Investment of Public Funds Policy

 

Approved September 2024

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PURPOSE AND SCOPE

The purpose of this policy statement is to outline the responsibilities, general objectives, and specific guidelines for management of public funds by the Moweaqua Public Library District (MPLD).

 

RESPONSIBILITIES

All investment policies and procedures of the MPLD are in accordance with Illinois law. The authority of the MPLD Board of Trustees to control and invest public funds is defined in the Illinois Public Funds Investment Act and the investments permitted are described therein. Administration execution of these policies is the responsibility of the Treasurer.

 

DELEGATION OF AUTHORITY

Management and administrative responsibility for the investment program is hereby delegated to the Treasurer. The Treasurer and, by designation, the Head Librarian, are responsible for establishing internal controls and written procedures for operation of the investment program.

 

"PRUDENT PERSON" STANDARD

All Library investment activities shall use a "prudent person" standard of care. This standard shall be applied in the context of managing an overall portfolio and specifies that investments shall be made with judgment and care, under circumstances then prevailing, that a person of prudence, discretion, and intelligence would exercise in the management of their own affairs—not for speculation but for investment, considering the probable safety of capital and the probable income to be derived. Investment officers, acting in accordance with this policy and the written procedures of MPLD and exercising due diligence, shall be relieved of personal responsibility for a security's credit risk or market price/value changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

 

OBJECTIVES

In selecting financial institutions and investment instruments to be used, the following general objectives should be considered in the priority listed:

• Legality (conforming with all legal requirements)

• Safety (preserving capital and including diversification appropriate to the nature and amounts of the funds)

• Liquidity (maintaining sufficient liquidity to meet current obligations and those reasonably to be anticipated)

• Yield (attaining a market rate of return on investments)

• Simplicity of management

 

GUIDELINES

The following guidelines should be used to meet the general investment objectives:

 

Legality and Safety:

Investments will be made only in securities guaranteed by the U.S. government or in FDIC-insured institutions including SAIF of the FDIC. Deposit accounts in banks or saving and loan institutions will not exceed the amount insured by FDIC coverage (unless adequately collateralized pursuant to regulations of the Federal Reserve regarding custody and safekeeping of collateral].

 

Authorized investments include and will primarily consist of certificates of deposit, Treasury bills, and other securities guaranteed by the U.S. government; participation in the State of Illinois Public Treasure's Investment Pool, and any other investment allowed under Illinois law that satisfy the investment of the library district.

 

Liquidity

In general, investments should be managed to meet liquidity needs for the current month plus one month (based on forecasted needs) and any reasonably anticipated special needs.

 

Yield-Return on investment

Within the constraints on Illinois law, considerations of safety, and this investment policy, every effort should be made to maximize return on investments or kept in interest-bearing deposit accounts.

 

Simplicity of Management

The time required by library administrative staff to manage investments should be kept to a minimum.

 

REPORTING

Investments, fund balances and the status of such accounts will be reported at each regularly scheduled meeting of the Library Board and at least quarterly include information regarding securities in the portfolio by class or type, book value, income earned, and market value as of the report date. At least annually, the Treasurer shall review this policy for any needed modifications and report to the Board on the investment portfolio, its effectiveness in meeting the MPLD's need for safety, liquidity, rate of return, diversification, and general performance. These reports will be available to the general public upon request.

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INTERNAL CONTROLS

In addition to these guidelines, the Treasurer shall establish a system of internal controls and written operational procedures designed to prevent loss, theft, or misuse of funds.

 

AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS

Any investment advisers, money managers, and financial institutions shall be considered and authorized only by the action of the MPLD Board of Trustees upon the recommendation of the Treasurer. The Treasurer will maintain a list of financial dealers and institutions authorized to provide investment services.