The city hereby establishes that all city officials shall apply the following policies and internal financial controls when dealing with the day to day financial affairs of the city:
(A) Purpose. The City Commission, Mayor and all officials and employees are responsible to manage the funds of the city effectively and to ensure the financial management of these funds is properly controlled. All city officials have a duty to care for and protect the funds and assets of the city and may use those funds and assets only for the good of the city and for properly authorized purposes.
(B) Internal controls. Oversight of the day-to-day expenditures are the responsibility of the Mayor, Clerk and Treasurer and shall be subject to the following internal controls:
(1) The city officials authorized to make purchases or request payments are; the City Clerk, City Treasurer, Director of Operations, Police Chief, Commissioners and Mayor.
(2) The Treasurer is responsible to intake and review any request for a purchase or payment to determine that funds are currently available in current budget and the affected expense account. No purchase or payment of any amount may proceed unless and until the treasurer determines that funds are budgeted and available. Thereafter:
(a) Any purchase or payment under $1,000 may be processed and paid.
(b) Any purchase or payment $1,000 and above may only be made after a purchase order has be drafted, reviewed by the Treasurer for completeness, correctness and signed by the Mayor.
(c) Any purchase or payment request $1,000 and above must additionally be accompanied by two written quotes. If the difference between the quote is over 25% difference, a third quote must be obtained. Any request for quotes must contain a specific description of the product or services requested. Quotes must be addressed to city of Middletown and must have a detailed description of the product or service and a clearly defined price.
(d) Any purchase or payment request $10,000 and above must additionally be approved through the City Commission.
(e) Insurance certificates are to be collected from contractors by the employee making the purchase or service, and accompany purchase orders.
(f) Any purchase or payment $20,000 and above must be sent out for public bid and advertised per KRS 424.260. Projects cannot be phased, in order to be approved under a smaller amount and requirement. The Mayor may determine that a certain purchase or payment meets exceptions listed in KRS 424.260 (such as for professional services contracts) and therefore exempt a certain purchase or payment from the public bidding requirements.
(g) Certain budgeted, normal and recurring expenses shall be exempt from the procedures set out in divisions (A) - (D) of this section. The exempt expenses are, monthly utility bills, all payroll expenses and taxes, sanitation, legal fees & litigation, mowing, insurance, museum expenses, pre-existing contracts for the community center, sidewalks and park expansion.
(C) Monitoring. Monitoring of city finances is an ongoing process. The Mayor, Clerk, Treasurer and Police Chief will work closely to monitor the finances. A comprehensive monthly report will be presented to the City Commission for review and approval, which includes reports of actual income and expenditure and comparison with budget, along with commentary on any material variance.
(1) It is the intent of the city to separate specific work items relating to finances, so that the same person is not able to make deposits, record deposits and expenditures and make out checks.
(2) Any member of the City Commission may demand detailed accounting for all receipts and payments.
(3) Salaries and wages shall be paid to non-elected staff in accordance with a pay scale, which shall be adopted by the City Commission as part of its annual budget. There shall be no changes or deviations from the adopted pay scale for the year without the specific approval of the City Commission.
(4) It is the responsibility of the Mayor, Clerk, Treasurer and Police Chief to establish an inventory of all the equipment, goods and personal property owned by the city and to safeguard those assets. The inventory must be provided to the city’s insurance earner so that risk of loss may be mitigated. Any item (of any kind) surplus to the needs of the city, must be disposed of in a way that complies with Kentucky Revised Statutes. This includes selling the item if the item has resale value.
(5) Whenever possible, any and all persons who are handling or have primary access to the money of the city should be bonded and/or insurance coverage for theft loss obtained in the city’s insurance package.
(6) Request for reimbursement for any personal expenditure must be accompanied by adequate documentation and explanation and must be approved as a purchase order as set out above. When possible, reimbursement to a city employee should be avoided in favor of direct payment by the city to the vendor, based on an approved invoice.
(D) Debit/credit cards are to be monitored carefully and used sparingly. Whenever possible, the maximum credit limit for each debit card or credit card should be reduced to its lowest possible amount. In the event that a pre-approved charge requires a temporary increase in the credit card limit, only the treasurer or city clerk has authority to do a temporary credit limit increase.
(1) Officials approved to have a city issued visa card are: Director of Operations, City Clerk, and Police Chief.
(2) Credit card expenses must have a receipt from the merchant where the expense was charged. No hand written receipts will be accepted. Credit card purchases made on-line must have a printed receipt. Charges made via phone must request a receipt emailed or faxed. All receipts must have purpose of charge written on receipt and location (if applicable) of where expense is to be charged. All receipts must be initialed by employee that charged expense. Receipts are to be turned in to treasurer as often as you prefer, but at least by every Friday. Credit card charges over $500 must be pre-approved by Mayor and purchases over $2,500 must be done through also have a purchase ordered and a purchase order should be used instead of charging to credit card. Lost or stolen cards are to be reported to the company and the Treasurer immediately.
(3) Cash advances or withdraws are prohibited. When applicable, please inform merchant the city is tax exempt.
(4) Lost receipts will need to be replaced by calling merchant to have a duplicate receipt sent to Treasurer by e-mail or fax. Lost receipts that cannot be recovered will be the personal financial responsibility of the person that made the charge. Payment must be made to Treasurer as soon as the credit card statement arrives in office (Treasurer will inform cardholders when the statement arrives). If payment is not made when the statement arrives, charge(s) will be deducted from employee’s payroll.
(5) The city may issue employees a fuel card for all city purchases or fuel. If the city does go to a fleet fuel card, the card may only be used for fuel purchases for city vehicles used for city purposes and no other. Each employee is required to log in and record their individual usage of the fleet fuel card, as instructed by the Mayor.
(Ord. 12-14-17-B, passed 12-20-2017)