Maximizing Interest Earnings for Student Instruction Needs
What is ISJIT?
Created by schools for schools, ISJIT allows public school corporations to safely and effectively increase their internal interest, providing additional dollars to increase the quality of educational services available to students across Iowa. ISJIT operates pursuant to Iowa Code Chapter 28E. Every ISJIT participant is a member of a combined investment effort, allowing the participants to join together to flex the investment presence. The power of pooling allows the program to more efficiently invest funds than is possible for a single district or financial institution.
How does a school corporation qualify to participate in ISJIT?
The ISJIT participation resolution must be approved by the school corporation’s board of directors. As a member of ISJIT, school corporations participate at any time they have funds to invest.
How do participants provide input to ISJIT?
The ISJIT Board of Trustees, made up of school board representatives and school business officials, provides input from their colleagues. The IASB Cash Management Advisory Committee, comprised of business managers/board secretaries and superintendents, provides feedback from across the state. ISJIT also receives input from one-on-one contact with school boards and central office staff. IASB staff members regularly review participants’ needs with the ISJIT investment team.
How safe are funds invested in ISJIT?
Protection of participants’ invested funds is the consistent number one objective of ISJIT. Annually, ISJIT processes more than $500 million of participants’ investments safely and efficiently. ISJIT’s annual report, including audited financial statements, is available to all school corporations.
How are ISJIT transactions processed?
Authorized officials, as identified in each school corporation’s ISJIT resolution, can electronically enter investments and withdrawals directly into ISJIT accounts 24 hours a day, seven days a week using PMA GPS®. Alternatively, funds may be transferred by placing a toll-free telephone call to ISJIT requesting that funds move in or out of the program. ISJIT takes over from there, moving funds in any amount as often as requested without cost.
What does it cost to participate in ISJIT?
ISJIT is a benefit available to all IASB member school corporations. IASB’s goal is to provide the best interest rate available, whether it is using ISJIT or receiving a better rate locally because of ISJIT. Fees for investment adviser services, trustee services and program sponsor fees are itemized in ISJIT’s financial report, which is distributed annually and available on ISJIT’s Web site.
Our board is concerned about maintaining a good working relationship with local financial institutions. How does ISJIT work with our banks?
Since the program began, the ISJIT Board of Trustees has directed that as many participant dollars as possible be reinvested back into Iowa financial institutions. ISJIT has reinvested more than $1.2 billion back into local Iowa banks on behalf of ISJIT participants.
ISJIT should complement your local bank relationships, not be a replacement. ISJIT allows school corporations to invest any amount with complete daily liquidity. Studies have shown that an ISJIT deposit will typically provide funds that are better suited to support local loans than demand account funds that some schools currently maintain. ISJIT is focused on reinvesting funds into any eligible Iowa institution, as long as that institution offers a market rate of interest for the deposit term.
How many school corporations are ISJIT members?
More than 340 school corporations have approved the ISJIT participation resolution since ISJIT’s creation in 1986.
Does ISJIT offer any special cash management services?
ISJIT offers a variety of investment services that participants find helpful.
Diversified Fund: ISJIT’s Diversified Fund provides complete daily liquidity, pays a variable rate of interest and is the most popular investment alternative. Investments are limited to the highest quality available and are specifically tailored to Iowa’s public funds statutory authorizations. Funds may be transferred in or out of ISJIT accounts as frequently as desired without cost. In addition, each participant may open as many ISJIT accounts as necessary to complement your local bank account structures.
Electronic Funds Transfer: The state of Iowa allows school districts to electronically receive distributions of foundation aid, Phase payments and any other state distribution of revenue via electronic funds transfer (EFT). Many ISJIT participants take advantage of this unique program service by having the state automatically deposit monthly payments directly into their ISJIT account, ensuring that payments are invested as quickly as possible. ISJIT notifies each participant by fax when funds are received. All directly deposited funds maintain complete daily liquidity until withdrawn.
Fixed Term Automated (FTA) Program: ISJIT’s Fixed Term Automated (FTA) program allows participants to lock in an interest rate for a specific period of time. Allowable securities under the program are in compliance with Iowa State Code Section 12B. 10. Investments purchased through the FTA Program will bear fixed rates of interest and will have a fixed maturity date.