cash and investments
DESCRIPTION
CASH AND INVESTMENTS. Sources. GASB Statement 3 GASB Statement 31 GASB Statement 40. Mission. Safety Liquidity Returns. Mission. Investment Policy SDCL 4-5-8. Mission. Consider an investment committee. Definitions. Statutory terminology: Deposits………..FDIC - PowerPoint PPT PresentationTRANSCRIPT
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CASH AND INVESTMENTS
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Sources GASB Statement 3
GASB Statement 31
GASB Statement 40
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Mission Safety
Liquidity
Returns
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Mission Investment Policy
SDCL 4-5-8
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Mission Consider an investment committee
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Definitions Statutory terminology:
Deposits………..FDIC Investments……..federal government
SDCL 4-5-6 U.S. securities directly or indirectly Repurchase agreements Open-end no-load fund INTERNAL CONTROL – prospectus, document your
conclusion regarding allowability
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Definitions Deposits are restricted by law:
Schools – SDCL 13-16-15…within state Municipalities – SDCL 9-22-6..within state Counties – SDCL 7-20-1…within county Out-of-state CD’s not allowed, except CDARS
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Definitions Financial Reporting Terminology:
Cash and Cash Equivalent…matures within 3 mo
Investments……..longer focus
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Safety FDIC…Federal Deposit Insurance
Corporation FSLIC…..Federal Savings and Loan
Insurance Corp NCUA…National Credit Union
Administration
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Safety Pledged Collateral
SDCL 4-6A Eligible collateral State Treasurer Shall at all times maintain collateral
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Safety CDARS
SDCL 4-5-6.1 Certificate of Deposit Account Registry Service
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Risks Custodial Credit Risks
Deposits are exposed to custodial credit risk if they are not covered by depository insurance
Investment securities are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of the government and are not held by the entity or its agent. SDCL 4-5-9
DTC – Depository Trust Company – physical security of investments, book entry basis
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Risks Credit risk
Rating Agencies---AAA Not needed for obligations explicitly guaranteed
by the U.S. Govt.
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Risks Concentrations of Credit Risk
5% or more By amount and issuer Explicitly guaranteed U.S. securities are exempt
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Risks Interest Rate Risks
Risks that are inherent because of the duration or term of an investment
Addressed in investment policy
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Other Points Interest Earned
Receipt to all funds Policy may allow for transfer to General Fund
Agency Funds Debt Service Funds Scholarship, Cemetery, etc….
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Other Points Sweep Accounts
Understand the account your money is swept into Internal control – document this understanding
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Other Points Tax ID number
Don’t loan it out to non-entity organizations Confirm with your bank how many accounts use
your number
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Other Points Outlying Cash Accounts
Mainly resulting from debt issuances Allowable investments Reconciled monthly
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Other Points Unclaimed Property
SDCL 43-41B-14 One year, old O/S checks, customer deposits First attempt to resolve locally State Treasurer
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Other Points Electronic Payment
SDCL 4-3-27 requires a policy Payroll, debt service, etc… Internal control Other statutory steps…..
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New Laws – SB 91 CO Fund Expanded Use:
Property and casualty insurance Energy and utility costs Motor fuel costs Any contract for student transportation Student mileage reimbursements
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New Laws – SB 91 CO Fund expanded use:
45% of total tax revenues deposited current year If “tax levy” is higher than base year FY2008 What would have been deposited if tax levy had
not increased from base year
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New Laws – SB 80 Revised General Fund levies:
Commercial $8.656 Ag 2.573 Owner – Occupied 4.042 Non-ag Z 3.573
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New Laws – SB 143 State will maintain an internet site of local
government financial information. Site to be maintained by BIT, BFM and BofA
