1. Accounting for Investments
TEXAS ASSOCIATION OF COUNTY AUDITORS
2017 TACA Fall conference
October 17-20, 2017
Mrs. Gina Robbins
Investment Accountant, Collin County

2. Overview from Start to Finish
Investment Policy
Pooling Investments
Broker/Dealer List
Account Reconciliations
Types of Investments
Investment Reports
Investment Strategy
Investment Software
The Marketplace
Audit
Investment Transactions

3. Investment policy Prepare Formal Investment Policy
Statutory Requirements
Local Government Code
Government Code 2256
Review carefully and understand policy
Must be adopted by Commissioners Court Annually

4. Investment policy
I. Authority and Scope of Policy II. Objectives III. Policies IV. Responsibility and Control V. Reporting and Performance Evaluation VI. Collateral and Safekeeping VII. Strategy

5. investment policy Request samples from other Counties
Use TAC Investment Academy Listserve

6. Broker/dealer list How many Brokers should you have
Do what works for you
Who can you trust
Do your due diligence 
 References
 Review Documents

7. BROKER/DEALER LIST
Send request to potential Brokers with documents attached:
Investment Policy
Application/Questionnaire
Agreement in Principle
Receive from approved Brokers
Bio/Professional Profile
Completed Application/Questionnaire
Executed Agreement in Principle
Certifications/Registrations/SEC Form
BrokerCheck (
Financial Statements
Certificate of Bond Proceeds/ IRMA

8. BROKER/DEALER LIST Review (Do your due diligence)
Application/Questionnaire
Perform BrokerCheck (
Obtain Referrals
Make your selections
Prepare Broker/Dealer List
Submit Broker/Dealer List for Commissioner Court review and approval
Acceptance/Rejection Notifications

9. Types of investments
AUTHORIZED INVESTMENTS
Government Code 2256
009 Obligations of, or Guaranteed By Government Entities
010 Certificates of Deposit and Share Certificates
011 Repurchase Agreements
0115 Securities Lending Program
012 Banker’s Acceptances

10. Types of investments 013 Commercial Paper 014 Mutual Funds
AUTHORIZED INVESTMENTS
Government Code 2256
013 Commercial Paper
014 Mutual Funds
015 Guaranteed Investment Contracts
016 Investment Pools
020 Institutions of Higher Education

11. Types of investments AUTHORIZED INVESTMENTS Government Code 2256
0201 Municipal Utility
0202 Municipal Funds from Mgmt & Developmt of Mineral Rights
0203 Ports and Navigation Districts
0204 Independent School Districts
0205 Decommissioning Trust

12. Types of investments Pooled Funds Investment Accounts (PFIA)
Federally Insured Cash Account (FICA) / ICS
Money Market Account (MMA)
Certificates of Deposit (CD)
Non-Negotiable
Brokered
Bonds
Federal Agency Bonds
Municipal Bonds

13. Investment strategy What is an “Investment Strategy”?
“An investment strategy is an investor’s plan of attack to guide their investment decisions based on individual goals, risk tolerance and future needs for capital.”
“The most important part of an investment strategy is that it aligns with the individual’s goals and is closely followed by the investor.” (

14. INVESTMENT strategy OPERATING FUNDS Perform Cash Analysis
Invest in Short Term Instruments
Ladder according to needs
Month
Payroll
Debt Service
TOTAL
January
$5,000,000
$0.00
February
$50,000,000
$55,000,000
March
$7,500,000
April
May
June

15. INVESTMENT STRATEGY NON-OPERATING FUNDS
Determine Amount Available to Invest
Short Term versus Long Term Instruments
Diversification
Market Trends
Ladder
Fund
General
Debt Service
TOTAL
Beginning Fund Balance
$197,000,000
$20,000,000
$217,000,000
Estimated Revenue Projections
$187,000,000
$60,000,000
$247,000,000
Expenditure Budget
$195,000,000
$50,000,000
$245,000,000
Liquidity Reserve
$15,000,000
$10,000,000
$25,000,000
TARGET
$174,000,000
$194,000,000

16. INVESTMENT strategy CAPITAL PROJECTS FUNDS
Determine when funds will be used
Lump Sum versus partial Debt Proceeds
Ladder

17. THE MARKETPLACE Definition of Marketplace by Merriam-Webster
“the economic system through which different companies compete with each other to sell their products”

18. THE MARKETPLACE Multi-Bank Securities, Inc. Fernando Pulido
(866)
eConnectDirect

19. The marketplace Email Request for Offers to approved Brokers
Review Offers Received
Select three “best” offers and recommendation
Request for Approval to Investment Officers
Contact Broker with Order for approved selection
Brokers that purchase has been made
Notify Bank of Trade and Settlement
Prepare and post journal entry to record investment purchase

20. Transactions PFIA Contribution PFIA Withdrawal Date GL Description
Debit
Credit
10/19/17
TexPool
$1,000,000.00
Pooled Cash
(Wire $1,000, from Pooled Cash to TexPool)
Date
GL Description
Debit
Credit
10/20/17
Pooled Cash
$500,000.00
TexSTAR
(Wire $500, from TexSTAR to Pooled Cash)

21. Transactions Interest Received (Cash Basis)
Interest Received (Accrual Basis)
Date
GL Description
Debit
Credit
10/31/17
Pooled Cash
$2,500.00
Interest Income
(Investment Interest Received)
Date
GL Description
Debit
Credit
10/31/17
Interest Receivable
$2,500.00
Interest Income
(Record Accrued Interest)
11/30/17
Pooled Cash
(Investment Interest Received)

22. transactions CD Purchase CD Maturity Date GL Description Debit Credit
10/19/17
CD Investment
$2,500,000.00
Pooled Cash
(Record CD Purchase %)
Date
GL Description
Debit
Credit
10/19/19
Pooled Cash
$2,575,000.00
CD Investment
$2,500,000.00
Interest Income
$75,000.00
(CD Matured)

23. TRANSACTIONS Investment Bond Purchase
Investment Bond Purchase with Purchased Accrued Interest
Date
GL Description
Debit
Credit
09/29/17
Investment Bonds
$5,000,000.00
Pooled Cash
(Purchase FHLMC #3134GBH %)
Date
GL Description
Debit
Credit
Investment Bonds
$2,801,000.00
Interest Receivable
$396.81
Pooled Cash
$2,801,560.20
(Purchase FHLMC #3134GBD %)

24. TRANSACTIONS Amortization (Bond purchased at a premium)
Accretion (Bond purchased at a discount)
Date
GL Description
Debit
Credit
06/30/17
Bond Premium Account
$294.96
Investment Bonds
(Record Amortization FNMA #31398ADM1)
Date
GL Description
Debit
Credit
06/30/17
Investment Bonds
$355.12
Discount on Bond Account
(Record Accretion FHLMC #3134G9VF1)

25. transactions INVESTMENT BOND CALLED/MATURED
Record Final Interest Received
Record Final Amortization (or Accretion)
Record Maturity/Call
Date
GL Description
Debit
Credit
08/28/17
Pooled Cash
$2,500,000.00
Investment Bonds (Accretion)
$24.68
Investment Bonds
$2,499,774.68
Realized Gain
$225.32
Discount on Bond Account
(Record FHLB #3130ABDU7 Bond Called)

26. Pooling investments OPERATING NON-OPERATING CAPITAL PROJECTS
Liquid Cash and Short Term Investments
Diversify between Short & Long Term Investments
Investment based on Cash Needs

27. Pooling investments OPERATING INVESTMENT POOL Establish GL Accounts
Pooled Cash
Operating Investment Pool
Investment Interest Receivable/Accrued Interest
Investment Receivable (Clearing Account)
Investment Interest Revenue

28. Pooling investments NON-OPERATING INVESTMENT POOL
Establish GL Accounts
Pooled Cash
Non-Operating Investment Pool
Investment Interest Receivable/Accrued Interest/Purchased Accrued Interest
Investment Receivable (Clearing Account)
Investment Interest Revenue
Premium/Discount on Bonds
Amortization/Accretion Expense
Capital Gains/Losses
Market Adjustment

29. Pooling investments CAPITAL PROJECTS INVESETMENT POOL
Establish GL Accounts
Pooled Cash
Capital Projects Investment Pool
Investment Interest Receivable/Accrued Interest
Investment Receivable (Clearing Account)
Investment Interest Revenue

30. Pooling investments Parallel Methodology OPERATING NON-OPERATING
CAPITAL PROJECTS
POOLED CASH
MONEY MARKET ACCOUNT
FIXED TERM INVESTMENTS < 1 YEAR
CERTIFICATES OF DEPOSIT
PFIA
FICA/ICS
INTEREST RECEIVABLE
INVESTMENT POOL EQUITY
INVESTMENT INTEREST REVENUE
POOLED CASH
MONEY MARKET ACCOUNT
FIXED TERM INVESTMENTS > 1 YEAR
CERTIFICATES OF DEPOSIT
FEDERAL AGENGY BONDS
MUNICIPAL BONDS
INTEREST RECEIVABLE
INVESTMENT POOL EQUITY
INVESTMENT INTEREST REVENUE
POOLED CASH
MONEY MARKET ACCOUNT
FIXED TERM INVESTMENTS
CERTIFICATES OF DEPOSIT
INTEREST RECEIVABLE
INVESTMENT POOL EQUITY
INVESTMENT INTEREST REVENUE

31. ACCOUNT RECONCILIATIONS
Perform account reconciliations on a monthly basis
Compare GL Ending Balances with outside source
Identify Discrepancies
Discrepancies/Exception items should be cleared ASAP
Update as changes occur
Submit for Supervisor Review and Approval

32. INVESTMENT REPORTS
Monthly Investment Report

33. INVESTMENT REPORTS
Quarterly Investment Report

34. Investment software PROS CONS Reporting Allocation
Amortization/Accretion
Validation
Import Journal Entries
System Quirks
Outside of GL Software
Duplicate Entry

35. AUDIT Fiscal Year End Be Prepared
Perform Final Review before submitting documents to Auditor