The city's cash management procedures provide guidelines to maximize the use of public funds in the best interest of the public.
(A) Collected funds.
(1) Cash collections. Cash received will be processed daily as received to provide an expedient and as reasonably possible secure handling of incoming cash. Copies of checks are available from our banking institution.
(2) Cash deposits. Funds shall be deposited in designated financial institution account(s) daily in accordance with G.S. § 159-32.
(3) Cash drawer; City Hall. A cash drawer shall be maintained in the Finance Department to assist in the collection of funds. The cash drawer will be reconciled at the time each deposit is made. The cash drawer shall maintain a balance of $100 in change and currency. The cash drawer will be secured overnight in the safe.
(4) Cash drawers; recreation complex. A separate cash fund of $100 shall be maintained by the Parks and Recreation Department for use with collection of program fees and concession activities. Collected funds will remain intact and deposited in accordance with cash deposit procedures. All vendor payments and program refunds must be processed through the established accounts payable process.
(5) Returned checks. A service fee of $25 or, if greater, as allowed by State statute, will be assessed whenever a check issued to the city is returned for insufficient funds. The issuer will be asked to make the check good with cash and may be required to use cash with any future financial transactions with the city.
(B) Receipts.
(1) Cash receipts. Receipts generated and recorded by the accounting system, pre-numbered duplicate forms or cash register tape documentation will be provided for all funds received by any representative of the city.
(C) Cash disbursements. The city's objective is to retain funds for investment for the longest appropriate period while maintaining an efficient policy for procurement and payment of goods and services required by city operations.
(1) Purchase orders. Purchase order forms will be required to purchase goods or services as detailed in subsequent divisions. Purchase orders shall be signed by the Finance Officer.
(2) Credit card purchase requests. Credit card purchase requests are subject to purchase authorization as detailed in § 36.38 and shall be signed by the Finance Director or City Manager.
(3) Check disbursements. Accounts payable disbursements will be made in advance of invoice due dates to take advantage of payment discounts, if any, but more importantly to avoid unnecessary late payment fees. Invoices processed through close of business on Wednesday will be included in a weekly check processing typically on Thursday. Invoices requiring expedited payment will be handled on an individual basis.
(4) Check signatures. City checks shall be signed by two of three different individuals to include the City Manager, Finance Director, and City Clerk.
(5) Pre-audit certification. City checks will bear the following pre-audit certification: "This disbursement has been approved as required by the Local Government Budget and Fiscal Control Act."
(6) General petty cash fund. Petty cash shall be maintained for non-recurring expenditures requiring a prompter payment than can be efficiently effected by issuance of a single check. For this purpose, a petty cash fund of $100 will be maintained. At all times the combination of receipts and cash should balance to $100. The City Clerk shall be the custodian of petty cash and is responsible for replenishing these funds when the reconciled cash balance falls below $20. Petty cash transactions shall be recorded as funds are replenished during the fiscal year and specifically at June 30 if the fund is not fully funded by cash. Periodic audits of petty cash shall be conducted by the Finance Director.
(D) Banking relations.
(1) Bank selection. Banking service providers will be evaluated and selected by the Council through a competitive proposal process.
(2) Review of banking relationship. The Council will review the banking relationship(s) at their discretion, but at least every five years.
(3) Bank accounts. The city will maintain a minimum number of bank accounts to facilitate the movement and investment of funds and for efficient operations.
(4) Account security. Collateralization for deposits will be in accordance with Title 20, Chapter 7 of the North Carolina Administrative Code.
(E) Investments.
(1) Responsible party. G.S. § 159-30 places responsibility for the city's investment program with the Finance Director at the direction of the City Council. The daily operation of the cash management and investment functions will be the responsibility of the Finance Director who is authorized to purchase, sell and exchange securities on behalf of the city and may make transfers between city bank accounts as deemed appropriate in the management of city funds.
(2) Investment objective. The city will preserve capital and invest public funds in a manner which provides the highest investment return with the maximum security while meeting the daily cash flow demands of the city while doing so in compliance with all State statutes and other applicable laws governing the investment of public funds. The city's investment portfolio will be designed with the objective of attaining a market rate of return while minimizing risk and retaining liquidity.
(3) Investment risk. The standard of prudence to be used in managing the overall investment portfolio shall be the "prudent investor" rule which states "Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." The Finance Director, acting in accordance with North Carolina General Statutes, this policy, and exercising due diligence in the scope of his or her duties, shall be relieved of personal responsibility for an investment credit risk or market price changes, provided that these deviations are reported immediately upon knowledge and that appropriate action is taken to control adverse developments.
(4) Permitted investments. The city shall conform to the listed types of investments permitted by local governments in G.S. § 159-30(b), and (c). See § 36.41 for detail of authorized investments.
(5) Investment deposits. Certificates of deposit and demand deposit arrangements shall be limited to institutions participating in the pooling method of collateralizing local unit funds established by the North Carolina State Treasurer. No certificates of deposit or demand deposit shall be placed with an institution unless it is a member of the FDIC or FSLIC.
(6) Investment earnings. All monies earned and collected from investments will be allocated monthly to the general fund, or any additional permanent fund that may be established.
(7) Investment report. The Finance Director is charged with the responsibility of preparing a monthly cash report for the City Manager and Council which shall include investment account balances.
(Ord. passed 11-14-2016)