California. Office of the State Treasurer

Agency History

Article Five of the 1849 California Constitution established the office of State Treasurer. Like the State Controller and Attorney General, State Treasurer is an administrative office in the executive branch of State government. The Constitution provided that Treasurers be elected to office, with terms coinciding with that of Governor. Initially two years, terms increased in 1862 to four years.

The State Treasurer acts as California's official banker (1850 Stats., Ch. 5 & 9). The Treasurer's duties, which include five principal functions, have changed little since the office was established. They include responsibility for maintaining custody over all State cash and securities; overseeing investment of State funds; preparing, selling and redeeming State bonds issued; making payments on Controller's warrants and overseeing the financial operations of local districts and public agencies to make sure their securities are sound.

During the 1930s, the Treasurer's office was compartmentalized into four accounting subdivisions. Income received was managed by the Receiving Department while the Warrants Department handled all payments made on State warrants. The Bond Deposit Department managed the issue, flotation and repayment of bonds, as well as bond purchases made for state agencies or accounts. Bonds held in trust for State agencies and securities on deposit from banks, insurance or investment companies were handled by the Vault Department.

In 1950, the Centralized Treasury Trust System was initiated by the State legislature to function as a commercial bank operated by the Treasurer for the benefit of State agencies. The CTFS expanded the Treasurer's control over all State monies. The Treasurer's duties were further increased in 1955 with the establishment of the Pooled Money Investment Board, a committee formed to supervise cash management and short term investment programs (Ch. 297). Since that time, more funds are supervised and more bonds issued by the California State Treasurer than by any government agency in the U.S. except the Federal government.

The Treasurer's office grew from a staff that included a single clerk in 1849 to seven employees in 1900. By the early 1980's, over two hundred employees worked in this department, now composed of seven functional subdivisions and an executive office. The subdivisions include Public Information, the Legal Office, District Securities, Administration, Cash Management, Investments and Trust Services divisions. The District Securities department reviews and approves fiscal operations of State irrigation and water districts. Internal operations like personnel, budgeting and data processing are handled through the Administration division. Cash receipts and payments are supervised by the Cash Management division, while long and short term investment planning take place in the Investments division. Finally, bond sales and redemption and related activities are supervised by Trust Services. A division chief heads each of the seven divisions and reports to the Treasurer through the Chief Deputy State Treasurer.

From the guide to the State Treasurer Office Records, (California State Archives)