Multiple Agencies
A Report on State Entities' Compliance with the
Public Funds Investment Act
April 1999
Report Number 99-032
Overall Conclusion
In fiscal year 1998, state entities subject to the Public Funds Investment Act (Act) continue to report substantial compliance with the requirements of the Act. Furthermore, the extent of state entities' investments in derivatives has decreased. Compliance with the Act and less exposure to derivatives are important to safeguard the entities' approximately $9.2 billion in investments.
Key Facts and Findings
All 30 state agencies and universities reported overall compliance with the Act and their own investment policies.
Independent audits of 50 community college districts reported that 43 districts complied with the Act. We could not determine the compliance of the remaining 7 districts because the independent auditors' reports did not indicate compliance or noncompliance.
The extent of state entities' investments in derivatives has declined since fiscal year 1996. As of August 31, 1998, state entities reported approximately $9.2 billion as the book value of investments with $65 million (0.71 percent) invested in derivatives as of August 31, 1998. This shows over a 40 percent decrease in derivative investments compared to the $113 million reported in fiscal year 1996.
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