Chapter Five:  Fiscal Affairs

Procedure Title:  Banking and Investments
Based on:  Board Policy No. 5
Procedure Number:  5.02
Date Adopted/Revised:  June 25, 2001; November 21, 2006; May 15, 2007

General Operating Cash Funds and certain other cash funds held by and/or for South Arkansas Community College will be placed with a depository institution according to the following procedures and practices.

  1. Interest-bearing time deposits and demand deposits will be placed with a single depository institution on the basis of competitive bids for up to a seven (7) year period, ending June 30.

  2. The rate bid on interest bearing time deposits will be primary in selecting the successful bidder.

  3. Institutions eligible to submit bids are state and national banking and savings and loan corporations located in the State of Arkansas, the deposits of which are insured by the Federal Deposit Insurance Corporation.

      1.  Bidders must have or arrange to have a depository location in El Dorado, Arkansas.

      2. All deposits of the College must be secured by collateral or surety bond.

      3. The depository bank will be expected to provide the College with the same account options for demand-deposits as are available to all other customers.

      4. The College reserves the right to place funds in either time deposits or demand deposits based upon the best interests of the College.

      5. The College reserves the right to invest in U.S. Treasury Bills or U.S. Treasury Notes. The depository bank is obligated to assist the College in making such investments at no charge for the services.

      6.  Accounts placed in trust with a depository institution by official Board of Trustees action are excluded.

      7.  As authorized under Arkansas Ann. Stat. Sec. 67-524, all deposits are to be secured by a pledge of the financial institution’s assets in such a manner as to confer a preferred status on the College’s funds.

      8. This collateralization will be accomplished according to the following:

          1. Basis of valuation of collateral: Market Value
          2. Pledging ratios: 100%
          3. Eligible Collateral:
          4. Direct obligations of the United States Government
          5. Obligations guaranteed by the United States and those of federal agencies
          6. Direct Obligations of the State of Arkansas
      9. Eligible Custodians:

          1. The Federal Reserve Bank
          2. Branch(s) of the Federal Reserve Bank
          3. Correspondent bank(s)
          4. The Federal Home Loan Bank
      10. Pledge Agreement

          1. A pledge agreement, safekeeping receipt, will be issued to the College which conforms to the conditions above and includes the following provisions:

              1. The depository bank’s affirmation that it has the power to pledge collateral,
              2. The certification that the pledged collateral is in the possession of the name custodians’ agency,
              3. A clear indication that the custodian has responsibilities of safekeeping and accounting, and
              4. Authorization for the custodian to deliver the collateral to South Arkansas Community College in the event that the deposit is not paid and ordered.
          2. In lieu of the above collateralization requirement, the financial institution may have the option of submitting a surety bond signed by the bank and some surety company authorized to do business in the State of Arkansas.

          3. The financial institution’s eligibility for deposits and/or investments will be restricted to the time limits and stated dollar limits of the surety bond as stated in the depository and/or investment depository contract.

          4. The value of the surety bond may rise and fall from day to day so long as all deposits of the College are fully and wholly protected.