Session of 1998
HOUSE BILL No. 3009
By Committee on Appropriations
3-12
9
AN ACT relating to the pooled money investment
board; concerning
10 audits and comparative
investment reviews; amending K.S.A. 75-4222
11 and 75-4234 and
repealing the existing sections; also repealing K.S.A.
12 75-627.
13
14 Be it enacted by the Legislature of the
State of Kansas:
15 New Section 1. (a)
The accounts and transactions of the pooled
16 money investment board shall be subject to
an annual financial-compli-
17 ance audit, and such other audits as
directed by the legislative post audit
18 committee, under the legislative post audit
act. The annual audit shall be
19 conducted as soon after the close of the
fiscal year as practicable. The
20 auditor to conduct this audit work shall be
a firm, as defined by K.S.A.
21 46-1112, and amendments thereto. The
company or firm or person to do
22 the work shall be selected and shall
perform such audit work as provided
23 in K.S.A. 46-1123, and amendments thereto,
and K.S.A. 46-1125 through
24 46-1127, and amendments thereto. Such work
shall be under contract
25 with the legislative post auditor in
accordance with the legislative post
26 audit act. The post auditor shall compute
annually the reasonably antic-
27 ipated cost of providing audits pursuant to
this subsection, subject to
28 review and approval by the contract audit
committee established by
29 K.S.A. 46-1120, and amendments thereto.
Upon such approval, the
30 pooled money investment board shall
reimburse the division of post audit
31 for the amount approved by the contract
audit committee. The furnishing
32 of audit services pursuant to this
subsection shall be a transaction between
33 the post auditor and the pooled money
investment board and shall be
34 settled in accordance with the provisions
of K.S.A. 75-5516, and amend-
35 ments thereto.
36 (b) Commencing on or
before June 30, 1999, and at least every two
37 years thereafter, a comparative investment
performance review and an
38 audit of the investment program of the
pooled money investment board
39 shall be conducted. Such review and audit
shall include an evaluation of
40 current investment policies and practices
and of specific investments of
41 the pooled money investment portfolio and
recommendations relating to
42 the investment policies and practices and
to specific investments of the
43 portfolio as are considered necessary or
desirable. The firm or individual
HB 3009
2
1 to perform the work required by this
subsection shall be selected in ac-
2 cordance with K.S.A. 75-37,102, and
amendments thereto.
3
Sec. 2. K.S.A. 75-4222 is hereby amended to read as
follows: 75-
4 4222. (a) It shall be unlawful for
the pooled money investment board to
5 award a state bank account to any
depository bank in which any member
6 of the board is interested as a
stockholder or officer, except upon the
7 unanimous vote of the other members
of the board.
8 (b) The board
shall appoint a director of investments who shall be in
9 the unclassified service under the
Kansas civil service act. The board may
10 appoint investment officers and investment
analysts, who shall be in the
11 unclassified service of the Kansas civil
service act. In addition the board
12 may appoint such employees as may be needed
who shall be in the clas-
13 sified service of the Kansas civil service
act.
14 (c) From and after the
effective date of this act, all current employees
15 of the office of the state treasurer
performing any responsibilities, powers,
16 duties or functions related to the
municipal investment pool fund are
17 hereby transferred to the pooled money
investment board. All such em-
18 ployees shall retain all retirement
benefits and all rights of civil service
19 which such employees had before the
effective date of this act and their
20 service shall be deemed to have been
continuous. All such transfers shall
21 be in accordance with civil service laws
and rules and regulations.
22 (d) From and after the
effective date of this act, the liability for all
23 accrued compensation, wages or salaries of
employees who, immediately
24 prior to such date, were engaged in the
performance of responsibilities,
25 powers, duties or functions relating to the
municipal investment pool fund
26 in the office of the state treasurer and
who are transferred to the pooled
27 money investment board pursuant to
subsection (c), shall be assumed and
28 paid from appropriations to the state
treasurer for operations of the mu-
29 nicipal investment pool fund and operations
of the pooled money invest-
30 ment board.
31 (e) The employees
working for the pooled money investment board
32 shall have access at all times to all
papers, documents and property in the
33 custody or possession of the state
treasurer that relate to duties of the
34 board, and the state treasurer shall take
such steps as may be necessary
35 to make this provision of law effective for
such purposes as the pooled
36 money investment board may indicate.
37 (f) On and after the
effective date of this act, the state treasurer shall
38 provide the pooled money investment board
office space, services, equip-
39 ment, materials and supplies, and all
purchasing and related management
40 functions required by the pooled money
investment board in the exercise
41 of the powers, duties and functions imposed
or authorized upon such
42 board. The portion of the state treasurer's
budget relating to the opera-
43 tions of the pooled money investment board
shall be approved by the
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1 pooled money investment board prior
to submission to the director of
2 the budget.
3 (g) The director
of investments shall keep and preserve a written
4 record of the board's
proceedings.
5 (h) The board
shall make an annual report to the legislature of the
6 investments by the board of all
moneys under the jurisdiction and control
7 of the board, by filing a copy of the
report with the chief clerk of the
8 house of representatives and with the
secretary of the senate no later than
9 the 10th calendar day of each regular
session of the legislature.
10 (i) The board
shall provide for an audit of the investment program
at
11 least every two years. Such audit
shall be conducted by a firm as defined
12 in K.S.A. 46-1112, and amendments
thereto. Such audit shall be con-
13 ducted in accordance with generally
accepted governmental auditing
14 standards. Such audit shall include
an evaluation of current investment
15 policies and practices and of
specific investments of the pooled money
16 investment portfolio and
recommendations relating to the investment
17 policies and practices and to
specific investments of the portfolio as are
18 considered necessary or desirable.
The resulting written audit report shall
19 be issued as soon after the end of
the fiscal year as is practicable. Copies
20 of this report shall be furnished
to the governor, director of accounts and
21 reports, director of the budget and
the legislative post audit committee.
22 A copy of the report shall be filed
with the chief clerk of the house of
23 representatives and with the
secretary of the senate no later than the 10th
24 calendar day of the regular session
of the legislature following completion
25 of such audit. The cost of such
audit work shall be borne by the pooled
26 money investment
board.
27 Sec. 3. K.S.A.
75-4234 is hereby amended to read as follows: 75-
28 4234. (a) Except as provided in subsection
(d) (c), all moneys in the state
29 treasury shall be invested as a single
portfolio which is hereby designated
30 as the pooled money investment portfolio.
The portfolio shall be invested
31 in accordance with article 42 of chapter 75
of the Kansas Statutes An-
32 notated, and amendments thereto. The
director of investments shall com-
33 pute daily the earnings of the portfolio,
including realized gains and losses.
34 The pooled money investment board by
written policy may provide for
35 allocation of unrealized gains or losses.
The director of investments shall
36 calculate on a daily basis and shall deduct
from earnings an administrative
37 fee which shall be set by the board and
applied as a fixed percentage of
38 moneys in the pooled money investment
portfolio. The administrative fee
39 shall not exceed .25% annually on moneys
deposited in the municipal
40 investment pool and .10% annually on other
moneys in the pooled money
41 investment portfolio. The director of
investments shall deposit the ad-
42 ministrative fee in accordance with K.S.A.
75-4235, and amendments
43 thereto. The gross earnings, after
deduction of the administrative fee, shall
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4
1 be designated as the net earnings of
the pooled money investment port-
2 folio.
3 (b) A
comparative investment performance review of the
pooled
4 money investment portfolio
shall be contracted for periodically by the
5 pooled money investment
board. The costs of such review shall be paid
6 from moneys appropriated to
the state treasurer for operations of the
7 pooled money investment
board.
8 (c)
(b) The pooled money investment board
shall may contract for
9 the services of an external
investment advisor to provide advisory services
10 concerning the investment policies and
practices of the pooled money
11 investment portfolio. Such investment
advisor shall not be the person or
12 firm contracted with under
subsection (b) section 1.
13 (d)
(c) Moneys in the employment security fund established
by K.S.A.
14 44-712, and amendments thereto, shall not
be invested in the pooled
15 money investment portfolio except as may be
authorized by the secretary
16 of human resources pursuant to subsection
(e) of K.S.A. 44-712, and
17 amendments thereto.
18 (e)
(d) For moneys in funds designated in this subsection
that are in
19 the pooled money investment portfolio and
which are not invested in the
20 municipal investment pool, interest is to
be paid on such moneys based
21 on the average daily balance in the fund
for each month and the net
22 earnings rate of the pooled money
investment portfolio for such month.
23 This subsection shall apply to the state
highway fund and funds for bonds
24 and other debt instruments of state
agencies and authorities.
25 (f)
(e) Moneys in funds designated in this subsection shall
not be
26 invested in investment options
of the municipal investment pool fund
for
27 which the minimum term of such
investment is less than 21 days. This
28 subsection shall apply to state moneys,
other than moneys of municipal-
29 ities as described in subsection (a) of
K.S.A. 12-1675, and amendments
30 thereto.
31 Sec. 4. K.S.A.
75-627, 75-4222 and 75-4234 are hereby repealed.
32 Sec. 5. This act
shall take effect and be in force from and after its
33 publication in the Kansas register.
34