Loading...
HomeMy WebLinkAbout14 FIN OPER'S MANUAL 04-03-95Inter-Com NO. 14 4-3-95 DATE: MARCH 29, 1995 TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER RONALD A. NAULT, DIRECTOR OF FINANCE PROGRESS REPORT ON FINANCE OPERATIONS MANUAL RECOMMENDATION: Receive and File FISCAL IMPACT: None DISCUSSION: The City Council has requested a report on the progress the Finance Department is making on our operations Manuals. First, 'let me assure you that we have not been operating without the aid of policy and procedure documentation. We currently have'a thick three ring binder that contains the department rules and regulations and individual procedures for the more significant internal controls within the department. We have been working on this project with the Audit Committee over the past year and have been providing them with updates of our progress. We submitted the draft of the first two sections for their review. Our objective is to formalize a comprehensive department manual and provide a desk manual for each operation within the department. We have completed a duties and responsibilities work sheet for each position which will be the back bone of the manual. I've attached a draft of the first two sections of the manual, the Introduction and Investments. We are targeting all cash activities as our highest priority. To properly complete a project of this magnitude it will require the dedication of a significant amount of staff time. With our limited staff we expected it to take up to twenty four months to complete a draft of the full manual. We requested a proposal from our auditors to assist us in preparing the draft but, I found the cost to be prohibitive due to the labor involved. The project is on hold at this time while we recruit to fill the Senior Accountant position which was recently approved by the City Council. Page 2 March 31, 1995 Finance Operations Manual Update The primary responsibility of the new person will be to complete this project. The tasks involved with the preparation of this document will immediately expose the new staff member to the smallest of detail for each function of our department. It will be a priority for completion as is the direction of both the City council and the Audit Committee. Director of Finance Attachment RAN: lS/a:operations.wah Accounfi City of Tustin ! olicy and Procedures ACCOUNTING POLICIES ~RAFT Introduction The City of Tustin exists to conduct and manage public .affairs and provide services to the-public. The City is controlled by legal provisions in California State statutes, City of Tustin resolutions and ordinances, and administrative regulations. Accordingly, the City is required to report its activities and · operations to citizens and other interested parties. The City's financial reporting is intended to Provide: Citizens, taxpayers and governmental agencies with information useful in assessing the management of the City's financial resources Investors and creditors with information useful in making investment and credit decisions Elected and appointed'City officials, and Audit Committee members with information useful in making decisions about. spending and service-delivery. In order to meet the information requirements of th'ese parties, the City has adopted accounting and financial reporting principles promulgated by the Governmental Accounting Standards Board (GASB). These principles are outlined 'in the National Council of.Governmental Accounting's Governmental Accountingand Financial Reporting, Statement 1 and subsequent statements issued by the NCGA. They are embodied in the Municipal Finance Officers Association's (MFOA) Governmental Accounting, Auditing, and Financial Reporting (GAAFR-1980 Edition). The basic principles provide a framework in which the City's accounting and financial reporting system may produce accurate and reliable financial information in accordance with generally accepted accounting principles (GAAP). The Statement 1 principles do not represent a complete and separate body of accounting principles. Rather they are a part of the whole body of generally accepted accounting principles. these principles incorporate GAAP as they apply to governmental accounting and financial reporting. Accounti~.o ~'olicy and Procedures City of Tustin GAAP and Legal Compliance The City's accounting.system is designed to: (a) present fairly and with full disclosure the financial position and results of financial operations Of the funds and account groups, of the City in conformity with generally accepted accounting principles; (b) determine and demonstrate compliance with finance-related legal and contractual provisions. Generally Accepted Accounting-Principles Generally accepted accounting principles (GAAP) are commonly recognized standards and guidelines for financial accounting and reporting. They are promulgated by the Financial Accounting Standards Board (FASB) and National Council on Governmental Accounting (NCGA).. GAAP-encompasses conventions, rules and procedures of generally accepted accounting practice at a particular time. GAAP-also governs the form and content of basic'financial.statements.'As such, it provides a uniform framework in which'the City may prepare financial statements.which will present fairly and with full disclosure the citY's financial position~and results of operations. The City prepares and publishes its financial statements in-accordance with Statement I, which is considered as part of GAAP for state and local governments in California State. Legal Requirements Requirements for the City's accounting and financial reporting are governed by a combination of federal, state and local 'laws and legal mandates. Federal regulations stem primarily from the requirements of grants (such as block grants,.revenue sharing, etc.). The regulations require the City demonstrate its compliance with those regulations. ' .State laws are prescribed by the State Legislators. They require the City.to report its financial position to the State COntroller on an annual basis. Local laws are as mandated by City Council resolutions and ordinances. · Accounting, _ Olicy and Procedures City of Tustin ! GAAP and Legal Compliance In accordance with Governmental Accounting, Auditing ant Financial Reponing, neither GAAP nor legal compliance take precedence.'Both are essential. When legal provisions conflict with GAAP, the City will prepare the basic financial statements in conformity with GAAP. Any difference will be disclosed in notes to the financial statements. The City will also present such supporting schedules, in addition to the GAAP based financial statements, as may be necessary to clearly report its legal compliance requirements. Financial Reporting The City prepares and publishes financial reports'which present its financial position and results of operations. The City's reporting function is twofold: A monthly basis tosatisfy the management information needs of the City's elected , appointed officials, and. committees. An a.nnual basis to satisfy the financial .needs of-interested parties external to the-City, including the Controller of the State of California. -~Interim Reporting The monthly reports are all computer generated revenue and.expenditure- summaries and detail are-used: 1) to control current operations; 2) to determine and demonstrate compliance with legal and budgetary limitation; and 3) to anticipate changes in financial resources and requirements. Financial statements that reflect current financial positions of each fund at the end of a month and compare actual financial results with budgetary estimates are also prepared monthly. The monthly reports are prepared for internal use only. But are used to prepare published quarterly reports such as the Mid-Year Budget report. Account~ ,-o' Policy and Procedures City of Tustin ~n~ual Financial Reporting The City prepares and publishes a comprehensive annual financial report (CAFR) to conform with GAAFR. The CAFR covers all funds and account groups of the City. It includes all activities considered to be part of, controlled by, or dependent on the City. The CAFR includes appropriate combined, combining and individual fund statements, including balance sheets; notes to the financial statements, 'and'- .supplementary schedules. The CAFR comprises three major, sections: · Introduction · Financial · Statistical The City seeks to achieve and maintain a standard of excellence and comprehensiveness qualifying fora Certificate of Achievement for Excellence in Financial Reporting. The Certificate issued by the GFOA signifies the attainment of an approved level of communication of financial'.information in the'City's CAFR. The annual, financial-.report is published by the City in accordance with statements and principlespromulgated by the Financial Accounting. Standards Board and-the.National Council of Governmental Accounting.. The financial statements are audited annually by independent auditors. · The CAFR is prepared and published by the Finance Department and is based on the City,s fiscal-year end of June 30. Accounting. ~/licy and ProcedUres City of Tustin Fund Accounting The City's accounting system is organized and operated on a fund basis. A fund is defined by Statement I, as a fiscal and accounting entity with a self-balancing set of accounts. The accounts record cash and other financial resources, together with all related liabilities and residual, equities or balances, and changes therein. The City maintains .the minimum number of funds possible, consistent with legal and operating requirements and in-accordance with GAAFR. The establishment and dissolution of funds is approved by either appropriate administrative or legislative authority. The City records its activities in individual funds and groups of accounts to comply with limitations and restrictions placed on both the resources available to the City and the services provided. Individual funds and groups of accounts .of the City are classified, below as defined Governmental Accounting Auditing and Financial Reporting. Governmental Funds Governmental funds typically finance most general service functions. -? · General Fund (Current Expense) 'to account for. all financial resources except those required to be accounted for in any other fund. · Special Revenue Funds - To account for proceeds of specified revenue sources (other than special assessments, expendable trusts, or for major capital projects) legally restricted to expenditure forspecified purposes (Examples of..these funds are Gas tax, Park acquisition and development, Asset forfeiture, other funds restricted for a specific purpose). · Debt'Service Funds -.To account for accumulation of resources for, and payment of, general long-term debt principal and interest and special assesSment debt principal and interest. M Capital Project Funds - To account for financial resources to be used for construction or acquisition of major capital facilities (other than those financed by Proprietary Funds). Accountt.~ Policy and Procedures City of Tuslin I Proprietary Funds Proprietary funds are used.to account for the City's ongoing organizations and activities similar to those found in the private sector. ' ' · Enterprise Funds - To account for operations that (a) are normally financed and operated 'in a manner s'imilar to private business enterprises -~wherethe intent of the governing body is that costs (expenses, including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body. has decided that periodic determination of revenues earned, expenses incurred and or net income is appropriate for.capital,, maintenance, public policy, management control, accountability or other purposes. Fiduc~ar~ Funds Fiduciary Funds are used to account for assets held by a governmental unit as a trustee oragent for individuals, private organizations, and for other governmental units. . · Trust an4 Agency Funds - To account for assets held by the City in a trustee capacity or as agent for individuals, private organizations, other governmental units,-and/or other funds. Trust and Agency Funds include: Expendable. Trust Funds - the principal and interest of assets accounted for in this fund type are .considered expendable Nonexpendable Trust Funds - the principal of assets accounted for in this fund are considered nonexpendable Pension Trust Funds'- a trust fund used to account for public employee retirement systems Agency Funds - a fund used to account for assets held by the City as an agent. Accounting- oticy.and Procedures Ci~. of Tu~tin &ccount Groups General Fixed Assets Account Group - A self-balancing 'group of accounts set up to record the general fixed assets acquired principally for use in the operations of governmental fund types (General fixed assets include all fixed assets not .accounted for in proprietary funds or in trust and agency funds). General Long-Term Debt ~ccount Group - A self-balancinggrouPof accounts set up to account for the unmatured general long~term debt of a government (the general long-term debt is that debt . expected to be repaid from the Governmental Funds and will mature in more than one year after the date'of issuance). · Accountin~ olicy and Procedures City of Tustin · I Basis of Accounting One of the most important principles contained in Statement 1 concerns the "basis of accounting." Basis of accounting refers to that point in time when revenues, expenditures or expenses (as appropriate), and the related assets and liabilities are recognized in the accounts and reported in the financial statements. In other words, the "'basis of accounting" governs the timing with which the accounting system recogniz es transactions. There are three bases of accounti~'~ in common use: 1) cash; 2). accrual; and 3) modified accrual. Cash Basis - Accounting transactions are recorded only when cash is received or disbursed. Accrual Basis - Transactions are recorded when they occur regardless of the timing of related cash flows. Under this method revenues are recognized in the accounting period in which they are earned and, "objectively measurable." The term "objectively Measurable" means the amount can be accurately determined. Using the accrual basis of accounting, expenses should be recognized in · the period, incurred, if "measurable." For an expense to measurable, the amount 'must be determined. (This is normally when the invoice is received.) Modified Accrual Basis - Under the modified accrual basis, revenues are recognized when they become susceptible to .accrual - that is when they become both "measurable- and "available" to finance .expenditures of the current period. Revenues .are considered "objectively measurable" if the amount can be reasonably determined. Revenues are considered "available" when they become physically, available. (i.e. collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period.) NCGA Interpretation 3, "Revenue Recognition - Property Taxes," states that property' taxes should be rec.ognized as revenue in the period for which they are levied (budgeted) except that they shall not be recognized unless they are: a. Due and receivable within the current, year. b. Collected within 'the current year or expected to be collected :within 30 days after the~ end of the current year: Ail other revenues are considered "available" by the City of Tust. in if revenues are expected to be received within 30 days. Accoun~ city of Tus~ ~olicy and Proccdurcs Under the modified accrual ~asis, governmental fund type (budgetary) expenditures are generally recognized when the related, fund liability is incurred. Exceptions to this general rule are: a. Inventories of materials and supplies which may be considered expenditures either when purchased or when used. The City of Tustin uses the "purchases method." ' bo Prepaid insurance and similar items which need not be reported. C. d. Accrual of unpaid vacation in proprietary 'funds. For governmental funds the accrual is recorded in the General Long-Term Debt Account Group. Principal 'and interest on long-term debt which are. generally recognized when due. The City of Tustin will employ the two methods of accounting by fund group as follows: Accrual Basis in ~overnmental Accounting 'Governmental fund revenues and expenditures are recognized on the modified accrual basis~ . Revenues. are recognized in the 'acco .u~. ting period in which they ~ecome available and measurable. Expenditures are recognized in the accounting period in which .the fund liability is incurred, if measurable, except for unmatured interest on general .long-term debt and on special assessment indebtness secured by interest-bearing special assessment levies (which should be recognized when due). PrOprietary fund revenues and expenses are recognized on the accrual basis. Revenues are recognized in.the .accounting period in which they are earned-and become measurable; expenses are recognized in .the period incurred, if measurable. Fiduciary fund revenues and expenses or expenditures (as appropriate) are recognized on the basis consistent with the fund's accounting measurement, focus. Non-expendable Trust and Pension Trust Funds are accounted for on the accrual basis; Expendable Trust Funds are accounted for on the modified accrual basis. Agency Fund assets and liabilities are accounted for on the modified 'accrual basis. Agency Funds are purely custodial (assets equal liabilities) and thus do not involve measurement of results of operations (i.e. revenues .and expenditures or expenses). Accounti~, ~olicy and Procedure~ City of Tu~tin Transfers are recognized in the accounting period in which the interfund receivable and payable arise: NOTE: The various fund types may be grouped in the following manner to more clearly portray their relationship' to an accounting basis: Spending Measurement Funds - use the modified accrual basis: Ge.neral Fund .(Current Expense Fund) '- Special Revenue Funds Debt Service Funds Capital Projects Funds Expendable Trust Funds Agency Funds Cost of Services Measurement Funds - use the accrual basis:- Enterprise Funds Non-expendable Trust' Funds Encumbrance Accounting Encumbrance accounting is an extension of management's control over-the financial commitments of the City. Encumbrances are an accounting record of purchase orders, contracts,, etc., which represent commitment to appropriations which are not yetactual liabilities of the City. Encumbrances outstanding at~year-end reported as. reservations of fund balances in governmental funds as. they do not constitute either expenditures or liabilities. Encumbrance of funds musthave City Manager approval. Accountit~_.olicy and Procedures  City of Tustin -. ! · Inventorios, F~xod As~et~ and Long-To~n L~ecb~l~t~es The accounting treatment applied to inventory, fixed assets and long-term liabilities associated with a fund's operations Varies depending on the type of fund. The following policies define the City's treatment.of inventory, fixed assets and long-term liabilities. ~overnmental Fund In the. financial statements, generally only current assets and liabilities are'included on the balance sheets. For governmental fund types, the City will account for these items as follows: Inventories - are recorded on the' balance sheet as .an asset and are offset (if significant) by fund balance reserve accounts at year-end, as they do not represent available spendable resourceS. Fixed assets - are recorded in the General Fixed Assets Account Group rather than in the fund's balance sheet (this is to maintain control of ~the general fixed assets without affecting the fund balance; as they do not represent financial resources available for expenditure.) Proprietaz7 Fund T~pes In the financial, statements, all-assets and liabilities (whether current or non-current) associated with. a fund' s activities are included in the balance sheet. For the proprietary fund types, the City accounts for inventories, fixed assets and long-term liabilities as follows: . Record as assets or liabilities in the balance sheet of the appropriate fund. This ensures related revenue and expenses (including depreciation) are recognized in the appropriate accounting period. AccountingPolicy and Procedures City of Tu~tin Valuation of Inventories and Fixed Assets The City values fixed assets (whether governmental or proprietary fund types) at historical cost. If actual historical cost is not available, estimated historical cost is used. The cost of a fixed asset includes: (I) the purchase price or construction cost, and (2) any ancillary charges necessary to Place the aS~%t in its intended location and condition for use. Donated .fixed assets are recorded at their estimated, fair value at the time received. The City does not capitalize public domain or infrastructure general fixed assets. These include roads, bridges, curbs and gutters, streets and sidewalks drainage Systems, lighting systems, and s.~ilar assets that are unmovable and of value only to the City. Inventories are established on the basis of a physical inventory and are recognized as expenditures using the purchases method in governmental funds and proprietary funds. Under the pUrchases-method, inventories are recorded as expenditures or expenses when they are acquired,.regardless of when they are.used. Physical inventories are taken periodically, and the inventory balances adjusted to reflect the results of physical counts. This methodology is used for all funds. ! Accounti~ .~Olicy and Procedures  City of Tustin I Depreciation of Fixed Assets Depreciation is a systematic allocation of the net cost (original cost less estimated salvage value) of using an asset over its estimated useful life. Depreciation is used to allocate the cost of a ~ixed asset to the appropriate accountingperiod. The City depreciates all exhaustible fixed assets used by the proprietary fund types and charges the depreciation as an expense against the fund's operations. Accumulated depreciation is report on the fund's balance sheet. No depreciation is provided on the general fixed assets used by the governmental fund types. . . Classification and Terminolog~ The use Of proper terminology and appropriate classification is essential throughout the budgeting,, accounting, and financial reporting process. This is to insure that the entire process is performed on a. consistent basis and will provide comparable financial reports. The City will utilize common terminology and uniform classifications consistently throughout the entire accounting and financial reporting process. The City will use, to the extent'possible, the suggested terminology and classification as recommended by Statement 1. A glossary .of terms used by the NCGAand is an appendix to this manual. Account~:r~Policy and Procedures City of Turn CAFR Reporting Requirements General Fund - Comparative Balance Sheet - Statement of Revenues, Expenditures, and Changes in Fund BaIance - Budget and Actual on Non-GAAP (Cash)'Basis - Comparative Statement of Revenues, Expenditure, and Changes in Fund Balance -'~ special Revenue Funds · - Combining Balance Sheet - Combining Statement of Revenues, Expenditures, and 'Changes in Fund BalanCe - Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual on Non-GAAP Budgetary (Cash) Basis (for each Fund) Debt Service Funds - Combining Balance Sheet - Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Statement of Rev~nues,~Expenditures and Changes in Fund Balance - Budget and Actual on Non-GAAP'Budgetary (Cash) Basis (for each Fund) Capital Project Funds - Combining Balance Sheet - Combining Statement of Revenues, Expenditures and Changes in. Fund Balance - Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual on Non-GAAP Budgetary (CaSh) Basis (for each Fund) - Project-Length Schedule of Construction Projects - All Capital Projects Funds Enterprise Funds - combining Balance Sheet - Combining Statement of Revenue, Expenses and Changes in Retained Earnings - Combining Statement of Change in Financial Position - Schedule of Cash Receipts and Disbursements - RestriCted Accounts Required by Revenue Bond. Ordinance . Accounting _~,licy and Procedures City of Tustin Internal Service Funds - Combining Balance Sheet - Combining Statement of Revenues, Expenses and Changes in Retained Earnings - Combining Statement~ of Changes in Financial Position - Schedule of Cash Receipt and Disbursements - Restricted Accounts Required by Revenue Bond Ordinance Trust and Agen~ Funds - Combining Balance Sheet - Combining Statement of Revenues, Expenses and Changes in Fund Balances - Combining Statement of Changes.in Financial Position General Fixed AsSets Group of Acoounts -.Schedule of General Fixed Assets by Source - Schedule of General Fixed Assets by Function and Activity - Schedule of 'Changes in General Fixed Assets by Function and Activity '~.~ , All Funds - Combined Balance Sheet - Combined Statement'of Revenues, Expenditures and Changes in .Fund Balances - Combined Statement of Revenues,'Expenditures and Changes in Fund Balances - Budget and Actual on Non-GAAP (Cash) Basis - Reports to be provided for CAFR Note: Combining required.only where there is more than one fund in the category. Accounting Policy,and Procedures DRAFT SUBJECT: INVESTMENTS General Objective The general objective of the investment function is to maximize the efficiency of the City's Cash Management System and enhance the economical status of the City while protecting its idle cash. Responsibility The Finance Director/City Treasurer is responsible for the implementation of these procedures and for compliance with the City's current Investment Policy. Cash Flow Requirements The cash flow requirements for all funds of the City that are co- mingled for investment purposes should be evaluated at least annually. The adopted budget shall be the basis of each new analysis. The cash flow analysis will identify possible periods of idle cash and target maturity periods. The cash flow analysis will also be used to identify a target balance that will support some portion of the City's' compensating balances that will offset the monthly bank account service charge. Authorized Deposit Accounts and Depositories As of April 30, 1994, the only authorized accounts and depositories of the City of Tustin are: For the General Fund: Bank of America South Orange County Regional Commercial Banking Office 1458 '3233 Park. Center Drive Costa Mesa, CA 92626 The following, accounts are maintained at Bank of America: ZBA 08400-80200 Activity Account 08408-80220 Payroll 1458-0-20829 Savings 06948-87099 Workers Comp Trust Account 2346-'8-35032 For Health Benefits: E1 Dorado Bank, Tustin Office 17752 E. Seventeenth Street Tustin, CA 92680 Account No. 341020026 Empress Account Deposit: $20,000 Accounting Policy and Procedures City of Tus-tin For the Tustin Community Redevelopment Agency: First Interstate Bank Tustin Office. 1140 Irvine Boulevard Tustin, CA 92680 Checking Account Savings Account No. 240298000 No. 240342971 Inves~nent Procedures All investments of City funds not otherwise restricted by bond indentures, etc., will be governed by the current adopted Investment Policy of the City. See Exhibit . The City of Tustin follows the Prudent Man Rule when makinginvestments and all investment decisions are made using the guidelines of safety, liquidity and then yield. All investments shall be made on delivery vs payment basis only. No funds will be directly transferred to an investment advisor, nor pledged as collateral. Daily Activity: le The Senior Account Clerk will record the previous days banking activity between 7:30-8:00 a.m..by using on line systems for each bank. They will report the current balance for each account to the Finance Director/Treasurer as soon as recorded. (See attached access instructions for Bank of America and First Interstate Bank) · The Finance Director/Treasurer will compare the balance with outstanding checks, cash flow requirements, incoming funds, next warrant run needs, etc. with a predetermined .target bank balance. · If the current balance is in excess of the target balance and other.cash flow commitments are adequately funded, the Finance Director/Treasurer can either transfer excess funds to the State's Local Agency Investment Fund (LAIF). Or, if in accordance with the Investment Policy, capacity is available for alternative, higher yielding investments, the Finance Director/Treasurer may contact Broker/Dealers for quotes on · allowable securities. Care should be taken to analyze the concentration levels for each type of'security at the time an investment is made. · Between 7:30 a.m. and 9:30 a.m. is the time to secure alternative investments. By 9:15 a.m. the decision to transfer or nOt to transfer to LAIF must be made. By 9:30 a.m. the availability of alternative securities will be significantly reduced. Accounting Policy and Procedures Cily of Tustin e Notify LAIF no later than 9:30 a.m. withdrawals· for deposits or Se The current maximum balance allowed by LAIF is $15 million per entity. (The general fund and RDA funds are separate entities each with a $15 million limit) · If LAIF is maxed out and an alternative investment cannot be found, funds should be transferred to the interest bearing savings account. The savings accounts should.only be used for short periods until alternative higher yielding options can be secured or for longer periods for a specific purpose, i.e., collateral deposit for RDA working capital loans.. · · If an alternative investment is found, delivery vs payment instructions are given. See Exhibit for specific instructions based ~on the nature of the security and the proper banks instructions. A journal entry must be written for all investment transactions including, but not limited to, transfers between savings and checking, transfers between checking account and LAIF, purchases and sales of securities, receipt of principal and interest. 10. All daily investment activity must be recorded on the monthly investment report. The detail should be made on the working copy of the previous months report and summarized at month end for the current months report. See exhibit . Weekly Activity: Friday morning (Or Thursday morning due to modified work schedule): · .Review warrant demand list with accounts payable to determine total dollar amount and if any large checks are being picked up by vendors. (Every other Friday ~the net payroll must be added to the warrant demand list to determine appropriate balance. There is zero float on direct deposit payroll.) · Checks must be signed (over $3,000 requires manuaI signature) and mailed by 4:30 p.m. · Complete the check log for specific activity. Note: Separate check log for payroll., direct deposit and regular; general warrants and RDA. The check log is to aid in keeping proper inventory of all checks issued, voided, returned, etc. Care should be taken to ensure that checks are used sequentially and all checks are accounted for. A random physical inventory Accoun~.~ Policy and Procedures · of remaining check stock will be conducted by the Sr. Account Clerk at least twice a year. General warrants are issued weekly; payroll is every Other week and RDA Warrants are issued every other week opposite of the payroll schedule. · Ail on going investment activity such as interest checks; credit advices; purchase information, etc., shall go directly to the Sr. Account Clerk for review. They will identify, initial and forward to the Finance Director. Se A minimum cash balance only should be left in the checking account at any one time, especially long holiday weekends. The necessary balance can be determined by analyzing the outstanding checks~ Monthly: · Both the General and RDA investment activity, sales, purchases, P and I income, etc., must be booked via journal entry and reflected on the current months investment report. The current months activity must be recorded in each investment file. Acknowledgement of monthly investment activity will be identified on bank statements ~nd supported by either a credit advice or the banks safekeeping report. The safekeeping reports provide all the detail necessary to properly book the individual monthly investment activity. The RDA account at First Interstate Bank does not send credit advices during the month. You must use the safekeeping report. Bank of america generally sends out credit advices for principal payments only. But, they are not consistent. The safekeeping report should always be reviewed for additional activity. · A separate journal entry should be prepared for each' individual investment activity as recorded in the bank statement/safekeeping report. A copy of each journal should also be placed in the appropriate investment folder. Use the lotus program, CALC P & I.wk3, to expedite the calculations. (The program is self explanatory and easy to follow). · Accounting Policy and Procedures Cily of Tustin ! The current months investment report must be updated. Each investment identified in the report must reconcile to the sub ledger maintained in the individual investment folders. Activity for LAIF; OCIP; Savings Account; Money Market Accounts and GIC's will be provided by separate statements. This activity should also be recorded by journal entry and reflected on the Investment Report. · A draft Investment Report is prepared and given to the Sr. Account Clerk (Cindy, Lynn) for reconciliation with the general ledger. The draft report should reflect all the investment activity for the month. ® Both safekeeping reports from Bank of America and First Interstate Bank provide current estimated market values for the securities they are holding. Use this information to update the current market values in the Investment Report, Once the Investment Report has been reconciled with the general ledger, make necessary corrections, print-and sign a clean copy. Send the original to the City Manager for the next Council meeting agenda, and file one copy in the current investment file. Annually: The City's Investment Policy should be reviewed by the City's Audit Committee at least annually. The Treasurer should provide input to the Audit Committee during the annual review. But, it is the' responsibility of the Treasurer to bring concerns regarding the investment policy to the Audit Committee at any time, not just during the annual review. a:invstpo[.how"