TOWNSHIP OF JACKSON
NOTES TO FINANCIAL STATEMENTS (continued):
FOR THE YEAR ENDED DECEMBER 31, 2013
For an investment, custodial credit risk is a risk that, in the event of the failure of the counterparty, the Township will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Investment securities are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of the Township and are held by either the counterparty or the counterparty's trust department or the agent but not in the Township's name. All of the Township's investments are held in the name of the Township and are collateralized by GUDPA.
Interest rate risk is the risk that changes in interest rates that will adversely affect the fire value of an investment. The Township has no formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Maturities of investments held at December 31, 2013, are provided in the above schedule.
The Township has no investment policy that limits its investment choices other than the limitation of state law as follows:
Bonds or other obligations of the United States of America or obligations guaranteed by the United States of America;
Government money market mutual funds;
Any obligation that a federal agency or federal instrumentality has issued in accordance with an act of Congress, which security has a maturity date not greater than 397 days from the date of purchase, provided that such obligations bear a fixed rate of interest not dependent on any index or other external factor;
Bonds or other obligations of the Township or bonds or other obligations of the local unit or units within which the Township is located;
Bonds or other obligations, having a maturity date of not more than 397 days from the date of purchase, approved by the Division of Investment in the Department of Treasury for investment by the Township;
Local Government investment pools;
Deposits with the State of New Jersey Cash Management Fund established pursuant to section 1 of P.L. 1977, c.281; or
Agreements for the repurchase of fully collateralized securities.
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