2014-01-02 Budget Attachments

2013/14 INVESTMENT POLICY


Examples include:
   investment in private placements;
   a security that is not supported or priced by at least two approved brokers/securities dealers;
   sub investment grade (i.e., a lower than rating BBB- (Standard and Poor’s) or equivalent),
    and in most cases, BBB rated investments; and
   unrated securities.

Return on investments
The portfolio is expected to achieve a market average rate of return and take into account
Council’s risk tolerance and current interest rates, budget considerations, and the economic cycle.
Any additional return target set by Council will also consider the risk limitations, prudent investment
principles and cash flow characteristics identified within this Investment Policy.

Comparison of Performance
For performance purposes, the portfolio will be compared to the UBS Australia Bank Bill Index
and/or the Bank Bill Swap Reference Rate over a rolling one-year period. The UBS Australia Bank
Bill Index has a modified duration of 45 days and comprises thirteen 90 Day Bank Bills. The
benchmark target is to be set equal to or above the benchmark yield and consider the expected
types of securities held in each portfolio.

In comparing performance, the portfolio will be market valued and take into account all coupons,
deposits and withdrawals to/from the portfolio.

ROLES AND RESPONSIBILITIES
Authorised personnel
The Director Organisational Services and the Financial Services Co-ordinator are authorised to
invest Council’s operating funds at their discretion in investments consistent with this Investment
Policy and legislation.

The Financial Services Co-ordinator will report to Council for investment guidelines, approved lists
and oversight of investment activities for the purposes of this Investment Policy.
Internal controls
The Financial Services Co-ordinator in consultation with the Director Organisational Services shall
establish internal controls and processes that will ensure investment objectives are met and that
the investment portfolios are protected from loss, theft or inappropriate use.

The established processes will include monthly and quarterly reporting (including compliance
reporting), as well as an annual review of the Investment Policy. The internal controls will address
the following:
      control of collusion;
      separate the transaction authority from accounting and record keeping;
      safekeeping;
      avoid physical delivery of securities;
      clearly delegate authority to investment officers;
      confirmation requirements for settlement of securities;
      compliance and oversight of investment parameters; and
      reporting of breaches.

The internal controls will be subject to periodic reviews by Council’s Internal Audit function to verify
compliance with the Investment Policy and legislation.


Noosa Shire Council                                                                          Page 3 of 7