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shall clearly indicate that the instrument is held for the City of La Porte. All safekeeping <br />arrangements shall be documented by the Investment Officer. <br />DELIVERY VERSUS PAYMENTAll investment transactionsshall be executedon a delivery <br />versus paymentbasis. That is, funds shall not be wired or paid until verification has been made <br />that the collateral was received by the Trustee. The collateral shall be held in the name of the <br />City. The Trustee's records shall assure the notation of the City's ownership of or explicit claim <br />on the securities. The original copy of all safekeeping receipts shall be delivered to the City. <br />MANAGEMENT AND INTERNAL CONTROLS <br />X. <br />TheDirector of Finance shall establish a system of internal controls, which shall be reviewed by <br />an independent auditor. The controls shall be designed to prevent losses of public funds arising <br />from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial <br />markets, or imprudent actions by employees or Investment Officersof the City. <br />Controls and managerial emphasis deemed most important that shall be employed where practical <br />are: <br />A.Control of collusion <br />B.Separation of duties <br />C.Separation of transaction authority from accounting and record keeping <br />D.Custodian safekeeping receipts records management <br />E.Avoidance of physical delivery securities <br />F.Clear delegation of authorityto subordinate staff members <br />G.Documentation on investment bidding events <br />H.Written confirmation of transactionsfor investments and wire transfers <br />I.Reconcilement and comparisons of security receipts with the investment subsidiary records <br />J.Compliance with investment policies <br />K.Accurate andtimely reports <br />L.Validation of investment maturity decisions with supporting cash flow data <br />M.Adequate training and development of Investment Officers <br />O.Review of financial condition of all brokers, dealers and financial institutions <br />P.Staying informed about market conditions, changes, and trends that require adjustments in <br />investment strategies <br />Q. Monitor credit ratings <br />R. Monitor FDIC status for mergers and acquisitions for brokered CD’s <br />COMPLIANCE AUDITThe City shall perform, in conjunction with its annual financial audit, a <br />compliance audit of management controls on investments and adherence to the entity's <br />established investment policies. The audit shall include a formal review of the quarterly <br />investment reports by an independent auditor and the results reported to the governing body by <br />the independent auditor. Also, the governing body shall review its investment policy and <br />investment strategy not less than annually and adopt a written instrument by rule, order, <br />ordinance, or resolution stating that it has reviewed the investment policy and strategy, and <br />recorded any changes made to them. <br />8 <br /> <br />