9.6 Investment Review and Oversight

For all bond funds, public agencies should periodically review their investment decisions and the management of these investments for compliance with laws, rules, regulations, and the public agency’s own investment policies and report the status of investments, including a summary of investment activities and compliance audits, to any oversight committees. For bond fund investments, public agencies should also periodically reconcile all deposits, expenditures, and withdrawals of monies from bond funds to ensure compliance with bond documents, including arbitrage rebate and yield restriction requirements, bond and financing rules. Public agencies should also establish procedures for internal control and management of bond proceeds. See Section 8.3, Post-Issuance Federal Tax Law Requirements.

California Government Code Sections 27131 through 27132.4 address the formation, composition, and role of a county treasury oversight committee. While no longer required by statute, a treasury oversight committee can monitor and review the county investment policy by conducting or causing an annual audit and discussing its findings at a public meeting. The rationale behind the creation of an oversight committee is to give local agencies and private sector citizens a say in the policies governing the county investment pool.

Cities and other local agencies are not required to have a treasury oversight committee; however, they may wish to consider whether an oversight committee is appropriate based on the agency’s treasury management procedures, the complexity of its portfolio, the frequency of its securities transactions, and the skill level of its staff. If a city or other local agency does form a treasury oversight committee, it is not subject to the limitations and restrictions associated with membership imposed on a county treasury oversight committee.