(A) The town adopts and directs the following principles in explanation of the pertinent standards above be followed at all levels of the town government:
(1) Control environment.
(a) The oversight body and management demonstrate a commitment to integrity and ethical values;
(b) The oversight body oversees the town’s internal control system;
(c) Management establishes an organizational structure, assigns responsibility and delegates authority to achieve the town’s objectives;
(d) Management demonstrates a commitment to attract, develop and retain competent individuals; and
(e) Management evaluates performance and holds individuals accountable for their internal control responsibilities.
(2) Risk assessment.
(a) Management defines objectives clearly to enable the identification of risks and defines risk tolerances;
(b) Management identifies, analyzes and responds to risk related to achieving the defined objectives;
(c) Management considers the potential for fraud when identifying, analyzing and responding to risks; and
(d) Management identifies, analyzes and responds to significant changes that could impact the internal control system.
(3) Control activities.
(a) Management designs control activities to achieve objectives and respond to risks;
(b) Management designs the town’s information system and related control activities to achieve objectives and respond to risks; and
(c) Management implements control activities through policies.
(4) Information and communication.
(a) Management uses quality information to achieve the town’s objectives;
(b) Management internally communicates the necessary quality information to achieve the town’s objectives; and
(c) Management externally communicates the necessary quality information to achieve the town’s objectives.
(5) Monitoring.
(a) Management establishes and operates monitoring activities to monitor the internal control system and evaluate the results; and
(b) Management remediates identified internal control deficiencies on a timely basis.
(B) The town adopts the internal control standards above so as to establish an effective internal control system for the town through its design, implementation and operation.
(Ord. 2016-03, passed 6-13-2016)