HomeMy WebLinkAboutCS 14-07
REPORT TO
EXECUTIVE COMMITTEE
Report Number: CS 14-07
Date: February 26, 2007
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From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject:
Financial Control Policy
Recommendation:
1. That Report CS 14-07 from the Director, Corporate Services & Treasurer regarding
the Financial Control Policy be received;
2. That the Financial Control Policy be approved by Council; and,
3. That the appropriate City of Pickering officials be authorized to take the necessary
actions to give effect hereto.
Executive Summary: The attached policy will provide elected and appointed
officials and City staff with consolidated guidelines governing the spending of money
and budgetary control.
Financial Implications: This policy should result in improved financial and
budgetary control across the Corporation as the authorities and responsibilities are
clearly delineated.
Sustainability Implications:
sustainability.
This report contains no information pertaining to
Background: Certain financial responsibilities are outlined in the Municipal Act,
2001 and inherent in the duties of the Treasurer, or others may have been delegated by
Council over time. A Financial Control policy is necessary to summarize/consolidate
these guidelines and responsibilities.
Certain Sections of the Policy allow a limited degree of latitude to the Chief
Administrative Officer and the Treasurer within the Budgets established annually by
Council so as to ensure that the business of the City is conducted in the most efficient,
effective and responsible manner.
Report CS 14-07
February 26, 2007
Subject: Financial Control Policy
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This Policy will also provide for a greater degree of responsibility on the part of staff in
ensuring proper budget control. While this has always been understood, it has not
been established in a Council approved policy.
While it is not suggested that the proposed policy will assist in all situations and solve
all problems, it is a necessary and important step in exercising sound financial practices
and controls. It is anticipated that over time changes and improvements will be
identified resulting in ongoing amendments.
The Financial Control Policy will increase operational efficiencies while putting in place
sound financial policies and effective and clear guidelines for expenditures and budget
control.
The Chief Administrative Officer, the Chief Executive Officer of the Library and the
Department Heads have all reviewed this Policy and are in concurrence with it.
Attachments:
1 . Financial Control Policy
Approved I Endorsed By:
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Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP:vw
Attachment
Copy: Chief Administrative Officer
Chief Executive Officer, Library
Recommended for the consideration of
Pickering City Council
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Tjl6~:~'J. Quinn, R MR. eM
"Chief AdministratiJ Officer
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ATTACHMENT # L. TO REPORT # .cs....JQ-tY7
CITY POLICY
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Approval: Date Originated: Policy Number:
Council Classification: FIN
Reference: Date Revised:
Category: 030
Subject: 001/001
Policy Title: FINANCIAL CONTROL POLICY
POLICY STATEMENT:
The City of Pickering staff is committed to providing leadership, quality customer service and
best value to the ratepayers of the City of Pickering through the provision of responsible and
prudent fiscal management.
We are committed to providing efficient and professional services as it relates to overall
financial management, strategic financial planning, budget, internal audit and accounting
services, financial reporting systems, and advice.
POLICY OBJECTIVE:
The objective of this Policy is to:
1. Ensure the financial well being of the City of Pickering is in accordance with Council and
Corporate policies, Provincial and Federal Legislation and Regulations and professional
accounting principles.
2. Establish and maintain a system of internal controls, policies and procedures to ensure
the integrity and reliability of financial information.
3. Ensure that the financial assets of the City of Pickering are maximized and safeguarded
at all times.
4. Ensure the liabilities of the City of Pickering are minimized and controlled to the best
ability of staff.
5. Ensure the financial stability of the City including the management of financial risk.
6. Ensure the Council, the Chief Administrative Officer and staff have accurate, timely and
authoritative financial advice and information.
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GENERAL:
01 Definitions:
01.01
01.02
01.03
01.04
01.05
01.06
01.07
01.08
01.09
01.10
01.11
Approval of Council - the funding approval authorized by the
adoption of the final current and capital budgets or the
adoption of specific recommendations/resolutions.
Capital Budqet - an annual plan that sets forth each project
or other capital expenditure to be undertaken by the City and
specifies the full resources necessary to finance the
projected expenditures. .
Capital Expenditure - an expenditure in excess of a
predetermined dollar limit defined by the Treasurer and
which has a useful life extending beyond the current year.
Chanqe Float - a sum of money to be maintained and used
to provide change when cash is received from the public.
Chief Administrative Officer (CAD) - the senior appointed
officer responsible for the administrative operations of the
City.
City - The Corporation of the City of Pickering.
Committee - a Committee of Council established under the
City's Procedural By-Law No 3665/91, as amended.
Commitment - a contractual obligation for the purchase of
goods, services or construction, including the execution of
any document evidencing the obligation.
Council - the elected officials of the City of Pickering.
Continqency Account - the money approved in the current
budget to provide for funding of one-time expenditures that
were not known or anticipated at the time the current budget
was approved by Council.
Current Budqet - an annual financial plan providing for the
operation of the municipality for the current year
incorporating both estimates of proposed expenditures and
revenues, including property taxes to be raised.
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01.12
01.13
01.14
01.15
01.16
01.17
01.18
01.19
01.20
01.21
01.22
01.23
Department - an organizational unit of the City headed by a
Department Head.
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Departmental Budqet - the current and capital budgets of the
department as approved by Council in adopting the
estimates.
Disposal - the selling, trading, assignment, and/or scrapping
of surplus assets.
Fixed Asset - vehicles, equipment and computer hardware.
Grant - payments made to individuals or organizations,
which are approved by Council for a purpose related to the
well-being of the community or its citizens.
Inventory - materials or items used or consumed in the
provision of City services.
Member - a member of Council.
Petty Cash Fund - a sum of money to be maintained and
used for miscellaneous payment of money for the purchase
of goods or services not exceeding a specified amount.
Purchasinq Card - a credit card that is used to purchase
goods and/or services. The use of the card is restricted to
selected merchant types and may be subject to spending or
and/or transaction limits.
Proiect - an undertaking, work, or scheme included in the
capital budget.
Real Property - lands, buildings, tenements or any interest,
estate or right or easement affecting it.
Treasurer - the Chief Financial Officer and Treasurer of the
City.
02 Responsibilities:
02.01 Council to:
(a) Approve and support this policy.
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02.02
Chief Administrative Officer to:
(a) Support the Financial Control Policy.
(b) Approve amendments for the consideration of
Council.
02.03 DepartmenVDivision Heads/Manaqers/Supervisors to:
(a) Support the Financial Control Policy.
02.04 Director, Corporate Services & Treasurer to:
(a) Support the Financial Control Policy.
(b) Maintain proper financial controls and procedure
guidelines to ensure accountability in the matters of
finance and related administration.
(c) Review amendments to this policy for the
consideration of Council.
(d) Provide final interpretations and rulings in regard to
the understanding and application of this policy.
(e) Approve procedures as prepared by the Manager,
Finance & Taxation or Manager, Accounting Services.
02.05 ManaQer, Finance & Taxation/Manaqer, AccountinQ Services
to:
(a) Prepare and maintain administrative procedures
required to implement the provisions of this policy.
(b) Present such administrative procedures to the
Director, Corporate Services & Treasurer for
approval.
03 Authority
03.01 This Policy shall be administered by the Corporate Services
Department and the Treasurer shall have the authority to
interpret any provisions in this policy necessary for the good
and efficient conduct and business of the City. Any changes
shall be approved by Council.
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03.02
In all cases the Municipal Act, 2001, as amended, any
Regulations passed there under and any other Provincial or
Federal Legislation or Regulations and professional
accounting principles shall prevail as it may pertain to the
duties and responsibilities of the Treasurer and any financial
matters.
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04 Purpose
04.01 The collection of revenues, the commitment of funds and the
payment of expenditures of the City shall be carried out by
the Treasurer in accordance with the provisions of this Policy
and any Acts, Regulations or directions of the Province of
Ontario or the Government of Canada and generally
accepted accounting principles.
05 Scope
05.01 This policy applies to all operations of the City of Pickering
including any Agencies, Boards and Commissions. It
applies to the Library to the extent that it does not conflict
with the role of the Board or Chief Executive Officer under
the Public Libraries Act.
06 Sole Authoritv
06.01 Council has the sole authority to allocate funds for corporate
expenditures and projects and for approving corporate
programs and objectives, unless otherwise provided for in
this Policy.
07 BudQets
07.01 Council, in adopting the total of all sums required during the
year for the operating purposes of the City shall, in
accordance with the Municipal Act, 2001, as amended,
determine the current budget required to provide for the
sums required for every purpose and the sums required for
the various categories.
07.02 Council, in adopting the capital budget, shall determine the
sums required for each capital project included in the capital
budget and each sum provided therefore shall be a capital
account.
07.03 The Treasurer, after consultation with the appropriate
Department Head, may close any capital project account
when the project is considered to be complete and may,
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07.04
07.05
subject to the provIsions of the Municipal Act, 2001, as
amended, apply any surplus funding to any other capital
project at his/her discretion or transfer surplus funds back to
their respective source.
Departments shall be allowed to incur, before the adoption of
the current budget for the year, interim spending for the
sums required in that year for the period from the 1 st day of
January to the date the estimates for that year are adopted,
operating costs up to an amount of 50% of the prior year's
budget.
Prior to the approval of the annual budgets, expenditures for
capital assets and projects shall be approved by the
appropriate Department Head, the Treasurer, the Chief
Administrative Officer and Council prior to committing or
expending funds for the purchase or undertaking. These
pre-budget approvals may be subject to the provisions for
Emergency Purchases provided for in the Purchasing By-law
and Policy.
08 Spendinq Authoritv
08.01 The current and capital budgets approved by Council
establish the spending authority for a program. Department
Heads shall ensure that expenditures do not exceed the
approved program budget.
08.02 Spending or funds control is based on the total gross
expenditures approved for a program. Department Heads
must address revenue shortfalls in this review of expenditure
levels. Unforeseen revenues are not to be expended or
committed without the approval of the Treasurer.
08.03 Department Heads shall report any anticipated significant
over-expenditure or revenue shortfall to the Treasurer as
soon as such is known.
08.04 The Chief Administrative Officer, together with the Treasurer,
may amend the spending authority of any staff member.
09 Commitments
09.01 No financial commitment shall be made, no debt shall be
incurred, no lease or other financial obligation entered into,
no expenditure shall be made and no monies shall be paid
by, or on behalf of, the City except as delegated to the
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Treasurer by Council in accordance with the provisions of
this Policy or by specific direction of Council.
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10 Council Approval
10.01 No contract shall be entered into nor any expenditure or debt
incurred involving an amount exceeding that provided in the
budget without the prior approval of the Treasurer and the
Council, except as otherwise provided herein.
11 Budqet Variances
11.01 The Chief Administrative Officer and the Treasurer may
jointly approve changes within an approved departmental
Current Budget upon request of a Department Head,
provided that:
(a) such over expenditures do not exceed $50,000; and,
(b) all such over expenditures are offset by
corresponding under expenditures in other activities
of the department so as to remain within the total
budget provision for the department; and,
(c) in no case shall the total budget for personnel costs
for the department be increased under this section
without prior approval of the Chief Administrative
Officer in consultation with the Treasurer.
11.02 Where authority has been given in the annual Capital Budget
for a particular project, the Chief Administrative Officer, the
appropriate Department Head(s) and the Treasurer may
jointly approve changes to such authorized amounts
provided that the total amount of the over expenditures:
(a) does not exceed the lesser of 10% of the approved
capital expenditure or $100,000; and
(b) are offset by corresponding under expenditures in
other approved capital expenditures.
(c) Financing of the over expenditure must have
additional prior approval of the Treasurer. Any
change to debt financing and/or transfers from
Reserve or Reserve Funds must also have Council
approval.
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11.03
The appropriate Department Head, Treasurer and Chief
Administrative Officer may jointly approve unbudgeted
capital expenditures of up to $35,000 as long as appropriate
funding (see 11.02 (c)) can be provided from other approved
expe nd itu res.
11.04
Current and Capital Budget expenditures in excess of the
limits established under Section 11.01, 11.02 and 11.03 shall
require the approval of the Treasurer, the Chief
Administrative Officer, and Council.
12 Temporarv Financinq
12.01 Capital projects temporarily financed by a specific loan from
an external source shall be charged the actual cost of that
loan.
13 Treasurer's Authoritv
13.01 The Treasurer is responsible for maintaining accurate
records and accounts of the financial affairs of the City. This
includes providing the Council with such information as it
requires or requests.
13.02 The Treasurer is responsible for the collection and receipt of
all revenue and any monies owing, and for depositing such
funds in a financial institution. All monies collected must be
adequately safeguarded and promptly deposited into a City
bank account.
13.03 The Treasurer is authorized to extend payment terms and
conditions on any amounts due the City and outstanding
where it is deemed necessary by the Treasurer in order to
collect such amounts.
13.04 Notwithstanding any other provision in this Policy or any
other policy or by-law, the Treasurer is authorized to pay the
following, provided that funds are available in the budgets as
approved by Council:
1. All salaries, wages and benefits due to any person in
the employment of the City.
2. All retiring allowances and any past retirement
benefits due to any person previously in the
employment of the City.
3. All amounts due for goods and services supplied to
the City.
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4.
All taxes, fees and levies payable to the federal,
provincial or other municipal government, or to any
other agency board.
All payments of principal or interest on debentures,
loans or overdrafts, including foreign exchange.
All amounts due to the Region and School Boards of
amounts raised for them by the Tax levy.
All advances to Agencies and Boards on account of
the current budget as authorized by Council for their
purposes.
All employee and employer pension contributions in
respect of salaries and wages, which are payable in
respect of any duly registered pension plan on behalf
of the respective employee.
All grants to any person or body as provided for in the
current budget without passing a by-law.
5.
6.
7.
8.
9.
13.05 The Treasurer is authorized to write-off outstanding amounts
owing to the City, deemed as uncollectible, provided that
such amount shall not exceed $10,000 and is not an amount
raised as taxation or deemed to be taxes. Uncollectable
amounts owing to the City in excess of $10,000 shall only be
written off with Council's approval.
13.06 In extenuating circumstances, the Treasurer or designate
may authorize the cancellation of any or all penalties and
interest on taxes.
13.07 The Treasurer has the authority to write off small balances
up to $15 for outstanding taxes for property tax roll
maintenance.
13.08 The Treasurer has sole authority over the expenditure of
funds from the contingency account.
14 Contracts and Aqreements
14.01 As a general rule, any contract or agreement may be
entered into only with the authorization of Council and the
Mayor and City Clerk who pos~ess the authority to legally
bind the City. The underlying approval process must be
followed before a document can be presented to the Mayor
and Clerk for signing.
14.02 Council may delegate authority, either complete or restricted,
to persons to approve a contract or expenditure.
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Notwithstanding the. foregoing, the Treasurer or his/her
designate has the authority to enter into agreements: for the
provision of goods or services; for expenditures or
undertakings approved in the annual budgets; or, by specific
approval of Council.
14.04
No Committee of Council has the authority to commit the
City or to approve or expend funds.
15 Successive Aqreements/Contracts
15.01 The Treasurer is authorized to pay for goods and services
deemed essential to the ongoing operations of the City for
any period from the expiry of an agreement or contract until
a new agreement or contract is executed. Such payments
shall be at the same rates, and on the same basis as the last
previously executed agreement.
16 Notification to the Treasurer
16.01 The Treasurer shall be notified of all agreements and
contracts containing financial terms or conditions, and all the
original documents of insurance and certificates thereof,
bonds, letters of credit and other securities for the due
performance thereof, executed by or on behalf of the City
shall be delivered to the Treasurer.
17 Departmental Siqninq Authoritv
17.01 The Treasurer is responsible for maintaining signing
authorities for the provision of goods and services and the
payment thereof.
17.02 Department Heads shall, in a form to be provided by the
Treasurer, maintain a current schedule specifying the
delegation of financial signing authority within their
Department and the respective authority limits. The
schedule shall be signed by the respective Department Head
and then by the Chief Administrative Officer. The original
schedule with specimen signatures of the relevant staff of
the department shall be forwarded to the Treasurer.
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18
Insurance
18.01 The Treasurer has the authority to undertake the Risk
Management Program and for the purchase of all
appropriate insurance coverages, adjusting claims, and
related services for the City, the Library and any other
Boards.
19 Subsidy Applications
19.01 The Treasurer and the appropriate Department Head have
the authority to apply to the Provincial and Federal
Governments for grants, subsidies or any other form of
funding for the City's programs and projects.
20 Bank Accounts and Investments
20.01
The Treasurer is authorized to open bank accounts in any
Canadian bank as required, and only Council is authorized
to change signatories for these accounts.
20.02
All monetary receipts and disbursements, other than petty
cash, must be made through a City bank account.
20.03
The Treasurer is authorized to invest the surplus funds of the
municipality at the maximum rate of return, at minimal risk, in
compliance with current Legislative requirements and the
City's Investment Policy.
21 Petty Cash and Chanqe Floats
21.01 The Treasurer has the authority to establish petty cash funds
and change floats for operational requirements in amounts
and in locations the Treasurer deems appropriate.
21.02 The Treasurer is authorized to reimburse a petty cash fund
upon delivery of original receipts and such other
documentation as the Treasurer may require.
21.03 Petty cash funds and change floats shall only be used for
City business and there shall be no personal use of the
monies.
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22 Corporate and Purchasinq Cards
22.01
22.02
22.03
22.04
Corporate credit cards are provided to the Mayor and CAO to
be used for City business and shall not be used for expenses
of a personal nature.
Departments or staff will be given a purchasing card where
the nature of their responsibilities requires such use.
Purchasing card assignments and limits are subject to the
approval of the Treasurer.
City staff should use purchasing cards for- transactions where
they have been determined by the Treasurer to be the most
efficient way to handle payments.
Purchasing Cards shall only be used for City business and
shall not be used for expenses of a personal nature.
23 Employee Advances and Expense Reimbursements
23.01 Employees may be advanced funds for City purposes when
the nature and approximate amount of the expense(s) has
been approved beforehand.
23.02 Employees may be reimbursed for travel and other business
related expenses subject to the required approvals and
within the limits of the approved current budget.
24 Donations
24.01
24.02
24.03
24.04
Any donations received by the City shall be recorded as
revenue in the fund to which the expenditure relates. If none
exists, the donation is to be recorded in general revenue of
the City.
All donations provided to the City of Pickering are to be
forwarded to the Treasurer for credit to the City's accounts.
Receipt for donation will not be prepared unless specifically
requested by the donor and must be issued by the Treasurer
Donations in kind are not acceptable without prior approval of
the Treasurer.
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25 Real Property
25.01 All real property surplus to the requirements of the City shall
be disposed of in accordance with the policies adopted by
Council from time to time.
25.02 All net proceeds from the sale of real property or any other
assets of the City shall be credited to the general revenue of
the City, unless otherwise approved by Council.
26. Fixed Assets
26.01 It is every employees and elected officials duty to ensure that
City fixed assets shall be safeguarded to the extent practical
to prevent loss or theft.
26.02 The City's fixed assets shall be recorded by the Treasurer
and the records updated for acquisitions and dispositions.
The accuracy of these records should be verified annually.
27 Inventories
27.01 City inventories shall be physically secured to prevent loss or
theft.
27.02 Accurate records shall be maintained of all City inventories,
which include recording transfers in and out of inventory
where practical. The accuracy of these records should be
verified annually.
28 Administrative Procedures
28.01 This Policy shall be read in conjunction with Purchasing By-
law 5900/01 and any other approved City policies or
administrative procedures.
28.02 This Policy shall be reviewed by the Treasurer every five
years; however, approved amendments can be made at any
time.
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