P3415 Investment of Idle Funds

Unified School District 259 shall invest idle funds in compliance with applicable law, managing such funds prudently and maintaining necessary levels of ready availability.  

Administrative Implemental Procedures

1. Idle funds shall be invested in a manner consistent with the following objectives:
    
   1. Safety of Principal: The foremost objective of this investment program is the safety of the principal of funds within the portfolios. Investment transactions shall seek to minimize credit and interest rate risk and to keep capital losses at a minimum whether they are from securities default or erosion of market value.
       
   2. Liquidity: Funds shall be available to meet reasonably anticipated cash flow requirements in an orderly manner. Periodic and regular cash flow analyses will be completed to ensure that the portfolios are positioned to provide sufficient liquidity. 
       
   3. Return on Investment: Portfolios shall be designed to attain a market rate of return throughout budgetary and economic cycles, considering the investment risk constraints and liquidity needs while being consistent with state law restrictions, prudent investment principles, and District priorities. Return on investment is of lesser importance than safety and liquidity; however, the portfolio will be managed and invested to maximize net earnings.
       
2. Delegation of authority allows that responsibility for providing oversight and direction for the management of the investment program resides with the Treasurer (Chief Financial Officer) and Assistant Treasurer (Director of Accounting/Controller).  If the Treasurer and Assistant Treasurer are absent for an extended period or a replacement is required, then a district administrator selected by the superintendent will assume the role of Treasurer. 
    
3. Daily investment management responsibility for the investment program and investment transactions is assigned by the Treasurer and/or Assistant Treasurer to qualified support staff with appropriate skill, education, and/or experience. Employees assigned this duty will participate in regular training related to governmental investing. If the District requires permanent or temporary use of an investment advisor, the advisory services will be solicited in accordance with the procurement procedures and any applicable state law or standards. Investment advisory services will be held to the “Prudent Expert” standard.
    
4. Standard of Prudence is to be used by investment officers and employees involved in the handling of investment activities shall be the "Prudent Person" standard and shall be applied in the context of managing the overall investment program. The "Prudent Person" rule states the following:
   
   "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived from the investment."  
   
   Individuals who are officers or employees acting in accordance with written procedures and this policy and exercising due diligence shall be relieved of personal responsibility for the specific security credit risk or market price changes, provided that these deviations are reported timely and that appropriate action is taken to control adverse developments.
    
5. Ethics and conflicts of interest: Employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, erode public trust, impair public confidence in the District’s ability to govern effectively, or which could impair their ability to make impartial investment decisions. Employees involved in the investment process shall disclose to the Treasurer and Assistant Treasurer any material financial interests in financial institutions that conduct business with the District, and they shall further disclose any material personal financial/investment positions that could be related to the performance of the District’s investment program. 
    
6. The District shall establish a system of internal controls or operational procedures. The internal controls should be designed to ensure that the assets of the District are protected from loss, theft, or misuse. The internal control structure should be designed to provide reasonable assurance that these objectives are met. Independent auditors, as a normal part of the annual financial audit to the District, may conduct a review of the system of internal controls to ensure compliance with policies and procedures.
    
7. Maturity and liquidity requirements: to the extent possible, an attempt will be made to match investment maturities with anticipated cash flow requirements.  Using cash flow analyses and assessing market conditions, the District will structure the portfolio(s) to ensure sufficient cash liquidity for anticipated payment disbursements and payroll through maturing investments, marketable U. S. Treasuries, or cash on hand. In the event of a cash shortfall, the Treasurer and Assistant Treasurer will be notified immediately upon discovery, and the District will follow the actions outlined in the written procedures.
    
8. Portfolio assets shall be diversified to control risks resulting from overconcentration of assets in a specific maturity, issuer, instruments, dealer, or bank through which these instruments are bought and sold. With oversight from the Treasurer and Assistant Treasurer, appropriate designated staff will analyze and determine diversification strategies, limits, and guidelines based on issuer and type making prudent changes to limits and guidelines as changes to markets require but reviewing no less than annually. All risk and diversification strategies will comply with all statutes and will be included in the investment procedures.
    
9. Selection of investments involves the maintenance of a list of eligible financial institutions which are approved by the Treasurer and/or Assistant Treasurer for investment purposes.  Investment bid solicitations will be offered to eligible banks for set amounts and maturities with a “local first” priority. Banks with a main office or branch office in the District’s area receive preference. All bids will be allowed a minimum 2-day response time and handled in accordance with all applicable statutes and laws.  Bids will be held in confidence until the best investment options have been determined and selected. The district shall accept the bid which provides the highest rate of return for the maturity required after considering risk and diversification provisions within the limits of this policy and Kansas Statutes.  Records will be maintained per record retention statutes and will include the details of the bids offered, bids accepted, and a brief explanation of the decision made regarding the investment.
    
10. All investments purchased under this policy shall be governed by Kansas law. Investments are limited to a maximum maturity of two years unless this policy is approved by the State of Kansas Pooled Money Investment Board (the "PMIB") for expanded investment authority, in which case the maximum maturity of investments can be for up to four years. The District is authorized to place public funds with eligible banks in the following:
     
    1. Commercial savings, demand deposits, and money market accounts
        
    2. Time deposits, certificate of deposits
        
    3. Reciprocal Deposit Programs
        
    4. Repurchase Agreements
       
       If no eligible bank is willing to make an investment available to the District at interest rates equal to or greater than the minimum investment rate, then the following investment types can be utilized:
        
    5. Direct obligations of the United States or obligations that are insured as to principal and interest by the United States or any agency thereof (excluding mortgage-backed securities)
        
    6. Municipal Investment Pool Fund established by KSA 12-1677a and managed by the state of Kansas
        
    7. Local government investment pools if operating under the provisions of KSA 9-2107
        
    8. Securities of United States government sponsored enterprises if this policy is approved by PMIB
       
       If this policy is approved by the PMIB for expanded investment authority, investments in securities will be limited to securities that do not have any more interest rate risk than direct United States government obligations of similar maturities. 
       
       All security purchases by the District shall occur on a delivery versus payment basis, perfected in the name of the District. The third-party custodian shall issue a safekeeping receipt to the district listing the specific instrument, rate, maturity, and other pertinent information.
       
       Per state statute, securities investment transactions shall only be conducted with banks, savings and loan associations and savings banks, with primary government securities dealers that report to the market report division of the federal reserve bank of New York, or any broker-dealer that is registered in compliance with the requirements of section 15C of the securities exchange act of 1934 and registered pursuant to K.S.A. 17-12a401, and amendments thereto.
        
11. Financial institutions will secure full collateral for investments except in the case of direct and indirect obligations of the United States Government wherein the actual security is the collateral. All FDIC insurance, including participation in any reciprocal deposit program, will be considered part of an institution’s pledged collateral in any collateral assessment. Any amounts exceeding FDIC limits will be collateralized by utilizing a public moneys pooled method of securities as required by Kansas law. Financial institutions must pledge a pool of securities equal to at least 102% of the uninsured public deposits and will be managed by the state treasurer through the Kansas Collateral Pool.  The District will receive regular monthly statements from banks and financial institutions with detailed lists of investments held and confirming proper collateral coverage.
     
12. To assist in the annual evaluation of the portfolios’ performance, the District will use performance benchmarks.  The district’s investment portfolio shall be designed with the objective of equaling or exceeding the Pooled Money Investment Board (PMIB) investment rate. The investment program shall seek to augment returns above this threshold, while being consistent with state law restrictions, prudent investment principles, and cash flow. 
    
13. Reporting to the District’s Board of Education will include monthly investment reports which include information about investments sold and purchased. Additional reports outlining other details may be provided as required or requested by the Board throughout the year. A report with a full list of current investments that includes portfolio size, maturity distribution, and expected yield to maturity will be provided annually to the Board and will be included as part of the annual financial reporting.  All investments and investment earnings will be credited and reported according to any applicable GAAP and GASB standards as well as any state and/or federal statutes and regulations. 
     
14. The policy along with all attachments and/or amendments shall be approved by the Board. The Treasurer and Assistant Treasurer along with designated staff shall review the policy annually and shall present all modifications to the Board for approval. If, after adoption of this policy by the Board, there is any conflict of this policy with Kansas laws and/or statutes, current law will prevail. 

A glossary of common cash and investment terms are included in Attachment A. (found in the download of P3415 below)

Administrative Responsibility:           Financial Services

Latest Revision Date:                         August 2026

Previous Revision Date(s):                 November 2006 

 Download P3415