§ 33.02  MATERIALITY THRESHOLD FOR REPORTING IRREGULAR VARIANCES, LOSSES, SHORTAGES AND THEFTS.
   (A)   Findings.
      (1)   Indiana political subdivisions are subject to and. at times, victims of erroneous and irregular variances in accounts, losses, shortages, and thefts.
      (2)   I.C. 5-11-l-27(j) requires that all erroneous or irregular material variances, losses, shortages or thefts of town funds or property shall be reported immediately to the State Board of Accounts and that the town may define what is considered material for reporting purposes.
      (3)   Pursuant to I.C. 5-11-1-27(b), MATERIAL means a significant or consequential amount, as determined by the State Examiner and approved by the Audit Committee.
      (4)   I.C.5-11-1-27 provides that all political subdivisions must develop their own policy of materiality for purposes of recognizing and reporting irregular variances, losses, shortages, and thefts which may occur, and the Indiana State Board of Accounts acknowledges that each political subdivision is the best determiner of the qualitative and quantitative factors unique to the unit in arriving at materiality.
      (5)   The town through § 33.03 is further maintaining and establishing a system of internal controls required to promote accountability and transparency.
      (6)   The Common Council specifically recognizes, confirms and acknowledges that pursuant to I.C. 5-11-1-27(l) public officials who have actual knowledge of or reasonable cause to believe that there has been a misappropriation of public funds shall send written notice of the misappropriation to the State Board of Accounts and the prosecuting attorney and nothing set forth in this section or § 33.03 is intended to circumvent the provisions of the above cited statute.
      (7)   The Town Clerk-Treasurer's office maintains documentation regarding the assets, properties, and accounting of the monies and property of the town and shall continue to do so in the future.
      (8)   After thorough consideration and review the Town Council determines that in accordance with I.C. 5-11-1-27 the materiality level for the town should be the sum of $500.
      (9)   The Town Council believes it is in the best interest of the citizens of Trafalgar that the Council, as the fiscal body, should establish this policy of materiality.
   (B)   Definitions. For the purposes of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
      IRREGULAR VARIANCE. A reduction in a cash or fund balance or actual cash on hand that cannot be accounted for or explained in the normal course of business.
      MATERIAL. For purposes of this section and the reporting requirements imposed by I.C. 5-11-1-27:
         (a)   An irregular variance, loss, or shortage of cash exceeding $500;
         (b)   Two or more irregular variances, losses, or shortages of cash, from the same fund or account, or related to the same person or department, occurring within a 60-day period, and exceeding, in the aggregate, $500;
         (c)   A loss of town property valued in excess of $500;
         (d)   The theft or suspected theft, by town personnel, of cash or any other town property, irrespective of the value or amount;
      PUBLIC OFFICER. As defined in I.C. 5-13-4-21, any person elected or appointed to any office of the state or any political subdivision and includes an officer of all boards, commissions, departments, institutions, and other bodies established by law to function as a part of the government of the state or political subdivision that are supported wholly or partly by appropriations of money made from the treasury of the state or political subdivision or that are supported wholly or partly by taxes or fees.
      THEFT. As defined under I.C. 35-43-4-2.
      TOWN PERSONNEL. All elected and appointed officials and all employees of the town.
   (C)   Reporting.
      (1)   The town, in addition to all other reporting requirements that it or town personnel may have pursuant to relevant provisions of I.C. 5-11-1-27, or otherwise, shall immediately report to the Indiana State Board of Accounts all irregular variances, losses, or shortages, deemed to be material as defined herein, and all incidents of theft.
      (2)   Additionally, I.C. 5-11-1-27(l) requires public officers who have actual knowledge of or reasonable cause to believe that there has been a misappropriation of public funds or assets of the public office, including: (a) information obtained as a result of a police report; (b) an internal audit finding: or (c) another source indicating that a misappropriation has occurred; to immediately send written notice of the misappropriation to the Indiana State Board of Accounts and the prosecuting attorney serving in the area governed by the town.
   (D)   Implementation; oversight; application. The Town Council and various department heads shall implement and oversee the policies and procedures as set forth in this section. This section and its separate rules, policies, and duties, as imposed, shall apply to and be enforced by and against all town personnel in strict compliance with its terms.
   (E)   Retention of documentation. The office of the Clerk-Treasurer shall maintain all documentation related to the public funds and property of the town as well as any documentation and resolution of incidents that do not meet the materiality threshold.
   (F)   Dissemination of policy. A copy of the materiality threshold shall be circulated by the Clerk-Treasurer's office to all department heads of the town.
(Res. 2016-006, passed 11-17-2016)