Source: US Dept. of Treasury End of Day
The investment directives for school districts vary from state to state. Certain state statutes require districts to manage all funds internally and other states direct the county treasurer to manage the funds. School districts typically have a shorter holding period for operating funds, as the state provides yearly funding that is used over the course of the school year. School districts also manage bond proceeds, which fund new school construction and building upgrades. GPA understands these investment needs are highly specialized—and how these funds are invested will result in significant earning difference. Districts can leverage GPA’s resources for an investment strategy to achieve their financial goals with a transparent and accountable process.
GPA works with district’s various funds, including operating, debt service, bond proceeds, insurance funds, and certain pension funds.
Often, a school district uses bank deposits and pooled investments, because they don’t have additional resources or tools to expand the management of the investment program. GPA has assisted school districts by breaking down the fund types into dedicated investment portfolios as well as implementing an investment program based on the district’s needs. We also have helped district leadership consolidate multiple investment holdings and bank balances into investment portfolio fund categories, including:
Operating Funds: Designed with a liquidity and core investment component to manage variances in cash balances while maintaining a dedicated investment discipline.
Debt Service: Strategically invested to match known debt service payments over a one-year period. Earmarking investments to dedicated liability dates accomplishes two objectives: 1) ensures that funds are available on the date that they are needed and 2) targets investment maturities (in one year and short maturities) to result in higher earnings over cash equivalents.
Bond Proceeds: Working with district staff to design a portfolio based on the project disbursement schedules, including working through the project scope to adjust investments in accordance with disbursement changes. In addition, we provide presentations to finance committees and school boards to make sure that their fiduciary obligations are disclosed and managed appropriately. Presentations cover investment policy, compliance reporting and coordinated arbitrage information.
Insurance or Retirement Funds: Designing an appropriate longer-term investment strategy to meet the specific objectives of these funds. We are able to help when school districts manage their own insurance or retirement funds and/or if funds are constrained by state statute to fixed-income securities.
