It is the policy of the Michigan Government Finance Officers Association (MGFOA or the Organization) to invest the Organization's funds in a manner which will ensure the preservation of principal while providing the highest investment return with maximum security, meeting the daily cash flow requirements of the Organization and conforming to all federal and state statutes governing the investment of funds.

This investment policy applies to all financial assets of the MGFOA.

3.1 Prudence: Investments shall be made with judgement and care, under prevailing circumstances, 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 principal and probable income to be derived.

The standard of prudence to be used by MGFOA Officers shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. MGFOA Officers acting’s in accordance with this investment policy, and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price change provided deviations from expectations are reported in a timely fashion and appropriate action is taken.

3.2 Ethics and Conflicts of Interest: MGFOA Officers involved in the investment process shall refrain from personal business activity that could conflict with proper execution and management of the investment program, or which could impair their ability to make impartial investment decisions. MGFOA Officers shall disclose any material financial interest in financial institutions that conduct business within the Organization, and they shall further disclose any large personal financial or investment positions that could be related to the performance of the investment portfolio. MGFOA Officers shall refrain from undertaking personal investment transactions with the same individual with which business is conducted on behalf of the Organization.

OBJECTIVE

The primary objectives, in priority order, of the MGFOA’s investment activities shall be:

4.1 Safety: Safety of principal is the foremost objective in the investment of MGFOA funds. Investments shall be undertaken in a manner that seeks to ensure the preservation of principal in the overall portfolio.

4.2 Liquidity: The investment portfolio shall remain sufficiently liquid to enable the MGFOA Treasurer to meet all operating requirements that might be reasonably anticipated.

4.3 Return on investments: The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow characteristics of the portfolio. Return on investment shall be of secondary importance compared to the safety and liquidity objectives above.

Authority and management responsibility for the investment program is hereby delegated to the MGFOA Treasurer. The MGFOA Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the investment activities.

The MGFOA Treasurer shall conduct the operation of the investment program consistent with this policy. Specifically, investment practices shall be conducted within the objectives of Safety, Liquidity, and Return on Investment as stated in Section 4.0. Further, before an investment is undertaken, the Treasurer shall consult with the MGFOA President to obtain his/her approval of the investment. Should the President deem prudent, the investment will not be entered without approval of a majority of the Board of Directors.

6.1 Authorized Financial Dealers and Institutions: Investments shall be authorized with those Financial Institution(s) approved by the Board of Directors, to perform the banking function of the Organization. The approved financial institutions shall certify that they have 1). Received the MGFOA’s investment policy, 2). Have read the policy, and 3). Will comply with said terms of the policy.

6.2 Authorized Investments: The MGFOA Treasurer is authorized to invest in the following types of securities

6.2.1 Bonds, securities, and other obligations of the United States or an agency or instrumentality of the United States.

6.2.2 Certificates of deposit, savings accounts, deposit accounts, or depository receipts of a financial institution operating within in the State of Michigan in which municipalities are authorized to deposit public funds.

6.2.3 Mutual funds registered under the investment company act of 1940 with authority to only purchase investment vehicles that are legal for direct investment by a Michigan public corporation. Investment is limited to mutual funds that maintain a net asset value of $1.00 per share.

6.3 Safekeeping and Custody: All securities transactions, except certificates of deposits as described below, shall be conducted on a delivery-versus-payment (DVP) basis. Securities will be held by a third party custodian, as designated by the MGFOA Treasurer, and shall be evidenced by a safekeeping receipt.

Non-collateral, non-negotiable certificates of deposits, as is allowed under State of Michigan law, shall be evidenced by a safekeeping receipt from the issuing bank.

6.4 Maximum Maturities To the extent possible, the Organization shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a particular cash flow need, the Organization will not directly invest in securities that mature more than one (1) year from the date of purchase.

The MGFOA Treasurer shall provide a monthly report to the Board of Directors, which provides a clear picture of the status and types of investments of the current investment portfolio. This report shall be prepared in such a way that will allow the Board to ascertain whether investment activities during the reporting period have conformed to the investment policy.

Further the MGFOA Treasurer shall report to the MGFOA Membership, at the Annual Business Meeting, the status and types of investments of the current investment portfolio

ADOPTION

The MGFOA’s investment policy shall be adopted by the Board of Directors. The policy shall be reviewed annually by the MGFOA Treasurer. Any revision to the policy shall be brought to the Board of Directors for approval.