The Federal Investments Branch

1
Government Agency Investment Services
Federal Investments Branch March 2012
2
Where we fit in the organization.
OPDA Organizational Chart
Office of Assistant Commissioner
Division of Federal Investments
Division of Accounting Operations
Division of Systems and Program Support
Federal Investments Branch
Trust Funds Management Branch

March 2012
3
DFI Responsibilities

• 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

4
Regulatory Function

• 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 Treasurys
  Operating Circular.

5
Our Systems

• 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.

6
Establishment of an Investment Fund

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

• The legislation then receives Legal review.

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

7
Funding Government Investment Accounts

• Receipts from the public

• Congressional appropriations
• of general revenues

8
Types of Accounts

• 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

9
The agency determines how much to invest and in
which securities to invest.
Investment Strategy

• 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.

10
Investment Options

• Mirror-Image Market-Based Specials

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

• 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)

• Zero Coupon Bonds (ZCBs)

11
Par Value Securities
Par Value Securities are issued only to agencies
whose legislation gives them permission to invest
in them.
12
Advantages of Non-marketable Investment 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

13
Interest Rates for 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)

14
Pricing 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 1115 and 1145 am each
  business day. Differences between BPDs
  calculation and those obtained from ODMs 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.

15
Daily Information goes to PARS, FMS, and Treasury
Invest One

GWA (IPAC/CTA)
16
Monthly Reporting Reconciliation
DTS
Zero Coupon Bond market valuation from FRB NY
FMS 1166
Federal Investments Branch
Customers Statements of Account and Accrual
Reports
Reports published on website
Interest Cost by Fund, Investment Funds Summary
Holdings Report, Principal Outstanding Detail
Report

17
Financial Report of the US Government (FR)
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)

18
Fruit Group

• 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 governments FR.

19
During Fiscal Year 2011, we.

• 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.

20
Monthly Statement of the Public Debt (MSPD)
http//www.treasurydirect.gov/govt/reports/pd/mspd
/mspd.htm
21
MSPD Detail
22
Daily Treasury Statement (DTS)
http//fms.treas.gov/dts/index.html
23
Find more information about Federal Investments
On the web at www.TreasuryDirect.gov, then select
Government.