Grey Street Primary School

Investment Policy

 

PURPOSE

School Council has the responsibility for monitoring school funds and deciding if there is the opportunity to invest surplus funds to generate interest revenue for the School.

 

BROAD GUIDELINES

1.    Due to the risk and complexity of some investments the School should invest with institutions having an authorised trustee investment status.  To maximise the funds available for investment, it is essential that the cash flow budget is utilised to determine cash requirements in any given period.

2.    When funds are invested Council should ensure that the maturity profile of their deposits is appropriate to meet with cash flow requirements as mentioned above.

3.    As a matter of principle, Council should ensure that funds are invested in a safe security that attracts the best interest rate available.  It is noted that the highest interest rate is not necessarily the best rate or the safest investment.

4.    School Council should monitor investments for compliance with the Grey Street PS Investment policy.

5.    All investment, or changes to investments, should be approved by School Council and authorised by the Principal and a School Council delegate.

6.    As a guide, the School should invest as follows:-

·      by depositing funds in any credit union, bank or building society

·      in bank accepted or endorsed bills of exchange

·      in negotiable, convertible or transferable certificates of deposit issued by a bank.

7.    In order to provide an investment fund that is able to meet unusual circumstances, the School Council should endeavour to maintain an investment account minimum balance equivalent to one and a half quarterly cash grants as allocated by the Department of Education in the School Global Budget.

8.    School Council should maintain an Investment account linked to the official account.

 

IMPLEMENTATION

1.    School Council will formally minute (prior to the investment of funds) and regularly review an investment policy which covers the following matters:

(a)    the level of funds to be invested

(b)    the term of the investment/s

(c)    the type of investment/s, with reference to the schools required cash flow           during the year.

 

2.   Procedural Details

Any official investment account will be in the name of the School Council and must be included on the CASES Finance package.

 

3.   Direct Deposits

Except for interest earned on the account, the School will not deposit funds directly into an investment account.  All receipts will go through the Official Account.  Once money has been receipted into the Official Account, the school is then able to do an investment transfer to shift the funds out of the Official Account into the investment account.

 

4.   Direct Payments

The School will not make payments to creditors directly from investment accounts.  All payments will be made from the Official Account.  To redeem funds, the School will complete an investment transfer to shift the funds from the investment account into the Official Account.

 

The only exception to the above procedure is where the investment account is approved by the Australian Taxation Office and the donations are tax deductable for the donor, for example the Library Building Fund.

 

5.   Investment Register

Investments held will be recorded in an Investment Register.  The following details will be recorded:

·      Date of lodgement

·      With whom invested

·      Terms of investment: period, percentage rate and maturity date

·      Amount invested

·      Source of money invested.

 

Prior to placement of the investment, a Council minute will record these details as a formal motion of the Council, approving the investment.

 

6.   Official Account

The School will maintain three accounts, specifically:

·      the School Official account

·      the School Linked Investment account, and

·      the School Fixed Term Investment account.

 

These accounts will meet the following requirements:

      (a)  School Official Account

      This will be the School operating account through which all payments and receipts  

      will be registered.  This account will operate within lower and upper limits of

      $2 000 and $15 000 respectively.  The Principal and/or Bursar are authorised to

      maintain sufficient funds in this account through the transfer to or from the School

      Linked Investment account.

      (b)  School Linked Investment account

      This investment account will hold the balance of monies not being held in the

      School Official account or the School Fixed Term Investment account.

      (c)  School Fixed Term Investment account

      This account will hold monies that are invested for a fixed period of time and at a

      fixed interest rate, as determined by School Council.  This account shall hold a

     minimum of money equivalent to 1.5 terms cash grant allowance (as determined by

     the School Council Global Budget) together with a building reserve fund amount

     that shall be determined by School Council on a six monthly basis.

 

EVALUATION

·      School Council will formally review all investments at least twice per year.

·      School Council will formally review this investment policy on an annual basis.

 

 

 

RESOURCES

The policy is developed given advice from the Department of Education through:

·      Executive memorandum 97/021

·      Schools of the Future Reference Guide.

 

Example of account structure:

Investment account

1.5 terms cash grant                                                      $80 000

Building reserve fund                                                     $40 000           $120 000

 

Linked investment account                                                                   $70 000

 

Official account                                                                                     $15 000

 

                                                            Total funds                               $205 000