| Western Buckeye ESC |
| Bylaws & Policies |
6144 - INVESTMENTS
It is the policy of the Western Buckeye Educational Service Center Governing Board to invest public funds in a manner which will provide the highest investment return with the maximum security, safety and preservation of principal while meeting the daily cash flow demands of the Board and conforming to all applicable statutes governing the investment of public funds by an Ohio school board. The Treasurer is the investment officer for the Board, charged with the responsibility for the purchase and sale of investments and the carrying out of this Investment Policy.
Scope
This Investment Policy applies to all financial assets of the Board, including State and Federal funds held by it. The Treasurer shall routinely monitor the contents of the Board's investment portfolio, the available markets and relative value of competing investments and will adjust the portfolio accordingly.
Prudence
Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.
The standard of prudence to be used by the Treasurer shall be the "prudent person" standard and shall be applied in the context of managing the overall portfolio. Acting in accordance with this Investment Policy and exercising due diligence shall relieve the Treasurer of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported to the Board in a timely fashion and appropriate action is taken to control adverse developments.
Objectives
The primary objectives, in priority order, of the Board investment activities shall be:
| A. | Safety: Safety of principal is the foremost objective of the investment program. Investments of the Board shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio. | |
| B. | Liquidity: The Board's investment portfolio will remain sufficient liquid to enable it to meet all operating requirements which might be reasonably anticipated. | |
| C. | Return on Investment: The Board's investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account this Investment Policy and the cash flow characteristics of the portfolio. |
Ethics and Conflict of Interest
Persons involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Employees and investment consultants shall disclose to the Board any material financial interests in financial institutions that conduct business within the Board and any large personal financial or investment positions that could be related to, or affected by, the performance of the Board's portfolio. All employees, officers and investment consultants to the Board shall subordinate their personal investment transactions to those of the Board, particularly with regard to the timing of purchases and sales.
Authorized Financial Dealers and Institutions
All financial institutions and broker/dealers which desire to become qualified suppliers of investment transactions to the Board must provide the Treasurer with audited annual financial statements, proof of good standing with the Comptroller of Currency or State banking regulatory information on the persons who are the primary contact with the entity. All financial institutions, broker/dealers and consultants which desire to conduct investment business with the Board must sign this Investment Policy, certifying they have read it, understand it and agree to abide by its contents.
Authorized Investments
The Board is empowered by statute to invest in the following types of securities:
| A. | United States Treasury bills, notes, bonds or any other obligation or security issued by the United States Treasury or any other obligation guaranteed as to principal and interest by the United States; | |
| B. | Bonds, notes, debentures, or other obligations or securities issued by any federal government agency or instrumentality, including but not limited to the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporate, Government National Mortgage Association and Student Loan Marketing Association. All such securities shall be direct issuances of federal government agencies or instrumentalities; | |
| C. | Interim deposits in duly authorized depositories of the Board, provided those deposits are properly insured or collateralized as required by law; | |
| D. | Bonds and other obligations of the State of Ohio; |
| F. | STAR Ohio; |
Diversification
The Board will diversify its investments by security, type and institution. With the exception of direct obligations of the U.S. Treasury and STAR Ohio, no more than eight percent (80%) of the Board's total investment portfolio will be invested in a single security type or with a single financial institution.
Maximum Maturities
To the extent possible, the Board will attempt to match its investments with anticipated cash flow requirements. No investment shall be made unless the Treasurer, at the time of making the investment, reasonably expects it can be held to its maturity. Unless matched to a specific obligation or debt of the Board, the Board will not directly invest in securities listed as one (1) through (5) above maturing more then five (5) years from the date of settlement.
Safekeeping and Custody
All security transactions, including collateral for repurchase agreements, entered into by the Board shall be conducted on a delivery-versus-payment basis. Securities shall be pledged at the Federal Reserve Bank to collateralize all repurchase agreements with financial institutions. Pledge collateral will only be released by the Board after verification that the principal and interest have been credited to the Board's account.
Prohibited Investment Practices
The Board shall not:
| A. | Contract to sell securities that have not yet been acquired on the speculation that prices will decline; | |
| B. | Make any investments in derivatives; | |
| C. | Invest in a fund established by another public body for the purpose of investing public money of other subdivisions (other than STAR Ohio); or | |
| D. | Leverage current investments as collateral to purchase other assets. |
Internal Controls
The Treasurer shall develop and maintain procedures for the operation of the Board's investment program in accordance with this Investment Policy. These procedures shall be designated to prevent loss of the Board's funds due to fraud, error, misrepresentation, unanticipated market changes or imprudent actions.
Non-Binding Arbitration
The Treasurer shall maintain a current inventory of all investments including:
| A. | Description of each security; | |
| B. | Cost; | |
| C. | Par Value; | |
| D. | Dates (beginning, settlement and maturity); | |
| E. | Rates; and | |
| F. | Seller |
The Treasurer shall also prepare and distribute annually (or more frequently if requested by the Board) a list of all investments and a report on investment activity and returns.
Investment Policy Adoption
This Investment Policy shall be adopted by the Governing Board and, upon adoption, filed in the office of the Auditor of State. The policy shall be reviewed on an annual basis by the Board or a committee designated by it and any modifications made thereto must be approved by the Board and upon adoption, filed in the Office of the Auditor of State.