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CABARRUS COUNTY, NORTH CAROLINA NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2021 At June 30, 2021, the carrying amount of the Cabarrus Health Alliance's bank deposits was $1,229,649 and the bank balance was $1,313,804, Of the bank balance, $250,000 was covered by federal depository insurance and the remainder was covered by collateral held under the pooling method. At June 30, 2021, the Cabarrus Health Alliance had $3,600 of cash on hand. 2. Investments As of June 30, 2021, the County had the following investments and maturities: ValuationMearsurement Fair Less Than 6‐12Investment TypeMethod 2,3Value 6 Months Months 1‐3 Years 4‐5 YearsUS Government AgenciesFair Value‐Level 2 50,497,316$ ‐$ ‐$ 35,588,486$ 14,908,830$ Commercial PaperFair Value‐Level 2 49,928,933 ‐ 49,928,933 ‐ ‐ NC Capital Management Trust:Government PortfolioFair Value‐Level 1 57,886,673 57,746,429 ‐ ‐ ‐ Total158,312,922$ 57,746,429$ 49,928,933$ 35,588,486$ 14,908,830$ Level of fair value hierarchy: Level 1: Debt securities valued using directly observable, quoted prices (unadjusted) in active markets for identical assets. Level Two: Debt securities are valued using a matrix pricing technique. Matrix pricing is used to value securities on the securities’ relationship to benchmark quoted prices. Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates, the County’s investment policy limits at least half of the County’s investment portfolio to maturities of less than 12 months. Also, the County’s investment policy requires purchases of securities to be laddered with staggered maturity dates and limits all securities to a final maturity of no more than five years. Credit Risk. The County’s investment policy limits investments to the provisions of G.S. 159‐30 and restricts the purchase of securities to the highest possible ratings whenever particular types of securities are rated. State law limits investments in commercial paper to the top rating issued by nationally recognized statistical rating organizations (NRSROs). As of June 30, 2021, The County’s investment in commercial paper were rated A‐1 by Standard & Poor’s, F‐1 by Fitch Ratings, and P‐1 by Moody’s Investors Service. The County’s investments in the NC Capital Management Trust Government Portfolio carried a credit rating of AAAm by Standard & Poor’s and AAA‐mf by Moody’s Investor Service as of June 30, 2021. The County’s investment in US Agencies (Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, and Federal Farm Credit Bank) are rated Aaa by Moody’s Investors Service. Custodial Credit Risk. For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The County’s formal policy indicates that the County shall utilize a third‐party custodial agent for book entry transactions, all of which shall be a trust department authorized to do trust work in North Carolina who has an account with the Federal Reserve. Certificated securities shall be in the custody of the designated investment officer. 60
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