School district loses big by investing locally

Joel Rutchick of The (Cleveland) Plain Dealer used local school financial records to show that “the Cleveland Municipal School District has lost out on as much as $14 million in potential investment income over the last three years by investing most of its idle cash through local banks – which have paid lower interest rates than those available elsewhere.” The switch to the local banks apparently happened without competitive bids, a normal industry practice. Income from the investments “has lagged well behind that of Cuyahoga County and other urban school districts – such as Cincinnati, Columbus and Toledo – all of which invested well within the safety parameters outlined by Ohio law.”