55C - RESO - STATEMENT OF INVESTMENT

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CITY OF SANTA ANA STATEMENT OF INVESTMENT POLICY JULY 1, 2016 — JUNE 30, 2017 Page 10 SAFEKEEPING OF SECURITIES: In accordance with California Government Code Section 53601, 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 the City's custodial bank or 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, excepting investments in the State Pool or money market mutual funds, will be received and delivered using standard delivery versus payment. INTERNAL CONTROLS: The Executive Director for FMSA 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 for FMSA 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 for FMSA, at his /her discretion, shall establish a process for annual independent reviews by an external auditor to the extent contemplated by generally accepted auditing standards. REPORTING: Government Code Section 53646 previously mandated that annual investment policies and quarterly reports be rendered to the legislative body (for the City of Santa Ana - the City Council). AB 2853 amended Government Code Section 53646 making these requirements permissive rather than mandatory. Although the Annual Investment Policy and Quarterly Reports to City Council are no longer required, we believe it to be both prudent and in keeping with the spirit of the City's Sunshine Policy that these documents continue to provided. The Executive Director for FMSA shall therefore continue to render to the City Council a statement of investment policy and a report to the City Council and City Manager containing detailed information on all securities, investments, and moneys of the City. The report will be submitted on at least a quarterly basis and provided to the Council within thirty (30) days following the end of the quarter. 55C -20