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The Cooperative Board shall designate (at their Annual Meeting, or as otherwise necessary) which financial institutions are authorized to hold the Cooperative’s funds and shall also designate those persons authorized to sign checks and approve ACH transactions; transfer funds from one Lakeland account to another; and initiate authorized ACH transactions.
All Cooperative funds deposited in a financial institution must be insured by FDIC, by repurchase agreements for government securities, or in some other manner approved by the Finance Committee and the Board.
4.3.1 Statement of Purpose
It is the policy of the Lakeland Library Cooperative to invest its funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow needs of the Cooperative and to comply with all state statutes governing the investment of public funds.
4.3.2 Scope of Policy
This investment policy applies to all financial assets of the Lakeland Library Cooperative. These assets are accounted for in the various funds of the Cooperative and include the general fund, special revenue funds, debt service funds, capital project funds, enterprise funds, internal service funds, trust and agency funds and any new fund established by the Cooperative.
4.3.3 Investment Objectives
The primary objectives, in priority order, of the Lakeland Library Cooperative’s investment activities shall be:
1. Safety
Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to insure the preservation of capital in the overall portfolio.
2. Diversification
The investments will be diversified by security type and institution in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.
3. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated.
4. Return on Investment
The investment portfolio shall be designed with the objective of obtaining a market average rate of return throughout the budgetary and economic cycles, taking into account the investment risk constraints and the cash flow characteristics of the portfolio.
4.3.4 Delegation of Authority
Authority to manage the investment program is derived from state law, Michigan Public Act 89 of 1977, Michigan Compiled Laws 397.558 (2). Management responsibility for the investment program is hereby delegated to the Board Treasurer and the Director who shall establish written procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include references to: safekeeping, delivery versus payment, investment accounting, repurchase agreements, wire transfer agreements, collateral/depository agreements and banking service contracts. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Board Treasurer and Director. The Board Treasurer and Director shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.
4.3.5 List of Authorized Investments
The Lakeland Library Cooperative is limited to investments authorized by Act 20 of 1943, as amended (including Public Act 196 of 1997, MCL 129.91 et. seq.), and may invest in the following:
1. Bonds,
securities, and other direct obligations of the
2. Certificates
of deposit, savings accounts, deposit accounts or depository receipts of a
financial institution, but only if the financial institution is eligible to be
a depository of funds belonging to the State under a law or rule of the State
of
3. Commercial Paper rated at the time of purchase within the highest classification established by not less than two standard rating services.
4. Repurchase agreements consisting of instruments listed in 1 above.
4.3.6 Safekeeping and Custody
All security transactions, including collateral for repurchase agreements and financial institution deposits, entered into by the Cooperative shall be on a cash basis. Securities may be held by a third party custodian designated by the Board Treasurer and Director and evidenced by safekeeping receipts as determined by the Board Treasurer and Director.
4.3.7 Standard of Prudence
Investments shall be made with judgement 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.
4.3.8 Statement of Ethics
The Director, Board Treasurer, and any other Board members and staff involved in the investment of funds shall refrain from personal business activity that could conflict with the proper execution and management of Lakeland Library Cooperative investments or that could impair their ability to make impartial investment decisions.
4.3.9 Investment Activity Report
The Director shall provide monthly reports and an annual report to the Board concerning the investment of Cooperative funds.
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