Revenue and Investments
The Superintendent or designee is responsible for making all claims
for property tax revenue, State Aid, special state funds for specific
programs, federal funds, and categorical grants.
The Board of Education shall designate a School Treasurer in
accordance with Policy 2:400. The School Treasurer shall act as the
chief investment officer for the District, and shall be responsible for
establishing the internal controls and written procedures for the
operation of the investment program. The School Treasurer shall invest
money that is not required for current operations, in accordance with
this policy and State law.
The School Treasurer shall use the standard of prudence when making
investment decisions. He/She shall use the judgment and care, under
circumstances when prevailing, that persons of prudence, discretion, and
intelligence exercise in the management of their own affairs, not for
speculation, but for investment, considering the safety of their capital
as well as its probable income.
The objectives for the School District's investment activities are:
- Safety of Principal. Every investment is made with
safety as the primary and over-riding concern. Each investment
transaction shall ensure that capital loss, whether from credit or
market risk, is avoided.
- Liquidity. The investment portfolio shall provide
sufficient liquidity to pay District obligations as they become due. In
this regard, the maturity and marketability of investments shall be
- Rate of Return. The highest return on investments is sought, consistent with the preservation of principal and prudent investment principles.
- Diversification. The investment portfolio is
diversified as to financial instruments and investments, as appropriate
to the nature, purpose, and amount of funds.
The Board of Education will annually review the District's investment
objectives and strategies. The School Treasurer may invest any District
- In bonds, notes, certificates of indebtedness, treasury bills or
other securities now or hereinafter issued, which are guaranteed by the
full faith and credit of the United States of America as to principal
- In bonds, notes, debentures, or other similar obligations of the
United States of America or its agencies, and its instrumentalities.
term “agencies of the United States of America” includes: (i) the
federal land banks, federal intermediate credit banks, banks for
cooperative, federal farm credit banks, or any other entity authorized
to issue debt obligations under the Farm Credit Act of 1971 and Acts
amendatory thereto; (ii) the federal home loan banks and the federal
home loan mortgage corporation; and (iii) any other agency created by
Act of Congress.
- In interest-bearing savings accounts, interest-bearing certificates
of deposit or interest-bearing time deposits or any other investments
constituting direct obligations of any bank as defined by the Illinois
- In short term obligations of corporations organized in the United
States with assets exceeding $500,000,000 if (i) such obligations are
rated at the time of purchase at one of the 3 highest classifications
established by at least 2 standard rating services and which mature not
later than 270 days from the date of purchase, (ii) such purchases do
not exceed 10% of the corporation's outstanding obligations and (iii) no
more than one-third of the public agency's funds may be invested in
short term obligations of corporations.
- In money market mutual funds registered under the Investment Company
Act of 1940, provided that the portfolio of any such money market
mutual fund is limited to obligations described in paragraph (1) and (2)
of this subsection and to agreements to repurchase such obligations.
- In short term discount obligations of the Federal National Mortgage
Association or in shares or other forms of securities legally issuable
by savings banks or savings and loan associations incorporated under the
laws of the United States. 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. Any such securities may be purchased at the offering or
market price thereof at the time of such purchase. All such securities
so purchased shall mature or be redeemable on a date or dates prior to
the time when, in the judgment of the School Treasurer, the public funds
so invested will be required for expenditure by such public agency or
its governing authority.
- In dividend-bearing share accounts, share certificate accounts or
class of share accounts of a credit union chartered under the laws of
this State or the laws of the United States; provided, however, the
principal office of any such credit union must be located within the
State of Illinois. Investments may be made only in those credit unions
the accounts of which are insured by applicable law.
- In a Public Treasurer's Investment Pool created under Section 17 of
the State Treasurer Act. Any public agency may also invest any public
funds in a fund managed, operated, and administered by a bank,
subsidiary of a bank, or subsidiary of a bank holding company or use the
services of such an entity to hold and invest or advise regarding the
investment of public funds.
- In the Illinois School District Liquid Asset Fund Plus.
- In repurchase agreements of government securities having the meaning
set out in the Government Securities Act of 1986 subject to the
provisions of said Act and the regulations issued there under. The
government securities, unless registered or inscribed in the name of the
public agency, shall be purchased through banks or trust companies
authorized to do business in the State of Illinois.
repurchase agreements of government securities which are subject to the
Government Securities Act of 1986, no public agency may purchase or
invest in instruments which constitute repurchase agreements, and no
financial institution may enter into such an agreement with or on behalf
of any public agency unless the instrument and transaction meet the
- The securities, unless registered or inscribed in the name of public
agency, are purchased through banks or trust companies authorized to do
business in the State of Illinois.
- The School Treasurer, after ascertaining which firm will give the
most favorable rate of interest, directs the custodial bank to
“purchase” specified securities from a designated institution. The
“custodial bank” is the bank or trust company, or agency of government,
which acts for the public agency in connection repurchase agreements
involving the investment of funds by the public agency. The State
Treasurer may act as custodial bank for public agencies executing
- A custodial bank must be a member bank of the Federal Reserve System
or maintain accounts with member banks. All transfers of book-entry
securities must be accomplished on a Reserve Bank's computer records
through a member bank of the Federal Reserve System. These securities
must be credited to the public agency on the records of the custodial
bank and the transaction must be confirmed in writing to the public
agency by the custodial bank.
- Trading partners shall be limited to banks or trust companies
authorized to do business in the State of Illinois or to registered
primary reporting dealers.
- The security interest must be perfected.
- The public agency enters into a written master repurchase agreement
which outlines the basic responsibilities and liabilities of both buyer
- Agreements shall be for periods of 330 days or less.
- The School Treasurer informs the custodial bank in writing of the maturity details of the repurchase agreement.
- The custodial bank must take delivery of and maintain the securities
in its custody for the account of the public agency and confirm the
transaction in writing to the public agency. The Custodial Undertaking
shall provide that the custodian takes possession of the securities
exclusively for the public agency; that the securities are free of any
claims against the trading partner; and any claims by the custodian are
subordinate to the public agency's claims to rights to those securities.
- The obligations purchased by a public agency may only be sold or
presented for redemption or payment by the fiscal agent bank or trust
company holding the obligations upon the written instruction of the
- The custodial bank shall be liable to the public agency for any
monetary loss suffered by the public agency due to the failure of the
custodial bank to take and maintain possession of such securities.
- In any investment as authorized by the Public Funds Investment Act,
and Acts amendatory thereto. Paragraph 11 supercedes paragraphs 1-10 and
controls in the event of conflict.
Investments may be made only in banks which are insured by the
Federal Deposit Insurance Corporation, unless the District enters into
an agreement with the institution requiring any funds not insured to be
collateralized as provided below.
Selection of Depositories, Investment Managers, Dealers, and Brokers
The School Treasurer shall establish a list of authorized
depositories, investment managers, dealers and brokers based upon the
creditworthiness, reputation, minimum capital requirements,
qualifications under State law, as well as a long history of dealing
with public fund entities.
In order to be an authorized depository, each institution must submit
copies of the last 2 sworn statements of resources and liabilities or
reports of examination, which the institution is required to furnish to
the appropriate state or federal agency. Each institution designated as a
depository shall, while acting as such depository, furnish the District
with a copy of all statements of resources and liabilities or all
reports of examination, which it is required to furnish to the
appropriate state or federal agency.
All banks used as depositories for School District funds shall be
approved by the Board of Education, and shall meet the criteria of the Public Funds Deposit Act.
Persons authorized to sign checks shall be approved by the Board of
Education. At least one of the signers shall be the District Treasurer
except for individual School Activity Fund Accounts.
All amounts deposited or invested with financial institutions in
excess of any insurance limit shall be collateralized by securities
eligible for District investment or any other high-quality,
interest-bearing security rated at least AA/Aa by one or more standard
rating services to include Standard & Poor's, Moody's, or Fitch. The
Board or the School Treasurer may at any time declare any particular
security ineligible to qualify as collateral when, in the public
agency's judgment, it is deemed desirable to do so. The market value of
the pledged securities shall equal or exceed the portion of the deposit
requiring collateralization. The School Treasurer shall determine other
Safekeeping and Custody Arrangements
The preferred method for safekeeping is to have securities registered
in the District's name and held by a third-party custodian. Safekeeping
practices should qualify for the General Accounting Standards Board's
Statement III, Category I, the highest recognized safekeeping
The School Treasurer shall establish a system of internal controls
and written operational procedures to prevent losses arising from fraud,
employee error, misrepresentation by third parties, or imprudent
The School Treasurer shall provide a quarterly investment report to
the Board. The report will: (1) assess whether the investment portfolio
is meeting the District's investment objectives, (2) identify each
security by class or type, book value, income earned, and market value,
(3) identify those institutions providing investment services to the
District, and (4) include any other relevant information. The investment
portfolio's performance shall be measured by appropriate and creditable
industry standards for the investment type.
The School Board shall determine, after receiving the
Superintendent's recommendation, which fund is in most need of interest
income and what unrestricted interest is available for transfer, and, by
resolution enacted before June 30 of each year, direct the School
Treasurer to execute any transfers of any unrestricted interest
Ethics and Conflicts of Interest
The School Board and District officials will avoid any investment
transactions or practice that in appearance or fact might impair public
confidence. Board Members are bound by the Board Member Conflict of Interest Policy 2:100. No District employee having influence on the District's investment decisions shall:
- have any interest, directly or indirectly, in any investments in which the District is authorized to invest;
- have any interest, directly or indirectly, in the sellers, sponsors, or managers of those investments;
- receive in any manner, compensation of any kind from any investments in which the agency is authorized to invest.
Adopted: September 8, 1997
Revised: January 20, 2004
Revised: March 19, 2012