2015-029 - Approving the City's Statement of Investment Policy

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CITY OF SANTA ANA STATEMENT OF INVESTMENT POLICY JULY 2015 -2016 Page 7 securities exchange, a National or State - Chartered Bank, a Federal or State Association (as defined by Section 5102 of the Financial Code), or a brokerage firm designated as a Primary Government Dealer by the Federal Reserve Bank. The Executive Director, Finance and Management Services / City's Treasurer's staff shall investigate all institutions which wish to do business with the City, in order to determine if they are adequately capitalized, make markets in securities appropriate to the City's needs, and agree to abide by the conditions set forth in the City of Santa Ana's Investment Policy and Investment Portfolio Guidelines. This will be done annually by having the Financial Institutions complete and return the appropriate questionnaire, and an audited Financial Statement must be provided within one hundred twenty (120) days of the Financial Institution's fiscal year -end. SAFEKEEPING OF SECURITIES: To protect against potential losses caused by collapse of individual securities dealers, all securities owned by the City except securities used as collateral for repurchase agreements, shall be kept in safekeeping with "perfected interest" by a third party bank trust department, acting as agent for the City under the terms of a custody agreement executed by the bank and by the City. All securities will be received and delivered using standard delivery versus payment. INTERNAL CONTROLS: The Executive Director, Finance and Management Services / City Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The Executive Director, Finance and Management Services / City Treasurer has developed a system of internal investment controls and a segregation of responsibilities of investment functions in order to assure an adequate system of internal control over the investment function. Internal control procedures address wire controls, separation of duties, delivery of securities to a third party for custodial safekeeping, and written procedures for placing investment transactions. Cash balances are reconciled daily by non - investment employees and reconfirmed by the City's accounting staff. In addition, the City's accounting staff also verifies investment activities and holdings on a monthly basis. The Executive Director, Finance and Management Services / City Treasurer shall establish a process for annual independent review by an external auditor to the extent contemplated by generally accepted auditing standards. REPORTING: Under the provisions of Section 53646 of the Government Code the Executive Director, Finance and Management Services / City Treasurer shall continue to render a report to the City Council, City Manager, and the internal auditor containing detailed information on all securities,