The Florida Legislature
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Office of Program Policy Analysis and Government Accountability

Performance Audit of the Investment of Treasury Funds by the State Treasurer , Report No. 12180, October 1993

  • The Treasurer has met the goal of maintaining sufficient liquidity to meet the state's disbursement needs and provide a cushion against unexpected disbursements. Further, the returns earned by the Treasurer have generally exceeded the returns earned on U.S. Treasury securities and on funds with comparable investment objectives. Factors contributing to the returns earned on Treasury funds include increases in the amount of funds available for investment and the use of external investment managers. Factors that may be limiting the Treasurer from potentially achieving higher returns include the statutory requirement that funds first be offered to qualified public depositories and the reliability of the Division of Treasury's cash forecasting system.
  • The Treasurer's Investment Policy does not adequately reflect the Treasurer's strategy of using external investment managers to invest Treasury funds not needed for liquidity purposes. A primary reason why the Treasurer's Investment Policy does not adequately reflect the use of external managers is that the Treasurer has not developed procedures to periodically review the Investment Policy to determine whether its objectives and guidelines continue to be appropriate given changes in investment strategies, investment authority, and operational conditions.

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