Comprehensive Annual Financial Report - Harford County Public ...

HARFORD COUNTY PUBLIC SCHOOLS
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Investments (continued)
Credit Risk
In order to control credit risk, State statutes authorize the Board to invest in obligations of the
United States Government, federal government agency obligations, secured time deposits in
Maryland banks, bankers’ acceptances, the Maryland Local Government Investment Pool,
money market mutual funds, commercial paper and repurchase agreements secured by direct
government or agency obligations.
Concentration of Credit Risk
In accordance with its investment policy, with the exception of US Treasury securities,
repurchase agreements, US government agencies and MLGIP, no more than 50% of the Board’s
total investment portfolio is to be invested in a single security type. With the exception of
overnight repurchase agreements with the Board’s lead bank and the MLGIP, no more than 50%
of the Board’s portfolio may be invested in a single institution.
Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of failure of the counter party,
the Board will not be able to recover all or a portion of the value of its investments or collateral
securities that are in the possession of an outside party. As of June 30, 2012, all of the Board’s
investments were insured or registered, or were held by the custodian in the Board’s name or
were invested in MLGIP. The Board’s investment policy states that all investments must be
fully collateralized. As of June 30, 2012, the Board’s investments were not exposed to custodial
credit risk.
Reconciliation of cash and investments as shown on the Statement of Net Assets:
Cash on hand $ 131
Carrying amount of deposits 36,353,173
Carrying amount of investments 20,126,776
Total cash and investments 56,480,080
Less: Amounts in fiduciary funds 25,344,546
Total Cash and Investments Per Statement of Net Assets $ 31,135,534
Cash and cash equivalents $ 11,008,758
Investments 20,126,776
Total Cash and Investments Per Statement of Net Assets $ 31,135,534
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