HomeMy WebLinkAboutItem 4.03 City Payments Policy~~~~ Off' nU~~~
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DATE:
TO:
FROM:
SUBJECT
STAFF REPORT
CITY COUNCIL
CITY CLERK
File #300-20
November 15, 2011
Honorable Mayor and City Councilmembers
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Joni Pattillo, City Manager ° ~'
Establishment of City Council Policy Related to Approval of City Payments
Prepared by Paul S. Rankin, Administrative Services Director
EXECUTIVE SUMMARY:
The City has a long standing practice of including on each agenda a Staff Report which includes
a listing of payments issued. The listing groups the payments into two categories: 1)Pre-Issued
Payments; and 2) Payments to be audited. In order to efficiently process payments for City
purchases a revised report format is proposed. The City Council will consider a policy which
provides for the payment listing to be presented once per month. The report will include all of
the payments issued in the previous month.
FINANCIAL IMPACT:
There is not a direct financial impact from the adoption of the proposed policy. The change will
result in staff time savings due to a reduction in the number of reports prepared. The time will
be utilized for other finance related activities
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution Establishing the Policy for the
Approval and Ratification of City Payments.
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Submitted By Reviewed By
Administrative Services Director Assistant City Manager
DESCRIPTION:
The City of Dublin has presented, as part of the regular bi-monthly agenda, a listing of payments
issued. The City issues an average of approximately 330 accounts payable checks each
month. The reporting has been established on a cycle of regular processing of payments due
twice each month. The administrative procedures provide for the actual release of the
payments by the Friday following the City Council meeting. This schedule allows adequate time
for the City to meet its obligations in Standard City Agreements, which call for payment within 30
days of receipt of the billing.
Page 1 of 2 ITEM NO. 4.3
Current Process Two Categories (Preaudited Pavments &Pavments To Be Issued)
In the current process there are times when a payment must be issued prior to the presentation
of the check listing to the City Council. For example, the City sometimes receives utility bills
without sufficient time to process them and have them presented on a Staff Report listing before
they are due. These payments are budgeted items and would be included as part of the
"Preaudited" listing. The same situation occurs if a regular City Council meeting is not
conducted twice during the month.
Proposed Change -Monthly Reporting In Arrears
Staff is proposing to maintain the same processing cycle of issuing payments in bulk twice each
month. However, it is proposed that the listing presented to the City Council will be done on a
monthly basis. Because of the timing of agenda deadlines it is recommended that the listing
occurs on the agenda of the second City Council meeting in each month. For example, if the
change is adopted, a listing of all payments issued in November will be part of the Agenda on
December 20, 2011.
The proposed method continues to provide a high level of disclosure for the business activities
undertaken by the City. Staff surveyed the practices used by other public agencies and they
vary widely. The California Government Code allows cities to follow a very rigorous process of
review and auditing all payments prior to their issuance, or if the agency has an annual audited
comprehensive financial report, the required process is no longer required. With the need to
process payments in a timely manner in order to avoid late fees and other impacts it would be
almost impossible to have all payments reviewed by the City Council prior to their issuance.
The more rigorous process is stated as follows:
California Government Code Section 37202. Except as provided in Section 37208, the
legislative body shall approve or reject demands only after such demands have been
audited in the manner prescribed by ordinance or resolution. Such audited demands may
be submitted separately or a register of audited demands may be submitted to the
legislative body for approval or rejection and shall have attached thereto the affidavit of
the officer submitting the demands certifying as to the accuracy of the demands and the
availability of funds for payment thereof.
The proposed monthly report would exceed the requirements in the California Government
Code. Section 37208(c) of the California Government Code states: "...budgeted payrolls and
demands paid by warrants or checks may be presented to the legislative body for ratification
and approval in the form of an audited comprehensive annual financial report." Therefore, the
City publication of the payment listing will be in addition to this requirement.
Staff has prepared a Resolution (Attachment 1) which documents the method being used to
disclose the payments made by the City.
NOTICING REQUIREMENTS/PUBLIC OUTREACH: None
ATTACHMENTS: 1. Resolution Establishing the Policy for the Approval and Ratification of
City Payments
Page 2 of 2
RESOLUTION NO. xx - 11
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
ESTABLISHING THE POLICY FOR THE APPROVAL
AND RATIFICATION OF CITY PAYMENTS
WHEREAS, the City of Dublin has well established policies and procedures for the
processing and issuance of payments for goods and services procured by the City; and
WHEREAS, the current policies and practices are intended to support financial internal
controls as well as compliance with government laws and regulations; and
WHEREAS, Government Code Section 37202 provides a mechanism by which the
legislative body approves or rejects audited demands before the payments are issued; and
WHEREAS, Government Code 37208(c) provides an alternative mechanism of approval
where the legislative approval and ratification is in the form of an audited comprehensive
annual financial report; and
WHEREAS, the City Council of the City of Dublin reviewed its practices and desires to
clearly establish a policy to ratify payments with the audit and to also allow for supplemental
reporting and disclosure.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby establish the following policy for the approval and ratification of City Payments:
A. The City Manager shall be responsible for the establishment and implementation of
internal controls as deemed necessary to administer payments made with public funds.
B. Payments may be issued for payroll and expenditures incurred by the City provided
that they are budgeted or authorized expenditures.
C. Absent other agreed to terms in writing, the standard City practice shall be to issue
payments due within 30 days of receipt of the invoice and confirmation of the billed amount.
D. A listing of all non-payroll payments issued during a month shall be presented to
the City Council in a public report on a City Council Agenda.
E. The monthly report will occur after the payments are issued and released and will
typically be included as an Agenda Item on the City Council Meeting scheduled for the third
Tuesday of the month.
F. In accordance with California Government Code Section 37208 (c) the statutory
obligation for ratification and approval of payments shall be in the form of an audited
comprehensive financial report.
Attachment 1
PASSED, APPROVED AND ADOPTED this 15t" day of November, 2011, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Attachment 1