local authority

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:28AM in AAT student discussion
Hi<BR><BR>Does anybody know what factors must a local authority treasurer take in consideration when lending cash surplus?<BR><BR>All I was able to find is that priority should be given to security and liquidity!<BR><BR>Thanks<BR><BR>Karen

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    local authority

    You are bang on, theres not much else you can say really so exactly how much do you need to write? Basically, you need to think of it in terms of the difference between private and public. The main difference here is the accountability factor i.e. private companies are accountable to their shareholders (if applicable) but other than that they are free to invest wherever they see fit regardless of the potential risks (hence they have access to better rates of return). Public on the other hand are very limited as to what they can invest in. For instance, our legislation dictates that we can only invest with "A" rated institutions as per recognised lists analysts. We are also limted to the amount that can be invested at any one time, both in total and with one company. This results in a lower rate of return but a greater level of security.<BR><BR>If you need more info let me know as Im sure we covered this in CCCM (Technician), I have also audited the process this year at the L.A I work for so I may have other info I can get for you.<BR>

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