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HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015

NOTE 3 - DEPOSITS AND INVESTMENTS - (Continued)

Credit Risk: The investments in the federal agency securities that underlie the District’s repurchase
agreement, were rated AA+ and Aaa by Standard & Poor’s and Moody’s Investor Services,
respectively. Standard & Poor’s has assigned STAR Ohio an AAAm money market rating. Ohio law
requires that STAR Ohio maintain the highest rating provided by at least one nationally recognized
standard rating service. The District’s investment policy does not specifically address credit risk
beyond requiring the District to only invest in securities authorized by State statute.

Custodial Credit Risk: For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the District will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. Of the District’s investment in
repurchase agreements, the entire balance is collateralized by underlying securities that are held by the
investment’s counterparty, not in the name of the District. Ohio law requires the market value of the
securities subject to repurchase agreements must exceed the principal value of securities subject to a
repurchase agreement by 2%. The District has no investment policy dealing with investment custodial
risk beyond the requirement in State statute that prohibits payment for investments prior to the delivery
of the securities representing such investments to the treasurer or qualified trustee.

Concentration of Credit Risk: The District places no limit on the amount that may be invested in any
one issuer. The following table includes the percentage of each investment type held at June 30, 2015:

Investment type Fair Value % of Total
Repurchase agreement
STAR Ohio $ 3,360,000 99.77
7,579 0.23
Total
$ 3,367,579 100.00

D. Reconciliation of Cash and Investments to the Statement of Net Position

The following is a reconciliation of cash and investments as reported in the note above to cash and
investments as reported on the statement of net position as of June 30, 2015:

Cash and investments per note $ 29,066,164
Carrying amount of deposits 3,367,579
Investments 1,300
Cash on hand
$ 32,435,043
Total

Cash and investments per statement of net position $ 30,954,009
Governmental activities 1,127,252
Business type activities 2,586
Private-purpose trust funds 351,196
Agency funds
$ 32,435,043
Total

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