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Government Agency Investment Services

Government Agency Investment Services. Federal Investments Branch March 2012. Where w e fit in the organization…. OPDA – Organizational Chart. Office of Assistant Commissioner. Division of Federal Investments. Division of Accounting Operations. Division of Systems and Program Support.

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Government Agency Investment Services

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  1. Government Agency Investment Services Federal Investments Branch March 2012

  2. Wherewe fit in the organization…. OPDA – Organizational Chart Office of Assistant Commissioner Division of Federal Investments Division of Accounting Operations Division of Systems and Program Support Federal Investments Branch Trust Funds Management Branch March 2012

  3. DFIResponsibilities • Account for and report on the Government Account Series (GAS) Investment Program, and to document and ensure compliance with statutory authorities and other Treasury policies • Manage certain Federal Government Trust Funds on behalf of the Secretary of the Treasury who is designated by law or by express agreement as the managing trustee • Formulate accounting policies and standards

  4. Regulatory Function • Only funds with statutory authority can invest in the Government Account Series securities. • Treasury has preferred language that should be included in the legislation authorizing the fund to invest. • Guidelines for the Government Account Series program are in the Department of the Treasury’s Operating Circular.

  5. Our Systems • InvestOne – Commercial off the shelf investment accounting system (mainframe) • InvestOne Enterprise – Browser-based front-end to access InvestOne. • FedInvest – Web-based front-end designed to provide customers access to selected portions of InvestOne We also use mainframe jobs and desktop COBOL programs for our daily processing and reports.

  6. Establishment of an Investment Fund • Before a fund can invest, the program agency must request that OMB and FMS establish it in their systems. • The legislation then receives Legal review. • Once approved, FIB sets up the fund in InvestOne and investing can begin.

  7. Funding Government Investment Accounts • Receipts from the public • Congressional appropriations of general revenues

  8. Types of Accounts • Treasury-Managed: Social Security funds, Highway Trusts, Unemployment Trust Fund (UTF), etc. • Agency-Managed: Bank Insurance Fund (FDIC), Bureau of Land Management funds (Dept. of Interior), etc. • Franchise: Securities and Exchange Commission (SEC), Federal Trade Commission (FTC) and US Courts

  9. Investment Strategy The agency determines how much to invest and in which securities to invest. • The agency must analyze the purpose, funding sources and disbursement needs of the program. • FIB assists by providing the agency with a listing of available securities.

  10. Investment Options Mirror-Image Market-Based* Specials: (*Securities are traded only with Federal Investments Branch. They cannot be bought/sold between agencies.) • Market-Based Bills (typically mature in 13, 26, & 52 weeks) • Market-Based Notes (Mature in 10 years or less) • Market-Based Bonds (Mature in 30 years or less) • Market-Based TIPS (Mature in 30 years or less) • One Day Certificates(Mature next business day) • Zero Coupon Bonds (ZCB’s)

  11. Par Value Securities Par Value Securities are issued only to agencies whose legislation gives them permission to invest in them.

  12. Advantages of Non-marketable Investment Securities • Provide Investment Funds maximum safety • A wide range of maturities • Liquidity • Prevent Investment Funds from disrupting the public market for Government debt • Reduce transaction costs • Allow for better Government (including Treasury) oversight

  13. Interest Rates for Securities • Rates for notes, bonds, and TIPS* are set by Treasury auction process. • Rates for one day investments are based on the coupon-equivalent yield to maturity on the shortest regularly issued Treasury security, which is currently the 4-week bill. • Calculations for rates for par value securities are established by legislation. (*Treasury Inflation Protected Securities)

  14. Pricing Securities • One Day and par value securities are priced at “par” or $100. • Bill, note, bond, and TIPS prices are calculated by BPD and ODM based on a survey of Treasury securities dealers taken by the FRB of New York between approximately 11:15 and 11:45 am each business day. Differences between BPDs calculation and those obtained from ODM’s price files are sent to ODM for certification. • ZCB prices are requested from ODMby 11am as needed. Pricing is calculated based on a comparable STRIPS security from sources obtained through Bloomberg and Trade Web around noon. BPD can price ZCBs using Bloomberg in a contingency.

  15. ODM/OFP PARS Daily Information goes to PARS, FMS, and Treasury InvestOne GWA (IPAC/CTA)

  16. PARS Monthly Reporting & Reconciliation DTS Zero Coupon Bond market valuation from FRB NY FMS 1166 Federal Investments Branch Reports published on website Customers Statements of Account and Accrual Reports Interest Cost by Fund, Investment Funds Summary Holdings Report, Principal Outstanding Detail Report

  17. Financial Report of the US Government (FR) FIB plays an important role in ensuring the accuracy of the FR by working to identify and reconcile differences in the intragovernmental eliminating entries. This includes working with the – • Intragovernmental Reporting and Analysis System (IRAS) • Intragovernmental Fiduciary Confirmation System (IFCS) • Governmentwide Financial Report System (GFRS)

  18. Fruit Group • FIB serves on the Treasury Intra-Governmental Fiduciary Committee (better known as the Fruit Group). • This group consists of members from OPDA, FMS, and Treasury. It works to reconcile and resolve elimination differences and improve the accuracy of the government’s FR.

  19. During Fiscal Year 2011, we…. • Processed redemptions and investments each averaging $172 billion a day • Processed redemptions and investments each over $43 trillion during the year • Paid over $191 billion in interest • Processed over 114,000 transactions There are currently 239 approved funds.

  20. Monthly Statement of the Public Debt (MSPD) http://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm

  21. MSPD Detail

  22. Daily Treasury Statement (DTS) http://fms.treas.gov/dts/index.html

  23. Find more information about Federal Investments… On the web at www.TreasuryDirect.gov, then select Government.

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