(A) Definitions. For purposes of this section and for carrying out the duties prescribed by it, the following definitions are adopted:
MANAGEMENT. Includes the Mayor with respect to the city as a whole, the City Clerk-Treasurer with respect to any department or person handling or having access to any public funds, and all department heads with respect to their department in the city.
OVERSIGHT COMMITTEE or OVERSIGHT BODY. The Common Council, acting as a committee of the whole in pursuit of its obligations under I.C. 5-11-1-27 and the Manual.
(B) (1) Mission. The city finds that its mission as related to internal control system is as follows:
(2) To serve the people of the city with integrity, efficiency and transparency in providing high quality government services, including in the areas of public safety, utilities, economic development and infrastructure, while safeguarding the public trust against risks of loss due to fraud, waste, abuse and mismanagement.
(C) Objectives. The city finds that in fulfilling its mission, a system of internal controls is necessary to advancing the following objectives:
(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 nonfinancial 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.
(3) Compliance objectives involve the adherence to law and regulations including by way of example following guidance documents such as State Board of Accounts' manuals, bulletins, directives and the Department of Local Government Finance's forms and directions and including other compliance related trainings and documents.
(D) Standards. The city hereby 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 that are necessary toward meeting the above described objectives, and explicitly adopts the Uniform Internal Control Standards for Indiana Political Subdivisions dated September 2015, as thereafter may be modified:
(1) Control environment;
(2) Risk assessment;
(3) Control activities;
(4) Information and Communication; and
(5) Monitoring.
(E) Principles. The city adopts and directs the following principles in explanation of the pertinent standards above be followed at all levels of city government:
(1) Control environment.
(a) The Oversight Body and management demonstrate a commitment to integrity and ethical values.
(b) The Oversight Body oversees the city's internal control system.
(c) Management establishes an organizational structure, assigns responsibility and delegates authority to achieve the city's objectives.
(d) Management demonstrates a commitment to attract, develop and retain competent individuals.
(e) Management evaluates performances 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 respond to risks.
(b) Management designs the city'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 city's objectives.
(b) Management internally communicates the necessary quality information to achieve the city's objectives.
(c) Management externally communicates the necessary quality information to achieve the city'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.
(F) Development and adoption of internal control procedures and policies based on standards.
(1) In order to meet the above-described objectives and fulfill the city's mission, the city shall develop procedures based on the above-described standards. The city, therefore, hereby directs that the above standards set forth under division (D) be used to design, implement, operate and modify current operations, reporting and compliance procedures that will safeguard the assets of the city, promote reliability, accountability and transparency of financial and non-financial information and to ensure compliance with all laws and regulations for each office, department and personnel of the city for an effective and reasonable internal control system of the city.
(2) Accordingly, the city authorizes the City Clerk-Treasurer to undertake a review of the current internal control system of the city; to conduct interviews with personnel of the city with regard to the nature and extent of control exercised over public funds so as to identify appropriate personnel under division (F)(3) below, and to make recommendations regarding the internal control system of the city. The City Clerk-Treasurer shall present his findings to the Oversight Committee no later than October 1, 2016 regarding any deficiencies and recommendations with respect to advancing policies and procedures in furtherance of this section.
(3) The city authorizes the City Clerk-Treasurer, in carrying out his activities in regard to the above-paragraph, to determine the position and persons who are the personnel who exercise duties involving 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.
(4) No later than December 31, 2016, the Oversight Committee shall adopt policies and procedures in accordance with this section, after review and consultation with the City Clerk-Treasurer regarding areas of improvement and deficiency in any existing policies and procedures so as to satisfy the terms of this section with regard to internal controls.
(5) Upon adoption of the procedures and policies by the Oversight Committee, all personnel, whether a public official or employee of the city shall comply with the procedures and any other policy regarding standards and procedures determined necessary by the city now and as modified in the future.
(6) All personnel of the city 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 city and shall cooperate with the City's Clerk-Treasurer or his designee so that the City Clerk-Treasurer may timely certify to the State Board of Accounts that the training was received annually by the personnel as provided by law.
(7) All elected and appointed officials and employees of the city are hereby directed to abide by and to cooperate fully in the implementation of the internal control system of the city.
(G) Failure to abide by internal controls.
(1) An employee who fails to abide by or cooperate with the implementation, compliance and certifications connected with the internal control system commits a violation thereof and may result in the discipline, including termination, of the employee.
(2) An elected or appointed official of the city who fails to abide by or cooperate with the implementation and the mandated certifications of the internal control system may be subject to any action allowed by law.
(H) Implementation of internal controls. This section may be implemented by any and all of the following actions or such others as authorized by this Council: (a) posting a copy of this section in its entirety in at least one of the locations in the city where it posts employer posters or other notices to its employees; (b) providing a copy of this section to its employees and elected and appointed officials; (c) providing or posting a notice of the adoption of this section; or (d) any such other action or actions that would communicate the polioes established by this section to the city's employees and elected and appointed officials.
(I) (1) Daily deposit amounts made at Horizon Bank will be compared to the amount processed in the Banyon software, be they utility payments or any other type of check or cash deposit. The Clerk-Treasurer and the Deputy Clerk will both initial for a given transaction in this way, as either the preparer of said transaction or the one who confirmed that it was processed correctly. If for some reason this process will not be timely, either set of initials can be replaced by the initials of a Council member.
(2) Petty cash, while not used very often, still has a function within the Clerk-Treasurer's office. Petty cash will be reconciled quarterly, or sooner if there exists a need, and will be logged and verified by both the Clerk-Treasurer and the Deputy Clerk.
(3) Monthly reconciliation will be performed by the Clerk-Treasurer and confirmed by the Deputy Clerk in a timely manner following a given month. The Clerk-Treasurer will initial to confirm that reconciliation has occurred, followed by either the Deputy Clerk, or if they are unable to do so timely, a Council member.
(4) The Clerk-Treasurer will provide the Council with documentation showing the reconciliation of city funds in a timely manner after a quarter of the year has concluded.
(5) The Deputy Clerk will inspect payroll check origination quarterly under the direction of the Clerk-Treasurer and this process will be confirmed by a log of the event and initials of both the Deputy Clerk and the Clerk-Treasurer.
(6) All checks that are originated by the City of Woodburn will be signed by the Clerk-Treasurer and either the Mayor or the current Council member who was delegated to have that authority.
(7) For any check that is to be originated, a claim docket will be presented to Council for their approval. In order for a claim to be considered valid, all present members of that quorum that were in favor of paying the claims as presented, need to sign the claim register. In the case that the Clerk-Treasurer originates a check under their authority prior to the presentation and approval of Council, signatures of that claim register in a similar method, even though signed after origination, will be considered valid.
(8) Anyone on the City of Woodburn's payroll that has access to a city credit card or line of credit from a vendor are to abide by the format listed in § 33.14 regarding the use and procedures for credit cards and lines of credit. Should § 33.14 not be in force by January 31, 2017, then division (I)(8) of this section will not apply and the city will not be bound to execute it in any capacity.
(9) Currently, only the Deputy Clerk and the Clerk-Treasurer handle city funds. If any other department is dealing with a customer or resident who wishes to have a payment processed, they are to refer that customer to City Hall. The only potential exception to this is the Woodburn Police Reserves. They are to handle all incoming and outgoing funds, if any, according to their established procedures.
(10) For any loss in either city funds or city property, the party who discovers the situation is to follow the current structure that is in place for the city's materiality threshold. This will determine whether or not it can be handled internally or if the State Board of Accounts needs to be informed of the loss.
(11) Anyone who suspects the possibility of fraud is encouraged to report their concerns to their department head, the Clerk-Treasurer, or the Mayor. The State Board of Accounts is always an acceptable option as well, particularly if you doubt the integrity of the individuals involved regarding the resolution of said potential conflict.
(Ord. 16-1336, passed 6-20-16; Am. Res. 16-213, passed 11-7-16)