A. Investment Instruments

The District may invest its funds in those instruments permissible under state law. The District has chosen to limit its allowable investments to those instruments listed below:

  1. Bonds, notes, certificates of indebtedness, treasury bills or other securities now or hereafter issued by the United States of America, its agencies and allowable instrumentalities.
  2. Interest bearing savings accounts, interest bearing certificates of deposit or interest bearing time deposits, or any other investments constituting direct obligations of any credit union, bank, savings bank, trust company, or savings and loan association that is authorized to transact business in the State of Wisconsin.
  3. Certificates of deposit that are insured by an insurer having a claims paying rating which is in the highest or second highest rating category assigned by a nationally recognized rating agency.
  4. Commercial paper meeting the following requirements:The State of Wisconsin Local Government Investment Pool (LGIP).
    1. The corporation must be organized in the United States.
    2. The obligations at the time of purchase must be rated within the highest classifications by at least two of the three standard rating services (Standard and Poor's, Moody's and Fitch Investors Service).
  5. The Wisconsin Investment Series Cooperative (WISC).
  6. Investments may be made only in those savings banks or savings and loan associations the shares, or investment certificates of which are insured by the Federal Deposit Insurance Corporation.

B. Diversification

Investments shall be diversified to eliminate the risk of loss resulting in over concentration in a specific maturity, issuer, or class of securities.

C. Collateralization

  1. Time deposits in excess of FDIC insurable limits may be secured by collateral or private insurance to protect public deposits in a single financial institution.
  2. Eligible insurers must have a claims paying rating in the highest or second highest rating category assigned by a nationally recognized rating agency.
  3. Eligible collateral instruments are any investment instruments acceptable under state law.
  4. The collateral must be placed in safekeeping at or before the time the District buys the investments so that it is evident that the purchase of the investment is predicated on the securing of collateral.
  5. Safekeeping of Collateral
    1. Third party safekeeping is recommended for all collateral. To accomplish this, the securities must be held at one or more of the following locations:
      1. at a Federal Reserve Bank or its branch office;
      2. at another custodial facility in a trust or safekeeping department through book- entry at the Federal Reserve;
      3. by an escrow agent of the pledging institution
    2. Safekeeping will be documented by an approved written agreement between theDistrict and the governing board of the bank that complies with FDIC regulations. This may be in the form of a safekeeping agreement.
    3. Substitution or exchange of securities held in safekeeping for the District can only be approved by the District Administrator or the Business Manager.

D. Safekeeping of Securities

  1. Third party safekeeping is recommended for all securities and commercial paper. To accomplish this, the securities must be held only at one or more of the following locations:Safekeeping will be documented by an approved written agreement between the District and the holder of the securities. This may be in the form of a safekeeping agreement, trust agreement, escrow agreement or custody agreement.
    1. at a Federal Reserve Bank or its branch office;
    2. at another custodial facility, which shall be a trust or safekeeping department through book-entry at the Federal Reserve, unless physical securities are involved; or
    3. in an insured account at a primary reporting dealer
  2. Original certificates of deposits will be held by the originating bank. A safekeeping receipt will be acceptable documentation.

E. Qualified Financial Institutions and Intermediaries

  1. Depositories - Demand Deposits
    1. Any financial institution selected by the District shall provide normal banking services, including, but not limited to: checking accounts, wire transfers and safekeeping services.
    2. The District will not maintain funds in any financial institution that is not a member of the FDIC system. All potential depositories must qualify as a public depository under Wisconsin investment statutes. In addition, the District will not maintain funds in any institution that does not first agree to post required collateral for funds or purchase private insurance in excess of FDIC insurable limits and in amounts acceptable to the District.
    3. Fees for banking services shall be mutually agreed to by an authorized representative of the depository bank and the District on an annual basis. Fees for services shall be substantiated by a monthly account analysis.
    4. Each financial institution acting as a depository for the District must enter into a depository agreement with an authorized school district official that incorporates District policy and this procedure by reference.
  2. Banks and Savings and Loans - Certificates of Deposit
    Any financial institution selected to be eligible for the District's competitive certificate of deposit purchase program must:
    1. provide wire transfer and certificate of deposit safekeeping services;
    2. be a member of FDIC system and be willing and capable of posting required collateral or private insurance for funds in excess of FDIC insurable limits and in amounts required by the District; and
    3. Meet at all times the financial criteria as established in the investment procedures of the District.
  3. 3. Intermediaries
    Any financial intermediary selected to be eligible for the District's competitive investment program must:
    1. provide wire transfer and deposit safekeeping services;
    2. maintain appropriate federal and state registrations for the type of business in which they are engaged;
    3. provide an annual audit upon request;
    4. be licensed to conduct business in Wisconsin; and
    5. be familiar with the District's investment policy and procedure and accept financial responsibility for any investment not appropriate according to them.

F. Management of Program

The following individuals are authorized to purchase and sell investments, authorize wire transfers, and authorize the release of pledged collateral:

a) Superintendent
b) Business Manager

The following individuals are authorized to execute any documents required under this procedure:

a) Superintendent
b) Business Manager

Document include:

1) Wire Transfer Agreement
2) Depository Agreement
3) Safekeeping Agreement
4) Custody Agreement

Oversight of the District's investment program shall be the responsibility of the Business Manager and District Administrator who shall establish a system of internal controls and operational procedures designed to prevent losses of funds that might arise from fraud, employee error, and misrepresentation by third parties, or imprudent actions by employees of the District.

The District may use financial intermediaries, brokers and/or financial institutions to solicit bids for securities and certificates of deposit. These intermediaries shall meet the criteria set forth in this procedure.

Wire transfers can only be made by one of the authorized individuals designated above and shall require a secondary authorization from a different authorized individual.

G. Ethics and Conflicts of Interest

Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

H. Indemnification

Investment officers and employees of the District acting in accordance with this procedure and such written operational policies as may be established by the District, and who otherwise exercise due diligence and act with reasonable prudence, shall be relieved of personal liability for an individual security's credit risk or market changes.

I. Reporting

An investment report shall be submitted to the Board on a quarterly basis (minimally) and shall include information regarding securities in the portfolio by class or type, book value, current rate of return/interest rate, and market values as of the report date. Generally accepted accounting principles shall be used for valuation purposes.


LEGAL REF.: Sections 34.05

Wisconsin Statutes 34.08
34.09
66.0603
66.0607
120.12(7)
120.13(23120.16(5)
Wisconsin Uniform Financial Accounting Requirements (WUFAR) Governmental Accounting and Financial Reporting Standards issued by the Government Accounting Standards Board (GASB

First Reading: May 21, 2013
Second Reading: June 4, 2013
Approved: July 16, 2013
For the Board: Tom Steiner, President; Lynn Jaeger, Vice President; Cole Marshall, Clerk; Bill Barhyte, Treasurer; Dean Troyer, Member