Article 20 Financial Management

Section 20.1: Purpose.

The intention of this article is to ensure that reasonable assurance can be given the public that the Town's assets are properly safeguarded and conserved, and that the Town's elected and appointed officials are dedicated to preventing and detecting errors and fraud.

Section 20.2: Definitions

(a) In general. In this Article, the following words have the meanings indicated.

(b) Internal Control. An integral component of an organization's management that provides reasonable assurance that the following objectives are being achieved:

Effectiveness and efficiency of operations,
Reliability of financial reporting,
Compliance with applicable laws and regulations, and
Actions and activities that occur throughout an entity's operations on an ongoing basis.

(c) Department Heads. Managers responsible for the Town of Forest Heights' Police Department, Public Works Department, and Office of Administration (Town Clerk, Treasurer, Receptionist, and other administrative personnel).

(d) Council. The Town Council of Forest Heights.

(e) Council Chair. The Mayor.

(f) Financial Officer. The Town Treasurer.

Section 20.3: Application of Article

(a) In general – All employees, appointed officials, and volunteers in the Town of Forest Heights.

(b) This article shall be construed so as to be consistent with Maryland Constitution or the Annotated Code of Maryland.

Section 20.4: Procedures

(a) Procurement – In addition to meeting all of the relevant Charter provision requirements, the procedures for the procurement of services and goods (including related parts and equipment) shall be as follows: (1) Except for emergency certifications, all procurement requests shall be pre-certified prior to purchase by the Mayor or Town Treasurer using the financial form approved by the Council for this purpose (Check and Credit Card Requisition Form).

(2) The person who requests an expenditure of funds shall not be the person approving said expenditure.

(3) All Vendors, clearances and certifications shall be identified using the financial form approved by the Council for this purpose.

(4) Procurement of an item valued at $10,000 or more, which, in accordance with the Charter, requires competitive bidding and a written contract, shall be advertised in the Town newsletter and, to the extent the procurement is expected to exceed $25,000 in value, on the eMaryland Marketplace, the Internet-based procurement system managed by the Maryland Department of General Services. As determined by the Mayor and Council at its discretion, such procurement valued at $5,000 or more may require the use of :

(I.) a Request for Proposal, in which the Town invites vendors to submit proposals to supply services or goods;

(II.) an Invitation to Bid, in which vendors are invited to submit proposals to supply goods or services with the understanding that further contract negotiations may be forthcoming; and/or

(III.) requests for qualifications, in which the Town requests vendors to submit their qualifications to fulfill procurement needs.

(5) Procurement of an item valued in excess of $1,000 but less than $10,000 shall require quotes, bids or proposals from three different vendors. Items valued at $1,000 or less may be purchased without obtaining multiple bids, quotes or proposals.

(6) Upon written findings entered into the journal, The Mayor and Council may exempt the purchase of a good or service from competitive selection processes when the purchase qualifies as a sole source procurement as a result of the following circumstances: (I) One vendor is the only one qualified or eligible or is quite obviously the most qualified or eligible to provide the good or service; (II) The procurement is of such a specialized nature or related to a specific geographic location that only a single source, by virtue of experience, expertise, proximity, or ownership of intellectual property rights, could most satisfactorily provide the good or service; (III) Applicable law requires, provides for, or permits use of a sole source procurement; or

(IV) The federal government or other provider of funds for the goods and services being purchased has imposed clear and specific restrictions.

(7) Emergency procurement certifications for goods or services less than $10,000 may be granted after the fact but shall be documented as soon as possible, within twelve (12) hours of the event listed on the financial form approved by the Council for this purpose , but shall require the prior approval of either the Mayor, the President of the Council, or in their absence, the chair of the responsible Council Committee (e.g. Public Safety, Administration, Public Works/Health and Sanitation or Finance) should such committees be established by Ordinance and such chairmanships be duly appointed by resolution of the mayor and council.

(a) Accurate Posting. All financial transactions are to be timely posted and accurate. The Financial Officer is responsible for assuring that posting errors or adjustments are documented and supported by a description indicating the need for such adjustments.

(b) Cash Management.

(1) All bank account statements must be reconciled to the general ledger monthly by the Financial Officer.

(2) All inactive bank accounts are to be closed.

(3) The Town receptionist will open the mail, make a control list of all receipts using using the financial form approved by the Council for this purpose (Cash Receipts Form), and restrictively endorse all items received as "for deposit only".

(4) The cash receipts will then be given to the Financial Officer for further processing and deposit to the bank daily.

(5) Following all bank deposits, the Police Department clerk will compare the deposit slips to the control list using the financial form approved by the Council for this purpose to ensure that all funds reflected on the control list have been deposited.

(c) Personal Property Taxes. The Financial Officer is responsible for the timely billing of business personal property taxes. The Financial Officer shall provide a monthly report to the Chair of the Council of the filings sent out.

(d) Cash Disbursements. No checks shall be issued without adequate supporting documentation, including the pre-certified requisition form and/or invoice using the financial form approved by the Council for this purpose.

(e) Check and Credit Card Control.

(1) Blank checks and credit cards shall be secured in the Police Department's property safe at all times.

(2) The Check and Credit Card Pickup Form using the financial form approved by the Council for this purpose shall be used to request checks or credit cards from the Police Department.

(3) Check and credit card requests from the Police Department shall be pre-certified by the Financial Officer and by the Chair of the Finance Committee or the Chair of the Council.

(4) All credit cards and any unused checks shall be returned to the Police Department's property safe daily.

(f) Payroll. The Financial Officer shall review all payroll postings biweekly as follows: (1) Compensatory time is not budgeted nor is it authorized for payment.

(2) Court pay is not budgeted nor is it authorized for payment. Police officers' regular work schedules will be adjusted to accommodate court dates.

(3) Overtime requests must be approved in advance by the Financial Officer and the Chair of the Finance Committee in consultation with the Mayor.

(4) Reports from outside payroll services are reviewed to ensure that they are accurate and reflect correct hourly pay rates, taxes withheld, and are consistent with budget appropriations.

(5) Payroll adjustments must be made at the next pay period.

(g) Once 75% of any appropriation is expended at any time before the end of the fiscal year's third quarter, no further charges can be made, and the Council must be notified immediately.

(h) All records are to be saved for audit.

Section 20.5: Preparation of the Quarterly Financial Report.

(a) The Town Treasurer is herby directed to prepare under the supervision of the Mayor and to submit through the Mayor quarterly financial reports to the Town Council in writing, due within fifteen days of the first day of January, April, July, and October. The reports shall provide estimates of the revenues and expenses in the categories provided in the budget resolution effective for the three months preceding the issuance of the quarterly report and for the year-to-date, showing the variances of those items to the budgeted amounts. Furthermore, the quarterly report will include a statement of the estimated assets and liabilities of the Town as of the last day of the quarter being reported.

(b) Failure of the Mayor to submit a quarterly financial report to the Council shall result in a fine, not to exceed One Hundred Dollars ($100.00) charged to the Mayor as provided in Article 12 (Anti-Corruption Act).

Section 20.6: Standards to be used for Quarterly Financial Report Preparation, publication of same, other reports.

(a) Standards to be used for Quarterly Financial Report Preparation. The intent of this report is to provide information on the status of the Town's revenues, expenses and assets for current decision-making purposes and estimates are acceptable where final data are not available. Revenues and expenses categories should be reported consistent with the current fiscal year's budget categories, and assets should include total balances in both the general and special revenue (highway) funds for the following items: checking, savings, certificate of deposit and similar accounts, accounts receivable and accounts payable.

(b) Publication of the Quarterly Financial Report. The Quarterly Financial Report, upon submission to the Council, shall be a publicly available document open for inspection and copying at the Municipal Building and a notice of its availability shall be inserted in the Town Newsletter, or other newspaper of general circulation within ten (10) days of submission to the Council. The report shall contain any disclaimers by the Treasurer related to the estimates contained therein and other qualifying factors related to the preparation of the report.

(c) Other Reports. This article shall not prohibit the Treasurer from preparing other financial reports as requested by the Mayor or the Town Council.