The general purpose of this policy statement is:  1) to develop and outline clear investment objectives, 2) to develop procedures and constraints for the investment process itself, and 3) to develop a consistent method of reporting and monitoring investments and their market value.


All policies and investment objectives should reflect the primary mandate to manage public funds prudently.




All investment objectives shall be governed by the following priority of goals:  1) Safety of Principal, 2) Liquidity, and 3) Yield.  In addition, all investments must qualify as acceptable and lawful under the statute named above.


It is understood that the specific investment guidelines may vary from account to account depending on the designated use for each pool of funds.  Each account that is managed separately should have its own set of investment guidelines that specifically state the types of investments to be used, the maximum maturity of the allowable investments and any other limitations.  Such Investment Guidelines should be developed by the CFO and approved by the Superintendent.


  1. 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 overall portfolio.  The objective will be to mitigate credit risk and interest rate risk while avoiding the erosion of principal by inflation.


  1. Credit risk is low because Louisiana state statues generally permit only conservative investments.  This Investment Policy further reduces credit risk by requiring that each investment account or pool have specifically designated investment guidelines specifying the types of securities that are permissible for that account or pool.

  2. Interest rate risk is the risk that the market value of the securities in the portfolio will decline due to an increase in interest rates.  Interest rate risk may be mitigated by:



  1. Inflation risk is the risk that the purchasing power of the portfolio will fall due to inflation being higher than portfolio returns over sustained periods of time.



  1. Liquidity

    The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.  This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands.  Furthermore, since all possible cash demands cannot be foreseen, the portfolio should consist largely of securities with active secondary or resale markets.

  2. Yield

    The investment portfolio shall be designed with the objective of attaining a fair rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints, liquidity needs and Inflation.  Return on investment is of least importance compared to the safety and liquidity objectives described above.  The investments are generally limited to low risk securities in anticipation of earning a fair return relative to the risk being assumed.




  1. Prudence

    The standard of prudence to be used by investment officials and investment management firms shall be, first and foremost, to comply with Louisiana state law.  In addition, the standard shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio.  Investment officers acting in accordance with this Investment Policy and any associated Investment Guidelines and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and any required action is carried out in accordance with the terms of this policy.

    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.

  2. Ethics and Conflicts of Interest

    Elected officials, officers and employees of the School Board involved in the investment process shall at all times comply with Louisiana state law and the Code of Ethics.  A full description of the State of Louisiana’s required behavior is found in the Code of Ethics for Public Officials and Public Employees, which is found in Title 42 of the Louisiana Revised Statutes.

    Additionally, elected officials, officers and employees of the School Board involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. 

    Elected officials, officers and employees of the School Board shall disclose any material interest in financial institutions with which they conduct business.  They shall further disclose any personal financial/investment positions that could be related to the performance of the School Board’s investment portfolio. 

    Elected officials, officers and employees of the School Board shall refrain from undertaking personal investment transactions with the same broker(s) with whom business is conducted on behalf of the School Board and from undertaking business conducted on behalf of the School Board with the same broker(s) with whom personal business is conducted.

  3. Delegation of Authority

    Authority to manage the investment program is granted to the Director of Business Services (CFO) who shall establish written investment guidelines for the operation of the investment program consistent with this investment policy.  These guidelines should be approved by the Superintendent.

    No person may engage in an investment transaction except as provided under the terms of this policy and the investment guidelines established by the CFO. 

    The CFO shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.

    The CFO has the authority to manage the investments, to delegate investment authority to staff members within the Finance Department, to engage one or more professional investment managers or to utilize a combination of these methods. 

    Any delegation of investment authority may only be by the CFO and should be approved by the Superintendent. 

    Delegation of investment authority by the CFO to staff members within the Finance Department should be in writing and be approved by the Superintendent. 

    Delegation of investment authority to professional investment managers should be by the CFO through contract and approved by the Superintendent. 

    Investment authority should never be delegated to anyone who is not either a staff member within the Finance Department or a professional investment manager that meets the criteria outlined below.

    If staff members within the Finance Department are managing investments, they should stay abreast of current market trends and bond spreads in order to be able to effectively judge the relative attractiveness of any given bid or offer.  The following practices should be adopted to ensure such staff is making adequately informed investment decisions:


  1. Staff members should monitor the scheduled maturities and potential calls for the securities in the investment portfolio on an ongoing basis. 

  2. In anticipation of the need to reinvest proceeds from maturing and/or called securities, staff members should be in contact with approved brokers and be monitoring yields on the types of securities that they anticipate purchasing for several days before the need for such purchases. 

  3. The purchase of securities on an ad-hoc basis without prior planning, and adequate familiarization with current market conditions, should be avoided to the extent of investing the proceeds from a security that matures in a money-market option until the staff member is able to take the time to become current on market trends and bond spreads.

  4. When purchasing securities, offers on relatively comparable securities should be solicited from a minimum of three separate brokers to provide a valid basis for comparison.

  5. When comparing offers on similar, but different, securities from brokers, differences in final maturity, the presence and details of any call features, issuer, structure of the issue, and discount or premium should be carefully factored into the evaluation process when determining which security is the best fit for the investment portfolio.

  6. When selling securities, bids should be solicited from a minimum of three separate brokers to provide a basis for comparison.  The best bid should be selected.  However, for sales that are part of a swap transaction, competitive bidding is not required.

  7. In order to truly maintain competition, no “last looks” should be permitted.  A “last look” is when a broker is permitted to improve his/her bid or offer so that it beats those of other brokers.  Brokers should never be provided with any information concerning other broker's bids or offers prior to submitting their own bid or offer.


If a professional investment manager is hired they must meet the following requirements:


  1. Be registered with the United States Securities and Exchange Commission as a Registered Investment Advisor or be a national bank, state-chartered bank or a national or state trust company.

  2. Provide evidence of having expertise in managing the type(s) of assets that they will be managing for the School Board.

  3. Provide evidence of specific experience managing funds for local Louisiana governments.

  4. Acknowledge, in writing, their obligation and their ability to serve as a fiduciary to the School Board. 

  5. Acknowledge, in writing, receipt of the School Board’s investment policy statement and investment guidelines as well as specific knowledge of the investment statutes of the State of Louisiana.

  6. Agree, in writing, not to conduct any transactions through any related entities.




  1. Authorized Financial Dealers and Custodians


  1. All securities owned by the School Board shall be held by a third party custodian completely independent from any broker or investment advisor with whom the School Board conducts business.  The custodian shall be a national bank, state-chartered bank or a national or state trust company.  Such custodian shall provide the School Board with monthly transaction and asset statements.

  2. A list will be maintained of approved security broker/dealers.  Those broker/dealers selected must have a minimum capital requirement of $10,000,000 and have been in business for at least five years.  These may include primary dealers or regional dealers that qualify under the Securities and Exchange Commission Rule 15C3-1.  The approved list of dealers will be kept to a manageable number.

  3. All financial institutions and broker/dealers who desire to be approved to conduct business with the DPSB must supply the following as appropriate:


  1. audited financial statements

  2. proof of Financial Industry Regulatory Authority (FINRA) certification

  3. certification of having read the School Board’s investment policy and guidelines as well as the statues of the State of Louisiana governing approved investments.


  1. The dealers and their representative brokers should have expertise in the types of securities allowable under the Louisiana statutes.  It is critical that each broker, with whom the School Board does business, know the client and understand both the School Board’s investment objective and policy statement as well as the investment statutes of the State of Louisiana.

  2. An annual review of the financial condition and registration of qualified broker/dealers will be conducted by the CFO.

  3. With regard to funds managed by a professional investment manager, the investment manager may use, and conduct transactions through, financial institutions and broker/dealers with whom they believe to be adequately qualified unless otherwise directed by the CFO and sections B, C, D & E, immediately above, shall not be required unless otherwise directed by the CFO.


  1. Internal Controls

    The CFO 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 internal control structure shall be designed to provide reasonable assurance that these objectives are met.

    Accordingly, the CFO shall establish a process for annual independent review by an external auditor to assure compliance with policies and procedures.  The internal controls shall address the following points:


  1. Control of collusion.  Collusion is a situation where two or more employees are working in conjunction to defraud their employer.

  2. Separation of transaction authority from accounting and record keeping. 

  3. Avoidance of physical delivery securities.  Book entry securities are much safer to transfer and account for since actual delivery of a document never takes place.  Delivered securities must be properly safeguarded against loss or destruction.  The potential for fraud and loss increases with physically delivered securities.

  4. Clear delegation of authority to subordinate staff members. 

  5. Written confirmation is required for all trades and wire transfers.  Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions should be supported by written communications and approved by the appropriate person.  Written communications may be via fax, email, or other electronic means and the safekeeping institution should maintain a list of authorized signatures.

  6. Development of a wire transfer agreement with the lead bank and/or the third party custodian.  This agreement should outline the various controls, security provisions, and delineate responsibilities of each party making and receiving wire transfers.

  7. All trades, where applicable, will be executed by delivery versus payment (DVP).




  1. Requirements for the CFO

    The CFO shall prepare, or have prepared, an investment report at least quarterly, including a succinct management summary that provides a clear picture of the status of the current investment portfolio and transactions made over the last quarter.  This management report will be prepared in a manner which will allow the determination whether investment activities during the reporting period have conformed to the investment policy.  The report should be provided to the Superintendent and the School Board.  With the approval of the Superintendent, an alternative summary report may be developed for distribution to the School Board.

    The report will include the following:


  1. A listing of individual securities held at the end of the reporting period.

  2. Unrealized gains or losses resulting from appreciation or depreciation by listing the cost and market value of securities.

  3. Average weighted yield to maturity of the investments in the portfolio.

  4. The percentage of the total portfolio which each type of investment represents.


  1. Requirements for a Professional Investment Manager


  1. The investment manager shall provide monthly reports to the CFO.  These reports will include the following:  Asset Statement with prices for all securities as of each month-end date as well as all information listed in A-D, above,

  2. Income and Expense Report, detailed by each individual security,

  3. Amortization and Accretion Report, detailed by each individual security,

  4. Interest Accrual Report, and

  5. Purchase and Sale Report for the month.


In addition to monthly written reports, the investment manager will plan to meet with the CFO at his/her convenience.  Phone consultations should be available as needed.


  1. Marking to Market

    A statement of the market value of the portfolio shall be issued monthly.  This will ensure that regular review has been performed on the investment portfolio in terms of value and subsequent price volatility.

    An independent pricing source is an important part of a sound investment process.  If there is an investment manager managing the portfolio, both the investment manager and the custodian will each be providing independent pricing on a regular basis.  Should broker pricing be required for some securities, the investment manager should verify the accuracy through some other market pricing mechanism such as Bloomberg Financial Services.

    If the CFO is managing the portfolio, he/she should try to obtain an independent pricing source separate from the custodian.  If broker pricing is all that is available, two brokers should be used to price all securities.  The average of the prices obtained for each security should be used for reporting purposes.

  2. Performance Standards

    The investment portfolio shall be managed in accordance with the parameters specified within this policy.  The portfolio should obtain a fair rate of return during a market/economic environment of stable interest rates.  Portfolio performance should be compared to appropriate benchmarks on a regular basis and analyzed within the context of all the risk constraints on the portfolio.




This policy shall be reviewed on an annual basis.  Any changes shall be recommended by the CFO and be approved by the Superintendent and the School Board.


Adopted:  August, 2003 Revised:  November, 2014
Revised:  March, 2010 Revised:  May 5, 2015
Revised:  February, 2011  



Ref:    La. Rev. Stat. Ann. §§17:99, 33:2955, 39:1211, 39:1212, 39:1219, 39:1221, 39:1222, 39:1223, 39:1225, 39:1226

Board minutes, 1-5-89, 9-7-00, 3-2-10, 2-3-11, 5-5-15


DeSoto Parish School Board