Board Policy DFL: Investment Earnings

Investment Earnings

1. Purpose

The purpose of this policy is to outline the rules and guidelines governing investments of surplus cash assets held by the DeKalb County Board of Education (DCBOE).

1. Investment Objective

The investment objective is to ensure adequate liquidity for the District is to meet its financial obligations in a timely manner, minimize the risk of capital loss, and achieve a satisfactory return on investment. Accordingly, the priority in executing individual investment transactions will be based upon safety, liquidity and yield. Also, diversification is a key factor to enhance safety of capital, liquidity and to consciously manage reinvestment risks.

The individual investment decisions also will be made based upon adherence to the following Guidelines.

1. Investment Guidelines

2. Eligible Investments

Funds shall be invested according to current state law. Such investments shall be made so that they will earn the highest possible rate of interest available for the investment period. All investments must be secured.

Georgia law authorizes the School Board to invest its funds in the following:

1. Obligations of the State of Georgia or other states;

2. Obligations issued by the United States government;

3. Obligations fully insured or guaranteed by the United States government or a United States government agency;

4. Obligations of any corporation of the United States government;

5. Prime banker's acceptances;

6. Georgia Fund 1 administered by the Georgia Department of Administrative Services;

7. Repurchase agreement, and

8. Obligations of political subdivisions of the State of Georgia.

9. Prohibited Investments

10. Commons stock

11. Leveraged derivative securities (including, but not limited to interest strips)
12. Options writing or purchasing
13. Securities purchased on a margin
14. Purchasing or selling futures or commodities contracts
15. Short sales of any security
16. Any other leveraged investments

17. Mutual funds (equity and bond. An exception for short-term money market funds which maintain constant principal valuation)

18. Quality

All investments in the U.S. Treasury Bills or Federal Agencies must be either guaranteed or backed by the implied faith and credit of the United States. Securities purchased by DCSS will be held for custodial safekeeping by an independent third party and the securities will clearly specify DCBOE as purchaser or owner. At the discretion of the Chief Financial Officer, DCSS may take delivery of Certificates of Deposit. Each security must clearly specify DCSS as purchaser or owner.

All repurchasing agreements will be collateralized by 110% of their value by acceptable securities. Certificates of deposits will be backed by 110% of their value.