10.10.625    INVESTMENT POOLS

(1) For purposes of this rule, "investment pool" is defined as a unified investment program established under 20-9-213 (4) , MCA, by a Montana school district and one or more other school districts or other local governmental entities. "Investment pool" does not include an investment program hosted by the county as a countywide investment pool or a school district investment account established under 20-9-235 , MCA.

(2) A school district participating in an investment pool shall enter into a written agreement with other participants, including one or more other school districts or local governments involved in the program. In addition to terms required by 7-11-105 , MCA, the agreement must state:

(a) the manner in which participants will share gains, losses, interest distributions and fees;

(b) that only the types of investments allowed by 20-9-213 (4) , 7-6-202 , and 7-6-213 , MCA, will be purchased;

(c) the procedures for dissolving the pool and distributing the ending balance to participants;

(d) the details specific to procedures necessary when more than one county treasurer is involved in funds combined in the investment pool;

(e) the party authorized to direct the purchase and redemption of investments (i.e. a representative of the host entity, investment pool committee or board, school district official, etc.) ; and

(f) that all elected officials, school district employees, and investment pool employees with duties related to the investment pool must be bonded.

(i) The bond may cover an individual or a blanket bond of the investment pool may cover all elected officials and employees or any combination.

(ii) The investment pool participants shall determine the amount for which an elected official or employee shall be bonded based on the amount of money or property handled and the opportunity for defalcation.

(3) Before participating in an investment pool a school district must have written documentation that the investment firm or entity contracted to administer the pool:

(a) complies with 20-9-204 , MCA, Article VIII, section 13, Montana Constitution, and is qualified and competent to provide investment services to the school districts;

(b) is either the state Board of Investments or an investment firm that is either registered with or has filed notice with the State Auditor under the provisions of Title 30, chapter 10, MCA;

(c) acquires pledged securities in the same manner and amount as required in 7-6-202 and 7-6-213 , MCA, for investments which are not guaranteed or uninsured investments; and

(d) provides each investment pool participant and associated county treasurer with a monthly report detailing:

(i) investment and redemption dates;

(ii) investment and redemption amounts, by school district fund;

(iii) fees charged for administering the investment pool;

(iv) the amount of interest accrued, reinvested and distributed, by fund;

(v) the balance of the district's investments, by fund; and

(vi) at fiscal year-end, the amount of interest accrued as of June 30 and the fair value of the district's share of pooled investments as of June 30 as prescribed by governmental accounting standards board (GASB) No. 31.

(4) A school district participating in an investment pool shall reconcile the district's records of investment balances and interest income to the county treasurer's reports and the investment firm's reports each month.

(5) When directed by a school district participating in an investment pool, a county treasurer shall invest the district's money within three days in an investment pool by issuing a treasurer's check, warrant, or wire transfer of funds to the state Board of Investments or investment firm that has registered or filed notice with the State Auditor administering the investment pool.

(a) When directing investments, the school district must provide written notification to the county treasurer stating the amount to invest and the fund making the investment.

(b) A school district shall not purchase investments using district warrants.

(6) A school district will direct the investment firm that has registered or filed notice with the State Auditor or State Board of Investments to deposit redeemed investments and interest income with the county treasurer, to the credit of the specific and appropriate school district fund.

(a) The school district will require that the investment firm or State Board of Investments informs the county treasurer in writing stating the funds to which the proceeds should be deposited and the amount of the interest earnings and principal contained in the proceeds.

(b) The school district shall not pay operating expenses from an investment pool without first returning the funds to the county treasurer. Operating expenses include but are not limited to salaries, service or construction contracts, and supplies and equipment.

(7) Each school district participating in an investment pool will monitor its cash balances maintained with the county treasurer and will promptly redeem investments to pay district warrants and bond principal and interest in a timely manner.

History: 20-9-102, 20-9-201; MCA; IMP, 20-9-212, MCA; NEW, 2000 MAR p. 632, Eff. 2/25/00; AMD & TRANS, 2002 MAR p. 1740, Eff. 6/28/02.