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Policy 4100 - Investment

This investment policy is intended to establish the investment scope, objectives, and delegation of authority from the Board to the Superintendent/Designee to invest school system unexpended funds, and the standards of prudence to be applied to such investments.

Policy Document

I. Policy Statement

The Board of Education of Howard County is required to invest and deposit unexpended funds pursuant to specific provisions of the Annotated Code of Maryland and it is the intent of the Board to follow best practices with regard to the investment of these funds.

II. Purpose

This investment policy is intended to establish the investment scope, objectives, and delegation of authority from the Board to the Superintendent/Designee to invest school system unexpended funds, and the standards of prudence to be applied to such investments.

III. Definitions

Within the context of this policy, the following definition applies:

Unexpended Funds – The Howard County Public School System (HCPSS) appropriations and other revenues received that are yet to be spent.

IV. Standards

  1. Scope

    All unexpended funds under the control and direction of the HCPSS will be administered in accordance with the provisions of this investment policy.

  2. Investment Objectives:

    The primary objectives, in order of priority, of school system investment activities will be:

    1. To protect the capital in the overall portfolio and to protect the investment principal.

    2. To retain sufficient liquidity to meet disbursement requirements which might be reasonably anticipated, and to diversify investments by specific security types and individual financial institutions to reduce risk to the extent possible.

    3. To maximize the return of the investment portfolio, consistent with legal restrictions, risk and prudent investment policies.

  3. Prudence

    1. Investments will be made pursuant to state law, exercising prudent judgment, discretion, and care, under circumstances then prevailing, not for speculation, but for investment, considering the probable safety of capital as well as the probable income to be derived.

    2. Staff responsible for managing investments while acting in accordance with state law, written procedures and this policy and exercising due diligence will not be held personally responsible for a single security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

  4. Ethics and Conflict of Interest

    All Board members as well as all staff members responsible for managing financial investments will adhere to the HCPSS Policy 2070 - Ethics and HCPSS Ethics Regulations, and file a Financial Disclosure Statement in accordance with those regulations.

  5. Investment Strategy, Monitoring and Controls

    1. In accordance with state law and regulation, investments will be limited to insured or fully collateralized funds, including obligations of the federal government, federal agency obligations, and repurchase agreements secured by direct government or agency obligations.

    2. Quarterly, the Superintendent/Designee will hold investment strategy sessions.

      1. To evaluate the portfolio for compliance with current investment policy.

      2. To discuss market conditions and cash flows.

      3. To identify appropriate investment vehicles and the most effective means of generating income.

    3. The school system’s investment policy will be consistent with COMAR 25.03.03 and the local government investment guidelines adopted by the Maryland State Treasurer.

V. Responsibilities

  1. The Superintendent/Designee will ensure that the school system’s investment policy is consistent with COMAR 25.03.03 and the local government investment guidelines adopted by the Maryland State Treasurer. The annual audit financial statement confirms the Board’s investments and policies.

  2. The Superintendent/Designee will ensure compliance with the standards of this policy.

VI. Delegation of Authority

  1. The authority and power to invest, redeem, sell, exchange, and reinvest unexpended or surplus monies will be with the Superintendent/Designee. No agency and/or person may engage in an investment transaction on behalf of the school system without the expressed written approval of the Superintendent/Designee subject to this policy and written delegations of authority by the Board.

  2. The Superintendent is authorized to develop procedures to implement this policy.

VII. References

  • The Annotated Code of Maryland, Local Government Article, Section 17-101 – Investment or deposit of surplus money by counties, municipalities, and other entities.

  • The Annotated Code of Maryland, Local Government Article, Section 17-104 – Investment in open-end and closed-end investment companies and trusts.

  • The Annotated Code of Maryland, Local Government Article, Sections 17-301 through 17-309 – Local Government Investment Pool.

  • COMAR 25.03.03 – Local Government Investment Guidelines and Reporting Requirements.

B. Other Board Policies

C. Relevant Data Sources

D. Other

VIII. History

ADOPTED: April 10, 2008

REVIEWED:

MODIFIED: May 7, 2015

REVISED:

EFFECTIVE: July 1, 2015