POLICY STATEMENT 159
FINANCIAL OPERATIONS & REPORTING POLICY

Prepared by: Karen Mills, Finance Director

Adopted by Council: 12/15/2011

Effective: 12/15/2011

Supersedes: Policy 159 (rev. 6/12/2008) 

I. Objectives

A.      To align the Town of Cary’s (“The Town’s”) long-term financial planning with it’s short-term daily operations 

B.      To maintain the Town of Cary’s ("The Town") stable financial position

C.      To ensure that Council’s adopted policies are implemented in an efficient, effective and cost conscious manner, while continuing to ensure compliance with contractual and statutory requirements.

D.      To protect the Town from emergency fiscal crisis by ensuring the continuance of service even in the event of an unforeseen occurrence

E.      To secure the highest possible credit and bond ratings by meeting or exceeding the requirements of bond rating agencies through sound, conservative financial decision making

II. Accounting/Financial Reporting

The Town will establish and maintain its accounting systems according to the North Carolina Local Budget and Fiscal Control Act. Financial systems will be maintained to monitor expenditures and revenues.

A.      All records and reporting will be in accordance with Generally Accepted Accounting Principles and Governmental Accounting Standards Board (GASB) pronouncements.

B.      The Town will place emphasis on maintenance of an accounting system which provides strong internal budgetary and accounting controls designed to provide reasonable, but not absolute, assurance regarding both the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and reports, such as the budget and the Comprehensive Annual Financial Report (CAFR), as well as maintenance of accountability of assets.

C.      An annual audit will be performed by an independent certified public accounting firm which will issue an opinion on the annual financial statements, with a management letter detailing areas that need improvement if required. Auditing services will be evaluated and selected through a competitive proposal process every five years at a minimum.  

D.      Full disclosure will be provided in all regulatory reports, financial statements, and bond representations.

E.      The Town will maintain the least number of funds and accounts necessary for proper and accurate records.  The Town may maintain sub-funds, in addition to legally mandated funds, for accounting and management purposes.

F.      The Town’s annual financial report will be prepared according to the standards necessary to obtain the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officer’s Association, and will be submitted each year for recognition. 

III. Operational Cash Management 

The purpose of the Town’s cash management policy is to provide guidelines to maximize the use of public moneys in the best interest of the public.

A.      Receipts

1.       Cash receipts will be collected and deposited as expediently as reasonably possible to provide secure handling of incoming cash and to move these moneys into interest earning accounts and investments.

2.       All incoming funds will be deposited daily as required by law and are allowed to be received in the most efficient means possible.  Efforts will be made to ensure deposits are made in such a manner as to receive credit for that day’s interest.

B.      Cash Disbursements

1.       Disbursements will be made shortly in advance of or on the agreed-upon contractual date of payment unless earlier payment provides a greater economic benefit to the Town.

2.       Payroll disbursements will be in accordance with the requirements of all state and federal regulatory laws, rules and regulations.  Overtime and benefit payments will be made in accordance with the Town’s Personnel Ordinance.

3.       Checks will be signed by the Finance Director. If the Finance Director is unavailable, the Town Manager, the Assistant Town Manager, the Controller, Deputy Treasurer or the Accounting Operations Manager may sign the check.  A facsimile signature for the Finance Director is permitted. 

4.       Disbursements will be made using the method(s) deemed most efficient at the discretion of the Finance Director or designee.

5.       Proper documentation will be maintained to meet all audit, general governmental accounting standards and Town policies.  Accounting and purchasing has the right to request additional documentation from departments as needed.

6.       The Town will follow escheat rules and regulations as directed by NC General Statutes.

7.       The Town will follow the following hierarchy related to revenue spending for programs or projects with multiple revenue sources; federal funds, State funds, debt funds, local non-Town funds, Town funds.  For purposes of fund balance classification, expenditures are to be spent from restricted fund balance first, followed in-order by committed fund balance, assigned fund balance and lastly, unassigned fund balance.  The Finance Director or their designee has the authority to deviate from this policy to in order to comply with grant agreements, debt requirements, contractual requirements or if it is in the best interest of the Town.

C.      Banking Relations

1.       Banking service providers will be evaluated on a regular basis to ensure the Town is receiving the best services at a competitive rate. 

2.       The Town will maintain a minimum number of bank accounts to facilitate the movement and investment of funds.

3.       Collateralization for deposits will be in accordance with the North Carolina Administrative Code.

4.       The State Treasurer enforces standards of minimum capitalization for all pooling method financial institutions.  The Town relies on the State Treasurer to monitor those financial institutions.  The Town analyzes the financial soundness of any other financial institution used by the Town.  The Town complies with the provisions of North Carolina General Statutes when designating official depositories and verifying that deposits are properly secured. 

IV. Collections

A.      The Town will pursue collection on delinquent customer accounts using any prudent manner available, including the North Carolina Debt Set-off Program and the use of a third-party collection agency.  After exhausting collection efforts and after considering legal time limits for all collection methods, delinquent balances may be written off at the discretion of the Accounting Operations Manager.

B.      Delinquent fees are established annually through the budget process.

C.      Town staff has the right to suspend related services in connection with the unpaid customer account.  Service may be resumed once the outstanding balance is paid in full.  With the approval of the Finance Director, additional unrelated Town services may be suspended for the past due customer.

V. Internal Control and Compliance.

The Town intends to maintain a system of internal controls that ensures complete, accurate and timely financial records by working with Departments to create business systems that properly capture and report financial related information.

A.      Finance, in coordination with Technology Services, will establish Town-wide standard procedures and policies for the security, handling and maintenance of sensitive information, which departments will be responsible for reviewing and incorporating into their daily activities. 

B.      Finance staff will provide training periodically in order to provide system information to users, as well as provide clarification on Town financial-related policies and procedures and other regulatory and statutory requirements.

C.      Background checks, which may include criminal and credit checks, will be conducted on positions deemed as critical for financial purposes according to procedures established by the Finance Department in conjunction with Human Resources.

VI. References

Other financially related Town Policies and ordinances include (alpha order):

Internal Audit Policy (#161)
Investment Policy (#160)
Finance Policy (#112)
Town of Cary Personnel Ordinance