Government Agency Investment Government Agency Investment ServicesServices

Federal Investments BranchFederal Investments BranchMarch 2012March 2012

OPDA – Organizational Chart

Office of Assistant CommissionerOffice of Assistant Commissioner

Division of Accounting OperationsDivision of Accounting Operations Division of Systems

and Program Support

Division of Systems and Program Support

Division of Federal Investments

Division of Federal Investments

Trust Funds Management BranchTrust Funds Management Branch Federal Investments BranchFederal Investments Branch

WhereWhere we fit in the organization….we fit in the organization….

March 2012

• 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

DFI ResponsibilitiesDFI Responsibilities

• 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.

Regulatory FunctionRegulatory Function

• 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.

Our SystemsOur Systems

Establishment of an Investment Fund Establishment of an Investment Fund

• The legislation then receives Legal review.

• Before a fund can invest, the program agency must request that OMB and FMS establish it in their systems.

• Once approved, FIB sets up the fund in InvestOne and investing can begin.

• Receipts from the public

Funding Government Investment Funding Government Investment AccountsAccounts

• Congressional appropriations of general revenues

• 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

Types of AccountsTypes of Accounts

• 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.

Investment StrategyInvestment Strategy

Mirror-Image Market-Based* Specials:

Investment OptionsInvestment Options

• 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)

(*Securities are traded only with Federal Investments Branch. They cannot be bought/sold between agencies.)

• Zero Coupon Bonds (ZCB’s)

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

Par Value SecuritiesPar Value 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

Advantages of Non-marketable Advantages of Non-marketable Investment SecuritiesInvestment 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)

Interest Rates for SecuritiesInterest Rates for 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 ODM by 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.

Pricing SecuritiesPricing Securities

ODM/OFP

PARS

Invest One

GWA (IPAC/CTA)

Daily Information goes to PARS, Daily Information goes to PARS, FMS, and TreasuryFMS, and Treasury

PARS

Federal Investments Branch

Zero Coupon Bond market

valuation from FRB NY

DTS

FMS1166

Interest Cost by Fund, Investment Funds Summary Holdings Report, Principal Outstanding Detail Report

Customers

Statements of Account and Accrual Reports

Reports published on website

Monthly Reporting & ReconciliationMonthly Reporting & Reconciliation

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)

Financial Report Financial Report of the US Government (FR)of the US Government (FR)

• 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.

Fruit GroupFruit Group

• 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.

During Fiscal Year 2011, we….During Fiscal Year 2011, we….

Monthly Statement of the Public Monthly Statement of the Public Debt (MSPD)Debt (MSPD)

http://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm

MSPD DetailMSPD Detail

Daily Treasury Statement (DTS)Daily Treasury Statement (DTS)

http://fms.treas.gov/dts/index.html

Find more information about Federal Find more information about Federal Investments…Investments…

On the web at www.TreasuryDirect.gov, then select Government.