title
APPROVE TITLE 5 - FINANCIAL MANAGEMENT OF THE COUNCIL POLICY MANUAL
recommended action
RECOMMENDATION
It is recommended that the Council adopt by resolution new Financial Management policies.
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Summary
On January 26, 2016, the Council adopted a revised Council Policy Manual that updated the format and content of existing policies. The revised Manual did not include a section for Financial Management, and it is recommended that Council adopt a new Title 5-Financial Management section of the policy manual.
Over the past year, Moss Adams, an audit firm acting in the capacity of City Auditor and staff worked to review and better document the internal policies of the City, with an aim to improve internal controls and the financial operations of the City. Additionally, Council adopted two policies since the January Manual adoption; the Reserve policy and the Mayor and Council Discretionary Funding policy. Revised policies were prepared as a new title for the Council Manual. It is recommended that Council adopt by resolution Title 5-Financial Management which consists of the following financial operations and policy areas:
• Reserve and Fund Balance Policy General Fund
• Interfund Loan
• Investment
• Debt Management
• District Formation and Financing
• Debt Forgiveness
• Mayor and Council Discretionary Funding
This staff report includes a copy of each of the policy areas listed above (Exhibit 1) and a revised policy Table of Contents (Attachment A).
DISCUSSION
Background
In the fall of 2013, the Council adopted an Internal Audit Plan designed to implement a series of audits and projects over a three-year period to mitigate risk and improve operations for the City. One project identified in the plan was a comprehensive review and update of internal policies and internal directives that govern the authority and actions of City employees.
These policies are captured in the scope of the project included in the Council Policy Manual as well as staff level internal policies including Administrative Directives and other citywide policies and procedures. The scope of this project did not include review or revision of the City Charter or Municipal Code.
On January 26, 2016, the Council adopted a revised Council Policy Manual that updated the format and content of existing policies. The revised Manual did not include a section for Financial Management. Over the past year, Moss Adams, an audit firm acting in the capacity of City Auditor and staff worked to review and better document the internal policies of the City, with an aim to improve internal controls and the financial operations of the City. Additionally, Council adopted two policies since the January Manual adoption; the Reserve policy and the Mayor and Council Discretionary Funding policy.
Present Situation
Revised policies were prepared as a new title for the Council Manual. It is recommended that Council adopt by resolution Title 5-Financial Management which consists of the following financial operations and policy areas:
• Reserve and Fund Balance Policy General Fund
• Interfund Loan
• Investment
• Debt Management
• District Formation and Financing
• Debt Forgiveness
• Mayor and Council Discretionary Funding
Staff have operated with functional policies and directives up to this point, but many needed an update or formal adoption. Staff developed the recommended policies in accordance with best practices as defined by Government Finance Officers Association (GFOA) and Governmental Accounting Standards Board (GASB). These policies were also reviewed by the City’s Internal Auditor (Moss Adams contracted audit firm), the municipal advisor, and investment advisors. The collective input clarified the recommended policies and ensures compliance with applicable state codes and industry best practices. Adoption of the recommended policies will position the City to achieve a better standing with rating agencies because of improved internal controls and financial operations.
To further these efforts, a new title for the Council Policy Manual, Title 5-Financial Management has been prepared for Council consideration and adoption. This staff report includes a copy of each of the policy areas listed above (Exhibit 1) and a revised policy Table of Contents (Attachment A).
FINANCIAL SUMMARY
There is no financial impact to the City of Stockton related to this agenda item.
Attachment A - Revised Table of Contents for the Council Policy Manual