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The reporting responsibilities imposed in recent years by the Texas Public Funds Investment Act and the mark-to-market requirements of the Governmental Accounting Standards Board Statement No. 31 "Accounting and Financial Reporting for Certain Investments and for External Investment Pools" has greatly increased the investment reporting duties of local government investment officers. First Southwest Asset Management, Inc., the SEC registered investment advisory affiliate of First Southwest Company, is please to provide a Public Funds Investment Reporting Service for Texas local governments.

First Southwest Asset Management, Inc. specializes in the investment reporting requirements of the Public Funds Investment Act. First Southwest's Investment Management department has provided investment advisory and trade execution for governmental entities under state guidelines since 1988.

The Public Funds Investment Act

The Public Funds Investment Act ("Act") requires investment officers to report the detail and value of an entity's investment portfolio to their governing body at least quarterly. The Act requires that the investment report contain, at a minimum, the following information:

a detail of the investment position as of the reporting date;

a summary statement of each pooled fund group prepared in compliance with GAAP;

beginning market value for the reporting period;

additions and changes to the market value during the period;

ending market value for the period;

fully accrued interest for the reporting period;

book value and market value of each separately invested asset at the beginning and end of the reporting period;

maturity date of each separately invested asset that has a maturity date; and

the name of the account, fund, or pooled fund group for which each investment was acquired.

Governmental Accounting Standards Board (GASB) Statement No. 31

GASB 31 imposes accounting standards requiring governmental entities to record the investments at fair value, rather than the book value, of certain investments for financial reporting purposes. Under this pronouncement, effective for fiscal years beginning after June 15, 1997, governmental entities are required to use fair value standards for investment reporting in financial statements and report investments at fair value on the balance sheet. GASB 31 requires that the change in the fair value of investments be recognized as revenue in the operating statement. First Southwest's Public Funds Investment Reporting Service can facilitate compliance with GASB 31.

First Southwest's Public Funds Investment Reporting Service

First Southwest's reporting service provides a comprehensive solution to investment reporting requirements. First Southwest can simplify, or enhance, the investment reporting process for governmental entities. Reports provided by First Southwest include, on either a monthly or quarterly basis:

Detail of investment activity and position (including graphical presentation);

Portfolio valuation using independent pricing sources;

Investment holdings by account or fund group;

Investment purchases and sales;

Fully accrued interest detail, as required by the Public Funds Investment Act;

Change in market value during the period;

Portfolio distribution by maturity date; and

Summary of the average yield-to-maturity, average maturity, average coupon and average duration of the portfolio.

The reports are ready for distribution to an entity's governing body and are prepared either monthly or quarterly, as desired.

Simplification.

First Southwest's investment reporting service simplifies compliance with the Public Funds Investment Act and GASB 31 in several ways:

Provides independent pricing for the determination of market value of the portfolio;

Results in a more cost effective approach to investment reporting than many other software or pricing services;

Provides timely investment reporting to the governing body;

Reports are designed specifically for compliance with the Public Funds Investment Act; and

Offers an easy reporting solution to entities with limited staff or minimal investment expertise.

Internet Access to View Reports.

In addition to providing hard copies of the investment reports, First Southwest's web site allows direct access through the Internet to view and print investment reports. This web site includes a secure username and password protection so that information is restricted only to those authorized and clients can only review their own reports. As well as viewing portfolio information online, clients will have access to economic news, a public funds information library, a calendar of upcoming events and other information relevant the investment process.

Additional Services.

In addition to the basic reporting service, First Southwest can provide several other investment-related services, including:

Monthly collateral valuation reporting;

Investment Policy reviews;

Performance benchmark reporting;

Investment purchase tracking by broker; and

Portfolio stress analysis.

Click here to download a copy of First Southwest's Public Funds Investment Reporting Service brochure or contact Greg Warner to get more detailed information on the Public Funds Investment Reporting services.