Recommended Practice
Mark-to-Market Practices for State and Local Government Investment Portfolios and Investment Pools
As the investment portfolios of state and local governments are subjected to increased scrutiny, it is essential that reporting standards be enhanced so that investors, governing bodies and the public remain informed of the current market value of the portfolio. Regular disclosure of the value of a governmental entity’s investments is an important step to furthering taxpayer and market confidence in state and local government investment practices.
The Government Finance Officers Association (GFOA) recommends that state and local government officials responsible for investment portfolio reporting should determine the market value of all securities in the portfolio on at least a quarterly basis. These values should be obtained from a reputable and independent source and disclosed to the governing body or other oversight body at least quarterly in a written report. It is recommended that the report include the market value, book value and unrealized gain or loss of the securities in the portfolio.
Many state and local government officials are allowed to invest in various state and local government investment pools available in their state or region. Pool administrators should, on at least a monthly basis, determine the market value of all securities in the pool and report this information to all pool participants on at least a quarterly basis. These values should be obtained from a reputable and independent source. This information should be included in the report to the governing body prepared on at least a quarterly basis.
(Prior Code, Ch. 38, App. F) (Ord. 99-286, passed 12-14-1999)