635  Deposit and Investment of Funds

Approved by President
Effective Date: June 5, 2017
Responsible Division: Business and Finance
Responsible Office:  Business and Finance
Responsible Officer:  Associate Vice President, Business and Finance

I. Purpose

This policy is adopted by Middle Tennessee State University (MTSU or University) and shall apply to all funds, regardless of source.

All depositories which provide deposit or investment services shall agree to comply with the terms of this policy, and with the requirements of Tennessee Code Annotated Title 9, Chapter 4. Words and phrases used in this policy shall have the same definition and meaning as in T.C.A. Title 9, Chapter 4.

II. Definitions

A.  Collateral Security. Securities which may be accepted as collateral for deposits.

B.  Compensating Balances. The amount of funds allowed to remain in an account.

C.  Default. May include but is not limited to:

1.  The failure of any qualified public depository to return any public deposit, including earned interest, in accordance with the terms of the deposit contract.

2.  The failure of any qualified public depository to pay any properly payable check, draft, or warrant drawn by the public depositor.

3.  The failure of any qualified public depository to honor any valid request for electronic transfer of funds.

4.  The failure of any qualified public depository to account for any check, draft, warrant, order, deposit certificate, or money entrusted to it.

5.  The issuance of any order of any court, or the taking of any formal action by any supervisory authority, which has the effect of restraining a qualified public depository from making payments of deposit liabilities.

6.  The appointment of a conservator or receiver for a qualified public depository.

7.  Any other action which the treasurer determines to place public deposits in jeopardy.

8.  Failure to provide the required collateral.

D.  Deposit Insurance. The insurance provided by the Federal Deposit Insurance Corporation.

E.  Eligible Collateral. Shall have the meaning set forth in T.C.A. § 9-4-103. For savings institutions securing local government deposits, eligible collateral shall also include securities described in T.C.A. § 9-1-107(a)(2), under such additional conditions as the treasurer deems appropriate.

F.  Loss. Includes but is not limited to:

1.  The principal amount of the public deposit;

2.  All accrued interest through the date of default;

3.  Additional interest at the rate the public deposit was earning on the total of the principal amount of the public deposit and all accrued interest through the date of default, through the day of payment by a liquidator or other third party or through the date of sale of eligible collateral by the treasurer or his agent; and