Township council has approved procedural amendments aimed at updating municipal practices regarding cheque signing and the accounts payable processes.
The changes will allow “any two signing authorities,” including the mayor, CAO clerk, director of finance/treasurer or deputy treasurer to sign cheques on behalf of the township. Previously either the mayor or CAO was required to be one of the two signing authorities.
In the case of electronic funds transfers, the accounting/payroll coordinator or the finance clerk along with one of mayor, CAO clerk, director of finance/treasurer and deputy treasurer, may now authorize transactions.
Also eliminated is the of the practice of obtaining the mayor’s signature on the cheque audit list and the inclusion of fully-itemized accounts payable reports on the council meeting agendas.
Finance director Karmen Krueger explained in a staff report at the Dec. 12 meeting the changes are possible due to internal controls on spending procedures and changes in banking technology.
“In the past, municipalities issued fewer cheques, and one of the functions of council was to oversee the outflow of payments from the municipality,” the report points out. “This was before many other controls were put in place, ranging from the development of policies and procedures around how payments are issued, printed and distributed, electronic banking and even procurement policies. It was also before the function and purpose of an external auditor evolved into the role it has today, which is to be more reliant on our internal control processes, rather than ‘audit’ or look at every single transaction.”
The report notes there are no direct financial implications to the changes, although there may be “a slight indirect savings” in the form of the mayor’s time and staff time in preparing council agendas, as well as in the turnaround of processing and issuing payments, particularly as more payments migrate to electronic options.
While stating they were pleased with the modernization of operations, some councillors expressed reluctance to let go of hands-on control of some aspects of township finance.
“This was a difficult one for me to let go of,” commented councillor Lori Woodham, who wanted to ensure the township had in place “the proper, clear policies and procedures to mitigate any risk for both our employees and for us as members of council.”
“Do I feel there are appropriate controls in place? I would say yes, and they’ve always been there in the form of internal controls,” Krueger responded.
In reaction to “not having any type of accounts payable report presented to council,” Woodham wondered if the regular quarterly report on departmental finance “could have a little more meat to it in terms of understanding, department-wise where (money) went?”
Krueger said the practice of approving accounts payable at council meetings may have given council the appearance of “control” over each transaction. However she said that perception was a bit “misguided,” and “stemmed back to a time when transactions happened far less frequently and they were happening with far less volume.
“Nowadays if the budget’s approved, or council passes a report to award a tender and that happens, there’s no way that signing a cheque can be denied three weeks later or two weeks later, so it just becomes more of an administrative slowdown than a real control.”
However, she stated, “I want to get a little bit more analysis in those departmental updates.”
Councillor Michael Martin said the moves were “something that I hoped for, expected … to evolve us into the 21st century.”
Martin suggested internal controls on funding transfers be well documented.
Krueger said staff would “definitely be documenting them in a more formalized basis.”
Council passed a resolution accepting the report and approving the procedural amendments.
“Thank you for bringing us into 2017,” said Mayor Neil Driscoll.
