Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 156.010, 160.570
NECESSITY, FUNCTION, AND CONFORMITY: KRS 156.029(8) requires
the Board of Education to develop policies and to promulgate administrative
regulations by which the Department of Education shall be governed. KRS 160.570(2) requires each local board of education's designated depository of
funds to provide collateral for the faithful performance of its duties, which
shall be approved by the local board and the Commissioner of Education. KRS 160.570(2) states that collateral shall be provided in accordance with KRS 41.240. This administrative regulation establishes the process for approval of
collateral by the local board of education and the Commissioner of
Education.
Section 1.
(1) Before any board of education appoints a
bank, trust company, or savings and loan association to serve as depository as
required pursuant to KRS 160.570, the board shall:
(a) Require the depository to pledge
collateral having an aggregate current face value or current quoted market
value at least equal to the local board of education deposits as of the last
business day of each quarter in which funds are so deposited, or provide to the
local board a surety bond or surety bonds in favor of the local board of
education in an amount at least equal to the local board of education deposits,
as of the last business day of each quarter in which funds are deposited;
provided, however, that amounts insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation need not be
so collateralized.
(b) As an
alternative to subsection (1)(a), a depository insured by the Federal Deposit
Insurance Corporation may either pledge to the local board, as collateral,
securities or other obligations having an aggregate face value or a current
quoted market value or provide to the local board a surety bond or surety bonds
in an amount equal to eighty (80) percent of the value of the local board of
education deposits including demand and time accounts, if the depository is
determined by the State Investment Commission to have very strong credit with
little or no credit risk at any maturity level and the likelihood of short-term
unexpected problems of significance is minimal or not of a serious or long-term
nature.
(2) The value of
the local board of education deposit shall be determined at the end of the
business day of deposit and as of the end of business on the last day of each
quarter that funds are so deposited.
Section 2. The local board shall submit the
affidavit of the depository to the Commissioner of Education for approval. The
collateral shall not be approved by the Commissioner of Education if the
commissioner determines that the collateral is inadequate to insure the
deposits of the local board of education.
Section 3. Incorporation by Reference.
(1) "Affidavit of Depository", is
incorporated by reference.
(2) This
material may be inspected, copied, or obtained subject to applicable copyright
law, at the Kentucky Department of Education, Office of Finance and Operations,
300 Sower Building, Frankfort, Kentucky, Monday through Friday, 8:00 a.m. to
4:30 p.m.
STATUTORY AUTHORITY: KRS 156.029(8),
160.570
