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HomeMy WebLinkAboutR93-103 financial management policyx Commission moved adoption of the follow ng Resolu ..on: BOARD OF COUNTY COMMISSIONERS COUNTY OF EAGLE, STATE OF COLORADO RESOLUTION NO. 93 - APPROVAL TO ADOPT THE FINANCIAL MANAGEMENT POLICIES FOR EAGLE COUNTY GOVERNMENT WHEREAS, the Board of County Commissioners (hereinafter referred as the "BOCCI') is empowered by the Colorado Revised Statute 30 -11 -107 et. seq. to make such orders concerning the County financial matters, budgetary and otherwise; and WHEREAS, a Financial Management Policies Manual has been finalized (attached and incorporated by reference as Exhibit " A") and submitted for the approval of the BOCC as the guideline to handling financial matters concerning the County; and WHEREAS, the BOCC finds that the Financial Management Policies Manual is appropriate and consistent in its outline as to how financial matters concerning the County shall be managed. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF EAGLE, STATE OF COLORADO: THAT, the BOCC hereby adopts and approves the Financial Management Policies as shown in Exhibit A as the guideline for the policies of financial management for Eagle County for this County Government and said policies shall remain in effect unless and until new policies concerning financial management affairs for the County are adopted by the BOCC. THAT, the BOCC finds that this resolution is necessary for the public health, safety and welfare of the citizens of Eagle County, Colorado. MOVED, READ AND ADOPTED by the Board of County Commissioners of the County of Eagle, State of Colorado, at its regular meeting held the p day of�, 1993. COUNTY OF EAGLE, STATE OF COLORADO, By and Through Its BOARD OF COUNTY COMMISSIONER By: Geotge,A. Gates, Chairman J,ghnnette Philli s, Connyissioner Commissione _ �`j .niy seconded adoption of the foregoing resgduution. The roll h viving been called, the vote was as follows: Commissioner George A. Gates Commissioner Johnnette Phillips Commissioner James E. Johnson, Jr. This Resolution passed by (3 vote of the Board of County Commissioners of the County of Eagle, State of Colorado. a \financre.res County Commissioners a EAGLE COUNTY GOVERNMENT Financial Management Policies I. INTRODUCTION A. Preface The purpose of this manual is to formalize the Board of County Commissioners policy direction regarding financial manage- ment in order to facilitate communications between and amongst the various elected and appointed officials. B. Ethics The Board of County Commissioners is committed to the high- est standards of conduct in the performance of their public duties. Since individual and collective adherence to high ethi- cal standards by public officials is central to the maintenance of public trust and confidence in government, the Board expects all elected officials, appointed officials, and employees to apply the following principals when conducting County business. o Promote decisions which benefit the public interest. o Actively promote public confidence in Eagle County Government. o Faithfully comply with all laws, regulations, and policies applicable to the County and impartially apply them to everyone. o Effectively manage all funds and assets of the County. o Maintain a respectful attitude toward members of the public, employees, other public officials, colleagues, and associates. o Cooperate effectively with other governmental agencies, po- litical subdivisions, and all other organizations in order to further the public interest of the County. o Engage only in outside interests which are compatible with the impartial and objective performance of public duties; any activities which may not be compatible regarding a specific duty or issue should be dis- closed immediately. o Never influence or attempt to influence other officials or employees to act improperly. Refer to the "Eagle County Employee Handbook" for a more detailed discussion of standards of conduct and conflicts of interest. J A EAGLE COUNTY GOVERNMENT Financial Management Policies II. ORGANIZATION & RESPONSIBILITIES A. Organizational Basis Legally, the County is an extension of State government. The State legislature promulgates a significant number of stat- utes and the executive branch imposes regulations affecting County government. Many of these statutes and regulations either specifically establish county policy or limit the Commissioners flexibility in establishing county policy. B. Board of County Commissioners The Board of County Commissioners establishes the financial policies of the County. The Board reviews and revises County management policies at least annually. The Board of County Commissioners believes that all County offi- cials will derive significant benefits from adherence to these Financial Policies. The Board believes that this financial pol- icy manual is consistent with the requirements of the "Local Gov- ernment Budget & Accounting Laws" (part 1,5,6 article 1 of title 29, C.R.S.) The Board authorizes the County Manager to take any and all nec- essary disciplinary actions to assure compliance with these poli- cies by Department Heads. The Board requires that the County Manager inform the Board regarding noncompliance with these poli- cies by Elected Officials. C. County Manager The County Manager serves at the pleasure of the Board of County Commissioners.. The County Manager is generally responsi- ble for providing administrative support to the Board, and for providing direction and interpretation of Board policies to the County Departments /Offices. The County Manager is directed by the Board of County ers to oversee the execution of the Financial Policies lished by the Board. Additionally, the County Manager nated as the official "Budget officer" by the Board of Commissioners. Commission - estab - is desig- County 2 EAGLE COUNTY GOVERNMENT Financial Management Policies D. Finance Director The Finance Director, appointed by the County Manager, is responsible for providing administrative and operational support, control and direction for the management of the County's finances. The Finance Director is directed by the County Manager to develop all appropriate procedures and practices necessary to implement the Financial Policies established by the Board of County Commis- sioners. In establishing procedures and practices, the Finance Director must comply with Generally Accepted Accounting Princi- ples, direction from the external auditor, direction from the State Auditor, direction from the State Department of Local Affairs, various cognizant agencies, and all relevant State stat- utes. K EAGLE COUNTY GOVERNMENT Financial Management Policies III. BUDGET A. Budget Preparation Philosophy The Board of County Commissioners' short and long term goals are the cornerstone of the budget. The budget is a financial plan which attempts to diversify revenues and minimize expenditures consistent with maintaining routine services and capital invest- ments. Tools used include Detail Budget Proposals, Long Range Financial Projections, and the Capital Improvements Plan. The budget will be prepared using the modified accrual basis of accounting. The Finance Department will be responsible for preparing annually and issuing to Department Heads and Elected Officials a budget preparation guide which shall include specific Board policy and detail procedures for preparing each year's budget. Balancing Guidelines Each fund is balanced separately. Subsidies (transfers) between funds require Board approval. Unless specifically authorized by the Board, expenditures will be equal to or less than the reve- nues for each fund. Long Range Financial Projections are pre- pared for major funds to assure that impacts of the proposed bud- get are fiscally sound in future years. Contingency Reserves The County has a separate Contingency Fund which can only be used for unforeseen "emergencies ". Individual departments /offices will not budget contingency funds. Each year's budget will con- tain contingency funds as deemed appropriate by the Board. Additionally, the Emergency Reserve Fund required under Amendment 1 will be funded as required in the amendment. However, due to the severe restrictions on the use of those funds, it is highly unlikely that any spending will occur from this Fund. Fund Balances Each fund will maintain sufficient unappropriated funds to assure adequate cash for working capital, bond ratings, and catastrophe reserves. 4 EAGLE COUNTY GOVERNMENT Financial Management Policies B. Budget Administration Philosophy Once the Board of County Commissioners adopts the proposed bud- get, the Finance Director enters the budget (now a financial plan) into the automated accounting system. The accounting sys- tem then becomes the major tool for monitoring financial status. Throughout the year, Department Heads and Elected Officials regu- larly review results by comparing actual expenditures and reve- nues to the budget. Whenever expenditures or revenues differ from the budget, the Department Head or Elected Official prepares and presents corrective action plans to the Finance Director for consolidation and presentation to the Board for approval. This continuous monitoring and correction of the financial plan assures flexible and responsive provision of services. Definition An appropriation is the authority to spend funds as determined by the Board in the budget appropriation resolution. A supplemental appropriation is the authority to spend funds in addition to those authorized in the budget appropriation resolution; the additional spending must be formally approved by the Board using a supplemental appropriation resolution. Amendment 1 sets specific revenue and spending limits for each budget year. The Board can not exceed those limits without spe- cific voter approval at a November election. Therefore, even when additional revenues may be available to support additional spending, the Board may be unable to approve changes to the bud- get due to the limits established by Amendment 1. Responsibilities Department Heads and Elected Officials are responsible for manag- ing their expenditures (at the "line item" level) within the appropriation authorized. If a Department Head or Elected Offi- cial determines a need for additional appropriation or to rear- range appropriations between line items, that Department Head or Elected Official should document and forward the request to the Finance Director immediately. The Finance Director will normally process "Appropriation Change Requests" from January thru July each year. During August thru December, any desired changes need to be handled in the "revised budget" portion of the budget prep- aration process. Any appropriation change request which creates an interagency, interfund, or supplemental type of request must be published in the newspaper and formally accepted by resolution of the Board at a public hearing; due to this adminstrative pro- cess the Finance Director will hold and process these types of requests on a periodic basis (typically, March, July, and Decem- ber). 9 EAGLE COUNTY GOVERNMENT Financial Management Policies The Finance Director is responsible for assisting Department Heads and Elected Officials in the preparation of appropriation change requests and in the presentation of those request to the County Manager and Board. Also, the Finance Director will initi- ate a "Carry Forward Supplemental" process at the beginning of each fiscal year. "Carry Forwards" are usually restricted to Major or Operating Capital projects; carry forwards for routine operating expenses may be requested but require very strong jus- tification and extenuating circumstances. The County Manager, as County Budget Officer, is responsible for reviewing all appropriation requests. By statute, the Board of County Commissioners has responsibility and authority for the final approval of all appropriations. 0 } EAGLE COUNTY GOVERNMENT Financial Management Policies IV. ACCOUNTING PRACTICES A. Accounting Basis The County will maintain adequate systems for collecting, controlling, recording, and reporting both revenues and expenses using the modified accrual basis of generally accepted accounting principles and providing full compliance with both State and Fed- eral laws and regulations. B. Fund Accounting The County uses Fund accounting to segregate monies based on designated use. Fund accounting provides the capability to man- age and control the expenditure of designated revenues. The fol- lowing brief definitions should help readers to better understand Fund accounting. General Fund The general fund is a single fund and is used to support all gen- eral government operations. It supports all administrative func- tions, the Assessor, Clerk, Treasurer, Community Development, Engineering, Sheriff, etc. Revenues to this fund are generated by property taxes, sales taxes, fees, and intergovernmental reve- nue. Special Revenue Funds This class of fund is used to account for specific revenue sources which are restricted to expenditures for specific pur- poses. The County currently has ten funds of this type; Road & Bridge Fund, Social Services Fund, Retirement Fund, Contingency Reserve Fund, Insurance Reserve Fund, Offsite Road Improvement Fund, Capital Improvements Fund, Airport Fund, Emergency Reserve Fund (Amendment 1) and Conservation Trust Fund. These funds sup- port very specific functions as indicated by the fund title. Revenues to these funds are generated in varying degrees by prop- erty taxes, sales taxes, fees, and intergovernmental revenue. Debt Service Funds This class of funds is used to account for those monies which are being accumulated for long term principal and interest debt pay- ments. The County currently has three debt service funds; County Debt Service, Bond Reserve, and Local Improvement District Debt Service. Capital Proiects Funds This class of funds accounts for the acquisition or construction of major infrastructure, facilities, and equipment. Enterprise Funds This class of funds is used to account for functions which oper- ate in a manner similar to a private business. The County cur- rently has one enterprise fund; the Landfill Fund. 7 EAGLE COUNTY GOVERNMENT Financial Management Policies Trust & Agency Funds This class of funds is used to account for assets held by the County in a trustee capacity or as an agent for individuals, pri- vate organizations, other governments, and /or other Funds; these funds may be expendable and non - expendable. The County currently has one Trust & Agency Fund, the E911 fund. There is no require- ment to budget trust and agency funds. The Treasurer's Office also maintains a special Collateral Fund as a Trust & Agency Fund on her "books" only. Internal Service Funds This class of funds is used to account for resources used by cen- tralized internal service functions. Currently, the County has two Internal Service Funds; the Motor Pool Fund and the Health Insurance Fund. These funds support very specific functions as indicated by the fund title. Revenues are generated totally by charging other Funds for services provided. C. Year -end Closings Each year the Finance Department shall establish "cut- offs" for processing purchases in order to facilitate timely "clos- ings". The Finance Department is responsible for preparing three closing reports each year; cash basis, budget basis, and final audited. The "cash basis" closing report is the least "accurate" of the 3 closing reports; it simply reflects the status as of December 31st with no adjustments. In most cases, revenues reflect receipts thru 12/31 and expenditures reflect items vouchered thru 12/15. Although this report can not be used to make overall judgements regarding ending position or bud- get performance, it is useful since it can provide prelimi- nary indication of problems. The "budget basis" closing report is probably the most use- ful for "lay" individuals and will be produced around the end of March or the beginning of April. This report re- flects revenue receipts thru 12/31, expenditures vouchered thru 12/31, and adjustments (accruals) as included in the budget. This report can be used to make overall judgements regarding ending position or budget performance. The "final audited" closing report is the most technical re- port and is produced after the auditor's have completed their offical audit of the County's financial report. This report reflects all prior year activity including the "ac- counting" accruals. This report can be used to make overall judgements regarding ending position but can not be used very easily to evaluate budget performance. M EAGLE COUNTY GOVERNMENT Financial Management Policies D. Reporting The Finance Department will produce and distribute monthly activity reports of both expenses and revenues to each depart- ment /office. Each Department Head and Elected Official is responsible for quality assurance review of these reports. The Finance Department will produce summary and exception reports for the County Manager and Board of County Commissioners. Each Department Head and Elected Official is responsible for pro- viding regular status reports to the County Manager. Also, each Department Head or Elected Official responsible for major proj- ects may be required to provide project status reports to the County Manager. E. Controls /Audits The Finance Department will be responsible for producing and distributing both the Annual Financial Statements and the associ- ated Audit Management Letters. The Finance department will be responsible for coordinating with Department Heads and Elected Officials to correct any deficiencies noted by the external audi- tors. The Finance Department will also establish appropriate internal controls for all County financial transactions. Special internal audits will be performed by the Finance Department on a regular basis; these will include audits for adequate "back -up" docu- ments, cash drawer balances, proper account coding (for both expenses and revenues), receivables audits, payable audits, fixed asset audits, etc. In addition to internal controls, the County uses the following three methods for external review of records, practices, and pol- icies. • The Board of County Commissioners employs a Certified Pub- lic Accounting firm to audit the accounting process on an annual basis. The Board of County Commissioners requires that the external auditor be changed every four years us- ing a bid process every four years (starting with 1995 au- dit); the Finance Department will assist in evaluating and selecting the external auditor only as directed by the Board of County Commissioners. • The County submits audited Financial Statements to the State Auditor's Office for review and comment. o The County submits the Official Budget Book to the State Department of Local Affairs for review and comment. E EAGLE COUNTY GOVERNMENT Financial Management Policies F. Special Functions Interfund or interdepartmental charges will normally be pro- cessed by voucher. Charges between departments /offices within a fund will generally NOT be done unless there is a compelling financial reason. Such reasons shall include the need to allocate expenses for grant reimbursements, State program reimbursements, or any other need related to the collection of revenues. Charges between funds will generally be done unless there is a compelling financial reason not to. o Motor Pool Charges from the Motor Pool will be processed monthly using a voucher. A detail usage report will be provided to each department /office throughout the year. The Motor Pool is responsible for preparing rates based on projections of equipment replacement and equipment maintenance costs. Each department using equipment from the Motor Pool must budget for the expense as either light vehicle expense or the heavy equipment expense. o Road & Bridge Charges for services provided by Road & Bridge to other funds, primarily Airport and Buildings & Grounds will be treated as contract services. Road & Bridge, as service provider, should budget these revenues and the service re- ceivers should budget the expense as contract services. o Central Copy Machines Copy machines are supported centrally from the General Fund. Use of copy machines by non - General Fund departments will be charged to those funds. Currently, the Social Services fund is an example of these charges. In addition, certain Gener- al Fund programs will be charged since their grant reim- bursements are designed to cover these costs. o Mail Room Central postage is supported from the General Fund. Postage provided for non - General Fund departments will be charged to those funds. Currently, the Social Services fund is an ex- ample of these charges. In addition, certain General Fund programs will be charged since their grants and reimburse- ments are designed to cover these costs. 10 EAGLE COUNTY GOVERNMENT Financial Management Policies o Central Stores Standard office supplies are supported by the Central Stores operation in the General Fund. Office supplies provided to non - General Fund departments will be charged to those funds. In addition, certain General Fund programs will be charged since their grants and reimbursements are designed to cover these costs. The Finance Department shall establish ade- quate operating policy and procedures necessary to effec- tively run the Central Stores function. o Equipment Center The Equipment Center is funded in the General Fund and is designed to provide "special purpose" equipment to all de- partments on a limited basis. Individual departments /of- fices will not be charged for these services. The Finance Department shall establish adequate operating policy and procedures necessary to effectively run the Equipment Cen- ter. o Computer Repairs & Maintenance The Data Processing department will budget funds to provide a "spare parts" inventory for both central computers and professional computers, and to cover repair & maintenance costs for all General Fund departments /offices. While the "spare parts" inventory will be made available to all other Funds on a "loaner" basis, other Funds should budget for their repair & maintenance costs. o Computer Supplies Diskettes and printer ribbons will be funded in the Central Stores budget and will be handled like office supplies. "Stock" computer paper will be funded in the Data Processing budget for General Fund. Stock computer paper provided to non - General Fund departments will be charged to those funds. o Professional Computer Software General purpose computer software will be budgeted in the Data Processing department (General Fund). Professional computer software provided for non - General Fund departments will be charged to those funds. In addition, certain Gen- eral Fund programs will be charged since their grant reim- bursements are designed to cover these costs. Data Process- ing will provide cost estimates and coordinate purchasing. o Professional Computer Hardware The Data Processing department will coordinate the purchase of all professional computer equipment. Data Processing will provide cost estimates and coordinate purchasing. 11 EAGLE COUNTY GOVERNMENT Financial Management Policies V. EXPENDITURE MANAGEMENT A. Policy The County will maintain an aggressive policy of expenditure management. Department Heads and Elected Officials must monitor actual expenditures versus budget appropriation for each requested payment and are responsible for assuring that spending does not exceed budget authorization. B. Delegation of Authority Each Department Head or Elected Official may delegate authority to staff for the approval of financial transactions; however, such delegation does not relieve the Department Head or Elected Official of responsibility for financial management. As part of the internal control system, the Finance Department shall maintain a signature authorization procedure for the following financial transactions -- Petty Cash, Payroll Timesheets, Pur- chase Requisitions /Orders, Vouchers, Appropriation Changes, and Expenditure Corrections. C. Payments to Vendors All payments to vendors for services or goods will be made using the central accounting system. Receiving documents or vouchers will be presented by the initiating department /office to the Finance Department for payment. The Finance Department will return any request for payment which does not have adequate sup- porting documents, causes the budgeted "line item" to go "over" budget, does not have adequate authorization, is not classified correctly, or does not meet any other internal control standards. The Finance Department will provide a "handcheck" process for emergency spending. All requested "handchecks" of less than $10,000 must be approved by the Finance Director and greater than $10,000 must be approved by the County Manager. The "handcheck" activity will be reported to the County Manager at least quar- terly for remedial management action. The County Manager will review and publish payments to vendors as required by statute and as authorized by the Board as part of their regular "consent" agenda. D. Payroll The payroll function will be split between Human Resources and Accounting. Human Resources shall be responsible for maintaining all employee information, including benefit programs /options and wage rates. 12 3 l J EAGLE COUNTY GOVERNMENT Financial Management Policies Accounting shall be responsible for verification of submitted time sheets and the actual processing of the payroll, including Federal and State tax filings. All departments /offices shall submit individual employee time records signed by the employee and the appropriate department /office official. The County Manager will review and publish payroll data as required by statute and as authorized by the Board as part of their regular "consent" agenda. E. Purchasing Purchasing Authority There is no central purchasing function at the County. The fol- lowing departments provide purchasing services: MOTOR POOL is responsible for the purchase of all vehicles and heavy equipment (excluding the Airport equipment). BUILDINGS & GROUNDS is responsible for the purchase of all furni- ture and fixtures for County facilities, for managing all capital projects related to buildings and grounds (excluding the Airport), and for managing property and casualty insur ance programs. The AIRPORT is responsible for purchasing its own equipment and facilities. The HUMAN RESOURCES Department is responsible for purchasing all employee benefit programs. The FINANCE Department provides purchasing of office /operating supplies, copiers, and computer equipment. Individual departments /offices perform their own purchasing activities for all other types of goods and services. Bids & Quotations Any capital item costing more than $10,000 must be formally bid; items costing less than $10,000 should be at least price com- pared. Any operating item costing more than.$5,000 must be formally bid; items costing less than $5,000 should be at least price compared. Unless a particular form of bid is required by statute, grant requirements, contracts, etc., the Board authorizes any of the following forms of "bid" processes; Sealed Bid, Request For Pro- posal (RFP), Request For Information (RFI), Request For Quotation (RFQ), Request For Negotiations (RFN), Sole Source, and State Bid. The Finance Department shall be responsible for developing procedures regarding the appropriate use of each authorized form. 13 n f EAGLE COUNTY GOVERNMENT Financial Management Policies The evaluation criteria for all bids /quotations shall include at least the following factors; price (cost), adherence to specifi- cations, availability /delivery, support, reliability /capability of vendor. Additionally, when there is no material difference between bids /quotation, local vendors shall be given preference. Note: bid requirements may be bypassed due to emergencies; the Finance Director will review and approve /deny all such requests. The Department Head or Elected Official responsible for any bid process will prepare a formal recommendation for the award requesting authorization from the Board (normally, as part of their regular "consent" agenda). Purchase Approvals All purchases must be based on budgeted appropriations. All departments /offices are required to use the purchase requisi- ton /order procedures in the following situations. Vendor requires an order form or other written order. Vendor requires confirmation of an order. All purchases of capital items; capital items are assets where the County gains full title, cost is greater than $500, and life expectancy is greater than one year. Items between $500 and $10,000 will be reviewed and authorized by the Finance Director; items greater than $10,000 will be reviewed and authorized by the County Manager. Purchases of operating items where the cost exceeds $5,000. Items between $5,000 and $10,000 will be reviewed and authorized by the Finance Director; items greater than $10,000 will be reviewed and autho- rized by the County Manager. NOTE: Authorizations required for Finance Department trans- actions will be completed by the County Manager. Receiving & Inspection All County supplies, materials, and equipment are to be shipped to and received at a County facility. Items purchased with County funds shall not be directed (shipped) to any employee's or official's personal residence or business. 14 EAGLE COUNTY GOVERNMENT Financial Management Policies The receiving department /office shall inspect all goods in a timely manner to assure that they are in conformance with the order. Any goods not in compliance with the order (such as dam- aged goods, unacceptable quality, incorrect quantity, missing parts, etc.) shall be returned or resolved with the vendor imme- diately. F. Credit Cards The County Manager's Office shall be responsible for the control and managment of County Credit Cards. Credit cards will be provided to Department Heads, Elected Officials, and other authorized staff. Each credit card issued will have a spending limit of $1,000. Credit cards will only be used for expenses directly resulting from the conduct of official County business; any personal use will result in repossession of the card and appropriate disciplinary action by the County Manager. G. Telephone Calling Cards The Buildings & Grounds Department shall be responsible for the control and managment of County Telephone Calling Cards. Telephone Calling Cards will be provided to Department Heads, Elected Officials, and other authorized staff. Telephone Calling Cards will only be used for expenses directly resulting from the conduct of official County business; any personal use will result in repossession of the card and appropriate disciplinary action by the County Manager. H. Cash Advances Cash advances will only be provided for expenses directly related to the conduct of official County business. I. Refunds Normally, refunds will be processed by warrant against the revenue account where the funds were originally deposited. Final determination shall be made by the Finance Department. J. Petty Cash The Finance Department will authorize "cash drawers" for County departments /offices as required and in sufficient amounts to conduct public business. It is the responsibility of each Department Head or Elected Official authorized a "cash drawer" to balance cash regularly and retain sufficient documentation to fully explain the basis and nature of each transaction. The Finance Department will maintain a "petty cash" check system to provide for emergency spending needs of less than $1,000 (reg- ular "handchecks" will be used for larger dollar amounts) as approved by the Finance Director. "Petty cash" checks will be charged to the requesting department /office. The - "petty cash" check system activity will be reported to the County Manager at 15 least quarterly for remedial management action. EAGLE COUNTY GOVERNMENT Financial Management Policies K. Expenditure Corrections Due to the volume of transactions processed by the County, data preparation and /or entry errors may occur and result in the misposting of an expense. Each Department Head or Elected Offi- cial is responsible for review and identification of such errors within his /her area of responsibility. The Finance Department is responsible for validating and coordinating the correction of all such errors. The Finance Department shall establish procedures as deemed necessary to effectively perform such corrections. 16 5 1 EAGLE COUNTY GOVERNMENT Financial Management Policies VI. REVENUE MANAGEMENT A. Policy The County will follow a policy of prompt and efficient col- lection of taxes, fees, and other revenues. The Finance Depart- ment and the Treasurer's office will coordinate in the develop- ment of adequate deposit procedures for County Departments. B. Collection Functions The Finance Department and Treasurer's Office shall coordi- nate collection functions which shall include, but not be limited to, use of collection agencies, short check fees, late payment charges, interest charges, etc. C. Sources & Distribution The Finance Department shall be responsible for analyzing the elasticity /diversity of the revenue stream and for determina- tion of distribution to Funds. 17 EAGLE COUNTY GOVERNMENT Financial Management Policies VII. INSURANCE & RISR MANAGEMENT The Buildings & Grounds Manager shall appoint a "Risk Man- ager". The "Risk Manager" is reponsible for developing and main- taining the operating policies and procedures for the administra- tion of the insurance and risk management programs. The "Risk Manager" will maintain adequate systems for preventing, controlling, recording, and reporting all property & casualty insurance and workers compensation insurance matters. The "Risk Manager" shall supervise the loss control and safety programs to minimize losses and maximize employee safety awareness. All insurance claims will be administered by the "Risk Manager "; the County Attorney's Office may be delegated claims management responsibility for major liability insurance claims, property losses, or claims involving death or serious bodily injury. The insurance /risk management programs will be reviewed at least annually; insurance services shall be bid at least every five years. W: J EAGLE COUNTY GOVERNMENT Financial Management Policies VIII. PERSONNEL ADMINISTRATION A. Policy The Human Resources Department will maintain adequate sys- tems for controlling, recording, and reporting information related to employee management. B. Employment Policies & Procedures Employment policies and procedures shall be developed, implemented, and coordinated by the Human Resources Department. The "Eagle County Employee Handbook" shall include the policies and procedures for the administration of the wage and benefit systems. The handbook shall also contain conditions of employ- ment to include provisions related to appointment, promotion, transfer, disciplinary actions, layoff, and dismissal. C. Benefit Programs Employee benefit programs, such as health insurance, life insurance, retirement, long term disability, etc., shall be administered by the Human Resources Department. The Human Resources Director shall review and submit recommendations regarding the employee benefit programs in conjunction with the annual budget preparation process. D. Compensation Programs The Human Resources Department is responsible for the man- agement and administration of the compensation (wages) program, including market competitiveness and the merit (performance) sys- tem. Market studies shall be performed annually by the Human Resources Department; complete evaluation of the effect of Market changes on the classification system will be done at least every five years. Annually, as part of the budget preparation process, the Human Resources Department shall coordinate with the Finance Department for the development and use "wage and benefit projec- tion systems" to facilitate the accuracy of personal services budgets. Additionally, wage and benefit turnover salvage reports shall be prepared and submitted to the County Manager on a monthly basis. Complete merit system performance reports shall be prepared and submitted to the County Manager on a quarterly basis. E. Training Programs Annually, the Human Resources Department will develop and coordinate County wide training programs based on budgeted fund- ing and specific needs analysis of training requirements. Reports regarding implementation /effectiveness of training pro- grams will be prepared and submitted to the County Manager at least quarterly. 19 M1ry EAGLE COUNTY GOVERNMENT Financial Management Policies F. Retention /Recruitment Programs Retention programs require the analysis of the causes and factors resulting in employee turnover. The Human Resources department shall develop and maintain adequate recruitment/selec - tion procedures and strategies to assure the availability of com- petent candidates. Reports regarding implementation/effective- ness of retention /recruitment programs will be prepared and sub- mitted to the County Manager at least quarterly. EAGLE COUNTY GOVERNMENT Financial Management Policies IX. BANKING /INVESTMENT MANAGEMENT A. Policy The Treasurer's Office will maintain adequate systems for controlling, recording, and reporting all banking and investment programs. The Treasurer, by delegation of the Board pursuant to C.R.S. 30 -10- 708(1), is responsible for all investment decisions, activities, and procedures. Nothing herein shall relieve the Treasurer from the obligations and duties of the Treasurer's Office under C.R.S. 30 -19 -701 et seq.. These programs will be reviewed at least annually. B. Debt Reserves Debt reserves are established either by the Board for spe- cific purposes or to protect bondholders from payment defaults. Adequate debt reserves are essential for maintaining bond ratings and marketability. The amount of each bond reserve is estab- lished by bond ordinance for each bond issuance. C. Banks & Dealers Banking agreements (for warrant processing) will be evalu- ated at least every three years. Depositories shall be selected through the Treasurer's procurement process. In selecting depos- itories, the Treasurer shall consider institutional creditworthi- ness and their ability to collateralize such deposits. Invest- ment dealers must provide adequate proof of creditworthiness and their ability to collateralize such transactions. A capitaliza- tion analysis may be used to assist the Treasurer in determining the financial ability of any institution or dealer to conduct public business. Eligible Depositories The following institutions are designated as eligible depos- itories for any and all County funds: o All state and national banks having their principle of- fices in Colorado which are insured by the Federal Deposit Insurance Corporation (FDIC), or its successor, and which meet all federal and state statutory requirements regarding County deposits as legal depositories for the County of Ea- gle, State of Colorado, in accordance with C.R.S. 24 -75 -603 and 30 -10 -708, as amended. o All state and federally chartered savings and loan asso- ciations having their principle offices in Colorado which are insured by the Federal Savings & Loan Insurance Corpora- tion (FSLIC), or its successor, and which meet all federal and state statutory requirements regarding County deposits as legal depositories for the County of Eagle, State of Col - 21 r , orado, in accordance with C.R.S. 24 -75 -603 and 30 -10 -708, as amended. EAGLE COUNTY GOVERNMENT Financial Management Policies The following are designated as eligible brokers /dealers for governmental securities transactions allowed under law: o Securities dealers and banks which are designated as re- porting dealers by the Federal Reserve Bank of New York (primary dealers). o National and state banks which have their principle of- fices in Colorado. D. Investment Practices The first priority for use of excess funds shall be to main- tain adequate reserves in highly liquid form. When evaluating the best use of excess funds generated by cash flow or fund bal- ance, both investment opportunities and debt retirement will be considered. Internal Controls The Treasurer has created written internal control proce- dures, which must be reviewed annually by the independent auditor. These controls shall be designed to prevent loss of public funds due to fraud, employee error, misrepresenta- tion by third parties, unanticipated market changes, or im- prudent actions by County employees. Ethics and Conflicts of Interest Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution of the investment program or which could impair their ability to make impartial in- vestment decisions. Officers and employees involved in the investment process shall disclose to the Board any material financial interest in financial institutions that conduct business with the County and they shall further disclose any large personal financial /investment positions which could be related to the performance of the County's portfolio. Addi- tionally, they will subordinate their personal investment actions to those of the County, particularly with regard to timing of purchases and sales. Delegation of Authority The Treasurer may designate an investment officer to be re- sponsible for the investment decisions /activities on a day to day basis. Any such delegation requires that the invest- ment officer shall comply fully with these policies and any procedures as designated by the Treasurer. 22 } EAGLE COUNTY GOVERNMENT Financial Management Policies Decision Making Criteria o The investment portfolio shall be managed in a manner to attain a market rate of return throughout budgetary and eco- nomic cycles while preserving and protecting capital in the overall portfolio. In order of their priority, the three criteria used to judge the viability of any investment are (1) safety, (2) liquidity (duration of use), and (3) yield (rate of return). Liquidity Strategies o Assets shall be invested in instruments whose weighted maturity average ensures reasonable liquidity. o The County shall diversify its portfolio. Cash and in- vestments shall be diversified by maturity, issuer, and class of securities. Risk Strategies o The County recognizes that investment risks can result from issuer defaults, market price changes, and various technical complications. No individual transaction shall be undertaken which jeopardizes the portfolio's total capital position. If default by a specific issuer occurs or if oth- er negative factors occur, the Treasurer shall review, and, if apropriate, proceed to liquidate securities of comparable credit risk. o To protect against potential fraud and embezzlement, County assets shall be secured through third -party custody and safekeeping procedures. Bearer instruments shall be held only through third -party institutions. Investment of- ficials shall be bonded to protect the public against possi- ble embezzlement and malfeasance. Collaterlized securities such as repurchase agreements shall be purchased using the delivery vs payment procedure. Eligible Instruments The following are the eligible investments for County excess funds: o Treasury Bills, Notes, and Bonds issued by the United States Government with a maximum maturity of five years in accordance with C.R.S. 24 -75- 601.1. o Written repurchase agreements, collateralized by U.S.. Treasury obligations with a maximum maturity of one year, made in compliance with C.R.S. 24- 75- 601.1(1)(j) and other applicable law. 23 1' EAGLE COUNTY GOVERNMENT Financial Management Policies o Any money market fund that meets the criteria set forth in C.R.S. 24- 75- 601.1(1)(k), and in addition, the invest- ments of the money market fund must consist solely of U.S. Treasury obligations as noted above. o Time certificates of deposits or interest bearing ac- counts in any eligible bank or institution as defined in section C. o Commercial paper, as defined herein, that at the time of purchase, is rated in its highest rating category by one or more nationally recognized organizations which regularly rate such obligations, in accordance with C.R.S. 24 -75 -601.1 o The County Treasurer may invest any excess County funds, pursuant to a resolution duly adopted by the Board in accor- dance with C.R.S. 24 -75 -701 et seq., in a local government investment pool trust. Any such participation in a local government pool trust shall follow all procedures and re- strictions in C.R.S. 24 -75 -701 et seq., and any additional procedures and restrictions provided as follows: Any local government investment pool trust created pursuant to C.R.S. 24 -75 -701 et seq., must be ap- proved by the Board, in writing, before the Trea- surer may invest County excess funds in such a trust. Additionally, the Treasurer may not invest any County excess funds in an approved local gov- ernment investment pool trust unless such a trust places discretion as to administration, invest- ment, and transfer of funds in separate individu- als. o Other investments as the Board may authorize in writing. Reporting The Treasurer shall prepare and submit to the Board an investment report on a quarterly basis and annually. Definitions CERTIFICATE OF DEPOSIT means a receipt from a commercial bank or a savings institution that promises to repay princi- pal plus interest on which are left on depost for a particu- lar period of time. COMMERCIAL PAPER means short term, unsecured promissory notes. 24 EAGLE COUNTY GOVERNMENT Financial Management Policies COUNTY FUNDS means any and all funds and monies of whatever kind, that come into the Treasurer's possession by virtue of her office and in her name as such Treasurer, that she is authorized to deposit pursuant to C.R.S. 30 -10 -708 and 11 -47 -101 et seq., as amended. COUNTY EXCESS FUNDS means any funds in the County treasury, under the control of the County Treasurer, that are not im- mediately required to be disbursed. REPURCHASE AGREEMENTS means short -term investments involving sales of securities subject to repurchase for which maturi- ties range from 1 to 90 days, and the minimum investment is $100,000. TREASURY BILLS, NOTES AND BONDS means obligations of the U.S. Treasury which are sold at a discount and repaid at, face value upon maturity. 25 EAGLE COUNTY GOVERNMENT Financial Management Policies X. DEBT The Finance Department will maintain adequate systems for controlling, recording, and reporting necessary to properly man- age all debt; this includes both County originated debt and Local Improvement District originated debt. Debt management shall include bonded debt, lease purchases, certificates of participa- tion, and any other forms of debt. These programs will be reviewed at least annually. The Board directs that the use of debt be limited to major capi- tal projects, generally greater than $1,000,000 in cost. The Board also directs the Finance Director to evaluate all requests to incur debt and to make recommendation regarding the effects of approval on the County's overall financial position. The Finance Director shall maintain communications with financial consultants, underwriters, bond rating agencies, paying agents, etc, regarding the County's debt structure. Ordinarily, the County incurs debt in one of three forms: GENERAL OBLIGATION BONDS General obligation bonds represent a commitment to fund debt ser- vice payments from property taxes, and as such, require voter approval in addition to Board approval. REVENUE BONDS Revenue bonds represent a commitment to fund debt service pay- ments from a specific non property tax revenue source (such as sales tax) and require voter approval in addition to Board approval. LEASE /PURCHASE AGREEMENTS Lease /purchase agreements represent a general commitment to fund payments from County revenues. Lease /purchase agreements may also require voter approval under Amendment 1. 26 EAGLE COUNTY GOVERNMENT Financial Management Policies XI. FIXED ASSET MANAGEMENT A. Capitalization Policy All assets acquired and owned by the County having a value of $500 or more and a life expectancy of greater than one year shall be considered a fixed asset by the Finance Department. B. Care of Assets Department Heads and Elected Officials are responsible for the care of all County assets in their department /office. Annu- ally, the Finance department will request that each Department Head and Elected Official take a physical inventory of all fixed assets within their department as identified in the County finan- cial records; the Finance Department will "audit" the asset inventories of selected departments /offices. The Motor Pool will develop and maintain operating policies and procedures to ensure adequate care of all vehicles and heavy equipment. C. Disposal of Assets Surplus items which are not included as fixed assets shall be forwarded to the Buildings & Grounds Department for disposal. The Buildings & Grounds Department may advertise and sell these items informally. Surplus items which are included as fixed assets shall be for- warded to the Buildings & Grounds Department for disposal. The Buildings & Grounds Department must use the formal process statu- torily required for the disposal of fixed assets. Each Depart- ment Head or Elected Official releasing surplus fixed assets must notify the Finance Department of asset numbers of the affected items. Prior to advertising the sale of any assets, the Buildings & Grounds Department shall circulate a list of the items to each Department Head and Elected Official. Any Department Head or Elected Official having a use for any such items may obtain them by requesting an asset transfer. D. Commodities Certain commodities, such as gasoline and gravel, will not be expensed when purchased but will be treated as assets. These commodities will be expensed when actually consumed. The Finance Department shall be responsible for determining which commodities are treated in this manner. 27 EAGLE COUNTY GOVERNMENT Financial Management Policies XII. CONTRACT REQUIREMENTS All purchases must be based on budgeted appropriations. All departments /offices are required to use written agreements (con - tracts).in the following situations. Intergovernmental arrangements. Property leases. Grants Purchases of personnel services. vendor requires written contract. All purchases of capital items; capital items are assets where the County gains full title, cost is greater than $500, and life expectancy is greater than one year. Purchases of operating items where the cost exceeds $5,000. If there is any doubt regarding the need for a formal agreement (contract), contact the Attorney's Office for guidance and direc- tion. The Attorney's Office will provide guidance regarding the "terms and conditions" required for agreements (contracts). When pur- chases of services or non - standard commodities are made, perfor- mance based contracting will be required. Performance based con- tracting means that the contract will associate payment(s) to specific tangible performance by the vendor; typically, there will be a schedule of specific results (tangible products) that will be paid for when the County accepts those results as com- plete and adequate. Some examples of vendor contracts which do not provide for performance based contracting are as follows: o Software vendors often want 80% to 100% of the contract price at signing of the agreement or delivery of the program tape /diskette. o Vendors providing labor intense services, such as the con- version of filing systems, microfiche projects, etc. often want to charge by the hour for labor rather than when some part of the project is complete. The Department Head or Elected Official responsible for any con- tract award will coordinate with the Attorney's Office to final- ize the terms and conditions of the contract prior to requesting authorization from the Board (normally, as part of their regular "consent" agenda). Additionally, each Department Head or Elected Official is responsible for providing the Attorney's Office with completed copies of each contract signed. 28 EAGLE COUNTY GOVERNMENT Financial Management Policies Prepared By Finance Director For Board of County Commissioners Effective September 1, 1993 -vY EAGLE COUNTY GOVERNMENT Financial Management Policies Table of Contents Section Page I. Introduction A . Preface . . . . . . . . . . . . . . . . . . 1 B. Ethics . . . . . . . . . . . . . . . . . . . 1 II. Organization & Responsibilities A. Organizational Basis . . . . . . . . . . 2 B. Board of County Commissioners . . . . . . . 2 C. County Manager . . . . . . . . . . . . . . . 2 D. Finance Director . . . . . . . . . . . . . . 3 III. Budget A. Budget Preparation . . . . . . . . . . . . 4 B. Budget Administration . . . . . . . . . . . 5 IV. Accounting Practices A. Accounting Basis . . . . . . . . . . . . . . 7 B. Fund Accounting . . . . . . . . . . . . . . 7 C. Year -end Closings . . . . . . . . . . . . . 8 D. Reporting . . . . . . . . . . . . . . . 9 E. Controls /Audits . . . . . . . . . . . . . . 9 F. Special Functions . . . . . . . . . . . . . 10 V. Expenditure Management Policy . . . . . . . . . . . . . . . A. Policy . . . . . . . . . . . . . . . 12 B. Delegation of Authority . . . . . . . . . . 12 C. Payments to Vendors . . . . . . . . . . . . 12 D. Payroll . . . . . . . . . . . . . . . . . . 12 E. Purchasing . . . . . . . . . . . . . . . . . 13 F. Credit Cards. . . . . . . . . . . . . . . 15 G. Telephone Calling Cards . . . . . . . . . . 15 H. Cash Advances . . . . . . . . . . . . . . . 15 I. Refunds . . . . . . . . . . . . . . . . . 15 J. Petty Cash . . . . . . . . . . . . . . . 15 K. Expenditure Corrections . . . . . . . . . . 16 VI. Revenue Management A. Policy . . . . . . . . . . . . . . . 17 B. Collection Functions . . . . . . . . . . . . 17 C. Sources & Distribution . . . . . . . . . . . 17 VII. Insurance & Risk Management . . . . . . . . . . 18 VIII. Personnel Administration A. Policy . . . . . . . . . . . . . . . . . . . 19 B. Employee Management . . . . . . . . . . . . 19 C. Benefit Programs . . . . . . . . . . . . . . 19 D. Compensation Programs . . . . . . . . . . . 19 E. Training Programs . . . . . . . . . . . . . 19 F. Retention /Recruitment Programs . . . . . . . 20 EAGLE COUNTY GOVERNMENT Financial Management Policies Table of Contents Section Page IX. Banking /Investment Management A. Policy . . . . . . . . . . . . . . . . . . 21 B. Debt Reserves . . . . . . . . . . . . . . . 21 C. Banks & Dealers . . . . . . . . . . . . . 21 D. Investment Practices . . . . . . . . . . . . 22 X. Debt Management . . . . . . . . . . . . . . . . 26 XI. Fixed Asset Management A. Capitalization Policy . . . . . . . . . . . 27 B. Care of Assets . . . . . . . . . . . . . . 27 C. Disposal of Assets . . . . . . . . . . . . . 27 D. Commodities . . . . . . . . . . . . . . . . 27 XII. Contract Requirements . . . . . . . . . . . . . 28