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 Council, 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 and Clerk/Treasurer and shall be subject to the following internal controls:
(1) All invoices/expense vouchers must be approved in writing by the Mayor and the City Clerk/Treasurer. Two signatures are required on the invoice/expense voucher. The approved invoice/expense voucher will be forwarded to a third party accountant, who will then issue the check. The check will be forwarded to the City Clerk/Treasurer for signature and distribution. If the City Clerk/Treasurer is unable to sign the check, the Mayor (or Mayor Pro-Tern), will be authorized to sign.
(2) Checks require one signature, which should be that of the Mayor or Clerk/Treasurer. If the Mayor is not available the second signature may be supplied by the appointed Mayor Pro-Tern. 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. Whenever possible, any person to whom a check is made payable, should not be one of the signatories.
(3) Expenditures that exceed any line item classification in the budget must be reviewed approved by the City Council at least once prior to the end of the fiscal year.
(4) 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. Any person desiring to use the city’s credit or debit card must first receive the approval of the Mayor and then return to the office a receipt for any purchase.
(5) Request for reimbursement for any personal expenditure must be accompanied by adequate documentation and explanation and must be approved as an invoice 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.
(C) Monitoring. Monitoring of city finances is an ongoing process. The Mayor and Clerk/Treasurer will work closely to monitor the finances. A comprehensive monthly report will be presented to the City Council for review and approval, which includes reports of actual income and expenditure and comparison with the 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 Council 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 Council 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 Council.
(4) It is the responsibility of the Mayor, City Council and Clerk/Treasurer 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 carrier 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.
(Ord. 8, Series 2013-2014, passed 6-3-2014)