(A) 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 State 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; and
(5) Monitoring.
(B) 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’s internal control system;
(c) Management establishes an organizational structure, assigns responsibility, and delegates authority to achieve the town’s objectives;
(d) Management demonstrates a commitment to attract, develop, and retain competent individuals; and
(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; and
(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 respond to risks;
(b) Management designs the town’s information system and related control activities to achieve objectives and respond to risks; and
(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; and
(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; and
(b) Management remediates identified internal control deficiencies on a timely basis.
(C) 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.
(D) 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 outlined in §§ 30.17 and 30.18) for an effective and reasonable internal control system of the town.
(Ord. 2016-3, passed - -2016)