(A) The acceptable minimum level of internal control standards and procedures developed under I.C. 5-11-1-27(e) by the SBOA contained in the “Uniform Internal Control Standards for Indiana Political Subdivisions” manual, are hereby adopted by the town, and that town personnel receive training concerning the internal control standards and procedures hereby adopted.
(B) The town establishes the following materiality policy under I.C. 5-11-1-10, 5-11-1-21, and 5-11-1-27:
Materiality, in the Town of Osgood, Indiana Government, is defined as $150 per occurrence. That is, if one occurrence of a loss or shortage or other irregularity is equal or greater than $150, it must be reported to the State Board of Accounts. The materiality definition is not limited to defalcations or suspicious activity involving only cash or cash transactions. If supplies, equipment or other fixed assets belonging to the town are suspected of being misappropriated or stolen or used in a manner not authorized by town officials and the value of those supplies, equipment or fixed assets are approximately $150, that misuse or series of misuse should be reported. That is not to say that if a loss or shortage is less than $150 it should be ignored. If there is a series of events, within the same office or department that appears to be a structuring event to defraud or misappropriate town funds or property, that event or series of events should be reported.
(C) All erroneous or irregular material variances, losses, shortages, or thefts of political subdivision funds or property shall be reported immediately to the State Board of Accounts. For all material variances, losses, shortages, or thefts, the State Board of Accounts shall:
(1) Determine the amount of funds involved and report the amount to the appropriate government and law enforcement officials;
(2) Determine the internal control weakness that contributed to or caused the conditions; and
(3) Make written recommendations to the appropriate legislative body or appropriate official overseeing the internal control system addressing:
(a) The method of correcting the condition; and
(b) The necessary internal control policies and internal control procedures that must be modified to prevent a recurrence of the condition.
(D) Pursuant to I.C. 5-11-1-27(1), a political subdivision, elected official or employee of the town that has actual knowledge of or reasonable cause to believe that there has been a misappropriation of public funds shall immediately send written notice of the misappropriation to the SBOA and the Prosecuting Attorney of Ripley County, Indiana regardless of the dollar amount, (i.e. there is no materiality threshold amount). Misappropriation occurs when an employee or in-house contractor of the political subdivision wrongly takes or embezzles public funds.
(E) The Town of Osgood, Indiana Ethics Policy/Internal Control/Materiality Declaration regarding establishment of a policy on materiality and a process for reporting material items, which was reviewed and approved by the town on June 21, 2016, is hereby adopted.
(Ord. 2016-3, passed 6-21-2016)