Note 5. Investments

FY 2003 Performance and Accountability Report
Bureau of Resource Management
December 2003
Report

The Department has activities that have the authority to invest excess cash resources. A description of those activities, the investments made and a listing of the outstanding investments follow. Although funds in the Chancery Development Trust Account and the Bosnia Federation Defense Fund are invested, because they are considered non-entity assets the investments for these funds are not shown in this section, but are described in Note 8, "Cash and Other Monetary Assets."

Foreign Service Retirement and Disability Fund (FSRDF)

Treasury initially invests FSRDF receipts in special, non-marketable U.S. Government securities. These special-issue Certificates of Indebtedness mature on the following June 30. On June 30, the Treasury rolls over the Certificates of Indebtedness into special, non-marketable bonds, with maturities spread over 15 years and a yield equaling the average of all marketable Treasury securities. All securities are purchased and redeemed at par, regardless of market conditions. Interest is paid semi-annually on December 31 and June 30. Maturity dates on these securities range from 2004 through 2017, and interest rates range from 3.50% to 8.75%.

Israeli-Arab Scholarship and Eisenhower Exchange Fellowship Program Trust Funds

The Israeli-Arab Scholarship and Eisenhower Exchange Fellowship Program Trust Funds are invested in market-based securities, issued at either a premium or a discount, and are redeemable for par at maturity. The discounts and premiums on these investments are amortized over the life of the security using the effective interest method. Maturity dates on these securities range from 2004 to 2013; interest rates range from 3.25% to 7.875%.

Gift Funds

The Gift Funds invest in U.S. Government non-marketable, market-based securities, which are issued at either a premium or a discount, and are redeemable for par at maturity. The discounts and premiums on these investments are amortized over the life of the Treasury bill using the straight-line method. These securities matured in 2003; interest rates ranged from 1.48% to 1.55%.

Summary of Investments

Investments at September 30, 2003 and 2002, are summarized below (Dollars in Thousands). All investments are classified as Intragovernmental Securities.

 

Summary of Investments
at September 30, 2003
(Dollars in Thousands)
  Par Amortization
Method
Unamortized
(Discount)
Investments
(Net)
Market
Value

Non-Marketable, Par Value:

         

FSRDF Certificates of Indebtedness

$ 2,576,177 N/A $  —  $ 2,576,177 $ 2,576,177

FSRDF Special Bonds

  9,713,125
single underline
N/A    — 
single underline
  9,713,125
single underline
  9,713,125
single underline

Subtotal

$12,289,302
single underline
  $  — 
single underline
$12,289,302
single underline
$12,289,302
single underline

Non-Marketable, Market Based:

         

Israeli-Arab Scholarship, Notes

      4,277 Interest  111        4,388       4,689

Eisenhower Exchange Fellowship, Notes

      7,534 Interest  (51)       7,483       8,172

Gift Funds, Bills

          — 
single underline
Straight-line    — 
single underline
          — 
single underline
          — 
single underline

Subtotal

$    11,811
single underline
  $ 60 
single underline
$    11,871
single underline
$    12,861
single underline
Total Investments $12,301,113
double underline
  $ 60 
double underline
$12,301,173
double underline
$12,302,163
double underline

 

Summary of Investments
at September 30, 2002
(Dollars in Thousands)
  Par Amortization
Method
Unamortized
(Discount)
Investments
(Net)
Market
Value

Non-Marketable, Par Value:

         

FSRDF Certificates of Indebtedness

$ 1,306,221 N/A $  —  $ 1,306,221 $ 1,306,221

FSRDF Special Bonds

 10,428,019
single underline
N/A    — 
single underline
 10,428,019
single underline
 10,428,019
single underline

Subtotal

$11,734,240
single underline
  $  — 
single underline
$11,734,240
single underline
$11,734,240
single underline

Non-Marketable, Market Based:

         

Israeli-Arab Scholarship, Notes

      4,277 Interest  176        4,453       4,857

Eisenhower Exchange Fellowship, Notes

      7,395 Interest  (42)       7,353       8,086

Gift Funds, Bills

      4,721 
single underline
Straight-line  (30)
single underline
      4,691
single underline
      4,651
single underline

Subtotal

$    16,393
single underline
  $104 
single underline
$    16,497
single underline
$    17,594
single underline
Total Investments $11,750,633
double underline
  $104 
double underline
$11,750,737
double underline
$11,751,834
double underline