Sound Investment Policy for School Boards

By Charles K. Trainor

The 2007 near-collapse of the financial markets continues to wreak havoc on consumers, companies, governments, and pension plans worldwide, and school districts have not been exempt.

Nevertheless, each school board is charged with protecting its taxpayers’ money. This responsibility is broad, encompassing oversight of the budget process and internal controls as well as the establishment of guidelines for investing available funds. Some members of your board may be very knowledgeable regarding money matters, but many are not. Fortunately, resources are available to educate and offer guidance.

Of critical importance to the board’s process of financial decision-making is the development of a comprehensive investment policy. A well-constructed policy heightens awareness of the potential risks when selecting investment opportunities and defines the level of tolerable risk.

What are some investment risks districts encounter in today’s financial environment?

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