- SCOPE & PURPOSE
This investment policy applies to all financial assets of the Park Forest Public Library.
The purpose of this policy statement is to outline the responsibilities, general objectives and specific guidelines for management of public funds by the Park Forest Public Library.
- RESPONSIBILITIES
All investment policies and the procedures of the Park Forest Public Library will be in accordance with Illinois law. The authority of the Board of Library Trustees to control and invest public funds is defined in the Illinois Public Funds Investment Act and the investments permitted are described therein.
- DELEGATION OF AUTHORITY
The Board of Trustees may employ one or more investment advisors possessing superior capabilities in the management of assets of governmental bodies. The Board of Trustees shall require the investment advisor(s) selected and working on behalf of the library to meet the following conditions:
- To take actions in the exercise of its discretion which in its best professional judgment are in the best interests of the library and in accordance with this policy.
- To execute all investment transactions on behalf of the library at the best net price, utilizing such approved brokers and dealers as it deems appropriate to obtain the best execution capabilities and/or valuable information with respect to the economy, at the lowest cost to the library.
- Such additional responsibilities as are set forth in such investment advisor’s written contract with the library.
The library’s investment advisors shall be responsible for establishing the internal controls in written procedures for the operation of the library’s investment program as set forth in this policy.
In the absence of investment advisors, management responsibility for the investment program set forth in this policy is delegated to the Library Director.
- “PRUDENT PERSON” STANDARD
All library investment activities shall use a “prudent person” standard of care. This standard shall be applied in the context of managing an overall portfolio and specifies that investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital, as well as the probable income to be derived. Investment officers, acting in accordance with this policy and the written procedures of the library, and exercising due diligence, shall be relieved of personal responsibility for a security’s credit risk or market price/value changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
- OBJECTIVES & GUIDELINES
In selecting financial institutions and investment instruments to be used, the following general objectives and guidelines should be considered in the priority listed:
A. Legality and Safety: Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the portfolio. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.
B. Liquidity: The investment portfolio shall remain sufficiently liquid to enable the library to meet all operating requirements which might be reasonably projected.
C. Yield: Within the constraints on Illinois Law, considerations of safety, and this Investment Policy, every effort should be made to maximize return on investments made. All available funds will be placed in investments or kept in interest-bearing deposit accounts.
D. Simplicity of Management: The time required by staff to manage investments shall be kept to a minimum.
- SUITABLE AND AUTHORIZED INVESTMENTS
Investments may be made in any type of security allowed for in Illinois statutes regarding the investment of public funds.
Investments shall be made that reflect the cash flow needs of the fund type being invested.
The Park Forest Public Library is empowered by statute to invest in the following types of securities:
Treasury Bills
Treasury Notes
Treasury Bonds
Certificates of Deposit
Government Bonds & Tax Anticipation Warrants
State of Israel Bonds
General Accounts of Life Insurance Companies
Separate Accounts of Life Insurance Companies
Government Agencies
- Federal Housing Administration (FHA)
- Government National Mortgage Associations (GNMA)
- Public Housing Boards (HUD)
- Farmers Home Administration
- General Services Administration (GSA)
- Maritime Administration
- Small Business Administration (SBA)
- SBA Loan Pools
- Tennessee Valley Authority (TVA)
- Washington Metropolitan Area Transit Authority
- Federal Land Banks
- Federal Intermediate Credit Banks
- Bank for Cooperatives
- Federal Farm Credit Banks
- Federal Home Loan Banks
- Federal Home Loan Mortgage Corp.
Commercial Paper
Money Market Mutual Fund
Separate Trading of Registered Interest and Principal of Securities (STRIPS)
Coupon Under Book Entry Safekeeping (CUBES)
Illinois Public Finance Director (Treasurer)s Investment Pool (IPTIP)
Illinois Metropolitan Investment Fund (IMET)
Bank Managed Fund
- DIVERSIFICATION
The Park Forest Public Library will diversify its investments to the best of its ability based on the type of funds invested and the cash flow needs of those funds. Diversification can be by type of investment, number of institutions invested in, and length of maturity.
- INTERNAL CONTROLS
The designated financial advisor shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures.
The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The internal controls shall address the following points:
- Control of collusion
- Separation of transaction authority from accounting
- Custodial safekeeping
- Written confirmation of telephone transactions for investments and wire transfers
- SAFEKEEPING AND CUSTODY
All security transactions entered into by the Park Forest Public Library shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third party custodian designated by the financial advisor and evidenced by safekeeping receipts.
- AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The financial advisor will maintain a list of financial institutions authorized to provide investment services. In addition, a list will be maintained of approved security brokers/dealers selected by credit worthiness, who maintain an office in the state of Illinois. These may include “primary” dealers or regional dealers that qualify under Securities & Exchange Commission Rule 15C3-1 (uniform net capital rule). No public deposit shall be made except in a qualified public depository as established by state laws. A current audited financial statement is required to be on file for each financial institution and broker/dealer in which the Park Forest Public Library invests.
- PERFORMANCE STANDARDS
The investment portfolio will be designed to obtain a market average rate of return during budgetary and economic cycles, taking into account the Park Forest Public Library’s investment risk constraints and cash flow needs.
- CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business that might conflict with the proper execution and management of this investment program, or that could impair their ability to make impartial decisions, or that could give the appearance of impropriety.
- REPORTING
The financial advisor shall prepare regular investment reports. The report will be provided to the Board of Trustees upon request. The report should be in a format suitable for review by the general public. An annual report should also be provided to the Board.