Page 55 - 2019-20 CAFR

Rogue Community College

Notes to Basic Financial Statements
Year ended June 30, 2020

2. Cash and Investments (continued)

control of, any fund. The LGIP is commingled with the State’s short‐term funds. Participants’ account

balances in the pool are determined by the amount of participants’ deposits, adjusted for withdraws

and distributed interest. Interest is calculated and accrued daily on each participants’ account based

on the ending account balance and a variable interest rate determined periodically by the Oregon
Short‐Term Fund.
Credit Risk

In accordance with ORS Chapter 297 and the College’s investment guidelines, investment in

commercial paper must be rated by A1 or better by Moody’s, P1 or better by Standard and Poor’s, F1

or better by Fitch, or an equivalent rating by any nationally recognized rating agency. Corporate

securities, bonds and debentures must be rated at settlement date Aaa or better by Moody’s, AA or
better by Standard and Poor’s, AA or better by Finch, or equivalent rating by any nationally recognized
rating agency.
Concentration of Credit Risk
It is the policy of the College to diversify its investments. Where appropriate, exposures will be limited

by security type, maturity, issuance and issuer. In accordance with GASB 40, the College is required to

report all non‐federal investments in any one issuer that exceed 5% of total invested funds. There are
no investments that exceed this threshold as of June 30, 2020.
Interest Rate Risk

In accordance with the objectives of the College’s investment guidelines, interest rate risk is mitigated

by structuring the investment portfolio so that securities mature to meet cash requirements for

ongoing operations. The College’s investment portfolio contains investments with the LGIP. The

weighted average maturities of investments in the LGIP at June 30, 2020 were: 61.16% mature within

93 days, 22.7% mature over one year, and 0% mature in over three years from settlement date. As of
June 30, 2020, the College was in compliance with this requirement.
Custodial Credit Risk ‐ Deposits

In the 2008 legislative session, new regulations were enacted for collateralizing public funds under

ORS 295.004. The statute established a shared liability concept to protect public entities and eliminate
personal liability of public officials for balance in excess of the collateral certificates. It also reduced
over collateralization and defined qualified depository institutions and addressed collateralization of

public funds over $250,000. Finally, it specified the types of instruments that are allowed as collateral

and require qualified bank depositories to sign a pledge agreement approved by the board of directors
or loan committee. Under ORS 295.004, governmental entities can maintain balance with such bank
depositories in accordance with their investment policies. On June 30, 2020, the College’s bank
balances were $2.4 million, which includes all bank accounts. Of these deposits, FDIC covered
$260,348 on deposit with two banks and the remaining balance was covered by the procedures for
collateralizing public funds.

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