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DELIVERY VERSUS PAYMENT All investment transactions shall be executed on a delivery <br /> versus payment basis. 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 /> X. MANAGEMENT AND INTERNAL CONTROLS <br /> The Director 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 Officers of 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 authority to subordinate staff members <br /> G. Documentation on investment bidding events <br /> H. Written confirmation of transactions for 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 and timely 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 /> COMPLIANCE AUDIT The 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 />