# Steven Kilgore Investment Accounting Director / Internal Audit at the Arkansas Office of the Treasurer of State. Email [email protected], office phone 501-682-1422. Signature: > Steven Kilgore > Investment Accounting Director / Internal Audit > Arkansas Treasurer of State > Office: (501) 682-1422 > Email: [email protected] The Treasury investment-accounting role with internal audit responsibilities. Kilgore handled two documented Israel Bonds-related operational matters in the Treasury R1 batch: the September 2024 BNY-versus-Clearwater pricing discrepancy, and the April 2025 SBOF policy review for the Book Entry custodial migration. ## The 9/4/2024 BNY-Clearwater pricing discrepancy Kilgore emailed the investment team 9/4/2024 9:15 AM about Clearwater Analytics's pricing overrides on Treasury bond holdings: > As update, these are the bonds where Clearwater is using the original purchase price as market value (Trade) or using a price provided (Override). > > Periodically, we will want to ask for vendor pricing on some of them or provide new pricing, to improve the accuracy of the total return ROI given to SBOF and the unrealized gain/loss sent DF&A. > > If we need to meet on any of them, let us know. Pulley's same-day 11:22 AM reply concerning Israel bonds specifically: > Concerning the discrepancy on the Israel bonds it appears that BONY has a more accurate pricing. Clearwater is severely off market for this particular security. Kilgore's 11:28 AM response: "Ok, yes.. not sure what the issue is from Clearwater's side, since they had pricing on the other Israel bonds. Thanks." The exchange documents that Clearwater Analytics, Treasury's portfolio accounting platform, was not pricing Israel bonds at market and was carrying them at original purchase price. The wiki's prior framing of the Israel bonds as a thinly-traded private placement (per the DCI rate-sheet's "CONFIDENTIAL Private Placement to Qualified Entities" framing) is consistent with the pricing-vendor difficulty. BNY's separate pricing source presumably reflects the institutional secondary-market pricing through a bond pricing vendor like ICE or Bloomberg. The substantive consequence is that prior to 9/4/2024, Treasury's quarterly SBOF reporting on total-return ROI and unrealized gain/loss for the Israel bonds line was based on a stale Clearwater override price, not on market value. Whether this affected Treasury's reported earnings on Israel bonds across multiple prior quarters is not documented in this batch. ## The 4/17/2025 SBOF policy review for Book Entry migration Gladden emailed Kilgore at 10:31 AM with the Book Entry migration question (described at [[celeste-gladden]] entity page). Kilgore's 12:55 PM response: > Celeste, > > I was reviewing the SBOF policy and the statutes again: > > Master Custodian - Since the SBOF policy says that the Treasurer "may" select "one or more" master custodian firms, that would not seem to mean that all bonds need to be held within BONY. The reference to "all" securities in the paragraph seems to refer only to those securities assigned to the custodian, not that there couldn't be bonds held outside of the main custody agreement. This seems to be more of a direct issue situation rather than another custodial agreement. I don't think the policy or codes indicate that direct purchasing is not allowable. > > Broker Dealer – Computershare seems to be only serving as an "agent" or arm of the issuer, rather than getting a fee from us. I assuming any fees are being paid the issuer, Israel, rather than us. > > It seems their recording keeping and reports should be sufficient and could be an improvement in terms of how the coupons show up on their portal. > > I don't find a barrier to using Computershare for Israel bonds, assuming no ongoing fees are involved Kilgore's review concluded the Book Entry migration was policy-compatible. The substantive analysis identified two relevant SBOF policy points: (1) the master custodian provision is permissive ("may") and does not require all bonds to be held at BNY, and (2) Computershare serves as agent for the State of Israel rather than as a fee-charging broker-dealer for the Treasurer's office. The conclusion was conditional on "no ongoing fees are involved" but the substance of the question was resolved within 2.5 hours of Gladden's initial inquiry. Kilgore's review is the only documented internal Treasury legal/policy review of the Israel Bonds Book Entry custodial migration. The review was operational/administrative in scope, not addressing the underlying merits of the Israel Bonds position size or the credit assessment. ## Role characterization Kilgore's role spans investment accounting (Clearwater oversight, SBOF and DF&A reporting), policy review (SBOF custodian policy and Arkansas state code), and internal audit. His 4/17/2025 review uses statutory language ("may," "one or more") suggesting familiarity with the SBOF policy document text. Kilgore is presumably the staff member who would prepare any internal-audit memo on Israel Bonds purchases if Treasury internal audit were to be conducted. The wiki's prior framing of the [[independent-credit-analysis-gap]] is now qualified by Kilgore's documented presence: an internal-audit and policy-review function exists at Treasury and has produced at least one documented review (the 4/17 Book Entry migration policy review). Whether Kilgore also reviewed the merits of the underlying $20M Thurston Israel Bonds purchase decision is not documented in this batch. ## Cross-references [[treasury-foia-r1-7-7-25]] source page [[steve-pulley]] Senior Investment Officer; Kilgore is part of Pulley's accounting-and-internal-audit team [[celeste-gladden]] wire operations principal; routed Book Entry migration policy question to Kilgore [[bny]] Treasurer's-office investment custodian; pricing source Kilgore validated for Israel bonds against Clearwater [[independent-credit-analysis-gap]] gap concept Kilgore's documented role qualifies on the Treasury side ## Treasury R2 Sub-batch 3 (Communications binders): documented procedural-compliance review function The Sub-batch 3 alphabetized Communications binders document Kilgore's substantive procedural-compliance review function on Israel Bonds operational changes. Full Sub-batch 3 documentation is at [[treasury-foia-r2-9-23-25]]. Kilgore-specific findings: (1) **Kilgore's 4/17/2025 12:55 PM SBOF policy review on the Computershare book-entry custody question** is the wiki's first documentation of internal Treasury procedural-compliance review on Israel Bonds. Gladden's 4/17/2025 10:32 AM email to Kilgore had requested formal procedural review: "According to policy we must have a third party holding the bonds. I think this would satisfy that requirement. It would also prevent the physical movement of these securities back and forth. I need the ok on this from your perspective." Kilgore's reply documented his SBOF-policy-and-statute review: > Master Custodian - Since the SBOF policy says that the Treasurer "may" select "one or more" master custodian firms, that would not seem to mean that all bonds need to be held within BONY. The reference to "all" securities in the paragraph seems to refer only to those securities assigned to the custodian, not that there couldn't be bonds held outside of the main custody agreement. This seems to be more of a direct issue situation rather than another custodial agreement. I don't think the policy or codes indicate that direct purchasing is not allowable. > > Broker Dealer – Computershare seems to be only serving as an "agent" or arm of the issuer, rather than getting a fee from us. I assuming any fees are being paid the issuer, Israel, rather than us. > > It seems their recording keeping and reports should be sufficient and could be an improvement in terms of how the coupons show up on their portal. > > I don't find a barrier to using Computershare for Israel bonds, assuming no ongoing fees are involved. > A-He binder, Kilgore to Gladden, 4/17/2025 12:55 PM The review covered SBOF Master Custodian policy interpretation, Broker-Dealer fee-arrangement assessment (Computershare as "agent or arm of the issuer"), and recordkeeping adequacy. Kilgore approved the change to book entry custody. The review is procedural-compliance, not substantive-investment-merits — it does not address the underlying purchase decision. The review function exists at Treasury at the Investment Accounting Director / Internal Audit level when operational changes require it. (2) **Kilgore's 12/6/2024 2:21 PM bond-comparison link to Damon Dortch** ("Bond Yield and Rating Comparisons" with link to www.worldgovernmentbonds.com) prompted Dortch's 12/6/2024 2:23 PM "We buy them to make a political statement and usually at the direction of the elected Treasurer" framing. Kilgore as Investment Accounting Director / Internal Audit was the recipient of Dortch's candid institutional-pattern articulation. Both Kilgore and Dortch are documented as understanding the operational logic. See [[damon-dortch]] for the full exchange. (3) **Kilgore's 6/6/2023 Foreign Asset Investment data response to Selby Tucker (Governor Sanders office)** transmitted via Munson the detailed Treasury portfolio composition showing $9.4B US (97.3%), $262M non-US (2.7%) of approximately $9.7B total portfolio. Israel sovereign debt: $44.2M (0.46% of portfolio, 1.0% of foreign exposure). Kilgore's data response is the wiki's first detailed Treasury portfolio composition snapshot. Documents Kilgore's role as the substantive data-compiler for executive-branch oversight inquiries on Treasury foreign holdings. (4) **Kilgore's 8/12/2025 Israel Bonds ACFR pricing concern to Gladden + Dortch** ("FYI, Clearwater did not find pricing at fiscal year-end for the newest Israel bonds. Since they are not in BONY, we also don't have it from them") initiated the ACFR FY2025 fair-value pricing methodology already documented in Sub-batch 1 via the 2025-9-15 ACFR Israel Bond Pricing pdf. (5) **Kilgore's 2021-2022 coupon-totals exchange with Stacy Peterson and Holly Beaver** (Hol-Is binder embedded thread) documents cumulative Israel Bonds coupon income through 2020-2021 of approximately $3.7 million, broken out by fiscal year and payment date. Kilgore as the Investment Accounting Director was the substantive data source for Peterson's communications-staff inquiries. [[treasury-foia-r2-9-23-25]] source page (Sub-batch 3 section) [[damon-dortch]] internal Treasury staff peer who Kilgore's 12/6/2024 link prompted to articulate the "political statement" framing