(A) The town finds that its mission as related to an internal control system is as follows:
(1) Provision of a democratic governmental structure at the grassroots level;
(2) Provision of services as determined through the political process including but not limited to the grant-writing activities and economic development;
(3) Promotion of government efficiency, accountability, reliability and transparency; and
(4) Promotion of safeguards to reduce the risk of loss due to fraud, waste, abuse, gross mismanagement or uncorrected errors.
(B) The town finds that its interrelated and often overlapping objectives as related to an internal control system are as follows:
(1) Operations objectives which involve the ways governmental services are performed and the performance of those providing governmental services including, by way of example, budgeting, purchasing, permitting, cash management and planning among others.
(2) Reporting objectives which involve the filing of financial and non-financial information to those inside the government and those outside of the government including, by way of example, filing the annual report, audit and examination cooperation, filing uniform conflict of interest forms and the other filings with any governmental agency or official or information required to be kept such as an OSHA log and responding appropriately to a public records request among others.
(3) Compliance objectives involve the adherence to law and regulations including, by way of example, following guidance documents such as the State Board of Accounts' manuals, bulletins, directives and the Department of Local Government Finance's forms and directions and including other outside of government trainings and documents such as IACT among others.
(C) The town adopts and directs the minimum level of internal control standards and internal control procedures for an internal control system that includes the following five standards to promote government accountability and transparency as described in the Uniform Internal Control Standards for Indiana Political Subdivisions guidance document from the State Board of Accounts dated September 2015 and as thereafter modified:
(1) Control environment.
(2) Risk assessment.
(3) Control activities.
(4) Information and communication.
(5) Monitoring.
(D) 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 internal control system.
(c) Management establishes an organizational structure, assigns responsibility and delegates authority to achieve the town objectives.
(d) Management demonstrates a commitment to attract, develop and retain competent individuals.
(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.
(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 responds to risks.
(b) Management designs the town's information system and related control activities to achieve objectives and respond to risks.
(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.
(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.
(b) Management remediates identified internal control deficiencies on a timely basis.
(E) 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.
(F) The town directs that the above standards be used to design, implement, operate and modify current operations, reporting and compliance objectives that will safeguard the assets of the town, promote reliability, accountability and transparency of financial and non-financial information and to assure compliance with laws and regulations for each office, department and personnel (as defined below) for an effective and reasonable internal control system of the town.
(G) The town authorizes itself to review the current internal control system of the town and adopt a policy for the future internal control system to be effective after June 30, 2016 (although the State Board of Accounts will not take audit exception as long as the minimum standards are adopted between July 1, 2016 and December 31, 2016) and perform an annual review, or more if determined necessary for compliance with this section.
(H) The personnel, whether an official or employee, of the town whose official duties include receiving, processing, deposition, disbursing, or otherwise having access to funds that belong to the federal government, state government, a political subdivision, or another governmental entity shall comply with these minimum internal control standards and procedures (so long as they are not in conflict with their specific elected duties) and any related policy regarding standards and procedures determined necessary by the town now and as modified in the future.
(I) The staff of the town whose official duties include receiving, processing, depositing, disbursing, or otherwise having access to funds that belong to the federal government, state government, a political subdivision or another governmental entity shall be trained at least once during a calendar year and annually thereafter, unless on leave status, on the minimum internal control standards and procedures and any other standards and procedures determined necessary by the town and shall cooperate with the Town Clerk-Treasurer or personnel of the Clerk-Treasurer, so that the Clerk-Treasurer can timely certify to the State Board of Accounts that the training was received annually by the personnel as provided by law.
(J) President of the Town Council or the Clerk-Treasurer will develop, maintain, and train personnel on internal control standards and policies, and all new personnel shall receive training in a timely manner.
(K) All elected and appointed officials and employees of the town are hereby directed to abide by and to cooperate fully in the implementation of the internal control system of the town.
(L) An employee who fails to abide by or cooperate with the implementation, compliance and certifications connected with the internal control system commits a violation; this may result in the discipline, including termination of the employee.
(M) An elected or appointed official of the town who fails to abide by or cooperate with the implementation and the required certifications of the internal control system may be subject to actions allowed by law.
(N) This section may be implemented by any and all of the following actions or such others as authorized by the Council (or delegated authority):
(1) Posting a copy of this section in its entirety in at least one of the locations in the offices of the town where other employee posters or notices are read by the employees;
(2) Providing a copy of this section to its employees and elected and appointed officials;
(3) Providing or posting a notice of the adoption of this section; or
(4) Any such other action or actions that would communicate the policies established by this section to its employees and elected and appointed officials.
(Ord. 2016-3, passed 7-13-16)
Statutory reference:
Local governmental internal controls, see IC 5-11-1-27