When was the last time you reviewed your investment policy?
CSDA Provides Free Review and Guidance
Special districts exist to provide essential services in their community, utilizing public funds to fulfill their mission. In the course of that mission, monies will be allocated to projects, core operations and capital assets. Inevitably, there will be monies held aside awaiting allocation that must be regarded with equal care as those funds which are actively in use.
It is recommended by CSDA, in accordance with GC §53600 and its subsections, that special districts develop an investment policy. A formalized policy dedicated to investment funds ensures prudent, goal-oriented planning and public transparency.
An investment policy should always be in place and should broadly incorporate the stated objectives of safety, liquidity, and yield. It is in the best interest of the local agency to present and discuss the policy with the agency’s legislative body or oversight committee, and then have the policy approved by a vote of the legislative body. A public vote signifies that the legislative body shares fiduciary responsibility with the treasurer, increases the authority and legitimacy of the investment policy, and provides transparency and disclosure.
4 Tips For Evaluating (or Creating) Your Investment Policy
- Investment policies should be written broadly based on §53601.
- Investment policies should apply to all financial assets of the district accounted for in the annual audited financial statements.
- Avoid written policies that narrow investment options by stipulating investments in particular funds, CDs, accounts, etc.
- Regularly review the policy (annually) to ensure your district remains in compliance while preserving the ability to take advantage of new investment opportunities that are allowable by the broad government code.
CSDA Resources To Guide Your Effort:
- Financial Management for Special Districts Workshop offered twice a year.
- Sample Policy Handbook including Investment Policy sample to use as a guide.
The contents of this communication should not be considered to be legal, tax or investment advice, and public agencies should consult with their own counsel and advisers as to all matters concerning investment. This information is neither an offer or solicitation to buy or sell any investment/s or strategy.