceed five years.

The maximum allowable stated maturity of any other individual in-vestment owned by the District shall not exceed legal limits or limits authorized by District policies. The District’s investment portfolio shall have sufficient liquidity to meet anticipated cash flow require-ments.

The investment portfolio shall be diversified in terms of investment instruments, maturity scheduling, and financial institutions to re-duce risk of loss resulting from overconcentration of assets in a specific class of investments, specific maturity, or specific issuer.

The market value of pledged collateral must be at least 110 percent of the principal plus accrued interest for excess cash balances, cer-tificates of deposit, guaranteed investment contracts, and repur-chase agreements. Evidence of proper collateralization shall be provided to a District investment officer no less than quarterly. An authorized District representative shall approve and release all pledged collateral.

Investment securities described in Government Code 2256.009(a) shall be eligible for use as collateral of District monies governed by this policy.

The investment officer shall monitor the investment portfolio and shall keep the Board informed of significant declines in the market value of the District’s investment portfolio. Information sources may include financial/investment publications and electronic media, available software for tracking investments, depository banks,

SAFETY AND

INVESTMENT MANAGEMENT

POOLING OF FUNDS

LIQUIDITY AND MATURITY

DIVERSITY

COLLATERAL

MONITORING MARKET

PRICES

28



commercial or investment banks, financial advisors, and represen-tatives/advisors of investment pools or money market funds. Moni-toring shall be done monthly or more often as economic conditions warrant by using appropriate reports, indices, or benchmarks for the type of investment.

Investments of the following fund categories shall be consistent with this policy and in accordance with the strategy defined below.

Investment strategies for operating funds (including any commin-gled pools containing operating funds) shall have as their primary objectives safety, investment liquidity, and maturity sufficient to meet anticipated cash flow requirements.

Investment strategies for agency funds shall have as their objec-tives safety, investment liquidity, and maturity sufficient to meet an-ticipated cash flow requirements.

Investment strategies for debt service funds shall have as their ob-jective sufficient investment liquidity to timely meet debt service payment obligations in accordance with provisions in the bond documents. Maturities longer than one year are authorized pro-vided legal limits are not exceeded.

Investment strategies for capital project funds shall have as their objective sufficient investment liquidity to timely meet capital pro-ject obligations. Maturities longer than one year are authorized provided legal limits are not exceeded.

Investment strategies for proprietary funds shall have as their pri-mary objectives safety, investment liquidity, and maturity sufficient to meet anticipated cash flow requirements.

Securities shall be held by a third-party custodian designated by the District and held in the District’s name as evidenced by safe-keeping receipts of the institution with which the securities are de-posited.

The District shall retain clearly marked receipts providing proof of the District’s ownership. The District may delegate, however, to an investment pool the authority to hold legal title as custodian of in-vestments purchased with District funds by the investment pool.

Prior to handling investments on behalf of the District, bro-kers/dealers must submit required written documents in accor-dance with law. [See SELLERS OF INVESTMENTS, CDA(LE-GAL)] Representatives of brokers/dealers shall be registered with the Texas State Securities Board and must have membership in the Securities Investor Protection Corporation (SIPC), and be in good standing with the Financial Industry Regulatory Authority (FINRA).

FUNDS / STRATEGIES

OPERATING FUNDS

AGENCY FUNDS

DEBT SERVICE FUNDS

CAPITAL PROJECTS

PROPRIETARY FUNDS

SAFEKEEPING AND CUSTODY

SAFEKEEPING AND CUSTODY

BROKERS / DEALERS

29



ADOPTED:

In order to get the best return on its investments, the District may solicit bids for certificates of deposit in writing, by telephone, elec-tronically, or by a combination of these methods.

For any investment purchased or sold through the secondary mar-ket, the District shall obtain at least three proposals from author-ized institutions in writing, by telephone, electronically, or by a combination of these methods.

Interest rate risk is specific to the individual funds and is addressed indirectly under the investment guidelines for each fund. Liquidity and diversity are specifically discussed in other portions of this pol-icy.

A system of internal controls shall be established and documented in writing and must include specific procedures designating who has authority to withdraw funds. Also, they shall be designed to protect against losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the District. Controls deemed most important shall include:

1. Separation of transaction authority from accounting and re-cordkeeping and electronic transfer of funds.

2. Avoidance of collusion.

3. Custodial safekeeping.

4. Clear delegation of authority.

5. Written confirmation of telephone transactions.

6. Documentation of dealer questionnaires, quotations and bids, evaluations, transactions, and rationale.

7. Avoidance of bearer-form securities.

These controls shall be reviewed by the District’s independent au-diting firm.

In addition to the quarterly report required by law and signed by the District’s investment officer, a comprehensive report on the invest-ment program and activity shall be presented annually to the Board.

SOLICITING BIDS

INTEREST RATE RISK

INTERNAL CONTROLS

PORTFOLIO REPORT

30

REVIEW OF CDA(LEGAL)

BY THE NORTH EAST ISD BOARD OF TRUSTEES

SEPTEMBER 13, 2010

31

North East ISD 015910 OTHER REVENUES CDAINVESTMENTS (LEGAL)

DATE ISSUED: 11/25/2008 1 of 11UPDATE 84 CDA(LEGAL)-P

All investments made by the District shall comply with the Public Funds Investment Act (Texas Government Code Chapter 2256, Subchapter A) and all federal, state, and local statutes, rules or regulations. Gov’t Code 2256.026

Investments shall be made in accordance with written policies ap-proved by the Board. The investment policies must primarily em-phasize safety of principal and liquidity and must address invest-ment diversification, yield, and maturity and the quality and capability of investment management. The policies must include:

1. A list of the types of authorized investments in which the Dis-trict’s funds may be invested;

2. The maximum allowable stated maturity of any individual in-vestment owned by the District;

3. For pooled fund groups, the maximum dollar-weighted aver-age maturity allowed based on the stated maturity date of the portfolio;

4. Methods to monitor the market price of investments acquired with public funds; and

5. A requirement for settlement of all transactions, except in-vestment pool funds and mutual funds, on a delivery versus payment basis.

Gov’t Code 2256.005(b)

The Board shall review its investment policy and investment strate-gies not less than annually. The Board shall adopt a written in-strument stating that it has reviewed the investment policy and in-vestment strategies and that the written instrument so adopted shall record any changes made to either the investment policy or investment strategies. Gov’t Code 2256.005(e)

The District shall perform a compliance audit of management con-trols on investments and adherence to the District’s established investment policies. The compliance audit shall be performed in conjunction with the annual financial audit. Gov’t Code 2256.005(m)

As part of the investment policy, the Board shall adopt a separate written investment strategy for each of the funds or group of funds under the Board’s control. Each investment strategy must describe the investment objectives for the particular fund under the following priorities in order of importance:

1. Understanding of the suitability of the investment to the finan-cial requirements of the District;

WRITTEN POLICIES

ANNUAL REVIEW

ANNUAL AUDIT

INVESTMENT STRATEGIES

32



2. Preservation and safety of principal;

3. Liquidity;

4. Marketability of the investment if the investment needs to be liquidated before maturity;

5. Diversification of the investment portfolio; and

6. Yield.

Gov’t Code 2256.005(d)

The District shall designate one or more officers or employees as investment officer(s) to be responsible for the investment of its funds. If the District has contracted with another investing entity to invest its funds, the investment officer of the other investing entity is considered to be the investment officer of the contracting Board’s District. In the administration of the duties of an investment officer, the person designated as investment officer shall exercise the judgment and care, under prevailing circumstances that a prudent person would exercise in the management of the person’s own af-fairs, but the Board retains the ultimate responsibility as fiduciaries of the assets of the District. Unless authorized by law, a person may not deposit, withdraw, transfer, or manage in any other man-ner the funds of the investing entity. Authority granted to a person to invest the District’s funds is effective until rescinded by the Dis-trict or until termination of the person’s employment by the District, or for an investment management firm, until the expiration of the contract with the District. Gov’t Code 2256.005(f)

A District or investment officer may use the District’s employees or the services of a contractor of the District to aid the investment offi-cer in the execution of the officer’s duties under Government Code, Chapter 2256. Gov’t Code 2256.003(c)

Within 12 months after taking office or assuming duties, the treas-urer or chief financial officer and the investment officer of the Dis-trict shall attend at least one training session from an independent source approved either by the Board or by a designated invest-ment committee advising the investment officer. This initial training must contain at least ten hours of instruction relating to their re-spective responsibilities under the Public Funds Investment Act. Gov’t Code 2256.008(a)

The treasurer or chief financial officer and the investment officer must also attend an investment training session not less than once in a two-year period and receive not less than ten hours of instruc-tion relating to investment responsibilities under the Public Funds Investment Act from an independent source approved by the Board

INVESTMENT OFFICER

INVESTMENT TRAINING

INITIAL

WITHIN A TWO-

YEAR PERIOD

33



or a designated investment committee advising the investment offi-cer. If the District has contracted with another investing entity to invest the District’s funds, this training requirement may be satis-fied by having a Board officer attend four hours of appropriate in-struction in a two-year period. Gov’t Code 2256.008(a), (b)

Investment training shall include education in investment controls, security risks, strategy risks, market risks, diversification of invest-ment portfolio, and compliance with the Government Code, Chap-ter 2256. Gov’t Code 2256.008(c)

Investments shall be made with judgment and care, under prevail-ing circumstances that a person of prudence, discretion, and intel-ligence would exercise in the management of his or her own af-fairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived. Investments shall be governed by the following objectives in order of priority:

1. Preservation and safety of principal;

2. Liquidity; and

3. Yield.

In determining whether an investment officer has exercised pru-dence with respect to an investment decision, the following shall be taken into consideration:

1. The investment of all funds, rather than the prudence of a single investment, over which the officer had responsibility.

2. Whether the investment decision was consistent with the Board’s written investment policy.

Gov’t Code 2256.006

A District investment officer who has a personal business relation-ship with a business organization offering to engage in an invest-ment transaction with the District shall file a statement disclosing that personal business interest. An investment officer who is re-lated within the second degree by affinity or consanguinity, as de-termined by Government Code Chapter 573, to an individual seek-ing to sell an investment to the investment officer’s District shall file a statement disclosing that relationship. A required statement must be filed with the Board and with the Texas Ethics Commission. For purposes of this policy, an investment officer has a personal busi-ness relationship with a business organization if:

STANDARD OF CARE

PERSONAL INTEREST

34



1. The investment officer owns ten percent or more of the voting stock or shares of the business organization or owns $5,000 or more of the fair market value of the business organization;

2. Funds received by the investment officer from the business organization exceed ten percent of the investment officer’s gross income for the previous year; or

3. The investment officer has acquired from the business or-ganization during the previous year investments with a book value of $2,500 or more for the personal account of the in-vestment officer.

Gov’t Code 2256.005(i)

Not less than quarterly, the investment officer shall prepare and submit to the Board a written report of investment transactions for all funds covered by the Public Funds Investment Act. This report shall be presented to the Board and the Superintendent not less than quarterly, within a reasonable time after the end of the period. The report must:

1. Contain a detailed description of the investment position of the District on the date of the report;

2. Be prepared jointly and signed by all District investment offi-cers.

3. Contain a summary statement for each pooled fund group (i.e., each internally created fund in which one or more ac-counts are combined for investing purposes). The report must be prepared in compliance with generally accepted ac-counting principles and must state:

a. Beginning market value for the reporting period;

b. Additions and changes to the market value during the period;

c. Ending market value for the period; and

d. Fully accrued interest for the reporting period.

4. State the book value and market value of each separately in-vested asset at the beginning and end of the reporting period by the type of asset and fund type invested.

5. State the maturity date of each separately invested asset that has a maturity date.

6. State the account or fund or pooled group fund in the District for which each individual investment was acquired.

QUARTERLY REPORTS

35



7. State the compliance of the investment portfolio of the District as it relates to the District’s investment strategy expressed in the District’s investment policy and relevant provisions of Government Code, Chapter 2256.

If the District invests in other than money market mutual funds, in-vestment pools or accounts offered by its depository bank in the form of certificates of deposit, or money market accounts or similar accounts, the reports shall be formally reviewed at least annually by an independent auditor, and the result of the review shall be re-ported to the Board by that auditor.


The Board or a designated investment committee, shall, at least annually, review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the Dis-trict. Gov’t Code 2256.025

The Board may purchase, sell, and invest its funds and funds un-der its control in investments described below, in compliance with its adopted investment policies and according to the standard of care set out in this policy. Investments may be made directly by the Board or by a nonprofit corporation acting on behalf of the Board or an investment pool acting on behalf of two or more local governments, state agencies, or a combination of the two. Gov’t Code 2256.003(a)

In the exercise of these powers, the Board may contract with an investment management firm registered under the Investment Ad-visers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and manage-ment of its public funds or other funds under its control. A contract made for such purpose may not be for a term longer than two years. A renewal or extension of the contract must be made by the Board by order, ordinance, or resolution. Gov’t Code 2256.003(b)

The following investments are authorized:

1. Obligations, including letters of credit, of the United States or its agencies and instrumentalities; direct obligations of the state of Texas or its agencies and instrumentalities; collateral-ized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the state of Texas, the United States, or their respective agencies and instrumentalities; ob-

SELECTION OF BROKER

AUTHORIZED INVESTMENTS

36



ligations of states, agencies, counties, cities, and other politi-cal subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; and bonds issued, assumed, or guaranteed by the state of Israel. Gov’t Code 2256.009(a)

The following investments are not authorized:

a. Obligations whose payment represents the coupon pay-ments on the outstanding principal balance of the under-lying mortgage-backed security collateral and pays no principal.

b. Obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest.

c. Collateralized mortgage obligations that have a stated fi-nal maturity date of greater than ten years.

d. Collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.


2. Certificates of deposit or share certificates issued by a de-pository institution that has its main office or a branch office in Texas that is guaranteed or insured by the FDIC or its suc-cessor or the National Credit Union Share Insurance Fund or its successor and is secured by obligations described in item 1 above, including mortgage-backed securities directly issued by a federal agency or instrumentality that have a market value of not less than the principal amount of the certificates (but excluding those mortgage-backed securities described in Section 2256.009[b]) or secured in any other manner and amount provided by law for the deposits of the investing en-tity. Gov’t Code 2256.010(a)

In addition to the authority to invest funds in certificates of de-posit under the previous section, an investment in certificates of deposit made in accordance with the following conditions is an authorized investment under Government Code 2256.010:

a. The funds are invested by the District through a deposi-tory institution that has its main office or a branch office in this state and that is selected by the District;

b. The depository institution selected by the District ar-ranges for the deposit of the funds in certificates of de-

37



posit in one or more federally insured depository institu-tions, wherever located, for the account of the District;

c. The full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality of the United States;

d. The depository institution selected by the District acts as custodian for the District with respect to the certificates of deposit issued for the account of the District entity; and

e. At the same time that the funds are deposited and the certificates of deposit are issued for the account of the District, the depository institution selected by the District receives an amount of deposits from customers of other federally insured depository institutions, wherever lo-cated, that is equal to or greater than the amount of the funds invested by the District through the depository in-stitution.


The investment policies may provide that bids for certificates of deposit be solicited orally, in writing, electronically, or in any combination of those methods. Gov’t Code 2256.005(c)

3. Fully collateralized repurchase agreements that have a de-fined termination date, are secured by obligations of the United States or its agencies and instrumentalities, are pledged to the District, held in the District’s name, and depos-ited with the District or a third party selected and approved by the Board, and placed through a primary government securi-ties dealer, as defined by the Federal Reserve or a financial institution doing business in Texas. The term of any reverse security repurchase agreement may not exceed 90 days after the date the reverse security repurchase agreement is deliv-ered. Money received by the District under the terms of a re-verse security repurchase agreement shall be used to acquire additional authorized investments, but the term of the author-ized investments acquired must mature not later than the ex-piration date stated in the reverse security repurchase agreement. Gov’t Code 2256.011

4. A securities lending program if:

a. The value of securities loaned is not less than 100 per-cent collateralized, including accrued income, and the loan allows for termination at any time;

38



b. The loan is secured by:

(1) Pledged securities described by Government Code 2256.009;

(2) Pledged irrevocable letters of credit issued by a bank that is organized and existing under the laws of the United States or any other state and continu-ously rated by at least one nationally recognized in-vestment rating firm at not less than A or its equiva-lent; or

(3) Cash invested in accordance with Government Code 2256.009, 2256.013, 2256.014, or 2256.016;

c. The terms of the loan require that the securities being held as collateral be pledged to the investing entity, held in the investing entity’s name, and deposited at the time the investment is made with the entity or with a third party selected by or approved by the investing entity; and

d. The loan is placed through a primary government securi-ties dealer or a financial institution doing business in this state.

An agreement to lend securities under a securities lending program must have a term of one year or less.


5. Banker’s acceptance, with a stated maturity of 270 days or fewer from the date of issuance that will be liquidated in full at maturity, which is eligible for collateral for borrowing from a Federal Reserve Bank, and is accepted by a bank meeting the requirements of Government Code 2256.012(4). Gov’t Code 2256.012

6. Commercial paper that has a stated maturity of 270 days or fewer from the date of issuance and is rated not less than A-1 or P-1 or an equivalent rating by at least two nationally recog-nized credit rating agencies or by one nationally recognized credit rating agency provided the commercial paper is fully secured by an irrevocable letter of credit issued by a bank or-ganized and existing under United States law or the law of any state. Gov’t Code 2256.013

7. No-load money market mutual funds that:

a. Are registered with and regulated by the Securities and Exchange Commission;

39



b. Provide the District with a prospectus and other informa-tion required by the Securities and Exchange Act of 1934 (15 U.S.C. 78a et seq.) or the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.);

c. Have a dollar-weighted average stated maturity of 90 days or fewer; and

d. Include in their investment objectives the maintenance of a stable net asset value of $1 for each share.

However, investments in no-load money market mutual funds shall be limited to the percentages authorized by Government Code 2256.014(c).

8. No-load mutual funds that:

a. Are registered with the Securities and Exchange Com-mission;

b. Have an average weighted maturity of less than two years;

c. Are invested exclusively in obligations approved by Government Code Chapter 2256, Subchapter A, regard-ing authorized investments (Public Funds Investment Act);

d. Are continuously rated by at least one nationally recog-nized investment rating firm of not less than AAA or its equivalent; and

e. Conform to the requirements in Government Code Sec-tion 2256.016(b) and (c) relating to the eligibility of in-vestment pools to receive and invest funds of investing entities.

Investments in no-load mutual funds shall be limited to the percentages authorized by Government Code 2256.014(c). In addition, the District may not invest any portion of bond proceeds, reserves, and funds held for debt service, in no-load mutual funds described in this item.


9. A guaranteed investment contract, as an investment vehicle for bond proceeds, if the guaranteed investment contract:

a. Has a defined termination date.

b. Is secured by obligations described by Government Code Section 2256.009(a)(1), excluding those obliga-

40



tions described by Section 2256.009(b), in an amount at least equal to the amount of bond proceeds invested un-der the contract.

c. Is pledged to the District and deposited with the District or with a third party selected and approved by the Dis-trict.

Bond proceeds, other than bond proceeds representing re-serves and funds maintained for debt service purposes, may not be invested in a guaranteed investment contract with a term longer than five years from the date of issuance of the bonds.

To be eligible as an authorized investment:

a. The Board must specifically authorize guaranteed in-vestment contracts as eligible investments in the order, ordinance, or resolution authorizing the issuance of bonds.

b. The District must receive bids from at least three sepa-rate providers with no material financial interest in the bonds from which proceeds were received.

c. The District must purchase the highest yielding guaran-teed investment contract for which a qualifying bid is re-ceived.

d. The price of the guaranteed investment contract must take into account the reasonably expected drawdown schedule for the bond proceeds to be invested.

e. The provider must certify the administrative costs rea-sonably expected to be paid to third parties in connec-tion with the guaranteed investment contract.


10. A public funds investment pool meeting the requirements of Government Code 2256.016 and 2256.019, if the Board au-thorizes the investment in the particular pool by resolution. Gov’t Code 2256.016, 2256.019

The District is not required to liquidate investments that were au-thorized investments at the time of purchase. Gov’t Code 2256.017

A written copy of the investment policy shall be presented to any person offering to engage in an investment transaction with the District or to an investment management firm under contract with

CHANGE IN LAW

SELLERS OF

INVESTMENTS

41



the District to invest or manage the District’s investment portfolio. For purposes of this section, a business organization includes in-vestment pools and an investment management firm under con-tract with the District to invest or manage the District’s investment portfolio. The qualified representative of the business organization offering to engage in an investment transaction with the District shall execute a written instrument in a form acceptable to the Dis-trict and the business organization substantially to the effect that the business organization has:

1. Received and thoroughly reviewed the District investment pol-icy; and

2. Acknowledged that the business organization has imple-mented reasonable procedures and controls in an effort to preclude investment transactions conducted between the Dis-trict and the organization that are not authorized by the Dis-trict’s policy, except to the extent that this authorization is de-pendent on an analysis of the makeup of the District’s entire portfolio or requires an interpretation of subjective investment standards.

The investment officer may not acquire or otherwise obtain any au-thorized investment described in the District’s investment policy from a person who has not delivered to the District the instrument described above.

Gov’t Code 2256.005(k), (l)

A gift, devise, or bequest made to provide college scholarships for District graduates may be invested by the Board as provided in Property Code 117.004, unless otherwise specifically provided by the terms of the gift, devise, or bequest. Education Code 45.107

Investments donated to the District for a particular purpose or un-der terms of use specified by the donor are not subject to the re-quirements of Government Code Chapter 2256, Subchapter A. Gov’t Code 2256.004(b)

The District may use electronic means to transfer or invest all funds collected or controlled by the District. Gov’t Code 2256.051

DONATIONS

ELECTRONIC FUNDS TRANSFER

42

RESOLUTION OF THE BOARD REGARDING REVIEW OF THE INVESTMENT PROGRAM

WHEREAS, Section 2256.005(e) of the Public Funds Investment Act (Texas Government Code Chapter 2256) requires the Board of Trustees of North East Independent School District to (a) review the District’s investment policy and investment strategies [set forth in CDA(LOCAL)] not less than annually and (b) adopt this resolution reflecting the Board’s review and recording any changes made to the investment policy or strategies;

WHEREAS, the District’s investment policy for fiscal year 2010 – 2011 has been presented to the Board for its consideration and approval, as required by the Act; and

WHEREAS, the District’s investment policy for fiscal year 2010 – 2011 includes no changes from the District’s investment policy for fiscal year 2009 -2010.

NOW THEREFORE BE IT RESOLVED the Board of Trustees of North East Independent School District has reviewed the District’s investment policy, and hereby adopts the policy for fiscal year 2010 -2011 in compliance with the Public Funds Investment Act.

Adopted this 11th day of October, 2010 by the Board of Trustees.

______________________________________________________________________ President ______________________________________________________________________ Secretary

annual investment report · 2017. 1. 10. · 2009-2010 annual investment report tab: title revised...

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