Authorized Investments of Funds by Governing Bodies

  1. Law
  2. Georgia Code
  3. Local Government
  4. General Provisions
  5. Authorized Investments of Funds by Governing Bodies

Checkout our iOS App for a better way to browser and research.

  1. The governing body of a municipality, county, school district, or other local governmental unit or political subdivision, in addition to all other legal investments, may invest and reinvest money subject to its control and jurisdiction in:
    1. Obligations of the United States and of its agencies and instrumentalities;
    2. Bonds or certificates of indebtedness of this state and of its agencies and instrumentalities; and
    3. Certificates of deposit of banks which have deposits insured by the Federal Deposit Insurance Corporation; provided, however, that that portion of such certificates of deposit in excess of the amount insured by the Federal Deposit Insurance Corporation shall be secured by direct obligations of this state or the United States which are of a par value equal to that portion of such certificates of deposit which would be uninsured.
  2. This Code section shall not impair the power of a municipality, county, school district, or other local governmental unit or political subdivision to hold funds in deposit accounts with banking institutions as otherwise authorized by law.

(Ga. L. 1964, p. 741, § 1; Ga. L. 1973, p. 1192, § 1.)

Law reviews.

- For article discussing tax-exempt financing in Georgia, see 18 Ga. St. B. J. 20 (1981).

OPINIONS OF THE ATTORNEY GENERAL

Phrase "certificates of deposit" as used in former Code 1933, § 32-942 (see now O.C.G.A. § 20-2-411) applied to certificates of deposit issued by commercial banks and to certificates of deposit issued by federal or state chartered savings and loan associations. The investment of school funds in "certificates of deposit" issued by institutions other than those named would present a question of whether such investment would be prudent and in the exercise of sufficient care and diligence. 1969 Op. Att'y Gen. No. 69-306.

Investment of bond proceeds in certificates of deposit is not allowed under this section. 1974 Op. Att'y Gen. No. U74-71 (see O.C.G.A. § 36-80-3).

Responsibility of school officials.

- Local school officials, in making legally authorized investments of local school funds, are not responsible if that investment results in a loss rather than a gain so long as the investment, at the time the investment was made, was reasonably prudent and cautious under the circumstances, and especially if the loss is occasioned by economic conditions over which the officials have no control. 1969 Op. Att'y Gen. No. 69-306.

RESEARCH REFERENCES

C.J.S.

- 26B C.J.S., Depositaries, § 43 et seq. 64A C.J.S., Municipal Corporations, § 2089 et seq.

ALR.

- Extent of power of school district to provide for the comfort and convenience of teachers and pupils, 7 A.L.R. 791; 52 A.L.R. 249.

Municipal funds and credits as subject to levy under execution or garnishment on judgment against municipality, 89 A.L.R. 863.

Particular purposes within contemplation of statute authorizing issuance of bonds or use of funds by school district for specified purposes, 124 A.L.R. 883.

Requirement of prior appropriation by municipal authorities as condition of making a contract or incurring expense as applicable to local improvements, or bond issue payable only out of special funds and not constituting an obligation of the municipality, 124 A.L.R. 1467.

Rights and liabilities of municipality as to interest earned on improvement assessments or other special funds collected or held by it, 143 A.L.R. 1341.


Download our app to see the most-to-date content.