SUSQUEHANNA TOWNSHIP SCHOOL DISTRICT
Harrisburg, Pennsylvania 17109
INVESTMENT OF DISTRICT FUNDS
It shall be the policy of the Board to optimize its return through investment of cash balances in such a way as to minimize non-invested balances and to maximize return on investments.
The primary objectives of investment activities, in priority order, shall be:
Legality – All investments shall be made in accordance with applicable laws of Pennsylvania.
Safety – Safety of principal shall be of highest priority. Preservation of capital in the portfolio of investments shall be ensured through the mitigation of credit risk and interest rate risk.
Liquidity – Investments shall remain sufficiently liquid to meet all operating requirements that are reasonable anticipated. A fiscal year operations anticipated cash flow shall be developed so that investments can be made as early as possible, with maturities concurrent with anticipated cash demands.
Yield – Investments shall be made with the objective of attaining a market-average rate of return throughout the budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs.
All investments of the school district made by an officer and/or employee of the district shall be made in accordance with this policy and a Board-approved investment program.
The Board shall delegate to the Business Manager the responsibility to manage the district’s investment program.
An annual review of the investment program shall be prepared by the Business Manager, based upon the anticipated cash flow of all district funds, i.e. general, capital reserve, bond, etc.
Investments permitted by this policy are those defined in Section 440.1 of the School Code, as amended, which are collateralized in accordance with applicable laws. Shares of an investment company in compliance with Section 440.1 of the PA School Code are also permitted.
All securities shall be purchased in the name of the school district, and custody of the securities shall be specified within the district’s investment program.
All investment advisors or bidders shall verify in writing that they have received a copy of this policy. Such written statement shall indicate that they have read and understand this policy and all applicable statutes related to school district investments, along with their intent to comply full with these requirements.
The district shall require all investment advisors/bidders to submit annually any or all of the following, as appropriate:
• Audited financial statements
• Proof of National Association of Securities Dealer (NASD) certification
• Proof of state registration
• Provide the rating from a recognized rating agency
Designated officers and employees involved in the district’s investment process shall disclose any personal business activity that could conflict with the proper execution and management of the investment program or could impair their ability to make impartial decisions.
Bond proceeds shall be invested in accordance with Local Government Unit Debt Act and applicable federal and state laws, subject to approval by the solicitor and/or bond counsel and the School Board.
Investment transactions arising from bond proceeds shall be reported monthly to the Board, in accordance with this policy.
Compliance with GAAP
The following is intended to guide district investments as limited by Section 440.1 of the School Code.
The district funds shall not be invested in foreign currency and shall have no related risk that would require disclosure pursuant to GASB Statement 40.
The district investments shall limit the exposure to loss of principal due to market changes in interest rates.
District investments in authorized instruments that are not backed by the “full faith and credit” of the federal or state governments shall be limited to those with the highest credit rating available for such instruments where the rating is issued by a recognized organization that routinely issues such ratings. If, after purchase, the rating of any instrument is reduced and no longer in compliance with this policy, the individual responsible for district investments shall advise the board at the earliest opportunity of such action and make recommendations for altering investments.
When district funds are invested in any one issuer other than designated depository accounts, the amount of the investment shall be unlimited, but the Board shall be notified of such investment at time of investment.
For purposes of interest rate disclosure in the annual financial report, the method of determining interest rate risk shall be based on weighted average maturity.
SC 440.1, 621, 622, 623
17 CFR 270
65 P.S. 110 et seq.
Adopted by the School Board – November 23, 1998
Amended by the School Board – August 27, 2007