Newspaper article THE JOURNAL RECORD

Earnings on State Invetments Fall 31.28%

Newspaper article THE JOURNAL RECORD

Earnings on State Invetments Fall 31.28%

Article excerpt

Earnings on state investments were down 31.3 percent to $14.4 million for the fourth fiscal quarter ended June 30, according to the report prepared by State Treasurer Claudette Henry. Earnings were down from $21 million in the fourth quarter of the previous fiscal year.

Oklahoma's investment portfolio at June 30 totaled $1.46 billion, down 5.8 percent from $1.5 billion at June 30, 1992.

For the fiscal year ended June 30, investment earnings were down 20.7 percent to $86.8 million from $109.47 million the prior year.

In the introductory letter to the fourth quarter report, Henry said the state's investment performance was stronger than the market generally. "But the poor condition of the national and Oklahoma economies has not improved, and state revenues are continuing to decline," she said. "The investable base for the fourth quarter increased only slightly from the amount available for investment in the third quarter."

Henry said interest rates remain at their lowest level in years, and a substantial increase may be slow in coming.

"The state's portfolio earned 3.95 percent in the fourth quarter, once again out-performing the benchmark 90-day Treasury Bill, which continues to earn only approximately 3 percent," the letter said.

"Safety of the public funds continues to be the primary objective of our investment policy, and the portfolio will remain heavily concentrated in government-backed securities," she said. "In order to be ready to take advantage of any increase in interest rates, the maturity of the investments has been shortened."

For the fiscal year, the portfolio earned a 5.33 percent return, Henry said.

The treasurer's three criteria for investment of funds, in order of priority, are safety, liquidity and yield, she said.

Henry said because of the sluggishness of the national and state economies, there was less state money available for investment than in previous years, and she did not expect the situation to improve substantially in the near future.

The Link Deposit Program, where the treasurer makes available a percentage of investable funds for lending to agriculture and small businesses at below-market rates, had an average of $109.4 million invested in collateralized time deposits for the fiscal year, Henry said. Earnings were 2.73 percent for the fiscal year.

Nonlinked time deposits totaled an average of $188.69 million and earned an average of 3.16 percent for the fiscal year.

Henry's office is under investigation by the state auditor and inspector's office and the attorney general's office. Former deputy treasurer Patricia Whitehead, who also was a close personal friend of Henry's, resigned in July. Auditors accused Whitehead of arranging for a company where she formerly worked, Planners Independent Management Co. …

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