FILE: DGA
CASH MANAGEMENT
Strategies for proper cash management and investment of available funds shall be reviewed and evaluated on a periodic basis to ensure that investment rules and guidelines expressed in this policy are being followed according to current statutory provisions. The monetary assets of the Orleans Parish School Board shall be held in trust by the fiduciary (fiduciaries) designated by the School Board. Cash management and the investment of funds shall be managed by the Superintendent and/or his/her designee.
CASH MANAGEMENT
All aspects of cash management operations shall be designed to ensure the absolute safety and integrity of the School Board’s financial assets.
Cash management activities shall be conducted in full compliance with prevailing local, state and federal regulations. Furthermore, such activities shall be designed to adhere to guidelines and standards promulgated by applicable professional organizations.
Operating within appropriately-established administrative and procedural parameters, the School Board shall aggressively pursue optimum financial rewards, while simultaneously controlling its related expenditures. Therefore, cash management functions which engender interaction with outside financial intermediaries shall be conducted in the best financial and administrative interests of the school system. In pursuit of these interests, the School Board shall utilize competitive bidding practices whenever practicable, affording no special financial advantage to any individual or corporate member of the financial or investment community.
The School Board shall authorize the Superintendent and staff to design and enforce written administrative regulations, guidelines, and procedures relating to a variety of cash management issues such as the eligibility or selection of various financial intermediaries, documentation and safekeeping requirements, philosophical and operational aspects of the investment function, and such other functional and administrative aspects of the cash management program which necessitate standard setting in pursuit of appropriate prudent, enhanced protection of assets or procedural improvements.
DEPOSITORY BANK
Louisiana statutes require School Boards to select a fiscal agent for purposes of receiving or depositing funds of the School Board. The bank selected as fiscal agent shall be asked to enter into a fiscal agency contract or such other necessary instruments setting forth the duties, responsibilities, and agreements pertaining to said fiscal agency.
The fiscal agency bank, when selected, shall serve for a term as agreed to by the School Board and until its successor shall have been duly selected and qualified, and shall pledge approved securities, as provided for in the fiscal agency contract subject to the regulations under state law.
PLEDGED SECURITIES
Funds on deposit shall be collateralized in an amount at all times equal to 100% by pledged "approved securities" in accordance with state law to adequately protect the funds of the School Board.
The School Board shall periodically monitor the amount of approved securities to assure that an amount not less than 100% on deposit with the depository bank, less any applicable Federal Deposit Insurance Corporation (FDIC) insurance, is pledged.
The bank shall have the right and privilege of substituting approved securities only upon obtaining the prior written approval of the School Board. Such approval may be granted by facsimile transmission. The approved securities shall be valued at their market value.
INVESTMENT OPTIONS
The School Board, in accordance with statutory provisions, may invest any funds which are available for investment and are above the immediate cash requirements of the School Board, from whatever source derived, in statutorily sanctioned investments and in accordance with the Investments policy of the School Board.
FINANCIAL INTERMEDIARIES
Deposits in commercial banks and savings and loan associations, whether they be time deposits, demand deposits, or deposits in special interest-bearing accounts (NOW, SUPER-NOW, etc.), shall only be made in banks or savings and loan associations which qualify to accept public-sector deposits which are protected or federally insured under the terms of prevailing laws.
However, certain “sweep” or “automatic repo” accounts, and certain funds held under the terms of a “repurchase agreement” arrangement may not be protected or federally insured under the provisions of federal or state law. Therefore, such balances shall be protected through the appropriate application of securities safekeeping procedures, which will ensure the reasonable safety and integrity of all School Board monies.
Financial intermediaries that conduct business with the School Board shall be subject to the following types of selection criteria:
Commercial Banks:
The creditworthiness, liquidity, and overall financial strength of financial institutions into which the School Board deposits money, as measured through recognized industry rating services, shall be a factor in the School Board’s decision.
Deposits of School Board monies in commercial banks may only be made with institutions which possess the overall financial strength, capitalization, and liquidity to reasonably ensure the safety and availability of such monies. To assess the overall financial strength of potential depositories, the School Board shall utilize third-party rating agencies to perform periodic reviews of various commercial banks, relying upon their reports to determine the appropriateness of the depository.
Fiscal Agent:
Currently, the School Board is provided banking services under a Fiscal Agent Agreement. To become the School Board’s Fiscal Agent, institutions shall be invited to quote rates of interest for the various checking accounts and the charges for demand deposit services. The School Board shall determine which institution shall be designated as Fiscal Agent according to their quote, financial strength, and liquidity.
Savings And Loan Associations:
Deposits of School Board monies in Louisiana savings and loan associations or savings banks shall be subject to the same rating criteria which are applied to commercial banks. Their acceptability as depositories shall be judged on the third-party ratings. However, deposits shall not exceed the insurance of accounts limits set by the Federal Savings and Loan Insurance Corporation or Federal Deposit Insurance Corporation.
Securities Banks:
The School Board or designated personnel of the School Board shall review and recommend broker qualified service contracts, much like the fiscal agent agreements for banking services, for School Board approval.
Moved from policy DFE and revised: November 21, 2019
Ref: La. Rev. Stat. Ann. §§17:99, 33:2955, 39:1211, 39:1212, 39:1219, 39:1221, 39:1222, 39:1223, 39:1225, 39:1226
Board minutes, 11-21-19
Orleans Parish School Board