(A) Delegation of authority. The Clerk-Treasurer, the investment officer of the city, shall be responsible to oversee the day-to-day management of the city’s investments pursuant to I.C. 36-4-10-4.5. Should the Clerk-Treasurer elect to select an outside investment advisor, such advisor or firm must be registered under the Investment Advisor’s Act of 1940, being 15 U.S.C. §§ 80b-1 through 80b-21. Responsibility for the operation of the investment program is delegated to the investment officer, who shall act in accordance with established written procedures and internal controls for the operation of the investment program consistent with this investment policy. Procedures should include references to: safekeeping, delivery vs. payment, investment accounting, repurchase agreements, wire transfer agreements and collateral/depository agreements.
(B) Prudence. The standard of prudence to be used by the investment officer shall be the “prudent person standard” and shall be applied in the context of managing all funds of the city. The “prudent person standard” states, “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.”
(C) Ethics and conflicts of interest. The investment officer and employees 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. The investment officer and employees shall disclose any material interests 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 investment portfolio.
(D) Internal controls.
(1) The investment officer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the city are protected from loss, theft or misuse.
(2) The internal control structure shall be designed to provide reasonable assurance that these objectives are met.
(3) The concept of reasonable assurance recognizes that:
(a) The cost of a control should not exceed the benefits likely to be derived; and
(b) The valuation of costs and benefits requires estimates and judgement by management.
(4) Accordingly, the investment officer shall establish a process for an annual independent review by an external auditor to assure compliance with policies and procedures. The internal controls shall address the following points:
(a) Control of collusion;
(b) Separation of transaction authority from accounting and record keeping;
(c) Custodial safekeeping;
(d) Avoidance of physical-delivery securities;
(e) Clear delegation of authority to subordinate staff members; and
(f) Written confirmation of telephone transactions for investments and wire transfers.
(Ord. 23-11, passed 6-26-2023)