The Investments policy of the Wapello Community School District shall apply to all public funds of the school district, which includes operating funds, bond proceeds, and all other funds, and all investment transactions involving public funds accounted for in the financial statements of the school district. Eave investment made pursuant to this policy must be authorized by applicable law and this written Investments Policy
The investment of debt service or sinking funds shall comply not only with this Investments policy, but also be consistent with any applicable bond resolution.
This policy is intended to comply with Iowa Code 12B.
Upon passage and upon future amendment, if any, copies of this policy shall be delivered to all the following:
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The governing body or officer of the school district to which the Investments policy applies
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All depository institutions or fiduciaries for public funds of the school district.
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The auditor engaged to audit any funds of the school district
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In addition, a copy of this policy shall be delivered to every fiduciary or third party assisting with or facilitating investment of school district funds.
Delegation of Authority
In accordance with Iowa Code 12B.10(1), the responsibility for conducting investment transactions resides with the Treasurer. Only the Treasurer and those authorized by resolution may invest public funds and a copy of any empowering resolution shall be attached to this policy.
All contracts or agreements with outside persons investing public funds, advising on the investment of public funds, directing the deposit or investment of public funds, or acting in a fiduciary capacity for the school district shall require the outside person to notify the school district in writing, within thirty (30) days of receipt of all communication from the Auditor of the outside person or any regulatory authority, of the existence of a material weakness in internal control structure of the outside person or regulatory orders or sanctions regarding the type of services being provided to the school district by the outside person.
The records of investment transactions made by or on behalf of the school and district are public records and are the property of whether in the custody of the school district or in the custody of a fiduciary or other third party. If a fiduciary or other third party with custody of school district public investment transaction records fails to produce requested records when requested by the school district within a reasonable time, the school district shall make no new investment with or through the fiduciary or third party and shall not renew maturing investments with or through the fiduciary or third party.
The Treasurer shall establish a written system of internal controls and investment practices. The controls shall be designed to prevent losses of public funds, to document those officers and employees of the school district responsible for elements of the investment process, and to address the capability of investment management. The controls shall provide for receipt and review of the audited financial statement and related reports on internal control structure of all outside persons performing any of the following for the school district:
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Investing public funds
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Advising on the investment of public funds
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Directing the deposit or investment of public funds
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Acting in a fiduciary capacity for the school district.
A bank, savings and loan association, or credit union providing only depository services shall not be required to provide an audited financial statement and related report on internal control structure.
The Treasurer and all employees authorized to place investments shall be bonded at an appropriate level.
Objectives
The primary objectives, in order of priority,, of all investment activities involving the financial assets of the school district shall be the following:
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Safety: Safety and preservation of principal in the overall portfolio is the foremost investment objective.
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Liquidity: Maintaining the necessary liquidity to match expected liabilities is the second investment objective.
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Return: Obtaining a reasonable return is the third investment objective.
Prudence
The Treasurer, when investing or depositing public funds, shall exercise care, prudence, and diligence under the circumstances then prevailing that a person acting in a like capacity and familiar with such matters would use to attain the investment “Objectives”. This standard requires that when making investment decisions, the Treasurer shall consider the role that hte investment or deposit plays within the portfolio assets of the school district and the investment objectives stated in “Objectives.”
When investing school district assets for a period longer than two (23) years, the Treasurer shall request competitive investment proposals for comparable credit and term investments from a minimum of three (3) investment providers.
Instruments Eligible for Investment
School district assets may be invested in the following:
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Obligations of the United States government, its agencies and instrumentalities.
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Certificates of deposit and other evidences of deposit (i.e., savings accounts, interest-bearing checking accounts, money market accounts, etc.) at federally insured Iowa depository institutions approved and secured pursuant to Iowa Code 12C
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An open-end management investment company registered with the Securities & Exchange Commission under the federal Investment Company Act of 1940, 15 U.S.C. Section 80(a) and operated in accordance with 17 C.F.R. Section 270.2a-7, whose portfolio investments are limited to those instruments individually authorized in this "Instruments Eligible for Investment” of this Investment Policy.
All instruments eligible for investment are further governed by all other provisions of this Investments policy, including “Investment Maturity Limitations” and “Diversification Requirements.”
Prohibited Investments and Investment Practices
School district assets shall not be invested in the following:
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Reverse repurchase agreements
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Futures and options contracts
School district assets shall not be invested pursuant to the following investment practices:
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Trading of securities for speculation or the realization of short-term trading gains.
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Pursuant to a contract providing for the compensation of an agent or fiduciary based upon the performance of the invested assets.
Investment Maturity Limitations
Operating Funds must be identified and distinguished from all other funds available for investment. Operating Funds are defined as those funds which are reasonably expected to be expended during a current budget year or within fifteen months of receipt.
All investments authorized in “Instruments Eligible for Investment” are further subject to the following investment maturity limitations: Operating Funds may only be invested in instruments authorized in “Instruments Eligible for Investment” of this Investments policy that mature within three hundred ninety-seven (397) days. However, if the school district has or expects to accrue in the current budget year an amount of public funds that exceeds Operating Funds by at least thirty-three perfect, the school district may invest amounts exceeding thirty-=three percent of Operating Funds in certificates of deposit at federally insured depository institutions approved pursuant to ioa Code 12C which mature within sixty-three months or less provided that the school district invests an amount reasonably expected to be expended during the current budget year or within fifteen months of receipt in investments authorized in “Instruments Eligible for Investment” of this Investment Policy that mature within three hundred ninety-seven (397) days.
The Treasurer may invest funds that are not identified as Operating Funds in investments with maturities longer than three hundred ninety-seven days (397) days. However, all investments of the school district shall have maturities that are consistent with the school district’s needs and use of funds.
Diversification
School district investments are subject to the following diversification requirements:
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Prime bankers’ acceptances:
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At the time of purchase, no more than ten percent (10%) of the investment portfolio of the school district shall be invested in prime bankers’ acceptances; and
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At the time of purchase, no more than five percent (5%) of the investment portfolio of the school district shall be invested in the securities of a single issuer.
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Where possible, it is the policy of the school district to diversify its investment portfolio. Assets shall be diversified to eliminate the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. In establishing specific diversification strategies, the following general policies and constraints shall apply:
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Portfolio maturities shall be staggered in a way that avoids undue concentration of assets in a specific maturity sector. Maturities shall be selected which provide stability of income and reasonable liquidity.
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Liquidity practices to ensure that the next disbursement date and payroll date are covered through maturing investments, marketable U.S. Treasury bills, or cash on hand shall be used at all times.
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Risks of market price volatility shall be controlled through maturity diversification so that aggregate price losses on instruments with maturities approaching one year shall not be greater than coupon interest and investment income received from the balance of the portfolio.
Safekeeping and Custody
All school district invested assets involving the use of a public funds custodial agreement, as defined in Iowa Code 12B.10C, shall comply with all rules adopted pursuant to Iowa Code 12B.10C. All custodial agreements shall be in writing and shall contain a provision that all custodial services be provided in accordance with the laws of the state of Iowa.
All school district invested assets eligible for physical delivery shall be secured by having them held at a third-party custodian. All purchased investments shall be held pursuant to a written third-aprty custodial agreement requiring delivery versus payment and compliance with all rules set out in this Sedtion, “Safekeeping Custody.”
Reporting
The Treasurer shall monthly, submit to the Board of Directors an investment report that summarizes recent market conditions and investment strategies employed since the last investment report. The investment report shall set out the current portfolio in terms of maturity, rates of return , and other features and summarize all investment transactions that have occurred during the reporting period and compare the investment results to the budgetary expectations.
Investment Policy Review and Amendment
This investment policy shall be reviewed every three (e) years or more frequently as appropriate. Notice of amendments to the Investments policy shall be promptly given to all parties noted in the “Scope of Investments” section.
Legal References: Iowa Code 11.2, .6; 12.62; 12B.10; 10A; 12C; 22.1, .14; 28E.2; 257.29; 283A;
285; 502.701; 633.123
Cross References: 206.03 Secretary
206.04 Treasurer
Approved: 4/18/95
Reviewed: 152/13/01; 12/12/07; 12/14/11; 4/10/19; 1/10/24
Revised: 12/13/01