Note X – External Investment Pool
The County sponsors the (pool name) External Investment Pool pursuant to state laws that authorize the County Treasurer to invest its surplus cash and any funds of municipal corporations which are not required for immediate expenditure and are in the custody or control of the county treasurer. The pool’s investments are limited to those authorized by state law for local governments. The pool is not registered with the SEC, but is subject to oversight by the County Finance Committee. The Committee is responsible for adopting investment objectives and policies, for hiring investment advisors, and for monitoring policy implementation and investment performance. The Committee’s primary role is to oversee the allocation of the Pool’s portfolio among the asset classes, investment vehicles, and investment managers.
The pool is reported on (an amortized cost / a fair value) basis [1]. The pool (is / is not) held in a trust for participants and is therefore reported as an (Investment Trust / Custodial activity). The County has not provided nor obtained any legally binding guarantees to support the value of shares in the Pool. Any credits or payments to pool participants are calculated and made in a manner as required by RCW 36.29.024. [2]
In accordance with state law, the County acts as the treasurer for most local governments within the County. (Percentage) of the pool consists of these involuntary participants. [3]
(Separate financial statements for the Investment funds may be obtained from the County Treasurer’s Office, or by visiting the County’s website /or since a separate annual financial report is not available for the External Investment Pool, the following additional disclosures are being provided in the County’s financial statements.) [4]
Instructions to preparer:
The requirements of this note are explained in Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards (Cod.) Section (Sec.) I50 "Investments" for reporting external investment pools.
Each county is expected to have at least one external investment pool as described in BARS 3.2.2, County's External Investment Pool. If the county operates multiple pools, then disclosures must distinguish between each pool.
[1] See GASB Cod. Sec. In5 "Investment Pools (External)" for requirements for the pool to be reported on an amortized cost basis. If the pool does not meet these requirements, it should be reported on a fair value basis for purposes of the county and participants’ financial statement reporting. The Local Government Investment Pool (LGIP) has met these requirements and should be reported at amortized cost even if the County’s investment pool is reported at fair value.
[2] If the County diverted any interest or other earnings from external pool participants under authority of RCW 36.29.020, then this fact should be disclosed, along with the total amount of investment income assigned to the County’s general fund for the year.
[3] If the county acts as the government’s treasurer, participation in the county pool is considered to be involuntary since it is specified by law. See GASB Cod. Sec. I50.
[4] If the County publishes a separate annual financial report for the pool, this may be referenced in lieu of additional disclosure. This report may be audited or unaudited but must be available before the issuance of the County’s financial statements for that period in order to be referenced. The reference should describe how a user can obtain this report. If the County does NOT PUBLISH A SEPARATE ANNUAL FINANCIAL REPORT FOR THE POOL, the following additional disclosures required by GASB Cod. Sec. I50 must be added:
-
Frequency of determining the fair value of investments
-
Method used to determine participants' shares sold and redeemed and whether that method differs from the method used to report investments
-
Summary of the fair value, carrying amount (if different from fair value), number of shares or the principal amount, ranges of interest rates, and maturity dates of each major investment classification.
-
Deposit disclosures required by GASB Cod. Sec. C20 "Cash Deposits with Financial Institutions"
-
Fair value disclosures required by GASB Cod. Sec. I50
-
Reverse Repurchase and Securities Lending disclosures required by GASB Cod. Sec. I55 "Investments - Reverse Repurchase Agreements" and GASB Cod. Sec. I60 "Investments - Securities Lending", if applicable
-
Condensed statements of fiduciary net position and changes in net position for the pool, with columns for internal and external portions. Note that the internal portion is the amounts held for county funds and the external portion should tie to the county’s fiduciary statements.
Counties may also maintain Individual Investment Accounts, to hold specific investments acquired for individual municipalities. There is no required note disclosure for Individual Investment Accounts.