10 INVESTMENT SERVICES

The Investment Division is responsible for investment of state monies from the date of receipt through the date of redemption. During the 2005-06 fiscal year, this Division handled 10,273 security investment transactions totaling $355.6 billion. The Pooled Money Investment Board program accounted for 6,353 of these transactions totaling $303.1 billion; time deposits accounted for 1,889 transactions totaling $43.7 billion. The remaining $8.8 billion is invested on behalf of the state's special funds, such as those associated with the California Housing Finance Agency, the Department of Fish and Game, the state's retirement system, etc. The Division also administers the Local Agency Investment Fund (LAIF), a voluntary investment program created to offer California local agencies greater access to the financial markets through the Pooled Money Investment Board program. In the 2005-06 fiscal year, 2,635 local agencies participated in LAIF, with deposits averaging $16.6 billion for the fiscal year.

20 CASH MANAGEMENT

The Cash Management Division is responsible for managing the state's cash resources as mandated by the Pooled Money Investment Board and Government Code Sections 16500 through 16510. The Division analyzes the state's cashflow and completes daily, weekly, and monthly forecasts of available cash, which allows others to make informed investment and business decisions. The Division is also responsible for administering the Centralized Banking Services Program. The main component of this program is the Centralized Treasury System. The system is responsible for processing and reconciling state warrants and agency checks presented by banks for payment, processing stop payment and forgery items, and reconciling all of the state's deposits within the Treasury System. In addition, the Division is responsible for maintaining the state's vault which is used for the safekeeping of moneys and securities pursuant to Government Code Section 12320 and for providing security in the handling and processing of billions of dollars in negotiable securities.

30 PUBLIC FINANCE

The Public Finance Division is responsible for selling all State of California general obligation bonds, revenue anticipation notes, commercial paper notes, revenue bonds, and any other indebtedness including securitization of assets. The Division also provides trust services for most state bonds. Interim financing from the Pooled Money Investment Account is also arranged to meet the immediate cash needs of the various bond programs. Interest costs are minimized through a planned bond-marketing program. This program includes disseminating information to bondholders through the Investor Relations Program.

The Division also assures compliance with federal tax laws applicable to state debt by investing and reinvesting bond sale proceeds as needed to meet federal yield restriction requirements, tracking expenditures, and computing and rebating arbitrage profit or other payments to the federal government.

35 SECURITIES MANAGEMENT

The Securities Management Division is responsible for: the service and redemption of all State of California general obligation bonds, revenue anticipation notes, revenue warrants, and revenue bonds for which the State Treasurer's Office serves as Trustee; the clearing, settling, income collection, and accountability for all state investments (excluding PERS and STRS) and other securities and personal property owned by or pledged to the state. The Division is made up of three sections: Executive, Securities Clearance, and Debt and Data Management.

50 ADMINISTRATION AND INFORMATION SERVICES

The Administration Division, Executive Office, and the Information Services Division provide executive direction and support services to programs in the State Treasurer's Office. Services include budgeting, personnel, accounting, information systems, business services, technical support, and production operations.