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FINANCE DEPARTMENT INTERNAL CONTROLS <br />June 16, 2025 <br />Internal controls are built into job duties as roles are assigned internally. <br />A strong culture of commitment to internal controls has been established through routine <br />operating practices, and reinforced annually through external auditor <br />questions/comments/ advice in onsite visits, etc. <br />The City intentionally pursued its new Enterprise Resource Planning (ERP) software <br />implementation to more comprehensively strengthen, formalize and automatically enforce <br />internal controls through the software’s workflow routing, system permissions, etc. <br />Financial Services Division <br />Accounting <br />Within the Financial Services Division, the person who can create vendors can’t enter an <br />invoice. The Accountant is responsible for bank reconciliation, and therefore very limited <br />to what they can do in terms of cash handling. Wire transfers/transactions are initiated by <br />an Accountant and approved by the Senior Accountant or Principal Accountant. <br />Checks: Every check is approved first in the requesting department, then it is reviewed by <br />two individuals in Finance before it is printed: 1) Accountant, and 2) Senior Accountant or <br />Principal Accountant. The check register is printed weekly by accounting staff and <br />reviewed/signed by the Finance Director and the City Manager. <br />Journal Entries: A journal entry is a detailed record of a business transaction in accounting, <br />specifying the date, affected accounts, and amounts debited and credited, ensuring debits <br />equal credits. It's the initial step in the accounting cycle and serves as a detailed log of <br />every financial event. Journal entries go through two levels of approval: Approver 1 cannot <br />be the preparer. Approver 2 is the Financial Services Manager. A closing monthly checklist <br />is used for recurring journal entries so that nothing is missed. <br />Purchasing Limits: In accordance with the City’s Purchasing Ordinance, purchases up to <br />$27,000 requires Dept Head approval, over $27,000 up to $108,000 requires City <br />Manager approval (or City Attorney approval for legal services), over $108,000 requires <br />City Council approval. All amounts listed are as of 2025; the limits increase annually with <br />changes in the Consumer Price Index. Purchases of goods, support services, and public <br />works projects over $10,000 and under $100,000 require informal bid documentation <br />(market research with 3 quotes), over $100,000 require a formal bid process (Request For <br />Proposals). Purchases of professional services over $10,000 require informal bid <br />documentation. Exceptions (sole source or city’s best interest) require City Council <br />approval. Emergency exceptions require retroactive Council approval. <br />Contracts: All City contracts are reviewed by the City Attorney’s Office for legal review. <br />6.C. - Page 7 of 9 <br />77