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Accounting Policies Procedures Manual_last update 11-14-13THE VILLA GE OF �,�R TH PA-LM BEA(" ^ � m - ^� � � ' _ ---- - - -- -- - -------------- - -' Accounting Polices & Procedures Manual Village of North Palm Beach Table of Contents Title Page Summary of Significant Accounting Policies 4 Accounting Policies 5 -6 Basis of Presentation and Fund Types i Basis of Accounting 6 Budgetary Accounting 6 Purchasing 7 -16 Objective and Department Responsibilities 7 Purchasing Policy 8 Initiating a Purchase 9 -10 Purchasing Procedures, Bids, Contracts, Vendor Selection. etc.. 10 -I I Design -Build Contracts 12 -13 Contract Pavrnent Process . 13 -14 Purchase Orders 14 -16 Emergency Purchases 16 Purchasing Cards . 16 Sales Tax Exemption 16 Budget Transfers 17 -18 Budget Transfers . 17 Departments / Controlled Divisions. 17 Emergency Transfers 18 Debt 19 Receipt of Goods and Services 20 Acceptance 20 Process for Pavrnent 20 Payment 21 -22 Invoices 21 Invoice Retirement 21 Check Requests 21 -22 Telephone & Utility Bills 22 Check Signers 22 Updated: 11 -14 -13 Page 1 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Surplus and Obsolete Material Equipment 23 Methods of Disposition 23 Procedure for Sale of Surplus Items 23 Fixed Assets Accounting and Recording 24 -26 General Definition. 24 Recording and Tagging 24 Recording Land 24 Recording Land Improvements 24 Recording Buildings 25 Recording Building Improvements 25 Recording Construction in Progress 25 Recording Machinery & Equipment 25 Recording Vehicles 25 Recording Infrastructure 25 Capitalization Threshold 25 Deletions 25 Physical In`-enton- 26 Exception 26 Cash Management 27 -28 Transfer of Funds 27 Surety Bond Requirement . 27 Cash Receipts and Deposits 27 Petty Cash 28 Departmental Procedures 29 -32 Finance Department 29 Village Clerk 29 Public Safet` 29 Public Works 29 Library 29 -30 Connn unity Development Department 30 Recreation Department 31 Country Chub 31 -32 Investments 33 -39 Scope 33 Objectives 33 -34 Performance Measurements 34 Prudence and Ethical Standards 35 Authorized Investments & Prequalification 35 -36 Maturity and Liquidity Requirements 36 Portfolio Composition 36 -37 Risk and Diversification 37 Authorized Investment Institutions and Dealers 37 Third Party Custodial Agreements 37 -38 Master Repurchase Agreement 38 Bid Requirement . 38 Updated: 11 -14 -13 Page 2 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Internal Controls . 38 Continuing Education 38 Reporting 38 Securities Disposition 38 -39 Sale of Securities 39 Policv Considerations 39 Delegation of Authority- 39 Inventories 40 Payroll and Personnel Administration 41 -42 Personnel Administration 41 New Employees 41 -42 Tenninations 42 Payroll 42 General Ledger and Financial Reporting 43 -46 Chart of Accounts 43 Funds 43 Department Types 43 -44 Account Types 44 Journal Entries 44 -45 Financial Reporting 45 Analytical Review 45 Annual General Purpose Financial Statements 46 Travel 47 -51 Authority to Incur Travel Expense 47 Authority to Incur Supplementary Expense 47 -48 Mode of Travel 48 -49 Travel Expense Procedure 49 -50 Definitions 51 Fund Balance. 52 -54 Fund Type Definitions 52 Fund Balance Reporting in Govenunental Funds 53 -54 Operational Guidelines 54 Implementation and Review 54 Updated: 11 -14 -13 Page 3 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Summary of Significant Accounting Policies HISTORY The Village of North Palm Beach, Florida ( "the Village ") was incorporated in 1956 pursuant to Chapter 31481, Laws of Florida, Extraordinary Session 1956. The Village is located in the northeast portion of Palm Beach County, Florida. Its municipal area comprises approximately 1,900 acres of land and 1,200 acres of lakes, canals and lagoons. The Village's non - seasonal population consists of approximately 13,000 residents, which increases during the winter months to approximately 20,000 people. The Village operates under the Council Manager form of government and provides the following services to its residents: public safety, planning and zoning, sanitation, recreation, library, parks, marinas and a country club. The Village Council (the `Council ") is responsible for legislative and fiscal control of the Village. Updated: 11 -14 -13 Page 4 of 54 Accounting Polices & Procedures Manual Accounting Policies Basis of Presentation Village of North Palm Beach The accounts of the Village are organized on the basis of finds and account groups, each of which is considered a separate accounting entity. The operations of each find are accounted for with a separate set of self - balancing accounts that comprise its assets and other debits, liabilities, fiord equity and other credits, revenues, and expenditures or expenses, as appropriate. Gover anent resources are allocated to and accounted for in individual fiords based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various finds and account groups are reported by generic classification within the financial statements as follows: Governmental Fund Types General Fund — used to account for all financial resources applicable to the general operations of the Village gover anent except those required to be accounted for in another find. Capital Projects Fund — used to account for resources principally provided by general long -term debt and used for the acquisition or construction of major capital facilities other than those financed by proprietary finds. Special Revenue Fund — used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Proprietary Fund Type Enterprise Fund — used to account for operations that provided services on a user charge basis to the public and activities where the periodic measurement of net income is deemed appropriate for capital maintenance, public policy, management control, accountability or other purposes. Proprietary find activities and basis of accounting are sintilar to those often found in the private sector. The Village's sole proprietary activity is the operation of a golf and country chub. Fiduciary Fund Types Trust Funds — used to account for assets held by the Village in a trustee capacity. The pension trust finds are accounted for in essentially the same manner as proprietary finds since capital maintenance is critical. Agency Funds — used to account for assets held by the Village. The Village retains no equity interest in these finds. Account Groups Account groups are not finds since they do not reflect available financial resources and related liabilities. Instead. they are used to establish accounting control and accountability for the Village's general fixed assets and general long -tern debt. The following is a description of the account groups of the Village: General Fixed Assets Account Group — used to maintain control and cost infornation for all fixed assets other than those accounted for in the proprietary find. General Long -Tern Debt Account Group — used to record outstanding long -tern debt other than debt recorded in the proprietary find. Updated: 11 -14 -13 Page 5 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental fiords are accounted for using the modified accrual basis of accounting. Their revenues are recognized in the period in which they become susceptible to accrual, i.e., when they become measurable and available to pay liabilities of the current period. Ad Valorem taxes and charges for sern-ices are susceptible to accrual when collected in the current year or within 60 days subsequent to year -end, provided that amounts received pertain to billings through the fiscal year just ended. Intergovernmental revenues, which include state revenue sharing allotments, local government one -half cent sales tax, and county shared revenue, among other sources, are recorded in accordance with their legal or contractual requirements if collected in the current period or within 60 days after year -end. Revenues from reimbursement grants are recorded in accordance with the grant terns if collected in the current period or within six months after year -end. Interest is recorded when earned. Licenses and pernits, fines and forfeitures and miscellaneous revenues are recorded as revenues when received in cash because they are generally not measurable until actually received. Occupational license revenues collected in advance of periods to which they relate are recorded as deferred revenues. Expenditures are generally recognized under the modified accrual basis of accounting when the related find liability is incurred. Exceptions to this general rule include principal and interest on general long -tern debt which is recognized when due. The proprietary find and pension trust fiords are accounted for using the accrual basis of accounting. Their revenues are recognized when earned, and their expenses are recognized when they are incurred. Membership fees of the proprietary find that are collected in advance of the period to which they apply are recorded as deferred revenue. Budgetary Accounting State of Florida statures require that all municipal governments establish budgetary systems and approve balanced annual operating budgets. The Council annually adopts an operating budget and appropriates finds for the general find. The Village also adopts a non - appropriated operating budget for the enterprise find (Country Chub) at the same time it adopts the General Fund Budget. The procedures for establishing budgetary data are as follows: In July of each year, the Village Manager submits a proposed operating budget to the Council for the next fiscal year commencing the following October V. The proposed budget includes expenditures and the means of financing them. During the third week of July. the Council holds public meetings to obtain taxpayer comments. Upon completion of the public hearings and prior to October 1, a final operating budget is legally enacted through the passage of an ordinance. Estimated beginning find balances are considered in the budgetary process. Updated: 11 -14 -13 Page 6 of 54 Accounting Polices & Procedures Manual Purchasing Objective Village of North Palm Beach The primary objective of the Village's purchasing operation is to maximize the value of the dollar spent. All Village departments are responsible for accomplishing this objective by planning for future purchase needs and completing them in an economical manner. Responsibilities of Finance Department - Maintain an up to date vendor list. - Process purchase requisitions. - Prepare and issue purchase orders. - Pav vendor invoices. Responsibilities of Village Clerk - Maintaining bid files. Responsibilities of Operating Departments - Obtain prices on comparable items. - Search for new sources of goods and sera ices and provide these vendor names to the Finance Department. - Provide complete information on items to be purchased on the purchase requisitions and reference the budget line item description. - Provide appropriate documentation with purchase requisitions as required. - Plan for purchases to minimize emergency purchases. - Prepare technical specifications. - Detennine if sufficient fiords are available in the budgeted line item. - Attempt to use the Finance Department's vendor list as a minimum for all quote requirements. Responsibilities of Village Manager - Advertise for bids. - Take formal bids. Updated: 11 -14 -13 Page 7 of 54 Accounting Polices & Procedures Manual Purchasing Policy Determininz Purchasinz Methods: Village of North Palm Beach a. All purchases that are budgeted to exceed $10,000 on either an annual basis or span across fiscal years such as a '`multi -year" contract: 1. Must be formally advertised in a newspaper of general circulation with the advertisement being no less than fourteen (14) days prior to the opening of bids. 2. Must be awarded on a sealed bid basis by Vote of Village Council. 3. The Vendors list will be used as a minimum notification list of available Vendors for the purposes of soliciting bids. b. All purchases having an estimated cost between $2,500 and $10,000: 1. Require three (3) quotations. A Written quote from each Vendor is to be attached to the requisition. Where a Written quote is not available and on approval of the Village Manager, a memorandum from the Department Head documenting the three (3) Verbal quotes is required. No hand -Written quotes Will be accepted. 2. Shall be authorized by Department Head, Finance Director, and Village Manager. c. Purchases having an estimated cost of up to $2,500, unless otherwise described in this manual: 1. Do not require bids or three (3) quotes; however. Department Heads are encouraged to obtain the most cost - effective price. 2. Shall be authorized by Department Heads. d. Exceptions — In certain instances exceptions to the above may exist and purchases may be accomplished using alternate methods: 1. Through the use of the emergence purchase provisions as provided for in the Emergency Purchases section of this manual. 2. When annual contracts exist. i.e. gas, oil, tires, office supplies, etc. 3. When requirements imposed by federal, state, or county- grants provide different regulations. 4. When the Village Manager deems it appropriate to use procedures of more formality than set out above. 5. When the Village Council waives the purchasing rules and regulations. e. The purchase of bulk motor and diesel fuel necessary to operate Village Vehicles and the purchase of inventory and goods for resale or distribution to the public shall not be subject to the rules and regulations set forth herein and may be approved by the Village Manager and /or the Finance Director. f. The purchase of food and beverage inventory necessary to operate the Village Restaurant shall not be subject to the rules and regulations set forth herein and shall require Village Manager approval when the total order being placed exceeds $2,000. g. Expenditures for utilities, advertising, subscriptions, registration fees, training, travel, seminars and lectures, performing artists and entertainers, membership dues, uniform allowances. and similar products or sern-ices for which competitive procurement is either not available or wholly impracticable shall not be subject to the rules and regulations set forth herein and may be approved by the Village Manager and /or the Finance Director. Updated: 11 -14 -13 Page 8 of 54 Accounting Polices & Procedures Manual Initiating a Purchase Purchase Requisition Village of North Palm Beach A purchase requisition must be completed and submitted to the Finance Department with the appropriate documentation attached. Where equipment is covered by maintenance contracts, requests for sern-ice may be made directly by the respective department. Copies of all approved maintenance agreements shall be submitted to the Finance Department at the beginning of each fiscal year. An annual purchase order that shall not exceed one v ear will be issued. if required by the vendor. Requisition Preparation Procedure to process regular requisitions: a. Print each requisition in duplicate and give the following: 1. Department account number. 2. Date of requisition. 3. Suggested vendor name and address. 4. Village delivery location. 5. Quatutity. 6. A complete, detailed description of the item(s) to be purchased along with a budget line reference. 7. Estimated net cost of line items of goods and sern-ices. 8. Estimated cost of shipping and handling. 9. Signature of department head which indicates department head's approval of purchase. b. When necessary, bid documentation. i.e. telephone bids, requests for quotations, etc. should be attached to the purchase requisition. c. Purchase requisition originals are to be sent to the Finance Department. d. Second copy is kept in the requesting departments file. e. Upon receiving the requisition. Finance will detennine the availability of finds in the departments account. If the finds are available, preparation and processing of the purchase order will be completed and forwarded to the Village Manager for final authorization. f. Requisitions over $10,000 will be subject to the bidding process. Once the Village Council awards the bid to a vendor, the operating department must prepare and forward to the Finance Department the purchase order requisition along with a copy of the bid documentation and the adopted resolution. g. The Village's purchasing policy allows management to "piggyback" on: 1. Current federal supply schedules, U.S. General Sern-ices Administration (GSA) or any other federal agency contracts; 2. Current cooperative purchase contracts; and 3. Other state and local government contracts for labor and materials, providing those government contracts identify those specific services or materials required and the government contract is both active and no older than 18 months from the date of the requested purchase. If the "piggyback" provision is to be utilized, the operating department will obtain a verbal quote from a secondary qualified vendor to verify the '`fair market' value of the item or sern-ices sought. If this quote is significantly lower. staff will go through the normal purchasing/bidding procedures. The verbal quote verification procedure will be indicated as part of the back -up material for the purchase. Updated: 11 -14 -13 Page 9 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach h. In the event the -piggy-back" provision is utilized and a '`change" in sern-ices, outside the scope of the government contract is required, that change will be treated as a '`change order'' in accordance with this policy. Purchasing Procedures, Bids, Contracts, Vendor Selection, etc. Formal Biddinz Formal bids are required for purchases in excess of $10,000. Writing Specifications Upon submitting a request for formal bidding, the department should also transmit desired specifications to be included as a part of the bidding process. Care should be taken to design specifications so that they are not so narrow as to liunit competition unnecessarily. Department heads have the responsibility for complying with this guideline. Identifying Suppliers Operating departments are responsible for maintaining a comprehensive, updated list of suppliers of various products frequently purchased by that department. It is the Village's policy to award to the lowest qualified bidder offering merchandise conforming to pre - defined specifications. Sealed Bid Opening All sealed bids are to be opened at the exact time, date and place specified in the bid package. A bid package contains: (1) notice to bidders; (2) complete bid specifications and (3) contract documents. if appropriate. All bids are to be opened publicly with tabulation being made available to all vendors participating. Formal bids are to be checked for proper submission of any required bid deposits, bonds, etc. All sealed bids will be opened by a bid board consisting of the Village Manager, the Department Head concerned, and the Village Clerk. After evaluation. a recommendation will be made by the Village Manager for transmittal to the Village Council. Sole Source Items "Sole source purchases are the acquisition of goods and sern-ices that for all practical purposes can only be obtained from a single vendor. usually because of limited technology, technological compatibility with existing systems, goods or sern-ices already in use by the Village or other unique qualities of the goods or sern-ices that preclude a competitor's price comparison." All sole source purchases will be documented by a memo from a Department Head justifying why the purchase is sole source. Every reasonable effort must be made to locate competitive suppliers. Only the Village Manager may certify an item as sole source. Approval of sole source purchases over $10,000 is to be made by the Village Council. Contracts, Retainage, Change Orders, & Payment a. The Village Manager is authorized to sign contracts on behalf of the Village that involve expenditures for goods and sern-ices that are line items within the Village budget and do not exceed ten thousand ($10,000). Prior to execution of contracts, the Village Manager shall first comply with the purchasing regulations adopted by the Village Council and have the contracts reviewed by the Village Attorney for legal sufficiency. b. Contracts for over $10,000 must be approved by the Village Council. Updated: 11 -14 -13 Page 10 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach c. The annual contracts awarded by Palm Beach County. the State of Florida and the Palm Beach County Cooperative Purchasing Council, and other governmental agencies for labor and materials are accepted by the Village in accordance with their terns. d. The American Institute of Architecture, AIA Document G702 -1992, Application and Certificate for Payment, is the form that is completed by the Contractor and Certified by the Architect/Engineer as part of their payment request. This form shoes the Original Contract amount then the progression of payments previously paid, retainage, current request and balance of contract to complete the Project. The percentage of retainage is specified in the Agreement that is executed by the Village and the Contractor. A standard of ten percent (10 %) will be used unless adjusted by the Mayor and Council. Change Orders A Change Order is a written instrument prepared by the Contractor, certified by the Architect/Engineer and approved by the Village stating their agreement to the following: a. Actual change in work- required. b. The dollar amount of the adjustment and its effect on the Contract's Total Sum. c. The extent of the adjustment and how it will affect the Contract's timefralme. d. If a hunp sum payment is necessary, the request must be properly itentized and supported by sufficient substantiating data to pennit evaluation. All parties involved must mutually accept the adjustment(s) as presented. e. Unit prices stated in the Contract Documents or subsequently agreed upon must be mutually acceptable to all parties in involved. f. If costs are to be detennined, all parties must agree upon a mutually acceptable fixed or percentage fee. Change Order Process a. All proposed change orders must be approved by the Village Engineer (if involved in the project), the Department Head overseeing the project. and the Village Manager. b. The Village Manager has the authority to approve change orders under $10,000 that are w ithin the original scope of the project and that do not exceed the original budget line item for the project; however. the Village Council will be notified of any such change orders for their approval and ratification at the next scheduled Council Meeting. c. All change orders in excess of $10,000 must be brought to the Village Council for approval. d. If exigent circumstances exist requiring irminediate action and a delay would adversely impede the project operationally, the Village Manager can with written documentation, authorize a change order in excess of the $10,000. The Village Manager will be responsible for immediately reporting this Change Order at the next scheduled Council Meeting for ratification. Updated: 11 -14 -13 Page 11 of 54 Accounting Polices & Procedures Manual Design -Build Contracts Village of North Palm Beach Except as provided herein. the foregoing Policies and Procedures are not applicable to the procurement of design -build contracts. Design -build contracts shall comply with the following rules: a. If the Village Manager determines that a design-build contract is the appropriate method of procurement for any construction project, a design criteria package for the design and construction of the project shall be prepared and sealed by a design criteria professional either employed or retained by the Village. The design criteria professional shall meet the requirements of subsection (2) of Section 287.055(2), Florida Statutes (Consultants' Competitive Negotiation Act). If the Village enters into a professional sen-ices contract for preparation of the design criteria package, the selection of the design criteria professional shall comply with subsections (4) and (5) of Section 287.055, Florida Statutes. b. The design criteria package shall specify performance -based criteria for the project, including but not limited to the legal description of the site; sun-ey information concerning the site; interior space requirements; material quality standards; schematic layout and conceptual design criteria for the project; cost or budget estimates; design and constriction schedules; site development requirements; provision for utilities, stormw ater retention and disposal; and parking requirements. c. A design criteria professional who has been selected to prepare the design criteria package shall not be eligible to render sen-ices under a design -build contract executed pursuant to the design -build criteria package. d. The Village shall publicly announce in a uniform and consistent manner the fact that design -build sen-ices are required. The announcement shall include a general description of the project, procedures for obtaining the request for proposals, and the time within which interested design -build firms may submit proposals. e. The Village Manager or his or her designee shall establish criteria, procedures, and standards for the evaluation of design -build contract proposals, weighted for the particular project, and shall solicit competitive proposals pursuant to the prepared design criteria package from qualified design -build firms for the project under consideration. In addition to price, evaluation factors shall include, but not be limited to, ability of professional personnel; past performance; ability to meet time and budget requirements; location of firm; and recent, current and projected work loads. For each public constriction project involving the award of a design -build contract, the Village Manager may initiate a two -step process whereby firms first submit qualification statements. The Village Manager or, at the Manager's option a selection committee selected by the Village Manager, shall evaluate qualification statements in accordance with published criteria, including, but not lintited to, past experience; availability: and the qualifications of key personnel and (provided that at least three (3) qualification statements have been submitted) select no fewer than three (3) qualified design - build firms from which competitive proposals shall be solicited based on the design criteria package. This step is not mandatory and the Village Manager may forego the pre - qualification process. g. The Village Manager or, at the Manager's option, an evaluation committee selected by the Village Manager, shall evaluate the proposals in accordance with the criteria set forth the solicitation and recommend to the Village Council no fewer than three (3) qualified design -build firms in order of preference. The Village Council may require public presentations and shall rank the firms. The Village Manager, in consultation with the Village Attorney, shall then commence negotiations with the top - ranked firm. h. Should the Village Manager be unable to negotiate a satisfactory contract with the top - ranked firm, negotiations shall be formally terminated in writing and negotiations commenced with the second - ranked firm. Should the Village Manager be unable to negotiate a satisfactory contract with the second - ranked form, negotiations shall be formally terminated in writing and negotiations commenced Updated: 11 -14 -13 Page 12 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach with the third- ranked firm. Should the Village Manager be unable to negotiate a satisfactory contract with any of the selected firms, additional firms shall be selected in accordance with the foregoing procedures and negotiations shall continue until a contract is reached. i. The Village Manager shall consult with the design criteria professional who prepared the package concerning evaluation of the proposals, approval of detail work and drawings for the project and compliance of project constriction. j. Each contract for design -build services shall contain a prohibition against contingent fees as required by law. k. In the case of a Valid public emergency, the Village Manager may suspend the procedures specified herein. and authorize negotiations of a design -build contract with the best qualified design -build firm available at that time. Contract Payment Process Certificates for Payment An Architect and/or an Engineer will be engaged on all professionally bid projects which are new or structurally reengineered. In those instances: a. The Architect/Engineer will, within seven days after receipt of the Contractor's Application for Payment, either issue to the Village a Certificate for Payment. with a copy to the Contractor, or notify the Contractor and the Village in writing of the Architect/Engineer's reasons for withholding certification in whole or in part. b. The issuance of a Certificate for Payment will constitute a representation by the Architect/Engineer to the Owner that the work has progressed to the point indicated and that the quality of the Work is in accordance with the Contract Documents. It will further constitute a representation that the Contractor is entitled to payment in the amount certified. Final Completion & Final Payment a. Upon receipt of written notice that the work is ready for final inspection and acceptance and upon receipt of a final Application for Payment. the Architect/Engineer will promptly make such inspection and, when the Architect/Engineer finds the work acceptable under the Contract Documents and the Contract finlly performed, the Architect/Engineer will promptly issue a final Certificate for Payment. b. Neither final payment nor any remaining retained percentage shall become due until the Contractor subrnits to the Architect/Engineer: I. an affidavit that payrolls, bills for materials and equipment and other indebtedness connected with the work have been paid or otherwise satisfied, 2. a certificate evidencing that insurance required by the Contract Documents to remain in force after final payment is currently in effect and will not be cancelled or allowed to expire until at least 30 days prior to written notice has been given to the Village, 3. a written statement that the Contractor knows of no substantial reason that the insurance will not be renewable to cover the period required by the Contract Documents, 4. consent of surety, if any, to final payment. 5. if required by the Village, other data establishing payment or satisfaction of obligations. Updated: 11 -14 -13 Page 13 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach NOTE: Contractors application for payment (partial or final) for repairs or maintenance to '`existing" systems and infrastructure can be authorized by the Village Department Head for which those repairs /maintenance was authorized. c. Acceptance of final payment by the Contractor, a Subcontractor or material supplier shall constitute a waiver of claims by that payee except those previously made in writing and identified by that payee as unsettled at the time of final Application for Payment. d. The Certificate of Completion and the Application for Final Payment forms must be completed. The Application for Final Payment requests the release of the retainage and requires the following signatures: 1. For Projects $10,000 or less, the Director managing the project and the Village Manager will sign off upon completion of the project. 2. Projects from $10,001 to $100,000 — The Director managing the project along with the Director of Connn unity Development and the Village Manager will sign -off upon completion of the project. 3. Projects exceeding $100,000 requires the same signature authority as item #2 and will be forwarded to the Mayor and Council for final closeout and release of contractual retainage. Purchase Orders Use of Purchase Orders A purchase order should be used for the purchase of a single item over $2,500 that is not purchased on a regular basis. This would include all purchases not covered by a blanket purchase order. All purchases that are budgeted to exceed $10,000 on an annual basis or span across fiscal years such as a '`multi- year'' contract surpass the Village's bid threshold and will be bid prior to the beginning of the fiscal year. Exceptions are outlined in the Purchasing Policy ' Detennining Purchasing Methods" section. as well as in the Emergency Purchases section. Procedure for Issuing a Purchase Order a. All purchase orders will be issued by the Finance Department. b. All purchase orders will be sequentially numbered. c. The purchase order is prepared in triplicate. d. The purchase order is printed giving the following information: 1. Purchase order number. 2. Vendor code number. 3. Vendor name. 4. Vendor address. 5. Vendor contact person. 6. Vendor telephone number. 7. Vendor fax number. 8. Department account number. 9. Requisition number. 10. Date of purchase order. 11. Required delivery date. Updated: 11 -14 -13 Page 14 of 54 Accounting Polices & Procedures Manual 12. Terns 13. F.O.B. point 14. Destination shipping point. 15. Quantity- ordered. 16. Vendor proprietary stock number (if any). 17. Generic description of goods or sen-ices ordered. 18. Unit price. 19. Extension 20. Net total of goods and services ordered. 21. Allowable shipping charges. 22. A box checking an original or confinning purchase order. 23. Signature of responsible Village official. How Purchase Orders are processed a. The original copy is delivered directly to the Vendor. Village of North Palm Beach b. The second copy is retained by the Finance Department for account encumbrance and is attached to the requisition original. c. The third copy is sent to the Department Head or the requisitioning department. Cancellation of a Purchase Order All cancellations of orders must be made by forwarding to the Finance Department the receiving copy of the purchase order with the Nord "VOID- printed across the face of said copy. The Department Head should sign and date all Voided purchase orders, as well as provide a brief reason for the Void. Expediting Orders Once the Finance Department has issued a purchase order, no follow-up work is done on the order by Finance. It will be the responsibility of the operating department to expedite orders. Back Orders of Partial Payments When several items are ordered, the supplier may deliver only a portion of the quantity requested. The supplier may then advise you that the remainder of the order has been back ordered. The Department Head should retain the copy of the purchase order until all items are delivered. Should the Vendor invoice the Village for the partial order delivered, the following partial payment procedures should be followed: a. When the invoice is received, the department head should forward the invoice to the Finance Department with his or her approval of the partial payment. Notations should be made on the invoice that the order is '`INCOMPLETE" and the purchase order number circled, or noted if it is not mentioned on the invoice. The Finance Department will use this as authority for partial payment. Documentation must be sent to the Finance Department indicating Which items have been received before the Finance Department makes the payment on such invoice. b. The department copy of the purchase order remains in the department until the entire order is filled, invoiced, or balance canceled. Blanket Purchase Orders Blanket purchase orders can be requested from the Finance Department for the purchase of materials, supplies, parts and sirnilar items over a certain period of time not to exceed a single fiscal year. Examples include, but are not limited to, office supplies, computer supplies, uniforms, firearms and firearm Updated: 11 -14 -13 Page 15 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach accessories, badges and specialized public safety- equipment, hardware store purchases, tires, tubes, and batteries. A blanket purchase order may be in any amount up to $10,000 and must be approved by the Department Director, the Finance Director, and the Village Manager. No single purchase pursuant to a blank purchase order shall exceed $2,500. Split Purchases (Pyramidin a. Split purchases, or pyramiding, is defined as issuing more than one purchase order on the same product with the intent of circumventing these regulations and/or budget limitations within an unreasonably short time period such that the totals of the purchase orders equal an amount greater than that authorized by these regulations. Split purchases are prohibited. Emergency Purchases General Policy True emergencies do occur as a result of parts, supplies, and labor needed to repair equipment and facilities that are needed to provide sern-ices for the health, welfare and safety of the public. Anticipating needs in advance, whenever possible, will hold emergency purchases to a mummun and allow the use of standard procedures. Procedure a. Emergency purchases between $0 to $2,500, mark invoice "EMERGENCY PURCHASE ". The invoice must be submitted to and approved by the Department Head, subject to confirmation by Village Manager. b. Emergency purchases of more than $2,500 and up to $10,000, mark invoice "EMERGENCY PURCHASE ". and contact the Village Manager for approval, subject to confirmation by the Village Council. c. Emergency purchases over $10,000 are not to be made without the approval of the Village Council. Purchasing Cards Recognizing the advent of automated Internet supply vendors and the occasional time sensitive procurements, the utilization of a Village purchasing card is both necessary and required. The Finance Department shall maintain one purchasing card per department to be utilized in select cases in accordance with the existing purchasing regulations. Any department needing to use the purchasing card shall request in writing. to the Finance Director, the intended use of the card, the amount and the account number(s) to be charged. All requests must be approved by the department head prior to sending it to the Finance Department. If the request meets all applicable purchasing regulations and the departmental finds are available. the Finance department will obligate the Village for the purchase by use of the Village's purchasing card. The department making the purchasing request shall be responsible for providing invoices (receipts) or other acceptable documentation to the Finance Department immediately upon receipt. All invoices (receipts) shall be initialed with the account number(s) to be charged. Sales Tax Exemption Village purchases are exempt from Florida sales tax. When making purchases, the vendor will be provided with the sales tax exemption number. Updated: 11 -14 -13 Page 16 of 54 Accounting Polices & Procedures Manual Budget Transfers Budget Amendment Ordinance Village of North Palm Beach A budget amendment ordinance is required when a transfer of monies increases /decreases the budgeted total of the respecti`-e find. Budget Transfer Requirements a. Budget transfers from the Council Contingency Account and the Country Chub Contingency Account must be approved by the Village Council. b. The Village Manager may approve transfers among acti`-ity amounts within a department so long as the amounts of the transfers do not exceed $10,000. Howes-er. transfers between departments (and not merely dis7sions within a single department) and any change to the total departmental expenses must be submitted to. and approved by, the Village Council. Departments /Controlled Divisions The following are the departments /controlled divisions and are considered for budget transfer purposes: 1. Village Manager: - Village Manager 2. Finance: - Finance - Village Attorney- - General Sen-ices - General Sen-ices - Debt Sen-ices - Resen-e - Insurance (Country Club) - Debt Sen-ices (Country Club) - Resen-e (Country Chub) 3. Village Clerk: - Village Clerk -l. Recreation: - Recreation - Village Council - Special Es-ents - Pool - Tennis S. Library: - Library 6. Public Safety: - Law Enforcement - Fire Rescue - General Sen-ices 7. Public Works: - Administration 8. Country Club: - Administration - Facilities Maintenance - Golf Course Maintenance - Sanitation - Golf Shop /Carts/DriN-ing Range - Street & Ground - Food & Beverage Maintenance - Clubhouse Grounds - Vehicle Maintenance 9. Community - Conumnityy Planning 10. Information - Infornation Technology Development. - Building Technology: - Code Enforcement 11. Human - Human Resources Resources: Updated: 11 -14 -13 Page 17 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Emergency Budget Transfer Emergency Budget Transfer Procedures Emergency budget transfer procedures for emergency purchases are as follows: a. Emergency budget transfers up to $10,000 among existing budgeted line items of the existing budget (regardless of department) require Village Manager approval. subject to confirmation of the Village Council. b. Emergency budget transfers over $10,000 require Village Council approval. Updated: 11 -14 -13 Page 18 of 54 Accounting Polices & Procedures Manual Debt Policy Village of North Palm Beach Under the governance and guidance of Federal and State laws and the Village's Charter, Ordinances and Resolutions, the Village may periodically enter into debt obligations to finance the constriction or acquisition of infrastructure and other assets or to refinance existing debt for the purpose of meeting its governmental obligation to its residents. It is the Village's desire and direction to assure that such debt obligations are issued and administered in such fashion as to obtain the best long -tern financial advantage to the Village and its residents. The Village hereby establishes the following policies concerning debt: • The Village Charter and the Constitution of the State of Florida do not provide for a legal debt limit. HO ever, in making or providing of capital improvements. the Village shall not incur a general obligation debt requiring the full faith and credit and taxing power of the Village that exceeds fire percent (5 %) of the property tax base of the Village. • The Village will analyze the impact of debt service on total annual fixed costs before any long - tern debt is issued. • Any loan obligation over $500,000 shall require review and comment by the Village's Audit Committee prior to Council action. • The Village will not use proceeds from long -tern debt for current, on -going operations. Long - tern borrowing will be confined to capital improvements too large to be financed from current rell-emles. • The Village will utilize the form of borrowing that is most cost - effective. including not just interest expense but all costs, including upfront costs, administrative and legal expenses, prepayment penalties, and reser-e requirements. Updated: 11 -14 -13 Page 19 of 54 Accounting Polices & Procedures Manual Receipt of Goods and Services Acceptance Village of North Palm Beach a. Department Heads are responsible for inspecting all goods upon receipt to detennine that the quantity- and quality of merchandise received meets the specifications of the order. b. If there is a discrepancy, the Department Head is responsible for informing the Vendor and the Finance Department immediately and documenting the conversation in writing. c. If quantity and quality conform to purchase order specifications, the Department Head signs off on the invoice and returns it to the Finance Department for processing. Process for Payment a. If the shipment does not complete the purchase order, the Department Head is responsible for forwarding the invoice with their signature approving payment along with a copy of the purchase order to the Finance Department. b. If the shipment completes the purchase order, the Department Head must mark "Close Purchase Order'' on the PINK copy of the PO, sign the invoice approving final payment. and return both of these copies along with any other pertinent documentation necessary for processing to the Finance Department. Mark the receiving copy "SHIPMENT COMPLETE RECEIVED" and forward it to the Finance Department. c. Forward the Vendor packing slip or bill of lading (if any) with the receiving copy to the Finance Department. d. Sernices, as distinct from commodities, rendered must be certified by the Department Head that the quality meets the specifications of the purchase order before the invoice is paid. Updated: 11 -14 -13 Page 20 of 54 Accounting Polices & Procedures Manual Payment Invoices a. Original vendor invoices will be sent directly to the Finance Department. b. The Finance Department will pay the invoice only if: 1. The invoice has been received by the Finance Department. Village of North Palm Beach 2. The Department Head must sign off on the invoice certifying that there has been a satisfactory delis ery of goods or services. 3. Total quantity received per line item is equal or less than quantity ordered. An explanation is required when discrepancies exist. 4. Unit Price on invoice is the same as unit price on the purchase order. An explanation is required when discrepancies exist. 5. Extension per line item is correct. 6. Total of line item extensions is reflected by the net total on the invoice. 7. Advantage is taken of all allowable discounts. 8. Funds are available within the department's budget. Invoice Retirement a. Check is issued to vendor, signed by the appropriate authorized individual(s). b. Original invoice is marked "PAID ". c. The "PAID'' invoice, any other necessary supporting documentation. and the remittance copy of the check are attached to the purchase order and filed. Check Requests a. Department Head may request checks on prescribed forms for: 1. Travel 2. Training 3. Subscriptions 4. Reimbursements 5. Pettv Cash 6. Donations 7. Contributions 8. Contract Labor 9. Independent Contractors 10. Etc. Updated: 11 -14 -13 Page 21 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach b. All check requests that are submitted for payment should include supporting documents and are subject to follow terms and conditions of accounting policies and procedures. Telephone and Utility Bills All Village telephone and utility bills are processed through the Finance Department to Verify long distance sern-ice usage and to Verify proper departmental allocation of utility costs. Any bills received in another department should be forwarded to the Finance Department. Prior to forwarding telephone bills to Finance, Department Heads must review and sign off on all charges to be paid. Check Signers All checks drawn on any depository of Village finds shall be signed by both the Village Manager and the Finance Director, or in the absence or inability of the Finance Director and /or the Village Manager to sign such checks, they shall be signed by the Vice Mayor and /or the Mayor. Updated: 11 -14 -13 Page 22 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Surplus and Obsolete Material and Equipment Methods of Disposition a. Surplus, worn out or obsolete material and equipment may be disposed of in an,,- of the follov ing ways: I. By transferring to other departments. 2. By returning to the manufacturer or supplier. 3. By trading in on new equipment. 4. By junking. 5. By advertising for sale. b. Each department shall report its surplus or obsolete stock, equipment or materials to the Finance Department. c. All Capital Equipment shall be declared surplus by Village Council before processing as surplus. Procedure for Sale of Surplus Items a. If surplus material is sold, it shall be accomplished by the affected department in conformance with competitive practices. b. Surplus property may be disposed of by auction. Final approval for sales will be made by the Village Manager or his designee. Advertisement for such sales will be made in a local newspaper at least one time. no less than fire (5) days prior to sale or auction. Updated: 11 -14 -13 Page 23 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Fixed Assets Accounting and Recording The Village follows the capitalization requirements of GAS13 Statement #34 (Asset Capitalization & Depreciation Guidance) for its fixed assets. General Definition Capital assets include: land, land improvements. buildings, building improvements. constniction in progress, machinery and equipment. vehicles and infrastructure. Recording and Tagging Departments will fill out the fixed asset worksheet for all newly acquired assets with the following information: a. Description b. Price c. Department d. Location e. Condition f. Custodian g. VIN — Manufacturer — Model — Model Year — License Number h. Estimated life i. Vendor, Purchase Order Number, Inventory Nuunber, Inventory Date, Amount Once information is received a tag number is assigned and information is put into the system. A print out of the information is nun and the tag mnnber is attached to the print out. The print out and tag number are sent to the Department Head to put the metal asset tag number on the equipment. The copy of the print out is to be retained by the department until equipment is disposed. Recording Laud Land is to be capitalized but not depreciated. It is recorded at historical cost and remains at that cost until disposal. If there is a gain or loss on the sale of land, it is reported as a special item in the statement of activities. Recording Land Improvements Land improvements include items such as excavation and non - infrastructure utility installation; driveways. sidewalks. parking lots, flagpoles, retaining walls. and fencing, outdoor lighting, and other non - bolding improvements intended to make the land ready for its intended purpose. Land improvements can be further categorized as non - exhaustible and exhaustible. Non - Exhaustible - Expenditures for improvements that do not require maintenance or replacement. expenditures to bring land into condition to commence erection of stnictures, expenditures for improvements not identified with stnictures, and expenditures for land improvements that do not deteriorate with use or passage of time are additions to the cost of land and are generally not exhaustible and therefore not depreciable. Exhaustible - Other improvements that are part of a site, such as parking lots, landscaping and fencing, are usually exhaustible and are therefore depreciable. Depreciation of site improvements is necessary if the improvement is exhaustible. Updated: 11 -14 -13 Page 24 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Recording Buildings Buildings should be recorded at either their acquisition cost or constriction cost. The cost of new constriction should be carefully evaluated. Usually projects consist of major components such as land, land improvements, building constriction (including professional fees and permits), furniture. fixtures and equipment. In addition. buildings include components (e.g.. roof, air conditioner system, etc.) that should be recorded separately when significant because these building components have different useful lives. The Value of each component needs to be determined and placed Within its own category. Recording Building Improvements Building improvements that extend the useful life should be capitalized. Examples of building improvements include roofing projects, major energy consern-ation projects, or remodeling and replacing major building components. Only those projects that meet the capitalization threshold need to be included. Recording Construction in Progress Constriction in progress should be capitalized and not depreciated. It should be reported With land and other non - depreciating assets at the government -Vide level. Unspent debt proceeds from capital assets related debt should be reported in the net assets section of the statement of net assets as -restricted for capital projects." Recording Machinery and Equipment Assets such as furniture, machinery and equipment (that meet threshold levels) should be identified and inventoried. Some assets, individually, may fall below the capitalization threshold but may be purchased in large quantities by the Village. Examples include library books, textbooks and computers. The Village should aggregate such assets and consider the materiality and significance of them and if material or significant capitalize such items either individually or in the aggregate. Recording Vehicles Vehicles should be identified. inventoried, and if applicable depreciated. Recording Infrastructure Infrastructure assets are long -lived capital assets that normally can be presern-ed for a significant greater number of years than most capital assets and that are normally stationary in nature. Examples include roads, bridges, tunnels, drainage systems, water systems, and darns. Infrastructure assets do not include buildings, drives, parking lots or any other examples given above that are incidental to property or access to the property. talization Threshold Capital assets and infrastructure are capitalized and depreciated as outlined in the capitalization threshold table below: Capitalization Threshold Table: Deletions To delete equipment or an asset from asset records the asset Worksheet should be filled out for retire date, disposal code, and sell price. Updated: 11 -14 -13 Page 25 of 54 Capitalize and Depreciate Land Capitalize only Land improvements $25,000 Building $50,000 Building Improvements $50,000 Constriction in Progress Capitalize only Machinery & Equipment $5,000 Vehicle $5,000 Infrastructure $250,000 Deletions To delete equipment or an asset from asset records the asset Worksheet should be filled out for retire date, disposal code, and sell price. Updated: 11 -14 -13 Page 25 of 54 Accounting Polices & Procedures Manual village of North Palm Beach Physical Inventory Phvsical inventory of all fixed assets must be taken alnuallv. Each department will be responsible for taking an annual physical count of their department's inventory per the list prodded by the Finance Department. Department Head shall certify the complete physical count. additions, deletions and changes marked on the list. and reconciliation of all discrepancies. The Department of Finance will be responsible for keeping up to date listings of all fixed assets. Exception Department Heads may request the Finance Department to track and inventory any item less than $5,000. Updated: 11 -14 -13 Page 26 of 54 Accounting Polices & Procedures Manual Cash Management Village of North Palm Beach General Policy The Village's deposits are held in qualified public depositories pursuant to State of Florida Statutes, Chapter 280, and 'Florida Security for Public Deposits Acts ". The Village also opts for the investment policy in compliance with State of Florida statutes chapter 218.415. Transfer of Funds The following Village officials are authorized to transfer fiords between Village bank accounts on behalf of the Village: 1. Manor 2. Vice Manor 3. Village Manager 4. Finance Director Surety Bond Requirement The following Village officials shall each before entering upon the duties of their respective office; give a good and sufficient Surety Company bond to the Village in the following amount: 1. Village Manager, $ 200,000 2. Finance Director, $ 200,000 3. Village Clerk, $ 10,000 4. Country Chub Manager or Administrator, $ 200,000 Cash Receipts and Deposits All mail, including checks, is received by the Executive Secretary to the Village Manager. The Executive Secretary then distributes the mail to each department. Each department is responsible for preparing the deposit and submitting the checks and report to the Finance Department on a daily basis for posting in the general ledger. Departments are required to send their deposits to the Finance Department within one business day. Departments are not allowed to hold any cash and /or checks to be processed at a later date. Updated: 11 -14 -13 Page 27 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Petty Cash The Village maintains petty cash boxes for regular operations, customer service and incidentals. The following is the list of departments with Petty Cash: General Fund Country Club Public Safety $ 200 Administration $ 500 Comimuiity Development 400 Driving Range 1,400 Recreation 300 Golf Pro Shop 500 Village Clerk 50 Restaurant L600 Human Resources 100 Tennis Shop 300 Total Petty Cash CC $4,000 Pool Shop 100 Library 150 Finance 150 Total Petty Cash - GFl All disbursements from petty cash require appropriate supporting documentation: 1. Payment Amount 2. Payment Date 3. Description of Expenditure 4. Account Number 5. Proper Authorization The designated employee in the department is responsible for the verification of payments made from the petty cash accounts, replenishment of the finds and the reconciliation of the account balances on a monthly basis. The procedures to reimburse the petty cash finds are as follows: The designated employees of the department prepares a disbursement form which contains the following information: 1. Disbursement Date 2. Name of the Pavor 3. Description of Disbursement 4. Account Number and Amount The petty cash supporting documentation is attached to the completed disbursement form. Replenishment requisitions are reviewed and approved by the Department Head and sent to the Finance Department for replenishment of the finds. Updated: 11 -14 -13 Page 28 of 54 Accounting Polices & Procedures Manual Departmental Procedures Finance Department Village of North Palm Beach Payments are received through the mail and Via electronic fiords transfer (EFT /ACH) from Various sources. Deposit slips are prepared by an Accounting Clerk, and checks are deposited in the bank daily by a courier (Public Safety Officer). Any payments received during the day. Which are not to be deposited in the bank, are kept in the secured area until the deposit is made. A daily deposit sheet is prepared listing payments received. These receipts are identified by type and coded by the Accounting Clerk. All deposits are posted to the general ledger (cash, revenue or other account as applicable). A copy of any support documentation is scanned and filed Within the customer folder, along With a Validated copy of the deposit slip. The Finance Director and Finance Manager periodically review the reports and deposit records Village Clerk The Village Clerk's Office receives payments for copies of public records, zoning maps, code supplements, lien certifications, donations, and code enforcement fines /liens. A receipt is generated for each transaction. With one copy to the purchaser, one copy to the bank bag, and one copy remains in the receipt book in the Clerk's office. A bank deposit is prepared as needed by the Administrative Assistant and Verified by the Deputy- Village Clerk or Village Clerk. The bank deposit form specifies the total received for each of the Clerk's revenue line items. The cash. checks, and deposit form are sent to the Finance Department for processing. Public Safety Public Safety receives payments for special details, copies of reports, fingerprinting, new alarm, false alarms, alarm pennit renewals. eater restrictions, parking Violations, and bicycle registrations. A receipt is generated for each transaction. A bank deposit is prepared as needed. The bank deposit form specifies the total received for each of the departments revenue line items. The cash. checks, and deposit form are sent to the Finance Department for processing. Public Works The Public Works Department receives payments for refuse collection. project plans & specification documents, and Vegetation debris ordinance fees. A bank deposit is prepared as needed. The bank deposit form specifies the total received for each of the department's revenue line items. The cash, checks, and deposit form are sent to the Finance Department for processing. Library The Librati- receives payments and issues receipts for fines, lost/damaged books, memberships, library cards, faxes. copies, donations, etc.. A bank deposit is prepared as needed. The bank deposit form specifies the total received for each of the departments revenue line items. The cash, checks, and deposit form are sent to the Finance Department for processing. Updated: 11 -14 -13 Page 29 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach The Libi-aiv also collects money for the Friends of the Library. These monies are turned over to the Treasurer of the Friends at their convenience. Community Development Department Building Division All applications for building pennits, business tax receipts, revisions, and contractor and non - domicile registrations are submitted to the Building Division. Staff verifies the application /registration information and detennines the applicable fee(s). Staff then enters appropriate information into the computer system. Partial payment is due at the time of submittal. A receipt is issued to customers when fees are received. State fees, Palm Beach County impact fees and remaining Village fees will be collected upon issuance when applicable. Staff distributes the application to the appropriate personnel (e.g. Building Official, Fire Chief, Plainer, etc.) for plan review. After all necessary approvals are completed, the information is updated in the computer system and the applicant is notified. Planning and Zoning Any land use, rezoning, variance. or plat applications are submitted to the Community Development Director for processing along with all estimated filing fees affiliated with the project. The Plainer then reviews and verifies all information for accuracy and enters the information into the MUNIS software (which assigns each project a unique project identification number). The Planner sets up an account with the Finance Department for each assigned project number to track any /all account receivables and/or payables for that project. The Planner submits a batch report to Finance with the deposit. Cash, checks and the batch report are placed in a locked deposit bag and sent to the Finance Department at the end of the day. Prior to final approval of the project, the project account is reconciled. If the actual costs exceed the project deposit, the developer is required to pay the balance prior to final approval. If the deposit amount exceeds the actual cost, the balance is refunded to the applicant. Code Compliance Payments received for abandoned property and /or abatement fees are entered into the computer system. All checks and cash are processed by the Code Compliance Officer as part of their daily deposit procedure. Code enforcement liens are collected and received and processed by the Village Clerk's Office. Preparing the Daily Deposit Prior to the end of their shift each day, each Pennit and Licensing Technician, Code Compliance Officer and Planner generate a batch report from the computer system summarizing all of the day's transactions. Each individual reconciles their drawer. and prepares the necessary reports for the cash and checks received. These are submitted to the supen-isor for approval. All cash, checks, and batch reports are placed in a locked deposit bag and sent to the Finance Department at the end of the day. Updated: 11 -14 -13 Page 30 of 54 Accounting Polices & Procedures Manual Recreation Department Registrations Village of North Palm Beach All registrations are taken at the Anchorage Park Facility-. Staff verifies registration information. including resident/non - resident status. Staff rings all transactions through the RecTrac system. Monies are placed in a deposit bag and dropped into the safe at the end of the evening. Checks and cash are totaled and compared to amounts on the Cash Journal that is printed out. Cash. checks, receipts, and cash journal tape are all placed in a locked deposit bag and sent to the Finance Department. Tennis Shop Every sale is entered into the RecTrac POS system and a receipt is given to the customer. A roster of all members is maintained in the Tennis Shop for reference, although all members should have a membership card with them. Closing Procedures are completed by the employee in charge of the cash register. 1. The cash register is closed out at the end of each day. 2. A Cash Journal is printed from the system which summarizes the clerks' monies for the day. The employee completes the balance sheet indicating the amount of cash and checks received. 3. The money and the Cash Journal are put in a locked deposit bag and stored in the safe until pick-up the next morning to go to the Finance Department. Pool Shop The Pool maintains a daily log -in sheet for members and non - members. The Pool Attendant turns this sheet in with the cash receipts for the day. Pool Director Coaches sell merchandise in the shop. This merchandises is NOT Village property, or Village sales or receipts. Receipts are generated in triplicate for such purchases of merchandise and are distributed as follows: White - - -- customer copy Yellow -- -coach s copy when charged to a member's account Pink - - - - -- remains in the shop Closing procedures are completed by the employee in charge of the cash register: 1. The cash register is closed out at the end of each day. 2. A Cash Journal is printed and the clerk completes a balance sheet indicating the amount of cash and checks received. 3. The money and the Cash Journal are turned into the Golf Shop Administration Office and stored in their safe until pick-up the next morning to go to the Finance Department. Country Club There are four cash registers on the chub premises: 1. Golf Pro Shop (2) 2. Restaurant (2) Updated: 11 -14 -13 Page 31 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach The Golf Shop registers produce three tapes, one for the customer, one for the starter, and one for the Village. The registers at the Restaurant produce two receipts, one for the customer and one for the Village. All Country Chub receipts are forwarded to the Finance Department. Each cash register has its own specific procedures for closing out the register, which will be described separately below: Golf Pro Shop Every sale is entered into the Golftrac POS system and each receipt is generated in triplicate. The receipts are distributed differently depending on type of purchase: Green & Cart Fees: one for the drawer one for the starter one for the customer Merchandise: one for the drawer one for the customer At the end of the day, the cashier completes a balance sheet after reconciling to their individual Cash Journal. The cashier puts all money, receipts and the Cash Journal in a bank deposit bag which is placed in a locked night deposit safe and forwarded to the Finance Department the next morning. Driving Range The money is removed daily from ball machines and entered into the GOIfTrac POS system as driving range sales. The money is deposited with the regular business. Restaurant Even- sale is entered into the MICROS POS system. Each sei er is in charge of his/her own-bank-.- Closing procedures are as follows: 1. The individual-bank" is closed out at the end of each employee's shift. 2. A Cash Journal is printed out at the end of the employee's shift. The employee balances the monies being turned in with the Cash Journal. 3. The money and the Cash Journal are turned into the F & B Director to be compiled with the daily sales and placed in a locked night deposit safe. These items are then forwarded to the Finance Department the next morning. Updated: 11 -14 -13 Page 32 of 54 Accounting Polices & Procedures Manual Investments Village of North Palm Beach The Village has adopted the Investment Policy pursuant to Florida Statutes chapter 218.415. Purpose The Village invests any surplus fiords that are in excess of the amounts needed to meet current expenses. This investment policy places the highest priority on the safety and liquidity of finds. Scope This investment policy applies to all the investment activity of the Village, except for its employees' pension finds, which are organized and administered separately, or for fiords related to the issuance of debt where there are other existing policies or indentures in effect for such finds. Funds included: a. General Fund b. Special Revenue Funds c. Enterprise Funds d. Capital Projects Funds e. Any new finds created by the governing body unless specifically exempt. Objectives The primary objectives, in priority of order, of investment activities shall be safety of principal, liquidity of finds, and maximizing investment income. 1) Safety Safety of principal is the foremost objective of investment activities. Investments shall be undertaken in a manner that seeks to insure presern-ation of capital in the overall portfolio. All other investment objectives are secondary to the safety of principal. The objective will be to mitigate credit risk and interest rate risk. a. Credit Risk - Credit risk the risk of loss due to the failure of the security issuer or backer, will be minimized bv: i. Limiting investments to the safest types of securities. ii. Pre - qualifying the financial institutions, broker /dealers, intennediaries, and advisers with which the Village will do business. iii. Diversifying the investment portfolio so that potential losses on individual securities will not place an undue financial burden on the Village. Updated: 11 -14 -13 Page 33 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach iv. Monitoring all of the Village's investments to anticipate and respond appropriately to changing market conditions. `. Quarterly reporting, in comparative format, of all market values of invested fluids and instruments. b. Interest Rate Risk - The Village will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rate by: i. Structuring the investment portfolio so that the securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity. ii. Investing operating fluids primarily in short-tern securities, money market mutual fluids, or similar investment pools unless it is anticipated that long -tern securities can be held to maturity without jeopardizing the liquidity requirements. 2) Liquidity a. General Liquidity: The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that the securities mature concurrent with cash needs to meet anticipated demands. Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets. Portions of the portfolio may be placed in interest - bearing checking /savings accounts with qualified public depositories. Securities and Exchange Commission registered money market fluids with the highest credit quality rating from a nationally recognized rating agency, or local government investment pools which offer same -day liquidity for short-tern fluids. b. Local Liquidity: The chief financial officer of the village shall establish and maintain a local, liquid fluid in an amount equal to, as a mininmun, one - twelfth (1/12) of the designated operating fluids in the amoral village budget. 3) Investment Income Without compromising safety and liquidity, the highest possible total return should be obtained on the Village's fluids. Income will include interest/dividends received as well as any realized or unrealized gains and losses of principal of the underlying security. Performance Measurements In order to assist in the evaluation of the portfolio's performance, the village shall use nationally recognized benchmarks for the short tern and long tern portfolios. Performance calculations will not include any balances invested in overnight sweep accounts. a. Short tern portfolio - A nationally recognized Money Market Fund Index, such as Standard and Poor's Government Investment Pool Index /Goverunnent 30 day gross of fees yield will be used as a benchmark. b. Long tern portfolio - Investment performance of the village portfolio will be compared to the Merrill Lynch 1 -3 year United States Treasury Note Index or the equivalent composed of U.S. Treasury or Government securities, with duration and asset mix that approximates the village portfolio. Updated: 11 -14 -13 Page 34 of 54 Accounting Polices & Procedures Manual Prudence and Ethical Standards Village of North Palm Beach 1. Prudence The standard of prudence to be used shall be the -prudent person rule ", which states that: Investments should be made with judgment and care, under circumstances then prevailing. which persons of prudence, discretion,. and intelligence exercise in the management of their own affairs, not for speculation. but for the investment, considering the probable safety of their capital as well as the probable income to be derived from the investment. The Chief Financial Officer, or other persons performing the investment functions. acting in accordance with written policies and procedures, and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported immediately and that appropriate action is take to control adverse developments. 2. Ethical Standards Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose anv material interest in financial institutions with which then conduct business. Thev shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the Village. Authorized Investments and Pre - qualification The Village may invest and reinvest. in accordance within the objectives stated in subsection (c), in the financial instruments noted in the table inset below. When considering such investments. the village shall use the following pre - qualification parameters for specific institutions: a. Banks: The Village shall only select a QPD (Qualified Public Depository) with a collateral pledge le`-el of 25% or 50% as established by the State Chief Financial Officer pursuant to Section 280.04, Florida Statutes. b. SEC registered money /market mutual finds: S &P: AAAm Minimum Or Moodv's: Aaa -mf Minimum Insurance companies: A.M. Best Rating: Minimum aaa c. Corporate interest notes: S &P: A- Minimum Moodv's: A3 Minimum d. Commercial Paper: S &P: A -1 Minimum Moodv's: P -1 Minimum Updated: 11 -14 -13 Page 35 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach e. State and/or Local Government Taxable and/or Tax - Exempt Debt: S &P: A- Minimum for long tern debt or A -2 for short-tern debt Moodti's: A3 Minimum long tern debt or VMIG2 for short tern debt f. Local government investment pools: All components in each pool must satisfy the appropriate pre - qualification parameters noted for that institution. Maturity and Liquidity Requirements The Village's investment portfolio shall be structured to provide sufficient liquidity to pay obligations as they come due. Furthermore, to the extent possible an attempt will be made to match investment maturities with known cash needs and anticipated cash flogs requirements. Unless matched to a specific cash flogs, the Village will not directly invest in securities maturing more than three years from the date of purchase. Portfolio Composition The following are the limits for investments and lirnits on security issues, and maturities in the portfolio. The Chief Financial Officer has the option to further restrict investment in selected instruments, to conform to the present market conditions. Note: The table insert noted below defines two types of Village investments; '`Operating" and-Core": 1. Operating: Those liquid fiords necessary to conduct routine village activity, in addition to an amount detennined by the village council and administration sufficient to corer emergency situations and unforeseen capital expenditures. 2. Core: All finds not included in operating finds. In general. these finds can be invested in issues with longer -tern maturities. These terns shall be defined and the amounts will be designated at least once a year during the village budget discussions. Changes during a year shall only be made by resolution of the village council. These changes will apply to the end of the current fiscal year and must be reconfirmed or changed as needed during the next annual budget process. Table Inset: Authorizedlnvestnients Type ofFunds -llaturi. &I iQe -llininauni % -llaxinauni io 8.33% 100% Interest - bearing Operating N/A (I/12 of annual (no more than 50 °o with checking or savings Village operating any one depository budget) institution) accounts 100% Core NSA 0% (no more than 50° o with any one depository institution) Interest—bearing time Operating 30 dais 0 0, /0 91.67% deposits (11;'12t" of annual Village operating budget) (no more than 33.330o with anv one issuer) Core 3 years 0% 100% (no more than 33.33 00 with anv one issuer) The Local Government Operating N/A 0 114> 25% Updated: 11 -14 -13 Page 36 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Authorizedlnvestnients Type o_fFurads Haturi. Ran e Hininnini % Haxinnini Surplus Funds Trust Core N/A 0% 25% Fund/intergovernmental investment pool Securities and Operating N/A 0% 50% Exchange Conm sslon registered money (no more than 33.33 00 with any one issuer.) Core N/A 0% 50% market fiords (no more than 33.33 00 with any one issuer.) Direct obligations of Operating 30 days 0°�> 50% the United States Treasury Core 5 vears 00" 0 100% Federal Agencies Operating N/A 0 114) 0% Core 5 years 0° 0 50% (no more than 100 o with any one issuer) Corporate Notes Operating N/A 0 114) 0% Core 3 vears 0 114> 25% (no more than 5 0o with anv one issuer) Commercial Paper Operating 30 Days 0° 0 5% Core 270 Days 0% 15% (no more than 5 °o with anv one issuer) State and /or Local Operating N/A 0% 0% Government Taxable and/or Tax - Exempt Core 3 Years 0% 20% (no more than Debt 5 °o with anti one issuer Risk and Diversification Assets held shall be diversified to control the risk of loss resulting from the over concentration of assets in a specific maturity, issuer, instrument. dealer, or bank through which these instruments are bought and sold. Diversification strategies shall be reviewed and revised periodically as deemed necessary by the Chief Financial Officer. Authorized Investment Institutions and Dealers A list will be maintained of financial institutions authorized to provide investment sern-ices. In addition, a list also will be maintained of approved security brokers /dealers selected by credit worthiness. Third -Party Custodial Agreements All securities purchased by the Village shall be properly designated as an asset of the Village and shall be held in safekeeping with a third -party custodial institution. The third -party custodian will be required to designate all securities held as assets of the Village. No withdrawal of securities, in whole or in part, shall be made from safekeeping, except by the Chief Financial Officer, or his /her respective designees. Securities transactions between a broker - dealer and the custodial) involving purchase or sale of securities Updated: 11 -14 -13 Page 37 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach by transfer of money or securities must be made on a '`delivery vs. payment" basis, if applicable, to ensure that the custodian will have the security or money, as appropriate, in band at the conclusion of the transaction. Master Repurchase Agreement All approved institutions and dealers transacting repurchase agreements shall execute and perform as stated in the Master Repurchase Agreement. All repurchase agreement transactions shall adhere to the requirements of the Master Repurchase Agreement. Bid Requirement An appropriate maturity date will be determined for each investment base on cash f low needs and market conditions. Based on these considerations, the Chief Financial Officer will analyze and select one or more optimal types of investments and competitively bid the security in question when feasible and appropriate. Except as otherwise required by law. the bid deemed to best meet the investment objectives specified in subsection III must be selected. Internal Controls a. The Chief Financial Officer shall establish and maintain a written system of internal controls made a part of the village's operational procedures. The internal controls shall be designed to prevent losses of finds, which might arise from fraud, employee error, and misrepresentation by third parties, or imprudent actions by employees of the Village. No person shall engage in an investment transaction except as authorized in this policy. b. Independent auditors, as a normal part of the amoral financial audit to the village, shall conduct a review of the system of internal controls to ensure compliance with policies and procedures as may be required by the village. Continuing Education The Chief Financial Officer shall complete eight (8) hours of continuing education annually in subjects or courses related to investment practices and products. Reporting The Chief Financial Officer, or his /her respective designee, shall prepare a quarterly investment report, which shall include securities in the portfolio by class and type, acquisition cost, income earned, yield, maturity date and market value as of the report date. The report will be provided to the legislative and govenung body of the Village. The report shall be available to the public. Securities Disposition Every security purchased on behalf of the Village must be properly earmarked and: a. If registered with the issuer or its agents, must be immediately placed for safekeeping in a location that protects the Village's interest in the security. b. If in book entry form, must be held for the credit of the governing body by a depository chartered by the Federal Government, the State of Florida, or any other state or territory of the United States which has a branch or principal place of business in the State of Florida as defined in Florida Statute Section 658.12, or by a national association organized and existing under the laws of the United States which is authorized to accept and exercise trusts and which is doing business in the State of Florida, and must be kept in the depository in an account separate and apart from the assets of the financial institution; or Updated: 11 -14 -13 Page 38 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach c. If physically issued to the holder but not registered with the issuer or its agents, must be immediately placed for safekeeping in a secured Vault. Sale of Securities When invested finds are needed in whole or in part for the purposes originally intended or for more optimal investments, the Chief Financial Officer matt sell such investments at the then prevailing market price and place the proceeds into the proper account or fund. Policy Considerations 1. Exemptions: Any investment held prior to the adoption of this policy that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. At maturity or liquidation,. such monies shall be reinvested only as provided by this policy. 2. Amendments: This policy shall be reviewed on an amoral basis by the village council at the '`setting of council goals and objectives" session of the annual budget. The Village Council must approve any changes. Delegation of Authority The Finance Director is the Chief Financial Officer of the Village and is responsible for investment decisions and activities. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established hereunder. Nothing set forth herein shall preclude the Village from utilizing a Chartered Financial Analyst or any other individual or agency subject to formal oversight by the United States Securities and Exchange Cormnission to invest finds on behalf of the Village in accordance with the mandates of paragraph (It) of this investment policy. Authorized signatories are the Chief Financial Officer, the Village Manager and the Village Mayor. These individuals are also authorized to initiate wire transfers for the Village. All investment transactions require approval by two of the depository signatories. Updated: 11 -14 -13 Page 39 of 54 Accounting Polices & Procedures Manual Inventories Village of North Palm Beach The Village keeps inventories for gas & diesel fiiel (Public Works Department), medical supplies (Public Safety- Department), golf merchandise (Country Chub Golf Shop), and liquor, food & non - alcoholic beverages (Country Chub Restaurant). These inventories are maintained by each respective department and reconciled by the finance department to properly allocate the expense on a monthly basis. Updated: 11 -14 -13 Page 40 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Payroll and Personnel Administration For most local governments, personnel sern-ice costs (payroll and related fringe benefits) constitute the single largest category of expenditures. Proper control over and accounting for personnel sern-ice costs is therefore Vital to financial control. Effective payroll administration begins well before the preparation of payroll checks. The payroll procedures of the Village are designed to pennit the accurate and timely transrnission of the payroll checks. Personnel Administration The Human Resources Director acts as Personnel Manager for the Village of North Palm Beach. The Village Personnel Policies are governed by: 1. Personnel Rimes and Regulations 2. Comprehensive Pay and Classification Plan adopted annually in the budget 3. Various Union Contracts The Human Resources Director is responsible to oversee the new hires, tenninations, pay scales and other personnel related matters. Personnel Action Form (PAF) generally is used to execute personnel related changes in the payroll system. New Employees The Human Resources Department is responsible for processing new employees. Department Heads are required to work with the Human Resources Director to complete the following forms for all new employees: 1. Employment Application and Background Releases 2. Department Hiring Recommendation Memo 3. Conditional Offer Letter from the Manager 4. Personnel Action Form 5. Background Check Authorizations 6. Oath 7. W -4 8. I -9 and copy(ies) of supporting document(s) 9. Drug -Free Work -place Acknowledgement and pre - employment testing Instructions 10. Emergency Contact Form 11. Identification Badge Questionnaire and Picture 12. F.S.S. 119.07 Exemption Form 13. Policy Acknowledgements (Safety, FMLA, and Vehicle as applicable) 14. Medical Insurance Enrollment Form or Opt -Out Form (full -time employees only) 15. Dental Insurance Enrollment Form or Waiver (full -time employees only) 16. Life Insurance Enrollment / Beneficiary Designation Form (full -time employees only) 17. Long -tern Disability Enrollment Form (full -time employees only) 18. Flexible Spending Account Enrollment Form (optional / full-time employees only) Updated: 11 -14 -13 Page 41 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach 19. Optional Insurance product enrollment forms if elected (e.g.. EyeMed vision insurance, AFLAC, etc.) (fiull -time employees only, except AFLAC) 20. Pension Election Form(s) (fiill -time employees only) 21. Deferred Compensation (457) Enrollment Fonn (optional / fiill -time employees only) 22. Direct Deposit Forn (optional) The Human Resources Director reviews the paperwork of the new employees and sends it to Finance Department for completion in automated payroll system. Following activation in payroll, employee paperwork is scanned by Finance and returned to Human Resources for maintenance as part of the employee's personnel file. Terminations The Human Resources Department is responsible for processing tenninations. Department Heads are required to work with the Human Resources Director to complete the following forms for all tenninations: 1. Personnel Action Forn 2. Exit Checklist (for return of all Village property) 3. Exit Interview 4. Computation of payout of accrued leave balances in accordance with applicable policies and/or collective bargaining agreements 5. Coordination of continuing benefits as applicable (COBRA, retiree insurance, and/or portability of life insurance) The Human Resources Director reviews the paperwork of tenninated employees and sends it to Finance Department for completion in automated payroll system. Following final payouts through payroll, employee paperwork is scanned by Finance and returned to Human Resources for inclusion in the employee's personnel file. Payroll The Village pays wages on a bi- weekly basis. The Finance Department electronically subunits an earnings worksheet to each Department which lists each employee and the categories of payment, i.e., regular pay, overtime pay. Vacation, etc. The following procedure is used to process the payroll paperwork: The Finance Department sends out a blank worksheet to every Department on Friday before the end of the pay period on Sunday. The Departments complete the worksheets on the first Monday of the new pay period. The Department Head allocates the numbers of hours worked among these categories. Any category other than regular pay must be supported by an approved personnel action forn. The Department will print a hard copy of the worksheet and attach all supporting documents. The Departments will submit the payroll work sheets to the Finance Department no later than the close of business on Monday. Departments must also subunit completed time cards /sheets for each employee that has been signed by the employee Verifying their time as accurate. The Finance Department will hold the checks of all employees for whom a signed time card /sheet is not received for the employee to pick -up in the Finance Department and sign for their time. Updated: 11 -14 -13 Page 42 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach General Ledger and Financial Reporting The Village utilizes a double entry system that includes the general ledger, books of original entry and suitable subsidiary records. The general ledger information is stored in a general ledger system. The books of original entry are posted and the general ledger and subsidiary ledgers are kept current and balanced to the control accounts monthly. Physical safeguards are maintained over the accounting records. A back -up copy, on computer disk/tape. of the accounting system is updated daily and kept in a safe place. Access to accounting records is restricted to employees with designated responsibility for the records. Chart of Accounts The Village incorporated the Uniforn Accounting System Chart of Accounts developed by the State of Florida Department of Banking and Finance as an integral part of its accounting system. The general ledger account classification stricture, as defined by the Village, consists of 10 digits. Funds While each year's budget will determine which finds are used, in general. the Village may utilize the following fluids: 1. General Fund 2. Enterprise Funds 3. Trust and Agency Funds 4. General Fixed Assets 5. General Long -tern Debt 6. Capital Projects Find 7. Special Revenue Funds Department Types Goverunental Funds Village Council Village Manager Village Clerk Finance Legal General Sen-ices Expenditure Law Enforcement Police Forfeiture Trust Expenditure Fire Department Pool Tennis Building Department Administration — Public Works Facilities Maintenance Sanitation Streets & Grounds Maintenance Vehicle Maintenance Library Recreation Special Events Debt Sen-ice Resen-es Comlmuiity Planning Code Enforcement Updated: 11 -14 -13 Page 43 of 54 Accounting Polices & Procedures Manual Enterprise Funds Golf Course Golf Shop & Driving Range Restaurant Resen-es Account Types Assets and Other Debits Village of North Palm Beach Country Chub Administration Clubhouse Grounds Debt Sen-ice This heading corers not only assets, but also those items that are not assets at the date of the balance sheet, but are expected to become assets at some future time. This heading also includes accounts, which normally have debit balances even though they are not assets. Liabilities and Other Credits This heading corers not only liabilities in existence at the date of the balance sheet, but items which may become liabilities at some future time, and other accounts which normally carry credit balances. Revenues Revenues may be operationally defined in a governmental find accounting context as -all increases in find net assets except those arising from interfind reimbursements. interf nd operating and residual equity transfers, or long -tern debt issues ". Expenditures The tern -expenditures ", whether used in connection with the accrual or accrual basis of accounting, denotes the cost of goods delivered or sen-ices rendered (whether paid or unpaid) including expenses, capital outlays, and the provisions for debt retirement where such debt is not reported as a liability of the find from which it was retired. Each expenditure should be analyzed and classified individually by transaction code, and object regardless of the organizational unit incurring it. Cost allocation may be necessary where material amounts of expenditures for a single organization unit cross function - activity lines. Journal Entries Journal entries are used to record all financial transactions in the general ledger. There are two types of journal entries. Journal entry sources are used to identify where the journal entry originated. The sources are: • Manual Journal Entry • Pavroll System • Accounts Pavable • Cash Receipts Updated: 11 -14 -13 Page 44 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach COMDuter Generated Journal Entries Upon completion of their work, other accounting personnel (i.e., Accounts Payable, Payroll, and Accounts Receivable) update their journal entries automatically on the computer system. Various checks and balances are completed along the way to insure accuracy. Manual Journal Entries Journal entry forms are prepared to document all manually prepared journal entries and are the source document to record information in the general ledger. Various accounting personnel are responsible for preparing this type of journal entry. The Finance Director approves each manual journal entry before it is entered into the accounting system. The docunment contains the following data: • Transaction date • Journal entn number • Account number (s) • Account title • Transaction debit or credit amount (s) • Transaction description Supporting documentation. where applicable, for the transaction being recorded is attached to the journal entry form. The journal entry forms and attached supporting documentation are filed by the month in which thev occurred. Daily, the computer generated journal entries and the manual journal entries are updated to the general ledger in accordance with the automated accounting based software. Financial Reporting Financial statements and schedules are prepared from the accounts and related records. Monthly financial reports and reports of operating results are prepared to facilitate management control of financial operations and to allow public and legislative oversight of the Village's operations. Analytical Review Monthly all general ledger accounts are reviewed. Each staff member is responsible for those accounts under their control. If applicable, commutative results from the general ledger accounts are collected in various spreadsheets. The results from the spreadsheets are then reviewed, balanced and /or matched to independent information. The Finance Manager and Finance Director are responsible for overseeing the reviews. Updated: 11 -14 -13 Page 45 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Annual General Purpose Financial Statements The Village requires that an annual audit of its accounts and records be completed after the end of its respective fiscal year by an independent certified public accountant retained by it and paid from its public funds. The audited general purpose financial statements contain the following sections: • Report of Independent Certified Public Accountants • Combined Balance Sheet - All Fund Types and Account Groups • Combined Statement of Revenues. Expenditures and Changes in Fund Balances - All Governmental Fund Types • Statement of Revenues and Expenditures - Budget and Actual - Special Revenue Fund • Compliance Report based on an audit of the general purpose financial statements performed in accordance with government auditing standards • Report on the internal control stricture in accordance with goverment auditing standards • Report on comments to management • GASB Reporting Requirements Updated: 11 -14 -13 Page 46 of 54 Accounting Polices & Procedures Manual Travel Village of North Palm Beach Purpose The purpose of the Travel Regulations is to provide a policy for guidance of employees and officials who are required to travel on official business of the Village, to attend schools, conferences, seminars, conventions, or other designated purposes. Objective The primary objective is to provide a procedure to be used when making claims for reimbursement of travel and supplementary expenses by travelers and payment of these allowances by the Finance Department. This procedure is applicable to all Village officials, employees, and authorized persons when making claims for travel expense allowances: all department/division supern-isors, administrators. the Village Manager when authorizing and approving travel. and the Finance Department when paying travel expenses. Authority to Incur Travel Expense All travel must be sanctioned by budgetary appropriation. Additional authorization for Department Head travel must be obtained from the Village Manager (no such authorization is necessary for travel by members of the Village Council). The Village Manager may promulgate such rules and regulations, and prescribe such forms as shall be necessary to effectuate the purposes of this manual. a. All regular overnight out- of -town travel by employees must be approved in writing in advance by the Village Manager after recommendation of the Department Director. All local and /or current -day travel must be approved in writing by the respective Department Director. b. The mode of travel will also be approved in the same manner as the travel. c. Local mileage will be authorized by Department budgetary availability and, in addition, approved in advance by the Department Director. Approval will be attached in reimbursement/payment documentation provided to the Finance Director. Authority to Incur Supplementary Expenses Authorization to incur supplementary expenses must be by budgetary action or special authority- granted by the Village Manager. The following are the only expenses authorized to be claimed as travel expenses: a. Transportation Allowance: 1) Fare — Commercial coach or tourist fares, utilizing the most direct route available to the carrier used. 2) Mileage — The mileage allowance for a private vehicle shall not exceed the latest allowable IRS per mile rate for mileage traveled either during regular travel or local trips in the immediate vicinity of the Village. b. Lodging: Reimbursement for lodging shall be at the current single occupancy rate and fully supported by said bills. Employee should seek the commercial rate whenever possible. Updated: 11 -14 -13 Page 47 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach c. Per Diem Subsistence Allowance: For the purposes of reimbursement rates and methods of calculation, per diem and subsistence allowances are divided into the following groups and rates: 1) All travelers shall be compensated for subsistence when traveling to a convention or conference or when traveling within or outside the state in order to conduct bona fide Village business, when such convention, conference or travel sern-es a direct and lawful public purpose. The subsistence allowance shall consist of either of the following for each day- of travel. at the option of the traveler: i. Fifty dollars ($50.00) per diem; or ii. If actual expenses exceed fifty dollars ($50.00), the amounts pennitted in paragraph (2) for meals, phis actual expenses for lodging at a single occupancy rate to be substantiated by paid invoices. 2) All travelers shall be allowed the following amounts for subsistence while on official business: Breakfast................................ ............................... .........................$12.00 Lunch............................................................. ............................... $18.00 Dilmer....................................................................... ............................... $20.00 3) No one, whether traveling out of state or in state, shall be reimbursed for any meal or lodging included in a convention or conference registration fee paid by the Village. d. All allowance rates for succeeding years shall be established concurrently with passage of the annual budget appropriation ordinance. e. Other Expenses: Tips and gratuities are not reimbursable to Village employees. The following incidental travel expenses will be reimbursed. Receipts should accompany requests for payment, when available. 1. Taxi or limousine fares 2. Ferry fares, and bridge, road and tunnel tolls 3. Storage or parking fees 4. Connn nication expenses (business only) 5. Conference or convention registration fees if attendance at such conference or convention sern-es a direct public purpose with relation to the person attending such meetings. Mode of Travel Travel by Common Carrier All travel shall be upon established direct routes, and shall be at coach or tourist fare rates. If a traveler elects to take an indirect route for his /her convenience. costs in excess of the rate for a direct route passage shall be bonne by said traveler and he /she shall be reimbursed only for such direct route rate. The Village Manager shall determine the most cost effective method of travel for each trip, and in making his determinations, shall consider the following conditions: Updated: 11 -14 -13 Page 48 of 54 Accounting Polices & Procedures Manual The nature of business. The most efficient and economica transportation). The number of persons making the transported. Travel by Private Vehicle Village of North Palm Beach means of travel (considering the time, cost of trip and the amount of equipment or material to be a. The use of a privately owned vehicle for official travel in lieu of public vehicle or common carrier may be authorized by the Village Manager, if a publicly owned vehicle is not available. If traveling by privately owned vehicle, the traveler shall receive reimbursement of a mileage allowance authorization by the Village policy. b. All mileage shall be computed from point of origin to point of destination and, when possible, shall be computed on the basis of the current map of the State Road Department. Vicinity mileage necessary for conduct of office business is allowable but must be shown as a separate item on expense vouchers. c. No traveler shall be allowed mileage or transportation expense if he /she is gratuitously transported by another person. or when transported by another traveler who is entitled to mileage or transportation expense from the Village. Advance Travel Allowance Advance payment of travel allowance is permitted provided that an advance is requested and approved by the Village Manager prior to disbursement. Advance travel payments are subject to the following rules: a. The Village shall advance to employee, prior to travel, per diem for meal allowance, cost of hotel. tuition and registration fees which have not been prepaid by the Village. Employees are encouraged to request the checks made out directly to hotels and organizations to avoid paying sales and other taxes. Sales tax paid by the employee for hotel is not reimbursable. b. Separate requests must be submitted for each person making the trip. Payment will be made with separate checks issued to each person. c. Requests will be supported by a copy of the applicable meeting brochure and will be submitted soon enough to allow sufficient time for processing and preparing checks. d. Check Issue Authorization form must be authorized by the Department Head and approved by the Village Manager. This form is then submitted to the Finance Department for check issuance. e. Upon return from a trip, all receipts and supporting documentation must be submitted with a completed Report of Travel Expense form. If additional monies are owed, a check request form should be attached. Monies not spent should be returned to the Finance Department with the Report of Travel Expenses. Travel Expense Procedure Travel Expense Reimbursement Travel expense will be reimbursed at the rates prescribed and authorized by the Village policies. A Request for all out -of -town overnight travel must be submitted in writing to the Village Manager reflecting recommendation of the Department Director. A Travel Expense reimbursement form for all Updated: 11 -14 -13 Page 49 of 54 Accounting Polices & Procedures Manual approved travel costs, including receipts traveling employees to their Department reimbursement package will be forwarded submission to the Finance Department. Payment for Travel Village of North Palm Beach and Check Issue Authorization form must be submitted bti Director for review and written approval. This approved to the Village Manager for his review and approval before After the Finance Department's review and approval of mathematical accuracy and a detailed review of required receipt documentation for the approved travel reimbursement, checks will be issued by the Finance Department to the individual requesting payment. Updated: 11 -14 -13 Page 50 of 54 Accounting Polices & Procedures Manual Definitions Village of North Palm Beach Authorized Travel That travel approved by Village Council through an appropriation ordinance and approved in advance by the Village Manager; or travel approved by Village Council extemporaneously. Class A Travel Continuous travel of twenty -four hours or more away from the Village which involves overnight absence. Class B Travel Travel for a short or day trip not involving overnight absence. Common Carrier Train, bus, commercial airlines operating scheduled flights, or rental cars of an established rental firm. Other Expenses Other incidental expenses for which reimbursement has been authorized, including: a. Taxi fare, ferry fares and tolls b. Auto storage and parking fees c. Conummication expenses d. Miscellaneous expenses Supplementary Other expenses authorized by Council or budgetary action which are not Expenses considered part of travel; e.g., spouse accompanying traveler with special permission, entertaining during and as a course of travel, etc. Traveler Any person authorized by law to travel a Village expense while traveling of official business. Travel Day A period of twenty -four hours consisting of four quarters of six hours each. Travel Expense The usual ordinary and incidental expenditure necessarily incurred by a traveler. Travel Period A period of time between the time of departure and time of return. Village The Village of North Palm Beach, Florida. Village Official An individual who in the performance of his official duties is vested by law with powers of government and who is elected by the people, or appointed by the Village Council and has jurisdiction extending throughout the municipality, or any person lawfully sern-ing as either of the foregoing classes of individuals as designee or successor. Updated: 11 -14 -13 Page 51 of 54 Accounting Polices & Procedures Manual Fund Balance Policy Purpose Village of North Palm Beach The following policy has been adopted by the Village of North Palm Beach in order to address the implications of Governmental Accounting Standards Board (`GASB ") Statement No. 54, Fund Balance Reporting and Government Fund Definitions. This policy and the procedures promulgated under it supersede all previous regulations regarding the Village's fluid balance and resern-e policies. Fund Type Definitions The following definitions will be used in reporting activity in governmental finds across the Village. The Village may or may not report all fiord types in any given reporting period, based on actual circumstances and activih . The general find is used to account for all financial resources not accounted for and reported in another fiend. Special revenue finds are used to account and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specific purposes other than debt sern-ice or capital projects. The tern proceeds of specific revenue sources" establishes that one or more specific restricted or committed revenues should be the foundation for a special revenue find. Those specific restricted or committed revenues may be initially received in another fiend and subsequently distributed to a special revenue find. Those amounts should not be recognized as revenue in the find initially receiving them; however. those inflows should be recognized as revenue in the special revenue find in which they will be expended in accordance with specified purposes. Special revenue finds should not be used to account for resources held in trust for individuals, private organizations, or other governments. The restricted or committed proceeds of specific revenue sources should be expected to continue to comprise a substantial portion of the inflows reported in the find. Other resources (investment earnings and transfers from other find, for example) also may be reported in the find if those resources are restricted, committed or assigned to the specified purpose of the find. Debt sern-ice finds are used to account for all financial resources restricted, committed or assigned to expenditures for principal and interest. Debt sen-ice finds should be used to report resources if legally mandated. Financial resources that are being accumulated for principal and interest maturing in future years also should be reported in debt sern-ice finds. Capital projects finds are used to account for all financial resources restricted, committed or assigned to expenditures for capital outlays, including the acquisition or constriction of capital facilities and other capital assets. Capital projects finds exclude those types of capital - related outflows financed by proprietary finds or for assets that will be held in trust for individuals, private organizations, or other governments. Permanent finds are used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the Village's programs — that is, for the benefit of the Village or its citizeriry. Permanent finds do not include private - purpose trust finds, which should be used to report situations in which the Village is required to use the principal or earnings for the benefit of individuals, private organizations, or other governments. Updated: 11 -14 -13 Page 52 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach Fund Balance Reporting in Governmental Funds Find balance will be reported in governmental fiords under the following categories using the definitions provided by GAS13 Statement No. 54: Nonspendable find balance includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash. for example, inventories and prepaid amounts. It also includes the long -tern amount of loans and notes receivable. as well as property acquired for resale. However. if the use of the proceeds from the collection of those receivables or from the sale of those properties is restricted, committed, or assigned, then they should be included in the appropriate find balance classification (restricted, committed. or assigned), rather than nonspendable find balance. The corpus (or principal) of a permanent find is an example of an amount that is legally or contractually required to be maintained intact Restricted find balance includes amounts that are restricted to specific purposes when constraints placed on the use of resources are either: (a) Externally imposed by creditors (such as through debt covenants). grantors, contributors, or laws or regulations of other governments: or (b) Imposed by law through constitutional provisions or enabling legislation. Enabling legislation authorizes the Village to assess, lexy, charge, or otherwise mandate payment or resources (from external resource prodders) and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation. Legal enforceability means the government can be compelled by an external party — such as citizens, public interest groups, or the judiciary — to use resources created by enabling legislation only for the purposes specified by the legislation. Committed find balance includes amounts that can be used only for specific purposes pursuant to constraints imposed by an ordinance, the Village's highest level of decision making authority. Those committed amounts cannot be used for any other purpose unless the Village removes or changes the specified use by taking the same type of action (an ordinance) it employed to previously commit those amounts. Committed find balance should incorporate contractual obligations to the extent that existing resources in the find have been specifically committed for use in satisfying those contractual requirements. Amounts in the committed find balance classification may be redeployed for other purposes pursuant to an ordinance. Constraints imposed on the use of committed amounts are imposed by the Village, separate from the authorization to raise the underlying revenue. Therefore, compliance with constraints imposed by the Village that commit amounts to specific purposes is not considered to be legally enforceable. An ordinance that commits find balance to a specific purpose should be adopted prior to the end of the reporting period. but the amount, if any, which will be subject to the constraint, may be determined in the subsequent period. Assigned find balance includes amounts intended to be used by the Village for specific purposes, but are neither restricted nor committed. Intent should be expressed by the Village Council or the Village Manager to which the Village Council has delegated authority to assign amounts to be used for specific purposes. The authority for making an assignment is not required to be the Village's highest level of decision - making authority. Constraints imposed on the use of assigned amounts are more easily removed or modified than those imposed on amounts that are classified as colnnitted. In governmental finds other than the general find, assigned find balance includes all remaining amounts (except for negative balances) that are not classified as nonspendable and are neither restricted nor committed. In the general find, assigned find balance includes all amounts that are Updated: 11 -14 -13 Page 53 of 54 Accounting Polices & Procedures Manual Village of North Palm Beach intended to be used for specific purposes in accordance with the Village's expressed intent, but are neither restricted nor committed. By reporting particular amounts that are not restricted or committed in a special revenue. capital projects, debt sern-ice, or permanent find, the Village has assigned those amounts to the purpose of the respective finds. Assigmnent within the general find conveys that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the Village itself. An assignment for an amount to a specific purpose should not be reported if the assigmnent would result in a deficit in unassigned find balance. An appropriation of existing find balance to eliminate a projected budgetary deficit in the subsequent year's budget in an amount no greater than the projected excess of expected expenditures over expected revenues satisfies the criteria to be classified as an assignnent of find balance. Unassigned find balance includes the residual classification for the general find. This classification represents find balance that has not been assigned to other finds and that has not been restricted, committed, or assigned to specific purposes within the general find. The general find should be the only find that reports a positive unassigned find balance amount. In other governmental finds, it may be necessary to report a negative unassigned find balance if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes. Operational Guidelines The following guidelines address the classification and use of find balance in governnental finds: Classifying find balance amounts — Fund balance classifications depict the nature of the net resources that are reported in a governnental find. An individual governmental find may include nonspendable resources and amounts that are restricted, committed, or assigned, or any combination of those classifications. The general find may also include an unassigned amount. Encumbrance repot - Encumbering amounts for specific purposes for which resources have already been restricted. committed or assigned should not result in separate display of encumbered amounts. Encumbered amounts for specific purposes for which amounts have not been previously restricted, committed or assigned, will be classified as committed or assigned, as appropriate, based on the definitions and criteria set forth in GASB Statement No. 54. Prioritization of find balance use - When an expenditure is incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) amounts are available. it shall be the policy of the Village to consider restricted amounts to have been reduced first. When an expenditure is incurred for purposes for which amounts in any of the unrestricted find balance classification could be used, it shall be the policy of the Village that committed amounts would be reduced first, followed by assigned amounts and then unassigned amounts. Implementation and Review Upon adoption of this policy the Village authorizes the Village Manager to establish and review any standards and procedures which may be necessary for its implementation. The Village Manager shall review this policy at least annually and make any recommendations for changes to the Village Council. Updated: 11 -14 -13 Page 54 of 54