Agenda Packets - 2005/05/09 - Laserfiche WebLink

Home Browse Search

VI. Safekeeping and Custody Internal Controls 1. Delivery vs. Payment All trades of marketable securities will be executed by delivery vs. payment (DVP) to ensure that securities are deposited in an eligible financial institution prior to the release of funds. 2. Safekeeping Securities will be held by a [centralized] independent third-party custodian selected by the entity as evidenced by safekeeping receipts in the City’s name. The safekeeping institution shall annually provide a copy of their most recent report on internal controls (Statement of Auditing Standards No. 70, or SAS 70). 3. 1. Internal Controls The Finance Director is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the City are protected from loss, theft or misuse. Details of the internal controls system shall be documented in an investment procedures manual and shall be reviewed and updated annually. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. The internal controls structure shall address the following points: • Avoidance of physical delivery securities • Written confirmation of transactions for investments and wire transfers • Password protected authorizations of wire transfers • Development of a wire transfer agreement with the lead bank Accordingly, the investment officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures or alternatively, compliance should be assured through the City’s annual independent audit. VII. Suitable and Authorized Investments 1. Investment Types Consistent with the GFOA Policy Statement on State and Local Laws Concerning Investment Practices, the following investments will be permitted by this policy and are those defined by state and local law where applicable: • U.S. Treasury obligations which carry the full faith and credit guarantee of the United States government and are considered to be the most secure instruments available; • U.S. government agency and instrumentality obligations that have a liquid market with a readily determinable market value; • Certificates of deposit and other evidences of deposit at financial institutions, • Bankers' acceptances; • Commercial paper, rated in the highest tier (e.g., A-1, P-1, F-1, or D-1 or higher) by a nationally recognized rating agency; • Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of dollar-denominated securities; and