Compton City Council
March 14, 2023

Members of the public may address the City Council on any item shown on the agenda or matter of the Council’s authority after completion of “Request to Address the Council Form” available in the lobby of the Council Chambers or in the City Clerk’s office. This form must be completed 15 minutes prior to the scheduled meeting time. Pursuant to Section 54957.5 of the California Government Code, Any writings (Except for those writings which are exempt from disclosure) which are
distributed to all or a majority of the members of the City Council are available for public inspection in the lobby of the City Council Chambers and in the office of the City Clerk during regular business hours.

COMPTON CITY COUNCIL
AGENDA
03/14/2023
Closed Session 4:30 P.M.

Public Meeting 5:30 P.M.

CITY COUNCIL CHAMBERS
205 SOUTH WILLOWBROOK AVENUE
COMPTON, CALIFORNIA 90220

HEARING(S)
5:50 PM - JOINT PUBLIC HEARING - HOUSING AUTHORITY 2023 PHA

ANNUAL PLAN

OPENING

MOMENT OF SILENCE

PLEDGE OF ALLEGIANCE

ROLL CALL

PUBLIC COMMENTS ON AGENDA ITEMS AND NON-AGENDA MATTERS
-2- City Council Agenda
3/14/2023 5:30 PM

CLOSED SESSION

PUBLIC EMPLOYEE PERFORMANCE EVALUATION
TITLE: City Controller
Pursuant to California Government Code Section 54957

OPENING
PUBLIC MEETING – 5:30 PM

REPORT ON CLOSED SESSION ACTION(S)

PUBLIC COMMENTS ON AGENDA ITEMS AND NON-AGENDA MATTERS

CONSENT AGENDA
Consent items are routine and expected to be non-controversial. They will be acted upon by the Council at one time without discussion unless a Council Member requests an item be removed or discussed..

APPROVAL OF MINUTES

1. JANUARY 17, 2023

2. JANUARY 24, 2023

CITY MANAGER/CITY ATTORNEY/CITY CONTROLLER/CITY TREASURER

REPORTS

3. CITY TREASURER'S REPORT - MEASURE P - Brandon Mims

CITY CONTROLLER

4. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON TO

RECEIVE AND FILE INTERNAL CONTROL POLICIES RELATING TO, CASH

RECEIPTS, BILLING, AND ACCOUNTS PAYABLE PRACTICES AND AN UPDATE TO THE BUDGET POLICY.

REGULAR AGENDA

UNFINISHED BUSINESS

5. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

ACCEPTING MEMBERSHIP IN THE GATEWAY CITIES AFFORDABLE HOUSING

TRUST, A JOINT POWERS AUTHORITY AND AUTHORIZING THE MAYOR TO

EXECUTE THE JOINT EXERCISE OF POWERS AGREEMENT
-3- City Council Agenda
3/14/2023 5:30 PM

NEW BUSINESS

6. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING THE ISSUANCE OF A PURCHASE ORDER FOR PAYMENT OF THE CITY’S 2023 MEMBERSHIP DUES TO LEAGUE OF CALIFORNIA CITIES ($26,354)

7. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON RESCINDING RESOLUTION NO. 25,674 AND AMENDING THE 2022-2023

FISCAL YEAR BUDGET TO TRANSFER FUNDS AND AUTHORIZE THE
REISSUANCE OF PURCHASE ORDERS TO EVTS INC. FOR ELECTRIC PARKING VEHICLES AND CHARGEPOINT, INC. FOR CHARGING STATIONS AND ANCILLARY INFRASTRUCTURE ($651,950)

COUNCIL COMMENTS

ADJOURNMENT
NEXT REGULAR MEETING: 3/21/2023 5:30PM
Visit our website at http://www.comptoncity.org
JANUARY 17, 2023
The Closed Session Compton City Council meeting was called to order at 4:47 p.m. by Mayor Emma Sharif in the Council Chambers of City Hall. The Moment of Silence Ceremony and the Pledge of Allegiance was led by Mayor Sharif.

ROLL CALL
Council Members Present – D. Duhart, A. Spicer, J. Bowers, Mayor E. Sharif Council Members Absent – L. Darden (Entered the meeting during closed session)

Other Officials Present: E. Perrodin, V. McDaniel, T. Thomas

CLOSED SESSION AGENDA ITEMS
PUBLIC EMPLOYEE PERFORMANCE EVALUATION TITLE: City Controller Pursuant to California Government Code Section 54957 (Re-scheduled for the next City Council meeting)
CONFERENCE WITH LEGAL COUNSEL - PENDING LITIGATION Kenneth Fountain, et al. v. City of Compton, LASC Case No. 20STCV11902 Debbie Crisp v. City of Compton, LASC Case No. 20STCV09271 pursuant to Government Code Section 54956.9(a)

AUDIENCE COMMENTS REGARDING CLOSED SESSION AGENDA ITEMS ONLY There were no audience comments regarding the closed session agenda items.

City Attorney Eric Perrodin requested a closed session for a conference with legal counsel regarding pending litigation in the matter of Kenneth Fountain, et al. v. City of Compton, LASC Case No. 20STCV11902 Debbie Crisp v. City of Compton, LASC Case No. 20STCV09271 pursuant to Government Code Section 54956.9(a)
On motion by Spicer, seconded by Duhart, the closed session was approved by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Sharif
NOES: Council Members – None
ABSENT: Council Members – Darden

RECESS TO CLOSED SESSION
On motion by Spicer, seconded by Duhart, the City Council recessed to closed session at 4:51 p.m. by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Sharif
NOES: Council Members – None
ABSENT: Council Members – Darden

RECONVENE TO OPEN SESSION
On motion by Spicer, seconded by Duhart, the City Council voted to reconvene at 5:52 p.m. by the following roll call vote:

ROLL CALL
Council Members Present: Duhart, Spicer, Bowers, Darden, Sharif Council Members Absent: None

1. REPORT OUT OF CLOSED SESSION
City Attorney Eric Perrodin reported out that there was no reportable action taken during the closed session in the matters of Kenneth Fountain, et al. v. City of Compton and Debbie Crisp v.

City of Compton.

PUBLIC COMMENTS ON AGENDA ITEMS AND NON-AGENDA MATTERS
Benjamin Holifield, Founder/President of the Compton Business Chamber of Commerce, urged the City Council to appoint Vernell McDaniel as the City Clerk, citing her experience and many years of working as the Chief Deputy City Clerk. Mr. Holifield then requested that the City of Compton institute a program to assist the homeless population as quickly as possible and further urged the Council to beautify the City.

Anthony Lewis, CIT, addressed the problems that have been plaguing the City since the 1980s.

Mr. Lewis quoted the Compton City Charter and indicated that the people of the City elected the Council to serve the citizens and improve the City. Mr. Lewis then suggested that Chief Deputy City Clerk Vernell McDaniel be appointed to fill the vacant term seat of outgoing City Clerk Alita Godwin.

Trina Allen requested that the City Council execute the Exclusive Negotiation Agreement (ENA) and added that her development company has received approval for funding and noted that they are on target to put shovels into the ground, after the agreement is approved. Ms. Allen indicated that the company is a 100% black-owned development team with funding for the project.

Abril Villanueva announced that she has collected a great deal of rainwater pouring from her roof using the free rain collection barrel she received from the Neighborhood for Sustainable Communities Center (NHS). Ms. Villanueva stated that it is critical that we begin conserving water and other resources for future generations. She further stated that water is life and encouraged the City to provide rain collection barrels and California native plants and trees for the residents.

Richard Earl requested that the City Council address the dangerous potholes and further suggested that the City needs a work crew to address the potholes after the rainy weather. Mr.

Earl then informed the Council that there must have more supermarkets for the residents and other amenities for the benefit of the community. Mr. Earl concluded by urging the City Council to appoint Vernell McDaniel to the position of City Clerk, noting that she will continue providing excellent service to the residents.

Wilbur McDaniel affectionately spoke in support of his mother, Chief Deputy City Clerk Vernell McDaniel, and requested that she be appointed to the position of City Clerk. Mr.

McDaniel thanked and commended the McDaniel family members for their willingness to provide decades of dedicated military and civil service to their communities and the Nation. Mr.

McDaniel highlighted that his mother is a strong, honest, kind, loving, and dedicated citizen and a pilar of the community with the highest of integrity.

Travis Martin requested that the Sheriff’s Department provide more deputies and patrol her neighborhood to eradicate the illegal street takeovers. Ms. Martin noted that she and several of the neighbors’ vehicles were wrongfully cited by Code Enforcement in their driveways. As a consequence, the neighbors were forced to park their vehicles in other places where the vehicles have been broken into or stolen. Ms. Martin indicated that there has been an ongoing issue relative to the parking and the illegal citation and further requested that the City Council assist the neighbors with resolving this issue.

Miller Martin commented that he was not contacted by the City Manager regarding his parking concerns, as promised, and indicated that the City Council has taken no action. Mr. Martin then asserted that he will exercise his media powers to address his concerns.

Mika Black spoke in favor of Vernell McDaniel being appointed to the position of City Clerk.

Ms. Black further commented that with the cities of Los Angeles and Long Beach are declaring a state-of-emergency relative to homelessness, which would result in the homeless being sent to Compton. Ms. Black urged the City Council to address the current homelessness crisis in the City.

Sherman Watson, VFW Post Commander, spoke in support of Vernell McDaniel being appointed to serve as City Clerk, noting that she is a remarkably dedicated person with excellent leadership skills. Mr. Watson noted that he assists in housing military veterans and their families.

Royce Esters spoke in support of appointing Vernell McDaniel to the position of City Clerk.

Mr. Esters invited the community to attend the National Association of Equal Justice in America (NAEJA) Crime Committee meeting scheduled for January 21, 2023, beginning at 3:00 p.m. at Holy Chapel Missionary Baptist Church. Mr. Esters stated that it is critical that the City eradicate all criminal activity in Compton.

Mark Smith thanked and the Compton Fire Department for their assistance in celebrating the birthdays of the residents of the community, and further acknowledged Sgt. Zimmerman and Commander Bell as well as other members of the Compton Sheriff’s Department for their assistance. Mr. Smith informed the Council that the area of Rosecrans and Long Beach Blvd. does not have visible street signs. He also stated that the Council must immediately address the many potholes around the City, upgrade the sewer system, combat illegal dumping and eradicate the illegal street takeovers. Mr. Smith concluded by speaking in support of Vernell McDaniel being appointed to the position of City Clerk, noting that she has worked for the City for over 4 decades.

Lynn Boone highlighted the speedy recovery of NFL Player Demar Hamlin after he suffered two cardiac arrests and stated that it was amazing to see people take a knee and pray for him along with the entire Nation. Ms. Boone suggested that everyone pray for the City of Compton to get back on track again. Ms. Boone spoke in support of Vernell McDaniel for the position of City Clerk until the City Council can grant a special election, noting that the residents of the community must be allowed to vote for who will fill the position the City Clerk.

REGULAR AGENDA

REPORTS OF OFFICERS, BOARDS, COMMISSIONS AND COMMITTEES AND

CITY COUNCIL

1. APPOINTMENT(S) OF OFFICERS, COUNCIL MEMBERS,

BOARDS/COMMISSIONS AND COMMITTEES

CITY CLERK, APPOINTMENT (DISCUSSION/ACTION)
It was moved by moved by Spicer, seconded by Duhart, that an appointment be made.

Councilman Bowers suggested that the City accept applications for the position of City Clerk.

Councilman Spicer agreed with Councilman Bowers that the City should hold interviews for the position.

Councilmember Duhart commented that there is currently a Chief Deputy City Clerk who has served in that capacity for years and added that the person who fills the position must possess knowledge of the daily operations of the office. Councilmember Duhart further noted that Chief Deputy McDaniel is highly qualified and capable of performing the duties of the City Clerk.

Councilmember Darden indicated that there is not sufficient time to request applications for the position. Moreover, Chief Deputy Vernell McDaniel is acutely familiar with the daily operations of the City Clerk’s Office as she has successfully performed the duties of Chief Deputy City Clerk for many years.

Mayor Sharif concurred with Councilmembers Duhart and Darden and indicated that there is not sufficient time to requests applications and added that with the City’s current state of affairs, an expensive election would not be beneficial to the City.

APPOINTMENT OF VERNELL MCDANIEL TO THE POSITION OF CITY CLERK Councilmember Darden offered a motion to appoint Vernell McDaniel to the position of City Clerk. The motion was seconded by Duhart.

Vernell McDaniel was appointed to the position of Compton City Clerk by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None
Newly appointed City Clerk Vernell McDaniel thanked everyone for their kind words of support and noted that she will serve with transparency and integrity and do everything she can to move the City’s business forward.

CITY MANAGER'S REPORTS

2. POWER POINT PRESENTATION - STREET SIGN REPLACEMENT
Damion Timmons offered a power point presentation and indicated that the major responsibility of the Public Works Street Maintenance department is to maintain public facilities and provide safety for residents, businesses and the public. Services provided by the department include but are not limited to; maintaining sidewalks, streets, signs and markings, street trees, alleys, traffic signals, streetlights, the sewer collection system and storm drain system.

Mr. Timmons stated that a resolution was approved for sign replacement in the amount of $517.750. This amount will cover the first phase of the Street Sign Replacement Project which is the repair, replacement, or installation of a total of 1,500 "No Parking” signs and added that the contractor will be installing the signs starting with designated zones. Based on the current cost of sign replacement, it is estimated that citywide sign replacement (faded, missing, vandalized, damaged) will total approximately $4.1 million.

Mr. Timmons informed the Council and community that in Fiscal Year 2020/21 the City received $2.7 million dollars in parking citation revenue and 3.1 million in parking citation revenue for FY 2021/22. According to parking enforcement data, missing signage constitutes approximately 25% of missed parking revenues due to missing or illegible signs. With newly hired Parking Enforcement staff, increased Enforcement staff operating hours and sign implementation, it is estimated that the City will see $200,000 to $400,000 in additional revenue from the first phase of the street sign replacement project.

The City of Compton has approximately 12,000 signs citywide. The three primary types of traffic signs are types of signs:
(1) Regulatory signs provide motorists and pedestrians with instructions on how to move, or not move through an area. Because they are used to regulate the flow of traffic, regulatory signs are arguably the most important type of traffic signs. Examples of regulatory signs include No Parking, Stop and speed limit.
(2) Warning signs are used to warn motorists and pedestrians about a given area. Examples of warning signs include, no left turn and road closed.
(3) Guide signs direct motorists through a given area and contain essential information about an area. Examples of guide signs include street name and route markers.

Mr. Timmons concluded that based on the current cost of sign replacement, it is estimated that citywide sign replacement (faded, missing, vandalized, damaged) will total approximately $4.1million. Sign installation has commenced and pending no delays, the contractor estimates that the sign installation will be completed in approximately 8 weeks.

The complete power point presentation is on file and available for review in the City Clerk’s Office.

Councilman Bowers noted that this is a public safety issue and stressed the importance of providing for proper street signage.

The City Council emphasized that there must be proper quality control to make certain that the signs are correct and placed in the correct location.

NEW BUSINESS

3. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING THE CITY MANAGER TO APPROVE AN UPDATE TO THE JOB

SPECIFICATIONS AND ESTABLISHING A SALARY INCREASES FOR THE

POSITIONS OF SECURITY OFFICER AND SECURITY LEAD OFFICER On motion by Spicer, seconded by Darden, Resolution Number 25,774 entitled ‘A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING THE CITY MANAGER TO APPROVE AN UPDATE TO THE JOB

SPECIFICATIONS AND ESTABLISHING A SALARY INCREASES FOR THE POSITIONS OF SECURITY OFFICER AND SECURITY LEAD OFFICER’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

4. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING THE CITY MANAGER TO ENTER INTO A SERVICE
AGREEMENT WITH C3 TECH FOR THE SUPPLY AND MAINTENANCE OF THIRTY (30) MULTIFUNCTIONAL DIGITAL IMAGING SYSTEMS FOR SIXTY (60) MONTHS FOR THE TOTAL AMOUNT ($318,873)
It was moved by Darden, seconded by Bowers, that the resolution be adopted.

Councilmember Duhart questioned the discrepancy in the amount listed in the title of the resolution on the agenda and the actual resolution title itself.

City Clerk McDaniel indicated that there was a mistake on the agenda title for the resolution, however, the actual resolution amount of $318,900 is correct.

Councilman Spicer then questioned if there were any other proposals submitted relative to this item.

Jimmy Smith, Budget Officer, reported that Staff reached out to local authorized vendors and received two proposals for this item and determined that C3 Tech Company provided the best proposal.

Resolution Number 25,775 entitled ‘A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF COMPTON AUTHORIZING THE CITY MANAGER TO ENTER INTO A SERVICE AGREEMENT WITH C3 TECH FOR THE SUPPLY AND MAINTENANCE OF THIRTY (30) MULTIFUNCTIONAL DIGITAL IMAGING SYSTEMS FOR SIXTY (60) MONTHS FOR THE TOTAL AMOUNT ($318,900)’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

COUNCIL COMMENTS
Councilmember Duhart offered the following communications/announcements:
 Thanked and commended Mr. Hector Tapia for his vision for beautifying the community and promoting Signs for Life, a new community initiative, dedicated to helping Compton neighborhoods disassociate themselves from any gang ties by posting anti-gang signs on local streets and hosting cookouts and highlighted that Mr. Tapia makes and posts signs which read: “No Gang Members Live on This Street.”
 Requested that the City Manager restart the various programs, classes and events for the Seniors at the Dollarhide Community Center
 Requested that the City Manager provide a status report relative to the upgrading of Compton Fire Station Number 3 including the parking lot repairs and further requested that the City Manager remove all of the election materials posted around Compton
 Invited the community to attend her Town Hall meeting scheduled for February 4, 2023, beginning at 10:00 a.m. at the Neighborhood Housing Services Center located at 1051 W. Rosecrans Avenue, Compton - residents are invited to learn about vital services and share questions and concerns about District 1 and the City  Commented on her attendance at the California Contract Cities Association 2023 legislative tour seminar and further highlighted that SB1100 which amends the Brown Act to authorize the presiding member of a legislative body to have an individual removed for disrupting a meeting of the body—removal requires a warning first and if the disrupter fails to comply, the presiding member of the legislative body can call for a recess, and if the individual is still being disrupting the meeting the presiding member may have the individual removed  Encouraged everyone to remember and honor the legacy of Dr. Martin Luther King, Jr. and serve to improve and uplift their neighborhood and community Councilmember Spicer offered the following communications/announcements:
 Commented on the wonderful ceremony for NBA champions Tyson Chandler and Tayshaun Prince who had their basketball jerseys retired at Dominguez High School-- both Chandler and Prince, individually went on to win NBA championships and Olympic gold medals and also helped lead Dominguez to a 1998 CIF title  Invited the residents to visit the Compton Black Exchange from 11:00 a.m. to 4:00 p.m. at the Compton Grocery Outlet parking lot – there will be food, music, shopping and fun
 Announced that he will be hosting the Make A Move Compton Chess Tournament for youths and adults on January 21, 2023, from 1:00 p.m. to 5:00 p.m. at the Dollarhide Community Center
 Thanked the citizens who reported on the street potholes and highlighted that most of the potholes have already been filled/repaired
 Congratulated Vernell McDaniel on her promotion to the position of Compton City Clerk
Councilmember Bowers offered the following communications/announcements:
 Commented on his attendance, along with the City Council, to the 2023 Sacramento legislative tour and highlighted that the sessions were extremely informative and provided critical information which could be instrumental in improving the City of Compton
 Highlighted that his office will continue to work on ensuring transparency of the City’s business functions for the residents
Councilmember Darden offered the following communications/announcements:
 Thanked everyone involved with the hugely successful city-wide e-waste collection and paper shredding event which was recently held in the City and offered a special ‘Thank you’ to Republic Services and noted that over 2,500 pounds of paper was shredded during this event—future events will be scheduled for the second quarter of the year
 Reported on her attendance at the 2023 Sacramento legislative tour which was coordinated by the California Contract Cities Association helping to better interface with representatives to improve public safety and address other critical issues at the state and local level
 Commented on her attendance at the wonderful swearing-in ceremony for Sergio Calderon, Joy Langford and John Allen to the Water Replenishment District Board of Directors
 Thanked everyone involved with the beautiful breakfast celebration honoring Dr.

Martin Luther King Jr.’s legacy at the Compton Community College and highlighted that the keynote speaker was Dr. Tyrone Howard, professor of education in the School of Education and Information Studies at UCLA and son of former City Manager Howard Caldwell
 Commented that she will be attending the community swearing-in ceremony to be held in honor of Assemblymember Mike A. Gipson, the duly elected representative of the 65th California State Assembly District
 Requested that the City Council meeting be adjourned in memory of Louis Harkless Mayor Sharif offered the following communications/announcements:
 Mayor Sharif commented on the recent trip by the City Council to Sacramento, which was sponsored by the League of California Cities and highlighted that a great deal of important information was disseminated, particularly surrounding the issue of proper recycling. Mayor Sharif indicated that the City is moving swiftly to remain in compliance of all the new regulations and thanked Cal Recycle and City Staff.  Mayor Sharif commented that she had an opportunity to meet with the State Auditors and assured the community that the City is working diligently to address the Audit Findings and improve the financial standing of Compton.  Mayor Sharif announced that the City, in partnership with the LA Clippers Spirit Team, Clean California, the Office of Assemblymember Mike Gipson, and Caltrans are hosting a city-wide Dump Day on January 21, 2023 and also on February 4, 2023 at 700 N. Bullis Road and encouraged the residents to contact her assistant Ms.

Shanice McKinley Reed at: [email protected] Reed to arrange for a pickup at their residence free of charge
 Mayor Sharif commended and thanked Mr. Hector Tapia for his vision for beautifying the community and promoting Signs for Life events with food, music and fellowship for the community and assisting neighborhoods in dissociating themselves against gang violence.
 Mayor Sharif honored the legacy of Civil Rights Leader Dr. Martin L. King, Jr. and invited the residents to attend the Black History Month Celebration on February 18, 2023 beginning at 12:00 noon at the Dollarhide Community Center. The celebration will include artwork, a kid’s zone, African Dancers, a YouTube Compton movie debut along with presentation from the Compton History Makers, food, vendors and much more!

ADJOURNMENT
On motion by Spicer, seconded by Darden, the meeting was adjourned in memory of Louis Harkless and Thomas Carver at 7:21 p.m. by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None
________________________________________ ___________________________________

CITY CLERK OF THE CITY OF COMPTON MAYOR OF THE CITY OF COMPTON JANUARY 24, 2023
The Compton City Council meeting was called to order at 5:35 p.m. by Mayor Emma Sharif in the Council Chambers of City Hall. The Moment of Silence Ceremony and the Pledge of Allegiance was led by Mayor Sharif.

ROLL CALL
Council Members Present – D. Duhart, J. Bowers, L. Darden, Mayor E. Sharif Council Members Absent – A. Spicer (Entered the Council meeting at 5:40 p.m.)

Other Officials Present: E. Perrodin, V. McDaniel, T. Thomas

PUBLIC COMMENTS ON AGENDA ITEMS AND NON-AGENDA MATTERS
Benjamin Holifield, President/Founder Compton Business Chamber of Commerce, stated that when we all work together with a plan, things can be accomplished and further expressed his pleasure with Vernell McDaniel being appointed as City Clerk. Mr. Holifield urged the City Council to enhance the safety of the personnel of the Fire Department and concluded by urging the Council to make Compton safe, clean and friendly and to move the City forward.

Abril Villanueva commented that she is an advocate for water recycling and water conservation, and further presented documents and a calendar relative to the issue. Ms. Villanueva stress, the importance of the L.A. River and the Compton Creek and the role they play in the significance of underground water. Ms. Villanueva further stated 2023 will undoubtedly be one of the hottest years on record and emphasized that the City must recycle, reduce and reuse and invest in the water system for our children and future generations.

Ron Bennett commented on the recent Black History Celebration which included a cheerleading squad from the City of Compton and further commented that he was appalled to see that there were no Black cheerleaders in the squad. Mr. Bennet stated that Black youth must be provided with the opportunity to celebrate their own heritage. Mr. Bennett concluded by requesting that the Mayor take a look into the matter to make sure this does not reoccur.

Martha Barajas thanked the City Councilmembers for assisting United Hands. Ms. Barajas informed the City Council that United hands distributes food to the community near Wilmington and 139th Street and further indicated that the organization has been receiving citations from Code Enforcement relative to overflowing trash bins and other issues in the amount of over $6,000. She then indicated that individuals receiving food have also been cited by Code Enforcement. Ms. Barajas thanked Councilman Bowers for assisting her in the past and further requested the City Council’s assistance in resolving this issue.

Freddie Escamilk addressed the City Council and indicated that the City needs to place a traffic signal near Long Beach Blvd. and the Rancho market location. He also indicated that there needs to be a cross walk and a traffic signal near Oaks and Santa Fe Avenue for the safety of the residents.

Anthony Lewis informed the City Council of an incident whereby he assisted a resident at Saint Timothy’s Towers with resolving landlord discrepancies. Mr. Lewis then questioned whether the landlord received permission to do electrical work at the complex. He then raised concerns that his mother experienced a fall as a result of the poor condition of the sidewalks and further indicated that he recently paid for costly repairs on his vehicle as a result of hitting a street pothole. Mr. Lewis concluded that the City is in a state of emergency due to the failing infrastructure.

Kim DeLay-Manning raised concerns that she has been calling the Water Department during business hours, however, her calls have gone unanswered. She further stated that she left a voice mail on January 3, 2023, and she is still waiting for a return phone call. Ms. Delay-Manning stated that she has an unresolved issue with her water bill and further reported a problem with the streets near 156th Street and Central Avenue which she also reported to the City with no response.

2. Lynn Boone raised concerns regarding agenda item Number 4 (Resolution approving Dump day) and stated that the City asserts that the bulky waste items will be picked up free of charge, however, there is a $26,000 fee. Ms. Boone then questioned agenda item Number 3 (Resolution for uniform lease) and noted that the proposal was dated for November of 2022. Ms. Boone referenced that the resolution for this item also states that the resolution was approved by the City Attorney as with other items; however, the City Attorney does not have a vote on the City Council.

Fidel Marquez raised concerns that the City did not complete the Bott’s Dot installation near Central, and further noted that there are two large sinkholes near on Central and Rosecrans Avenue which must be repaired as soon as possible. Mr. Marquez urged the City Council to clean up the City and eradicate the illegal street takeovers, and further stated that the City must increase the number of Sheriff’s Deputies patrolling the streets. He further stressed that the City if filthy and unsafe for the residents. Mr. Marquez suggested that the Council allocate additional funding for public safety and address the needs of the Compton Fire Department.

CONSENT AGENDA

APPROVAL OF MINUTES

1. DECEMBER 14, 2022
On motion by Darden, seconded by Duhart, the consent agenda was approved by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

REGULAR AGENDA

CITY MANAGER'S REPORT

2. POWER POINT PRESENTATION - SCREAMING EAGLES
Andrew Thompson, Screaming Eagles, indicated that the company is pleased to provide services as an independent contractor to the City. As with other cities, Compton has been experiencing an increase in activity from illegal dumping, homeless encampments, and graffiti.

Screaming Eagles in conjunction the City, has targeted and cleaned up known dumping hot spots and homeless encampments by going in and removing all debris and unsightly material, relocating it to the county dump and performing regular patrols around the City to maintain its cleanliness and beauty. Screamin Eagle Services also became certified by rail works to perform cleanup on the train tracks in Compton’s section of the Alameda corridor where homeless encampments and illegal dumping were a major topic for the Compton community. With support from LA County Sheriffs and Code Enforcement, Screaming Eagles was able to clear out the corridor and continue to perform regular cleanup operations of the area.

During the pandemic Screamin Eagles has been able to donate food and water to all four districts in the City of Compton as well as provide the trucks to deliver the food and water where it was needed most in the community. The organization also donated one hundred gallons of paint to the Compton Public Works department to help assist the City in its effort to remove graffiti from the community.

Screamin Eagles offered a power point presentation highlighting some of the clean-up work they have performed in the City of Compton.

The complete power point presentation is on file and available for review in the City Clerk’s Office.

NEW BUSINESS

3. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AUTHORIZING THE CITY MANAGER TO ENTER INTO A THIRTY-SIX (36)

MONTH AGREEMENT WITH ARAMARK UNIFORM SERVICES FOR THE LEASE OF UNIFORMS AND SUPPLEMENTAL ITEMS ($45,000)
It was moved by Duhart, seconded by Spicer, that the resolution be adopted.

Councilman Bowers raised concerns regarding the City’s use of three different vendors to supply City employee uniforms.

City Manager T. Thomas indicated that the various uniform contracts have staggered expiration dates, therefore, the departments requested bids for uniform services.

Mayor Sharif suggested that Staff consider utilizing one vendor for these services in the next fiscal year’s budget.

Resolution Number 25,776 entitled ‘A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF COMPTON AUTHORIZING THE CITY MANAGER TO ENTER INTO A THIRTY-SIX (36) MONTH AGREEMENT WITH ARAMARK UNIFORM SERVICES FOR THE LEASE OF UNIFORMS AND SUPPLEMENTAL ITEMS’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Darden, Sharif
NOES: Council Members – Bowers
ABSENT: Council Members – None

4. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AUTHORIZING THE CITY MANAGER TO ENTER INTO A THREE (3) DAY

COMPTON DUMP DAY PROGRAM WITH THE CALIFORNIA DEPARTMENT OF

TRANSPORTATION (CALTRANS) FOR THE COLLECTION OF HOUSEHOLD

BULKY ITEM IN THE CITY OF COMPTON
It was moved by Duhart, seconded by Darden, that the resolution be adopted.

Mayor Sharif spoke in support of the item and highlighted that the residents and the City will benefits from this event.

Councilman Bowers stated that the residents must be provided with important information relative to the process and procedures for bulky waste pick-up services from their residences.

Councilman Spicer also commented that the residents should be provided with the proper procedure for requesting bulky waste pick up, as well as information regarding the recycling program.

Councilmember Darden concurred with Councilmembers Bowers and Spicer and highlighted that the City must provide information to the residents so that everyone may participate.

Councilmember Darden further questioned if the City will be receiving credits for recycling.

Resolution Number 25,777 entitled ‘A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF COMPTON AUTHORIZING THE CITY MANAGER TO ENTER INTO A THREE (3) DAY COMPTON DUMP DAY PROGRAM WITH THE CALIFORNIA

DEPARTMENT OF TRANSPORTATION (CALTRANS) FOR THE COLLECTION OF HOUSEHOLD BULKY ITEM IN THE CITY OF COMPTON’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Darden, Sharif
NOES: Council Members – None
ABSENT: Council Members – None
ABSTAIN: Council Members – Bowers

5. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING THE CITY MANAGER TO APPROVE AN AMENDENT TO

THE POSITION CLASSIFICATION FOR THE POSITIONS OF BUDGET

OFFICER
On motion by Duhart, seconded by Spicer, Resolution Number 25,778 entitled ‘A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING THE CITY MANAGER TO APPROVE AN AMENDENT TO THE POSITION CLASSIFICATION FOR THE POSITIONS OF BUDGET OFFICER’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

6. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AMENDING THE PUBLIC WORKS DEPARTMENT 2022-23 FISCAL YEAR

BUDGET AND AUTHORIZING THE CITY MANAGER TO ENTER INTO

PROFESSIONAL SERVICES AGREEMENT WITH DUDEK TO PREPARE A

SEWER MASTER PLAN UPDATE FOR THE CITY OF COMPTON AND THE ESTABLISHMENT OF A PURCHASE ORDER IN THE AMOUNT OF $399,270 IN

CONNECTION WITH PREPARATION OF THE SEWER MASTER PLAN UPDATE On motion by Duhart, seconded by Spicer, Resolution Number 25,779 entitled ‘A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AMENDING THE PUBLIC WORKS DEPARTMENT 2022-23 FISCAL YEAR BUDGET AND

AUTHORIZING THE CITY MANAGER TO ENTER INTO PROFESSIONAL

SERVICES AGREEMENT WITH DUDEK TO PREPARE A SEWER MASTER PLAN

UPDATE FOR THE CITY OF COMPTON AND THE ESTABLISHMENT OF A PURCHASE ORDER IN THE AMOUNT OF $399,270 IN CONNECTION WITH PREPARATION OF THE SEWER MASTER PLAN UPDATE’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

7. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AMENDING 2022-2023 FISCAL YEAR BUDGET TO ESTABLISH A PURCHASE

ORDER TO AUTHORIZE THE CITY MANAGER TO PAY INVOICES FOR CAPPO

MANAGEMENT XXXIV, INC DBA FREEWAY TOYOTA OF HANFORD IN THE

AMOUNT OF FIFTY-FIVE THOUSAND SIX HUNDRED THIRTY-NINE DOLLARS AND SIXTY-FOUR CENT ($55,639.64)
On motion by Duhart, seconded by Spicer, Resolution Number 25,780 entitled ‘A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AMENDING 2022-2023 FISCAL YEAR BUDGET TO ESTABLISH A PURCHASE ORDER TO

AUTHORIZE THE CITY MANAGER TO PAY INVOICES FOR CAPPO

MANAGEMENT XXXIV, INC DBA FREEWAY TOYOTA OF HANFORD IN THE

AMOUNT OF FIFTY-FIVE THOUSAND SIX HUNDRED THIRTY-NINE DOLLARS AND SIXTY-FOUR CENTS’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

8. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING PAYMENT OF ANNUAL FEES TO THE STATE OF CALIFORNIA

DEPARTMENT OF INDUSTRIAL RELATIONS FOR CONTINUED
ADMINISTRATION OF THE CITY'S WORKERS' COMPENSATION SELFINSURANCE PROGRAM ($37,114.41) On motion by Darden, seconded by Duhart, Resolution Number 25,781 entitled ‘A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

AUTHORIZING PAYMENT OF ANNUAL FEES TO THE STATE OF CALIFORNIA

DEPARTMENT OF INDUSTRIAL RELATIONS FOR CONTINUED
ADMINISTRATION OF THE CITY'S WORKERS' COMPENSATION SELFINSURANCE PROGRAM’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

9. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON AUTHORIZING THE ESTABLISHMENT OF A PURCHASE ORDER TO FIRE ETC.

FOR THE PURCHASE OF THIRTY-EIGHT (38) SELF-CONTAINED BREATHING

APPARATUSES (SCBA) AND RELATED COMPONENTS FOR THE CITY OF COMPTON FIRE DEPARTMENT ($446,996.00)
On motion by Duhart, seconded by Spicer, Resolution Number 25,782 entitled ‘A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON
AUTHORIZING THE ESTABLISHMENT OF A PURCHASE ORDER TO FIRE ETC.

FOR THE PURCHASE OF THIRTY-EIGHT (38) SELF-CONTAINED BREATHING

APPARATUSES (SCBA) AND RELATED COMPONENTS FOR THE CITY OF COMPTON FIRE DEPARTMENT’ was adopted by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None

COUNCIL COMMENTS
Councilmember Duhart offered the following communications/announcements:
 Commented on the remarkable swearing-in ceremony for Assemblymember Mike Gipson and further applauded the wonderful multicultural representation and entertainment presented at the event
 Announced that she will be partnering with United Hands and the NHS to offer a food giveaway on February 3, 2023, at Gonzales Park located at 1101 W. Cressey Street beginning at 10:00 a.m. while supplies last
 Requested that the City Manager remove all election materials posted around the City  Invited the community to attend her Town Hall meeting scheduled for February 4, 2023, beginning at 10:00 a.m. at the Neighborhood Housing Services Center located at 1051 W. Rosecrans Avenue, Compton
 Thanked the residents for attending the Council meeting and voicing their questions and concerns
Councilmember Spicer offered the following communications/announcements:
 Commended everyone involved with the wonderful jersey retirement ceremony for NBA champions Tyson Chandler and Tayshaun Prince
 Requested that the City perform a traffic study to provide for flashing red light traffic signals at Santa Fe and Oaks Street as well as Long Beach Blvd. and the vicinity of Tom’s Burgers
 Commented on the success of the Make A Move Compton Chess Tournament recently held in the City and highlighted that there were a large number of children present to showcase their outstanding chess playing skills
 Requested that the City Manager prepare the City to prevent street flooding by clearing out the street gutters
 Requested that the City Manager perform a survey of surrounding cities to determine what the monetary penalties are for illegal dumping citations Councilmember Bowers offered the following communications/announcements:
 Offered his sincere condolences to the city of Monterey Park, California and all the victims and families and friends due to the senseless shooting that occurred this past Sunday
 Stressed the importance of the City of Compton becoming more prepared in the event of a natural disaster or emergency and requested that the City take advantage of the ‘Active Shooter’ training in collaboration with the Sheriff’s Department and added that the Emergency Operations Center must be activated immediately to develop a plan to adequately address a massive emergency response  Addressed the City’s new website and indicated that there are several problems associated with accessing the public notices along with other glitches and further highlighted inaccuracies that must be corrected
 Indicated that there is a two-way Stop sign at Aprilia Avenue and Claude Street which must be replaced with a 4-way Stop sign for the safety of the residents  Commented on the wonderful swearing-in ceremony for Assemblyman Mike Gipson and further highlighted that the cultural representations were outstanding  Invited the community to attend a Health Fair at the Compton Grocery Outlet from 10:00 a.m. to 2:00 p.m. on February 4, 2023 – offering free screening and information regarding cholesterol, blood pressure, diabetes, and a free grocery distribution – please visit: www.healthmatters.clinic for additional information Councilmember Darden offered the following communications/announcements:
 Announced that there will be a posthumous tribute to former Compton Fire Department Chief Monroe Smith during the Black History Month Celebration event
 Commented that she attended a street renaming session presented by the Compton Entertainment Chamber of Commerce
 Commented on the beautiful multicultural swearing-in ceremony held for Assemblymember Mike Gipson
 Wished Mildred Johnson and Joseph W. Baker a very Happy Birthday!  Requested that the City Council meeting be adjourned in memory of Harriet W.

Cannister
Mayor Sharif offered the following communications/announcements:
 Mayor Sharif thanked Assemblymember Maxine Waters for her response to the request for maintenance of the Compton Post Office and further commended Councilmember Darden her assistance in the renaming of the Post Office in honor of Pfc. James Anderson Jr. who was the first Black Marine to be awarded the Medal of Honor for service during the Vietnam War. Mayor Sharif further thanked Councilmember Darden for her continued efforts to insure that both post office locations are properly maintained.
 Mayor Sharif announced that the City in partnership with the LA Clippers, Clean California, the Office of Assemblymember Mike Gipson, and Caltrans are hosting a city-wide Dump Day on February 4, 2023 and encouraged the residents to contact her assistant, Ms. Shanice McKinley Reed at: [email protected] to arrange for a pickup at their residence free of charge. Mayor Sharif also announced that the Caesar Chavez monument has been neglected far too long and stressed that the monument must undergo a revitalization, along with the civic center complex.  Congratulated Assemblymember Mike Gipson for his extraordinary swearing-in ceremony which featured representatives from all cultures and communities.  Mayor Sharif thanked everyone involved with restoring the mural of Dr. Martin Luther King, Jr. and further thanked the Compton Initiative for their wonderful work cleaning and revitalizing the community and encouraged the residents to please visit:
www.justdogood.org to volunteer to assist the City of Compton.  Mayor Sharif invited the community to attend the Black History Month Celebration on February 18, 2023, beginning at 12:00 noon at the Dollarhide Community Center.

The celebration will include artwork, a kid’s zone, African Dancers, a YouTube Compton movie debut along with a presentation from the Compton History Makers, food, vendors and much more!

ADJOURNMENT
On motion by Duhart, seconded by Darden, the meeting was adjourned in memory of Harriet W. Cannister at 7:24 p.m. by the following vote on roll call:

AYES: Council Members – Duhart, Spicer, Bowers, Darden, Sharif NOES: Council Members – None
ABSENT: Council Members – None
_____________________________________ _________________________________

CITY CLERK OF THE CITY OF COMPTON MAYOR OF THE CITY OF COMPTON March 14, 2023
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
FROM: CITY CONTROLLER
SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON

TO RECEIVE AND FILE INTERNAL CONTROL POLICIES RELATING

TO, CASH RECEIPTS, BILLING, AND ACCOUNTS PAYABLE
PRACTICES AND AN UPDATE TO THE BUDGET POLICY.

SUMMARY
The City Controller’s Department has prepared a Cash Receipts, Billing, and Accounts Payable policy, as well as an update to the Budgeting policy, to address deficiencies and weaknesses in internal controls surrounding various operations that are performed within various departments of the City.

BACKGROUND:

These policies which are attached as Exhibits A through D include (a) provisions for proper separation of duties to avoid conflicts of interest, (b) provisions for methods to ensure continuity of operations during the absence of Departmental staff, and (c) provisions for proper procedures to be put in place to ensure that appropriate staff perform their cash receipts, billing and accounts payable management functions effectively and efficiently. Additionally, an amendment to the Budget policy has been added to address recommendations from the State of California Auditor’s audit report issued October 13, 2022. The amended sections are underlined in the document attached. The provisions contained in all of the policies attached directly address audit findings that the City has received in the past from the State Controller’s Office (SCO) as well as from its external auditors, Eadie and Payne, LLP.

Additionally, the Standard Operating Manual policies, and other financial policies and procedures currently in place to address these issues were not sufficient and they will be proposed to be appended or replaced with the attached policies. Per our review there were no existing policies that were previously adopted by the City Council that addressed these needs and therefore these do not conflict with already adopted policies on these matters.

Per the City’s FY2020 Single Audit Report, Finding No. 2014-108B is stated as follows:

4. Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 2 of 9
2014-108B: Policies and Procedures (General Applications) (MW) Recommendation: We recommend that the City continue to review and update its Administrative Policies and Procedures manuals to ensure consistency with current processes and organizational structure; and perform periodic and ongoing reviews to ensure proper documentation, accuracy, and completeness in its financial transactions and records. When completed, the updated Administrative Policies and Procedures manuals should be readily available to all responsible employees.

The manuals should clearly state the authority and responsibility of all employees, especially the authority to authorize transactions and the responsibility for the safekeeping of assets and records.

This audit finding and recommendation demonstrated the need for the implementation of policies affecting internal controls.

Other findings and recommendations listed in the FY2020 Single Audit report demonstrate the need for many of the provisions contained in these policies, such as having succession planning procedures, as well as how to avoid inciting repeated or new audit findings in the future. Other specific audit finding recommendations are listed below according to their finding number, which has been obtained from the FY2020 Single Audit report:
#2014-072B – Commitment to Competence (SD):

Recommendation: We recommend that the City implement a remedial action plan to adequately staff the departments that are short on staff. In addition, we recommend that the City implement policies to address the importance of experience and proper training of back-up staff when regular staff members are not available.
#2014-074B – Commitment to Competence (SD):

Recommendation: We recommend that the City implement a remedial action plan to adequately staff the departments. Most importantly, the City Controller’s Office should be staffed with qualified and experienced individuals who can contribute immediately to the performance of its accounting functions. In addition, we recommend that the City implement policies to address the importance of experience and proper training of back-up staff when regular staff member are not available.

Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 3 of 9
Inexperienced staff may cause material impact in the City’s operations in terms of incurring additional costs, delaying the processing of financial transactions, and failing to keep City Management and the City Council updated with accurate information.
#2014-083B – Management Philosophy and Operating Style (SD):

Recommendation: The SCO recommends that the City evaluate its hiring practices for its upper management positions. In addition, we recommend that the City develop a succession plan that will help it to ensure continued leadership even during management turnover.
#2014-093B – Assignment of Authority and Responsibility (MW):

Recommendation: We recommend that the City assess its current processes and implement policies and procedures to segregate incompatible functions. #2014-100B – Risk Identification (MW)
Recommendation: We recommend that the City start doing risk assessments to be able to identify and properly address risks.
#2014-101B: Risk Identification (SD)
Recommendation: We recommend that the City put mechanisms in place to aid in anticipating, identifying, and reacting to routine events that affect the achievement of objectives.
#2014-107B: Policies and Procedures (General Applications) (MW) Recommendation: We recommend that the City update its formal Policy and Procedures manual to incorporate the recently implemented internal control procedures, and complete these updates as soon as possible. #2014-108B: Policies and Procedures (General Applications) (MW) Recommendation: We recommend that the City continue to review and update its Administrative Policies and Procedures manuals to ensure consistency with current processes and organizational structure; and perform periodic and ongoing reviews to ensure proper documentation, accuracy, and completeness in its financial transactions and records.

When completed, the updated Administrative Policies and Procedures manuals should be readily available to all responsible employees. The manuals should clearly state the authority and responsibility of all employees, especially the Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 4 of 9
authority to authorize transactions and the responsibility for the safekeeping of assets and records.
#2014-111B: Common Categories of Control Activity (MW)
Recommendation: We recommend that the City assess its current processes and implement policies and procedures to segregate incompatible functions. #2014-114B: – Common Categories of Control Activities (MW) Recommendation: We recommend that City Management and department heads evaluate if proper segregation of duties are in place. If not, mitigating controls should be developed and implemented to decrease the risk of error or inappropriate actions. #2015-115B: – Common Categories of Control Activities (SD) Recommendation: We recommend that the City continue to review and update its Administrative Policies and Procedures manuals to ensure consistency with current processes and organizational structure; and perform periodic and ongoing reviews to ensure proper documentation, accuracy, and completeness in its financial transactions and records.
#2014-117B: – Information (SD)
Recommendation: We recommend that City Management communicate and manifest the importance of timely communication in the policies and employee manuals. #2014-122B – Communication (BP)
Recommendation: We recommend that the City has forms and means of communication in place to be able to communicate important information with employees and others. #2015-036 – Accounts Receivable – Supporting Documentation (SD) Recommendation: The City should establish and implement a systematic filing system, as well as a document retention policy.
#2014-041 – Deposit Reconciliation (MW)
Recommendation: The City Controller's office should include reconciliation of the daily cash receipt to the bank account in the cash receipt posting procedures and communicate any discrepancies with the City Treasurer's office.
#2014-041 – Deposit Reconciliation (MW)
Recommendation: The City Controller's office should include reconciliation of the daily cash receipt to the bank account in the cash receipt posting procedures and communicate any discrepancies with the City Treasurer's office.
#2014-048 – Internal Control over Accounts Receivable (SD) Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 5 of 9
Recommendation: The City should track business licenses, rents and leases, and other miscellaneous reoccurring revenue to ensure timely collection. The City should also utilize its accounting system’s accounts receivable module. It will allow the City to review, reconcile, and monitor its accounts receivable balances throughout the fiscal year for financial reporting and budgeting purposes.
#2019-028 – Cash Disbursements – Payments Based on Quotes (SD) Recommendation: The City should strengthen its review procedures and provide necessary training for staff emphasizing the need to scrutinize invoices for accuracy. Any discrepancies should be resolved with the vendor prior further processing the invoice for payment. The City should strengthen its procurement policies and internal controls over cash disbursements and closely monitor staff adherence. 2015-015 – Cash Disbursement – Payments Based on Quotes (MW) Recommendation: The City should strengthen its monitoring of City staff adhering to City policy.
2015-016 – Cash Disbursement – Payments Processed without Supporting Documentation (MW)
Recommendation: The City should strengthen its procurement policies and internal controls over cash disbursements.
2014-031 – Internal Control over Cash Disbursements – Payment Processed from Statement (SD)
Recommendation: The City should implement monitoring procedures to ensure that daily operations are conducted according to City Policies. In instances where deviations from City policies are necessary, properly documented support, including approval of such deviation from the department manager should be attached. 2018-025 – Accounts Payable Supporting Documentation (SD) Recommendation: The City should implement and maintain procedures to ensure that appropriate supporting documents are retained and accessible. 2015-014 – Cash Disbursement – Review and Approval Process (MW) Recommendation: The City should strengthen its review procedures and provide necessary training for staff emphasizing the need to scrutinize invoices for accuracy. Any discrepancies should be resolved with the vendor prior further processing the invoice for payment.
2015-022 – Construction in Progress – Retentions (SD)
Recommendation: The City should strengthen review procedures for invoices. Also, construction in progress should be separately tracked to ensure that all retention liabilities are properly recorded, tracked, and cleared as appropriate. 2015-030 – Cash Disbursement – Inadequate Review (MW)
Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 6 of 9
Recommendation: The City should ensure that proper review is being performed prior to check disbursement.
2015-031 – Cash Disbursement – Inadequate Supporting Documentation (MW) Recommendation: The City should strengthen its review procedures to ensure that sufficient supporting documentation is attached to the check requests. Also, additional training for staff is encouraged to allow detection of issues and corrective action to be set in motion sooner.
2015-032 – Cash Disbursement – General Ledger Object Code Usage (SD) Recommendation: The City should strengthen its review procedures to include detection of classification errors as a review objective. Also, additional training for staff to help them better determine the appropriate classification is strongly encouraged. 2014-031 – Internal Control over Cash Disbursements – Payment Processed from Statement (SD)
Recommendation: The City should implement monitoring procedures to ensure that daily operations are conducted according to City Policies. In instances where deviations from City policies are necessary, properly documented support, including approval of such deviation from the department manager should be attached. 2014-033 – Internal Control over Cash Disbursements – Signor of Checks (SD) Recommendation: The City should establish appropriate alternate signers in the absence of the Controller. In instances where the appropriate alternate signer is also not available, a comprehensive explanation and proper documentation of support authorizing and validating another City staff’s signature should be attached. 2014-035 – Internal Control over Cash Disbursements – Lack of Documented Approvals (SD)
Recommendation: The City should implement procedures that help prevent cash disbursements for unauthorized expenditures. Adequate review procedures by the requesting department managers and approving officials should be documented by signature or initials. In instances such as reoccurring bills for utilities, communication, etc., proper language should be added to the City Policy for proper documentation. 2014-036 – Internal Control over Cash Disbursements – Verification of Remittance Addresses (SD)
Recommendation: The City should have policies and procedures addressing the proper handling of situations like this to prevent late payments due to incorrect remittance addresses or misappropriation of City funds due to illegitimate vendors. Documentation of support verifying the used address should be attached. 2014-037 – Internal Control over Expenditures – Processing of Duplicate Invoices (SD) Recommendation: The City should eliminate override capabilities from City staff to mitigate the risk of double payment of invoices. In instances where the account numbers Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 7 of 9
are used as invoice references, which causes them to be identical each month, the date of the invoice could be added to allow for a unique invoice reference. 2014-038 – Internal Control over Cash Disbursements – Segregation of Duties (MW) Recommendation: The City should have one City staff post the disbursements and another prepare and mail the checks. Segregation of authorizing, recording, and custody duties of transactions allows the City to ensure oversight and review to catch errors and to prevent fraud or theft.
2014-146C – Payment on Invoices (SD, NC)
Recommendation: The SCO recommended that the City follow invoice procedures as indicated in service contracts.

STATEMENT OF THE ISSUE:

Each of these finding numbers and recommendations display deviation from at least one of the five elements of proper internal control. The five elements of proper internal controls are (1) Control Environment, (2) Monitoring Activities, (3) Risk Assessment, (4) Control Activities, and (5) Information and Communication. The provisions in these policies, if implemented properly by staff, will help minimize risk for the City as they cover a wide array of situations that pose a risk to proper internal control and the City’s financial position and operations. It is also important to know that policies may need to change to keep up with the current environment or any unforeseen circumstances.

Additionally, training will be provided to staff so that they can understand the various provisions of the policy.

FISCAL IMPACT:

The fiscal impact of these policies is to improve the City’s internal controls surrounding Cash Receipts, Billing, Accounts Payable, and Budgeting controls for greater monitoring, information and communication, control environment, control activities, and risk assessment. When these internal controls are improved the result will be a more favorable impact on the financial position of the City. Additionally, when these policies are fully implemented, a result of having less audit findings will be expected.

Further, in the State of California Auditor’s report of October 13, 2022, the following recommendations were stated:
“By October 2023, the City Council should adopt budgeting policies that follow Government Finance Officers Association best practices. For example, the policies should specify that City staff solicit input from the public about priorities before starting Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 8 of 9
the budget process and that the City has a process for ensuring that the City budget document is clear and comprehensible.

By October 2023, to ensure that its City Council has the necessary knowledge and tools to make sound and responsible decisions on behalf of the public, Compton should implement a robust orientation and ongoing training program for Council members, including training related to budgeting, finances, and the Council’s role in overseeing City operations.”
To implement these recommendations, the Budgeting policy that was previously received and filed by Council in March of 2022 has been updated with the following amendments in the policy:

ROLES AND RESPONSIBILITIES SECTION:

2.“City Manager or designee, shall be responsible for:
 Ensuring that City staff solicit input from the public about priorities before starting the budget process
 Ensuring that the City’s budget document is clear and comprehensible DEPARTMENT OPERATIONAL EFFICIENCY SECTION:

The City Manager or designee, shall include an allocation in the budget that is dedicated to providing training to the City Council such that it will be ensured that the City Council will have the necessary knowledge and tools to make sound and responsible decisions on behalf of the public. Additionally, the City Manager or designee shall include an allocation in the budget that is dedicated to implementing a robust orientation and ongoing training program for Council members, including training related to Budgeting, Finances, and the Council’s role in overseeing City operations.”
ALTERNATIVE:

The result of not receiving and filing these policies would be the continuance of not having sufficient guidance for staff for proper internal control policies and procedures in the areas of Cash Receipts, Billing, Accounts Payable, and Budgeting. This would result in reoccurrence of audit findings.

RECOMMENDATION:

Staff Report – Resolution Receive and File Internal Control Policies January 21, 2023, Page 9 of 9
It is recommended that the City Council adopt the attached Resolution to receive and file the attached policies.

SHARON RAHBAN NAVIZADEH,

CITY CONTROLLER
APPROVED FOR FORWARDING:

THOMAS THOMAS

CITY MANAGER
RESOLUTION NO. __________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COMPTON TO

RECEIVE AND FILE INTERNAL CONTROL POLICIES RELATING TO,

CASH RECEIPTS, BILLING, AND ACCOUNTS PAYABLE PRACTICES AND

AN UPDATE TO THE BUDGET POLICY
WHEREAS, adoption of this resolution will authorize the receiving and filing of a Cash Receipts, Billing, Accounts Payable, and amendment to the Budget Policy to be accepted and implemented by City staff. The policy exhibits internal control practices to provide greater control over the Cash Receipts, Billing, Accounts Payable, and Budgeting practices that are performed across various City departments; and
WHEREAS, the City Controller’s Department has prepared a Cash Receipts, Billing, Accounts Payable, and amendment to the Budgeting Policy to address deficiencies and weaknesses in internal controls surrounding Cash Receipts, Billing, Accounts Payable, and Budgeting practices that are performed within various departments of the City. These policies which are attached as Exhibits A through D include (a) provisions for proper separation of duties to avoid conflicts of interest, (b) provisions for methods to ensure continuity of operations during the absence of Departmental staff, and (c) provisions for proper procedures to be put in place to ensure that appropriate staff perform their cash receipts, billing, accounts payable, and budgeting management functions effectively and efficiently.

The provisions contained in the policies directly address audit findings that the City has received in the past from the State Auditor’s Office, the State Controller’s Office, as well as from its external auditors, Eadie and Payne, LLP; and
WHEREAS, additionally, the Standard Operating Manual policies, and other financial policies and procedures currently in place to address these issues were not sufficient and it is proposed that they be appended or replaced with the attached policies. Per staff review there were no existing policies that were previously adopted by the City Council that addressed these needs and therefore these do not conflict with already adopted policies on these matters; and
WHEREAS, Per the City’s FY2020 Single Audit Report, Finding No. 2014-108B is stated as follows:
#2014-108B: Policies and Procedures (General Applications) (MW) Criteria: Control activities are regularly evaluated to ensure that they are still appropriate and working as intended.

Condition: Outside the City Controller's Office, most of the employees that the SCO interviewed were unaware of control activities in place or how they are being applied.

Recommendation: We recommend that the City continue to review and update its Administrative Policies and Procedures manuals to ensure consistency with current processes and organizational structure; and perform periodic and ongoing reviews to ensure proper documentation, accuracy, and completeness in its financial transactions and records. When completed, the updated Administrative Policies and Procedures manuals should be readily available to all responsible employees. The manuals should clearly state the authority and responsibility of all employees, especially the authority to authorize transactions and the responsibility for the safekeeping of assets and records.

Resolution No. _________

2 WHEREAS, this audit finding and recommendation demonstrated the need for the implementation of policies affecting internal controls; and WHEREAS, other findings and recommendations listed in the FY2020 Single Audit report demonstrate the need for many of the provisions contained in these policies, such as having succession planning procedures, as well as how to avoid inciting repeated or new audit findings in the future; and
WHEREAS, each of the findings and recommendations in the FY2020 Single Audit display deviation from at least one of the five elements of proper internal control. The five elements of proper internal controls are (1) Control Environment, (2) Monitoring Activities, (3) Risk Assessment, (4) Control Activities, and (5) Information and Communication. The provisions in these policies, if implemented properly by staff, will help minimize risk for the City as they cover a wide array of situations that pose a risk to proper internal control and the City’s financial position and operations. It is also important to know that policies may need to change to keep up with current environment or any unforeseen circumstances; and WHEREAS, training will be provided to staff so that they can understand the various provisions of the policy; and
WHEREAS, it is recommended that the City Council adopt the attached Resolution to receive and file the attached policies.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COMPTON DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. Receive and file the attached policies
Section 2. That a copy of this Resolution shall be filed in the offices of the City Clerk, City Attorney, City Manager, and City Controller.

Section 3. That the Mayor shall sign and the City Clerk shall attest to the adoption of this Resolution.

ADOPTED this ____________ day of _____________, 2023.
________________________________

MAYOR OF THE CITY OF COMPTON
ATTEST:
________________________________

CITY CLERK OF THE CITY OF COMPTON

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss

CITY OF COMPTON )
Resolution No. _________

3 I, Vernell McDaniel, of the City of Compton, hereby certify that the foregoing Resolution was adopted by the City Council of the City of Compton, signed by the Mayor and attested by the City Clerk at a regular meeting thereof held on this ___________ day of ________________, 2023.

That said Resolution was adopted by the following vote, to wit:

AYES: COUNCILMEMBERS -
NOES: COUNCILMEMBERS -
ABSTAIN: COUNCILMEMBERS -
ABSENT: COUNCILMEMBERS -
____________________________________

CITY CLERK OF THE CITY OF COMPTON
1 BUDGET/CARRYOVER/RESERVE
Section 1: Purpose…………………………………………………………………...3
Section 2: General Policy……………………………………………………………3
Section 3: Responsibility…………………………………………………………….3
Section 4: Internal Control Guidance……………………………………………......7 Section 5: Definitions…………………………………………………………..……8
Section 6: Budget Development Overview……………………………………….....9 Section 7: Program Based Budget…………………………………………………...9
Long Term Initiatives (10 year foresight) ………………………....10 Short Term Initiatives (1 to 5 year foresight)………………………10 Significant Changes (1 year look back)……………………………10
Goals and Objectives by Department (1 year foresight)………...…10 Net Position……………………………………………………...…10
Capital Expenditures………………………………………………11
Program – Base Budget Will Link Resources with Results………..11 Section 8: Revenue Budget Development……………………………………….…11 Section 9: User Fees/Rates…………………………………………………………13
Section 10: Expenditure Budget Development……………………………….....…13 Section 11: Accruing Liability……………………………………………………..17
Section 12: Forecasting…………………………………………………………….17
Section 13: Budget Document Quality Control……………………………………17 Section 14: Time Frame for Completion………………………………………......18 Section 15: Reserve Policies…………………………………………………….....18 Reserve Policy Purpose…………………………………………...18
Reserve Tracking Procedures……………………………………..19
Reserve Maintenance………………………………………….…..21
Reserve Target Levels………………………………………….…21
i. Restricted Funds………………………………………..21
ii. Capital Reserve Funds……………………………….…22

CITY BUDGET POLICY
2 iii. Liquidity Funds……………………………………….....23
Section 16: Budget Surpluses and Deficits…………………………………………25 Surpluses………………………………………………………………….….25
Deficits…………………………………………………………………….…26
Section 17: After Adoption of the Budget………………………………………….27 Section 18: Appropriations…………………………………………………………28
Legal Level of Control……………………………………………...28
Encumbrances…………………………………………………..…..28
Lapse in Budget…………………………………………………..…28
Section 19: Transfers………………………………………………………..……..29
Transfer of Appropriations……………………………………..…29
Transfer Procedures…………………………………………...…..29
Transfers of Reserves……………………………………………..31
Section 20: Carryovers……………………………………………………….……31

CITY BUDGET POLICY
3 BUDGET/CARRYOVER/RESERVE
SECTION 1: PURPOSE
Financial policies such as this Budget/Carryover/Reserve, improve the City’s fiscal stability by helping City officials plan fiscal strategy with a consistent approach.

Adherence to adopted financial policies such as this one promotes sound financial management, which can lead to improvement in bond ratings, a lower cost of capital, assure the tax and ratepayers that taxes and fees are being collected and spent per Council direction, and provide a minimum of unexpected impacts upon taxpayers, rate-payers and users of public services.

SECTION 2: GENERAL POLICY
The guiding principles of the City’s financial management include integrity, prudent stewardship, planning, accountability, and full disclosure. The City’s Budget should satisfy criteria as a financial and programmatic policy document, as a comprehensive financial plan, as an operations guide for all organizational units, and as a communications device for all significant budgetary issues, trends, and resource choices.

The budget process and format shall be performance-based and shall be focused on goals, objectives, and performance indicators. The budget will provide adequate funding for the maintenance and replacement of capital plants and equipment.

The budget process is intended to weigh all competing requests for City resources within expected fiscal constraints. Requests for new, ongoing programs made outside the budget process will be discouraged. The City will endeavor to avoid budgetary and accounting procedures that balance the current budget at the expense of future budgets.

The City shall anticipate and address economic and fiscal risks to ensure the City lives within its means and has the resources to invest in its infrastructure, facilities, equipment, training and workforce to preserve and enhance community well-being.

SECTION 3: RESPONSIBILITY
At the City of Compton (or the City) the following represent sets of responsibilities borne by various levels of City Council members, Staff, and management.

1.The City Controller or designee, shall be responsible for:
 Developing, implementing, and managing this policy as well as subsidiary

CITY BUDGET POLICY
4 policies.
 Ensure that the budget document shows the budgeted fund balance for the budget year
 Financial forecasting
 Recommending approved strategies for Reserve maintenance  Recommending to the CM and the Council, and then implementing an approved plan of action for Budget surpluses and deficits o Include performing a calculation of one day’s (or applicable multiple thereof) worth’s of budgeted operating expenses. Such a calculation would be used by the CM to assist with making recommendations regarding reserves
 Posting the approved budget and all budget amendments to the financial system
 Posting approved budget transfers of appropriations to the financial system  Performing transfers between reserve accounts in the financial system  To endeavor to maintain the highest credit rating possible for the City  Proactively identify and monitor long-term financial liabilities, including unfunded pension obligations, and commit to taking actions to manage these commitments, in connection with using the Pension Levy Fund that prioritizes the City’s long-term financial sustainability.
 To perform or facilitate debt issuance, interest payments, principal repayments, and other debt-related activity. Also designing, implementing, and evaluating the internal controls over debt-related activity.
 Coordinating and analyzing debt requirements, including the timing of debt, calculation of outstanding debt, debt limitation calculations and compliance, impact on future debt burdens, and revenue requirements.  Preparing and presenting to the Council, interim revenue and expenditure trends to allow evaluation of potential discrepancies from budget assumptions.  Perform quarterly reports to the Council of:
o Budget vs Actual Variances
o Transfers of appropriations
o Transfers between reserve accounts
o Reserve target level compliance

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5  Development and maintenance of adequate billing and collection measures  Have a backup protocol to ensure continuity and timeliness of operations during vacations and other leaves.
 Must actively participate in and support the implementation of the internal controls contained in this policy and all other policies, and immediately follow up if the deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.  Additional responsibilities are stated in the remaining sections within this policy.

2.City Manager or designee, shall be responsible for:
 Developing, implementing, and managing this policy as well as subsidiary policies.
 Ensure that the budget document shows the budgeted fund balance for the budget year
 Ensuring that City staff solicit input from the public about priorities before starting the budget process
 Ensuring that the City’s budget document is clear and comprehensible  Ensuring that the budget office has proper training to prepare the budget  Developing the Budget, including discussions and explanations of all assumptions, estimates, and calculations to the Council  Recommending and implementing approved strategies for Reserve maintenance
 To endeavor to maintain the highest credit rating possible for the City  Proactively identify and monitor long-term financial liabilities, including unfunded pension obligations, and commit to taking actions to manage these commitments, in connection with using the Pension Levy Fund, that prioritizes the City’s long-term financial sustainability.
 To perform or facilitate debt issuance, interest payments, principal repayments, and other debt-related activity. Also designing, implementing, and evaluating the internal controls over debt-related activity.
 Perform the GANN Limit Calculation for insertion in the annual budget book.  Coordinating and analyzing debt requirements, including the timing of debt, calculation of outstanding debt, debt limitation calculations and compliance,

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6 impact on future debt burdens, and revenue requirements.  Preparing and presenting to the Council, interim revenue and expenditure trends to allow evaluation of potential discrepancies from budget assumptions.  Perform and present to the Council, current and future cost implications for operating or capital improvement costs before the Council commits to new spending
 Development and maintenance of adequate billing and collection measures  Have a backup protocol to ensure continuity and timeliness of operations during vacations and other leaves.
 Must actively participate in and support the implementation of the internal controls contained in this policy and all other policies, and immediately follow up if the deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.  Confirm with the Grants department or any other City Department manager that manages a grant, if that person needs to get their grant expenditures preapproved by the granting agency before budgeting those expenditures in the City budget
 Additional responsibilities are stated in the remaining sections within this policy.

3.The City Manager (CM), City Controller (CC), and City Department Heads, collectively, are responsible for:
 Administering programs within the specific funding decisions contained in the budget
 Participate in meeting policy goals, budget goals, and ensuring the long-term financial health of the City
 Assistance with building the annual budget through participation in the evaluation of long-term initiatives, short-term initiatives, significant changes, goals and objectives, Capital expenditures, program-based budgeting that link resources with results.
 Identify and evaluate immediate and long-term economic, social, and environmental impacts of all issues provided for community and Council consideration.
 Strive to identify entrepreneurial solutions to recover costs of operating programs.
 To fairly and honestly collect and supply sufficient information (when available) as appropriate, and as needed by the City Controller’s Office to fairly

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7 and properly support financial assumptions, calculations, and estimates that will be used to prepare the annual budget, forecasts, reports, rate-setting calculations, as well as other financial calculations.
 Search for, obtain, and maintain appropriate grant funding to leverage City funds, when available
 Quarterly, performance measurement reporting to the Council  To endeavor to maintain the highest credit rating possible for the City  Have a backup protocol to ensure continuity and timeliness of operations during vacations and other leaves.
 Must actively participate in and support the implementation of the internal controls contained in this policy and all other policies, and immediately follow up if the deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.  Additional responsibilities are stated in the remaining sections within this policy.

SECTION 4: INTERNAL CONTROL GUIDANCE
COST BENEFIT:

The cost associated with the control process should not exceed the expected benefits.

1. If any control mechanism is costing the City more to operate than is merited by the risk it is seeking to mitigate, then the City Manager may take steps to reduce the cost of the Control Mechanism.

2. The City manager may reduce the scope of an existing control mechanism. For example, a control mechanism that verifies transactions accuracy could not be applied to a sample of transactions within a group, as opposed to the entire group. If performed randomly to a population of data a statistical minor error margin can offer a reasonably similar level of comfort over a group of transactions. Other examples may include modifications to authorization level, approval requirements, frequency of testing, completeness of testing, testing from an individual basis to a group basis (batch totals). However, with reduced control mechanisms, any discovered errors must be treated more seriously as they may reflect the existence of a larger problem.

3. The City Manager may substitute an alternate and lower-cost control mechanism if the substituted control mechanism offers a reasonably similar level of control.

4. If the alteration or elimination of a control mechanism will significantly increase the risk it was trying to mitigate, then the change may only be approved through City adoption by resolution.

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8 SECTION 5: DEFINITIONS
Operating budget—adopted annually, the operating budget is a detailed estimate of how much the City needs to spend in its fiscal year to meet its ongoing financial obligations and provide programs and services. It establishes a spending cap that management may not exceed without special authorization.

Capital budget— the capital budget is money set aside for buying or building fixed assets such as buildings, equipment, vehicles, water facilities, and land. Because capital construction normally takes place over more than one fiscal period, capital budgets are generally adopted on a project-length basis.

Capital improvement projects - infrastructure or equipment purchases or construction which results in a capitalized asset and having a useful (depreciable life) of one year or more.

Indirect Costs – Costs incurred for a common purpose not readily assignable to a cost center or user at the time services or goods are provided or delivered Pay-as-you-go financing - is defined as all sources of revenue other than City’s debt issuance, i.e., Net Assets, contributions, developer contributions, grants, endowments, etc.

Restricted Funds – Monies where restrictions on the use of these funds are imposed by an outside source such as creditors, grantors, contributors, laws, or regulations governing use.

Capital Funds – Monies that are utilized primarily to fund capital and asset costs, for both new and replacement projects.

Liquidity Funds – Monies used to safeguard the financial flexibility and stability of CITY and to maintain stable customer charges and rates from year to year. Liquidity may be funded from accumulated revenues and when appropriate available shortterm liquidity arrangements.

Cash Account(s) – Accounts used to track cash and/or cash equivalent assets for accounting or reporting purposes. For purposes of investment, the City may commingle unrestricted accounts and reserve funds, so long as the City’s Investment Policy permits such.

State of extreme emergency - During the existence of any national or local emergency created by military attack or sabotage, or in the provision for adequate national or local defense, or upon the occasion of a great public calamity, such as an extraordinary fire, storm, epidemic, earthquake or another disaster, the City Manager is hereby authorized to take such actions as is deemed by him necessary to safeguard life, health or property notwithstanding any other provisions of this charter. During the existence of any such emergency, the responsible officer may comply with any lawful federal or state law,

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9 order, or regulation, notwithstanding any conflict which may exist between such law, order, or regulation and the provisions of this charter, in safeguarding life, health, or property in the City. At the first meeting of the City Council following the commencement of such emergency, or the taking of any action under this section, the City Council shall review the situation and its finding as to the existence of such emergency or the need for any further action of an emergency nature and contrary to any provision of this charter shall be final and conclusive.

Emergency Ordinances - Any ordinance declared by the City Council to be necessary as an emergency measure for preserving the public peace, health safety and containing a statement of the reason for its urgency, may be introduced and adopted at one and the same meeting if passed by at least four affirmative votes (Charter Sec. 607).

SECTION 6: BUDGET DEVELOPMENT OVERVIEW
Budget development will use strategic multi-year fiscal planning, conservative revenue forecasts, and program-based cost accounting that requires every program to be justified annually as to how it will meet intended objectives. The process will include a diligent review of programsby staff, the CC, the CM, and the Council. The City will avoid budgetary procedures that balance current expenditures at the expense of meeting future years’ expenses, such as postponing expenditures or accruing future years’ revenues. The City’s balanced budget is to be adopted on a modified accrual basis. Non-cash items, such as investment adjustments to market value, depreciation, amortization, and bad debt expense are not budgeted. Multiyear capital projects are often budgeted both (a) on a full cost multi-year basis where the year-end active project budgets are continued to the next year until the completion of the project. And (b) their estimated cost for the budget year will also be delineated and presented in the annual budget.

SECTION 7: PROGRAM BASED BUDGET
The utilization of a program budget format will provide a basis for the evaluation of services as well as a way to evaluate impacts of potential increases or decreases in funding. Current operating expenditures will include all allowable overhead operating (indirect) costs. For the most part, these expenses will be charged to individual budget program elements through indirect cost allocation plan charges.

Applicable indirect costs will also be allocated to capital projects to provide full cost accounting as appropriate.

City staff shall strive to identify entrepreneurial solutions to recover the costs of operating programs.

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10 Building the program-based budget will entail the following procedures:

1. Long-Term Initiatives (10-year foresight)
o Evaluate City’s vision, mission, and values.
o Evaluate the City’s goals and objectives of the above. o Evaluate the City’s prioritization of the above.
o Evaluate the City’s expected outcomes of the above.
o As an example, the fiscal sustainability plan adopted by the council should be referenced (if applicable).

2. Short-Term Initiatives (1 to 5-year foresight)
o Evaluate short-term goals.
o Evaluate service-level assumptions.
o Evaluate budget impact - revenues and expenditures.
o Evaluate staffing level changes.

3. Significant Changes (1 year look back)
o Evaluate specific issues and actions causing significant changes.  Policy issues
 Economic factors
 Regulatory issues
 Legislative challenges
o Evaluate emerging issues or changes in priorities.

4. Goals and Objectives by Department (1-year foresight) o Evaluate department goals and objectives.
o Evaluate how department goals are linked to overall City goals. o Evaluate short-term objectives, measurable results to be achieved. o Evaluate the timeframes of achieving those objectives.

5. Net Position
o Define net position
o Prepare a five-year historical trend.

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11 o Prepare (at least a) five-year forecast.

6. Capital Expenditures
o Define capital expenditures.
o Summarize capital expenditures.
 Routine.
 Non-routine.
o Identify and match funding sources.
o Explain how the City’s current and future budget will be impacted.  Financial impact.
 Non-financial impact.

7. Program - Base Budget Will Link Resources with Results o Identifying community needs for essential services
a. Priority lists should be established annually & prepared by the City Manager or designee.
b. This shall include the community’s needs for reducing the City’s legal claims. c. The Cities fiscal sustainability plan should be referenced at this time (if applicable).
o Describing the programs required to provide the essential services o Identifying the purpose of activities performed in delivering services o Establishing goals and objectives which define the nature and level of services required
o Identifying resources required to perform program activities and accomplish goals and objectives
o Staffing levels
o Program activity revenue and appropriations
o Meet bond covenant requirements for net revenues and reserve requirements
SECTION 8: REVENUE BUDGET DEVELOPMENT
While building the revenue budget, the following parameters will be followed: by the City Controller’s Department:

CITY BUDGET POLICY
12  Revenues will not be dedicated for specific purposes unless required by law or generally accepted accounting principles (GAAP). All non-restricted revenues will be deposited in the General Fund (or other designated fund as approved by the City Council) and appropriated by the Council. • Current revenues will fund current expenditures and a diversified and stable revenue system will be developed in coordination with the City Manager’s Department and maintained to protect programs from short-term fluctuations in any single revenue source.
• The City will estimate its annual revenues by an objective, analytical process, wherever practical. The City will project revenues for the next year and will update this projection annually. Each existing and potential revenue source will be reexamined annually. In the case of assumptions uncertainty, conservative projections will be used.
• The City Manager’s Department in conjunction with the City Controller’s Department will investigate potential new revenue sources, particularly those that will not add to the burden of tax or rate-payers.
• Each year, the City will recalculate the full costs of activities supported by user fees/rates to identify the impact of inflation and other cost increases. • Grant funding will be considered (the City Manager’s Department in conjunction with the City Controller’s Department) to leverage City funds.

Inconsistent and/or fluctuating grants should not be used to fund ongoing programs. Programs financed with grant monies will be budgeted in separate cost centers, and the service program will be adjusted to reflect the level of available funding. In the event of reduced grant funding, City resources will be substituted only after all program priorities and alternatives are considered. • One-time revenue windfalls should be designated as a reserve or used for onetime expenditures. The funds are not to be used for ongoing operations. To the extent, such funds are not required for current expenditures, one-time expenditures, and/or capital improvements such funds should be maintained as operating reserves or used to reduce debt.
o For purposes of this policy, one-time revenue windfalls shall include:
 Lump sum (net present value) savings from debt restructuring  CalPERS Rebates
 Tax Revenue growth in excess of 5% in a single year
 Sale of City-owned real estate
 Pure unexpected revenues (i.e. litigation settlement)

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13  Receipts from approved Development Fees
 Contributions and Gifts
 Any other revenues the Council may elect to designate as extraordinary
SECTION 9: USER FEES/RATES
The process for changing user fees or rates will follow the existing approved User Rate policy. All user fees and charges will be examined or adjusted every year and undergo a thorough review to determine the 100% direct and indirect cost of service recovery rate at least every four years. This shall include operations and maintenance, capital outlay, and debt services costs. The Council will strive to obtain 100% cost recovery rates but will reserve the right to recover less, as appropriate. The acceptable recovery rate and any associated changes to user fees and charges will be approved by the Council following public review, each year.

Any unfavorable balances in cost recovery will be brought to the Council’s attention by the City Controller and City Manager or designee and evaluated from a departmental, program, and goals perspective.

The department responsible for each fee shall on an annual basis evaluate the completeness of the fee schedule in recovering all costs from the associated operations and shall present its findings to the City Manager. The City Manager will report these findings to the City Council if action is required as needed. The City Manager may opt to present these findings during the budget process.

SECTION 10: EXPENDITURE BUDGET DEVELOPMENT
 Each program will identify activities and the recommended expenditure appropriations to perform those activities
 Identify recurring vs. nonrecurring expenditures
 Identify general vs. restricted expenditures
 Expenditure appropriation increases to the budget shall not be allowed unless offset with ongoing additional revenues or reduction in services.  Addition of personnel will only be requested to meet program initiatives and policy directives: after service needs have been thoroughly examined and it is substantiated that additional staffing will result in increased revenue or enhanced operating efficiencies and effectiveness. To the extent feasible, personnel cost reductions will be achieved through attrition or transfer.

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14 o The City Manager or designee shall evaluate the fiscal impact of proposed changes in all salaries or retirement benefits to be provided to any employee or employee association and present to the Council.  Capital equipment replacement will be accomplished through a life cycle funding mechanism and in some instances the use of a “rental” rate structure. The rates will be revised annually to ensure that charges to operating departments are sufficient for the operation and replacement of vehicles and other capital equipment (fleet, computers, phones, and copier systems). The City shall endeavor to maintain adequate cash reserves to fund 100% replacement of certain capital equipment. Replacement costs will be based upon equipment life cycle financial analysis developed by each department and approved by the Budget Officer. Non-capital equipment replacement will be accomplished through a life cycle funding mechanism developed by each department and implemented and approved by the Budget Officer.
 Alternative means of service delivery will be evaluated by the CM or designee to ensure that quality services are provided to customers at the most competitive and economical cost. Departments, in cooperation with the CM and CC, will identify all activities that could be provided by another source and review options/alternatives to current service delivery. The review of service delivery alternatives and the need for the service will be performed annually or on an “opportunity” basis.
 A (at least) five-year Capital Improvement Plan (CIP) shall be developed and updated annually by the City Manager or designee, including anticipated funding sources. The City staff shall maintain all its assets at a level adequate to protect the City’s capital interest and to minimize future maintenance and replacement costs.

PROCEDURES FOR THE CAPITAL IMPROVEMENT PROGRAM (CIP):

The City Manager or designee will include the following actions during CIP development:
 The CIP will include the total cost and expected duration of each project, spread appropriately by year. It will also include by the project the plan for grant funding for match requirement funding, and for the remaining balance.
 New projects additions and existing project updates are made annually to the CIP during the Annual Budget Process.
 Other current fiscal year additions to the CIP must be approved by the City Council by resolution.

CITY BUDGET POLICY
15  Future fiscal year CIP additions may go to the City Council within the next combined Budget resolution as long a modification to current year funding is not required.
 Rescheduling a capital project does not require City Council adoption by the resolution. However, deferring a capital project for more than one year requires at a minimum, City Council resolution.
 Elimination of a capital project requires City Council adoption by resolution by four votes.
 The total estimated cost calculations of CIPs shall include adequate costs of repair and replacement of deteriorating infrastructure and avoidance of significant unfunded liability.
 Proposed capital projects will be considered through the City budget development process and reviewed and prioritized by a crossdepartmental team regarding accurate costing (design, capital, and operating) as well as the City Manager or designee for overall consistency with the City’s goals and objectives. The City Manager or designee will then identify financing sources for the highest-ranking projects.
 The City Manager or designee shall determine the least costly financing method for all new projects
 Pay-as-you-go financing is defined as all sources of revenue other than the City’s debt issuance, i.e., Net Assets, contributions, developer contributions, grants, endowments, etc. Pay-as-you-go financing should generally be considered as the preferred option. However, the potential for debt issuance that provides additional economic and/or strategic values could be considered as recommended by the CM.
o In the context of funding future capital facilities and maintaining and replacing existing assets, in each instance, the City will analyze the benefits and tradeoffs of utilizing pay-as-you-go and/or debt financing and determine the optimal funding strategy or combination of funding strategies. The analysis should consider the City’s current and projected liquidity, and capital positions, as well as the impact of inflation, the cost of water, and other factors on the operations of the City and its capital improvement program. CITY may from time to time measure its liquidity position by calculating “day’s cash” or other appropriate calculation of liquidity and its capital positions, as measured by its debt to equity ratio or other

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16 appropriate calculation of capital position.
 The City shall endeavor to apply restricted funds (i.e. existing Bond proceeds) to capital projects before using “unrestricted” funds.  Capital project budget book descriptions will include a fiscal impact statement disclosing the expected operating impact of the project and when such cost is expected to occur.
 An inventory of the City’s physical assets, their condition, and remaining useful life will be maintained by the City Controller’s department and will be shared with the City Manager or designee to assist with Capital Budgeting.

INDIRECT COSTS:
 A systematic and rational methodology should be used to calculate the amounts allocated within an indirect cost allocation plan
 City Manager or designee in conjunction with the City Controller’s Office needs to be involved in the process and knowledgeable about the methodology used
 Staff shall be aware of and sufficiently trained on all applicable laws and regulations if the cost allocation is to be used as the basis for requesting reimbursement under a grant, for bond proceeds, for rate-setting, or for any other contractual or governmental regulation or restriction COMMITMENT TO CAPITAL PROJECTS:

Once the City commits a capital project, it is important to stay committed so that City resources are not wasted on unfinished projects. If a capital project has been funded and work has begun, then it will continue to be funded in subsequent years in accordance with the capital improvement program. Only by the resolution of the City Council, by four votes of Approval, shall funding for a capital project be reduced or eliminated once work has begun.

DEPARTMENT OPERATIONAL EFFICIENCY:

The City of Compton provides a variety of services, and it is important that the services are performed consistently, and at the lowest cost to the City. To support this standard, the City Manager or designee will look for opportunities to reallocate departmental responsibility so that similar City functions are organized under a single department, or to break out departmental responsibility when certain functions of one department can be more efficiently conducted by another department.

The City Manager or designee, shall include an allocation in the budget that is dedicated to providing training to the City Council such that it will be ensured that the

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17 City Council will have the necessary knowledge and tools to make sound and responsible decisions on behalf of the public. Additionally, the City Manager or designee shall include an allocation in the budget that is dedicated to implementing a robust orientation and ongoing training program for Council members, including training related to Budgeting, Finances, and the Council’s role in overseeing City operations.

SECTION 11: ACCRUING LIABILITIES
The City Manager or designee shall endeavor to maintain cash reserves sufficient to fully fund the net present value of accruing liabilities including self-insurance provisions, obligations to employees for vested payroll and benefits, and similar obligations as they are incurred, and to maintain the highest credit rating possible for the City. At a minimum, they must be funded to 90%. If the funding is not yet at 90% then the CM, or designee, must design a reasonable, effective plan to reach the 90% minimum and begin implementing it in at least the next budget cycle with Council approval.

SECTION 12: FORECASTING
The annual budget shall include a Five-Year Forecast. The forecast will be comprised of estimated operating costs and revenues as well as future capital improvement financing sources and uses. Balanced revenue and expenditure forecasts will be prepared by the CC to examine the City’s ability to absorb operating costs due to changes in the economy, service demands, and capital improvements.

The forecast will be taken into consideration when preparing budget recommendations. The forecast will be updated annually and include a five-year outlook. The CC will prepare and present these estimates to the Council at least once a year. The City’s capital plan will be informed by the ten-year forecasting process.

The forecast shall factor in future increases in demand, expected rate increases, regulations, and infrastructure renovation and renewal needs.

During the preparation of the budget, all interfund receivables and payables must be reviewed and the relevant interest expense and interest revenue payments must also be budgeted.

SECTION 13: BUDGET DOCUMENT QUALITY CONTROL
The Budget Officer or designee with assistance from the City Controller or designee must perform the following QC procedures on the Final Budget document and all underlying, linking, or foundry files, documents, or spreadsheets.

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18 1. All summing formulas or their results must be checked for consistency, reasonableness, and appropriateness in the elements getting summed together. To document this procedure either: a printout needs to indicate the reviewer’s initials next to each sum and/or initialing on the spreadsheet.

2. Total formulas which add up other sums with the document must also follow step 1.

3. They must include a schedule that shows beginning (or a projected beginning) fund balance, anticipated revenues, anticipated expenses, anticipated inter-fund transfers, anticipate other financing sources and uses, anticipated usage of reserves, and final projecting ending fund balance for all funds. This schedule must be reviewed and initialed by the CM or designee and Budget Officer and the City Controller or designee (3 different people).
a. This schedule must reveal a balanced budget and really describe reasons why reserves are used, if applicable.

4. Analytical review procedures must be performed. The final budget document must be compared, for each line, against the prior year’s budget, the prior year’s most recent audited actuals. Material differences must be explained and checked for reasonableness by the budget officer or designee and/or department manager. This review must be documented and initialed by the Budget officer and City manager or designee.

5. This schedule must include expenses or revenues, or other financing sources expected to be incurred or received during the FY that is being budgeted.

6. When the budget is received by the City Controller’s office, the City Controller or designee shall enter the budget into the finance software and check for irregularities by verifying that revenue and expenditure appropriations are balanced by fund number and by the department.

SECTION 14: TIME FRAME FOR BUDGET COMPLETION
The time frame for the completion of the budget shall follow the budget calendar adopted by the City Manager or designee.

SECTION 15: RESERVE POLICIES
RESERVE POLICY PURPOSE:

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19 A critical element of prudent financial planning is to ensure that sufficient funding is available for current and future operating, capital, and debt service needs.

Additionally, fiscal responsibility requires anticipating the likelihood of and preparing for, unforeseen events. The City of Compton (“City”) will at all times strive to have sufficient funding available to meet its operating, capital, and debt service obligations.

Reserve Funds (“Funds”) will be accumulated and maintained to allow the City to fund operating expenses and capital expenditures in a manner consistent with its Annual Operating and Capital Improvement Budgets and its long-term Capital Improvement Program, respectively, and avoid significant customer or taxpayer rate fluctuations due to changes in cash flow requirements.

Through a variety of policy documents and plans, including the City’s Capital Improvement Program, master plan, and strategic plan, the Council has set forth a number of long-term goals for the City. A fundamental purpose of the City’s policy documents and plans is to link what must be accomplished with the necessary resources to successfully do so.

The Council may designate specific fund accounts and maintain minimum fund balances consistent with statutory obligations that it has determined to be in the best interest of the City. The Policy directives outlined in this section are intended to ensure the City has sufficient funds to meet current and future needs. The Council shall annually review the level of these funds in the budget book.

RESERVE TRACKING PROCEDURES:

The City may maintain its liquidity and capital funds in separate, designated subaccounts in a manner that ensures its financial soundness and provides transparency to its stakeholders. The account balances are considered the minimum necessary to maintain the City’s creditworthiness and adequately provide for:
 Compliance with applicable statutory requirements
 Financing of future capital facilities and repair and replacement of existing assets
• Per the City Charter: section 1413 & 1414
Section 1413. Public Service Departments’ Depreciation
Funds. The City Council shall annually set aside from the income derived from its revenue-producing public utilities, as a separate depreciation fund for each of said public utilities, a sum which, according to the estimate of the City Manager, and approved by the City Council, shall be sufficient to meet the normal depreciation in said public utility. Such depreciation

CITY BUDGET POLICY
20 funds shall be used only for the replacement, betterment, and extension of the plants and equipment of said public utilities, respectively.

Section 1414. Capital Outlays Funds. A fund for capital outlays, generally, is hereby created, to be known as the “Capital Outlays Fund.” The City Council by ordinance may create a special fund or funds for a special capital outlay purpose. The City Council may levy and collect taxes for capital outlays and may include in the annual tax levy a levy for such purposes in which event it must apportion and
appropriate to any such fund or funds the monies derived from such levy. It may not, in making such levy, exceed the
maximum tax rate provided for in this Charter, unless
authorized by the affirmative votes of a majority of the electors voting on the proposition at any election at which such question is submitted. The City Council may transfer to any such fund any unencumbered surplus funds remaining on
hand in the City at any time. Once created, such fund shall remain inviolate for the purposes for which it was created; if, for capital outlay, generally, then for any such purposes, and if for a special capital outlay, then for such purpose only, unless the use of such fund for some other purpose is authorized by the affirmative votes of a majority of the electors voting on such proposition at a general or special election at which such proposition is submitted. If the purpose for which any capital outlay fund has been created has been accomplished the City Council may transfer any unexpended or unencumbered
surplus remaining in such fund to the fund for capital outlays, generally established by this Charter.
 Cash flow requirements
 Economic uncertainties, local disasters, and other financial hardships or downturns in the local or national economy
 Contingencies or unforeseen operating or capital needs Additionally, the City has established and will maintain the following primary cash (and/or equivalent) accounts (and any other related fund tracking mechanism if needed):

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21  Restricted Cash Account(s) – comprised of Bond Proceeds, legally restricted grants or contracts, Developer and or Capacity Fees and Customer Deposits
 Unrestricted Capital Cash Account(s) – comprised of money set aside for Capital Projects, including those for General and Administrative Capital Projects
 Liquidity Cash Account(s) – monies set aside for Rate Stabilization, for enterprise funds, the Operating Reserve, the Emergency Reserve.

RESERVE MAINTENANCE:

The minimum established for each reserve type represents the baseline financial condition that is acceptable to the City from risk and long-range financial planning perspectives. Maintaining reserves at appropriate levels is a prudent, ongoing business process that consists of an iterative, dynamic assessment and application of various revenue-generating alternatives. These alternatives (either alone or in combination with each other) include, but are not limited to: taxes, fees and charges, asset or resource management, capital financing, investment of funds, and levels of capital expenditures.

RESERVE TARGET LEVELS:

To establish and preserve its strong credit ratings, in every fiscal year the City will strive to maintain a Liquidity fund balance totaling a minimum of 180 days of budgeted operating expenses without regard to any Liquidity Facility.

The following represents the City’s target reserve levels by type:

I. RESTRICTED FUNDS
a. Bond Proceeds Fund(s): Bond proceeds funds are monies derived from the proceeds of a bond issue. Typically, they consist of construction fund monies, and a debt service reserve fund (“DSRF”). The use of these proceeds is restricted by conditions set forth in the respective legal bond documents.

Typically, these funds are held by the Trustee in favor of the bondholders.

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22 Target Level – The debt service reserve requirement is established at the time of the bond issue. This amount may be recalculated as the bonds are paid down. Any excess principal and/or interest earnings can be used to pay debt service on the appropriate bonds. The target level must appropriately respond to changes in interest rates for variable-rate debt.

Events or Conditions Promoting the Use of the Fund(s) – As stipulated in the respective bond documents. Construction fund monies are expected to be spent on applicable projects, while DSRF can only be used to pay debt service or to pay down principal at maturity.

Review Dates for Balances – Reviewed by the Trustee and City staff on a semiannual basis at least 15 days prior to an interest payment date. b. Customer and Development Deposits: Monies held on behalf of City customers as required for their account or as cash bonds for development projects.

Target Level – Customer deposits required are based upon the process outlined in the City’s Water Service Regulations. Deposit requirements for development projects are also outlined in the City’s Water Service Regulations.

The balance in this account will fluctuate depending on the number of utility customer deposits required and the number of development projects in process. Therefore, no minimum or maximum levels will be established.

II. CAPITAL RESERVE FUNDS
The City will strive to maintain minimum balances in the Capital Reserve Funds, as of June 30, of any fiscal year equal to the amounts set forth below.

The Capital Reserve Funds will consist of the following sub-accounts:
a. Capital Project Account: The Capital Project Reserve is used for the funding of new capital assets or the rehabilitation, enhancement, or replacement of capital assets when they reach the end of their useful lives.

Target Level – City may set aside capital money for replacement funds on a project-by-project basis. The minimum target level the City will strive for is 100% of its then-current fiscal year from the Capital Improvement Budgets plus 80% of the amount estimated to be needed the following fiscal year. Failure to meet the minimum target level will not result in a violation of the policy. The maximum balance may be determined upon the reasonable needs of the City as set forth in the Capital Improvement Program, the City’s Master Plan Documents and Strategic Plan.}
Events or Conditions Prompting the Use of the Fund – Staff will recommend new assets to be constructed or assets to be rehabilitated, enhanced, or

CITY BUDGET POLICY
23 replaced during the annual budget preparation. As projects are approved, funds will be appropriated from reserve funds or available revenues.

Review Dates for Balances – Fund balances and projected improvement projects will be reviewed by staff and the Council during the preparation and approval of the annual budget and during the mid-year budget review process. b. Administrative & General Account: The Administrative & General Account can be used to fund certain general, administration and overhead projects. Fleet Management, Building, Equipment, and Information Technology reserves will be maintained based upon life cycle replacement plans to ensure adequate net asset (fund balance) designation required for systematic replacement of fleet vehicles, building components and systems, computers and related equipment, and operational contingencies. Operating departments will be charged over the useful life of the asset used. The City shall endeavor to stabilize funding by building reserves equal to the anticipated replacement cost of each asset class at end of useful life.

Target Level – This Account has no specific target level for each component.

However, the City shall seek to maintain a minimum balance equal to 5% of its annual operating expenses. Special projects can be funded on an as-needed or project-by-project basis.

Events or Conditions Prompting the Use of the Fund – Improvement projects will be identified by staff and recommended to the Council during the preparation of the annual budget. As projects are approved, funds will be appropriated from available revenues.

Review Dates for Balances – Fund balances and projected improvement projects will be reviewed by staff and the Council during the preparation and approval of the annual budget and during the mid-year budget review process.

III. LIQUIDITY FUNDS
Liquidity Funds will be comprised of the following sub-accounts: The Rate Stabilization Reserve Account, the Operating Reserve Account, the Emergency Account, and the water banking account, when applicable. The balance in the Liquidity Funds will fluctuate depending on the annual operating expenses. Further, the City will also incorporate an aggregate reserve goal since policy requirements and goals might fluctuate year over year. The total reserve goal of maintaining cash and equivalents shall be equal to 180 “days’ cash”.
a. Rate Stabilization Account for Enterprise Funds: This fund is established to provide flexibility to the Council when setting rates to allow for absorbing

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24 fluctuations in water demand and smoothing out rate increases over a period of time.

Target Level – This fund shall be maintained at a minimum level equal to the lower of (1) a calculation of the difference between (a) the amount of revenue from the lowest year of historical water usage going back 25 years and (b) the amount of revenue from a typical year using current rates; or (2) 180 days of the budgeted total operating expenses
Events or Conditions Prompting the Use of the Fund – This fund is intended to be used to defray any temporary unforeseen decreases in the sale of water.

The Council, on a case by case basis, will determine the amount and timing for any use of the fund. If at the end of any fiscal year, moneys on deposit in all accounts or reserve funds are at or exceed their respective maximum amounts or levels, the City may consider rebating surplus amounts to its ratepayers.

Review Dates for Balances – Fund balances will be reviewed by staff and the Council during the preparation and approval of the annual budget and during the mid-year budget review process.
b. Operating Reserve Account: The Operating Reserve Account is used for unanticipated operating expenses. This fund is designated by the Council to maintain a reserve for current operations and to meet routine cash flow needs.

Target Level – Funding shall be targeted at a minimum amount equal to 180 days of the City’s budgeted total operating expenses
Events or Conditions Prompting the Use of the Fund – Upon Council authorization, this fund may be routinely utilized by staff to cover temporary cash flow deficiencies caused by timing differences between revenue and expenses or decreases in revenues and unexpected increases in expenses.

Review Dates for Balances – Fund balances and target level will be reviewed by Staff and the Council during the preparation and approval of the annual budget and during the mid-year budget review process.
c. Emergency Account. The Emergency Account may be used to make emergency purchases of water in the Water Enterprise Fund at any time or to begin repair of the water system after a catastrophic event, such as a severe earthquake, drought, or fire while interim, or long-term financing is being arranged or insurance claims are being processed. The City may use funds herein for either capital or operating purposes. It may also be used for general emergency purposes in the General Fund.

Target Level – Funding shall be targeted at a minimum equal to 1% of the net

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25 capital assets of the City’s, a target level of 2% of the net capital assets and a maximum of 3% of the net capital assets of the city.

Events or Conditions Prompting the Use of the Fund – The Council may designate use of this fund after establishing that conditions exist as called out in the definition and purpose of the fund.

Review Dates for Balances – Fund balances and target level will be reviewed by staff and the Council during the preparation and approval of the annual budget and during the mid- year budget review process.
d. Water Banking Account (Water Enterprise Fund). The Water Banking Account can be used to fund the purchase of replenishment water for future use. The City will strive to maintain a minimum level equal to the cost of 1,000 acre-feet of water and a maximum amount equal to the cost of 10,000 acre-feet of water.

The City will review annually the cost to purchase water.

Target Level. Funding shall be targeted at a minimum equal to the existing rate times 1,000 acre-feet of water and a maximum equal to the existing rate times 10,000 acre-feet of water.

Review Dates for Balances – Fund balances and target level will be reviewed by staff and the Council during the preparation and approval of the annual budget and during the mid- year budget review process.

Self-Insurance Reserves (workers’ compensation, other employment related matters) will be maintained at a level, which, together with purchased insurance policies, will adequately cover the City’s property, liability, and health benefit risk. A qualified actuarial firm shall be retained and report on a bi-annual basis recommended appropriate funding levels. The City shall endeavor to maintain reserves equal to 90% of the estimated net present value of such liabilities. If the funding is not yet at 90% then the City Manager, or designee, must design a reasonable, effective plan to reach the 90% minimum and begin implementing it in at least the next budget cycle with City Council approval.

SECTION 16: BUDGET SURPLUSES AND DEFICITS
SURPLUSES:

It is the intent of the City to use all surpluses generated to accomplish three goals:
 Meet reserve policies

CITY BUDGET POLICY
26  Avoidance of future debt or liabilities
 Reduction of outstanding debt
Any surplus realized at year-end shall be used first to meet reserve policies as set forth in this policy. Excess surplus will then be used for the following purposes:
 Capital replacement program
 Retirement or refinancing of existing debt
 Cash payments for capital improvements
One-time revenue windfalls should be designated as a reserve or used for one-time expenditures. The funds are not to be used for on-going operations. To the extent such funds are not required for current expenditures, one-time expenditures and/or capital improvements such funds should be maintained as operating reserves or used to reduce debt.

For purposes of this policy, one-time revenue windfalls shall include:
• Lump sum (net present value) savings from debt restructuring • CalPERS Rebates
• Tax Revenue growth in excess of 5% in a single year
• Sale of City-owned real estate
• Pure unexpected revenues (i.e. litigation settlement) • Receipts from approved Development Fees
• Contributions and Gifts
• Any other revenues the Council may elect to designate as extraordinary DEFICITS:

It is the intent of the City to minimize all net asset (fund balance) deficits. The City Controller or designee will diagnose and communicate any fund balance deficits with the following recommendations to the Council:
 Primary Treatments – treatments that are recommended as the first line of defense and should be considered as a first option. In many cases, these treatments not only provide immediate help but also improve the long-term prognosis.
 Treatment to Use with Caution – treatments that may be called for if the primary treatments are not sufficient. However, the side effects of these treatments could potentially worsen financial condition if used improperly.

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27 SECTION 17: AFTER ADOPTION OF THE BUDGET
City staff shall strive to avoid returning to the Council for new or expanded appropriations. Exceptions may include emergencies, unforeseen impacts, midyear adjustments, or new opportunities.

The City will follow an aggressive, consistent, but sensitive policy of collecting revenues, with proper internal controls, to meet the needs of the City and follow all applicable state and federal laws.

The Council is to be provided with a monthly budget report comparing actual versus budgeted revenue and expense activity. Significant deviations between budget and actual results are to be explained. This will create an opportunity to adjust revenue projections and make expenditure appropriation changes if needed. Further, it also provides an opportunity to make budget transfers if necessary.

All fund designations and reserves will be evaluated at least annually by the City Controller for long-term adequacy and use requirements in conjunction with the development of the City’s balanced five-year financial plan and mid-year budget review procedures.

For Budget Amendments or Adjustments, when updating expenditure budgets from approved budget adjustments or amendments, the Accountant performing the adjustment shall check if there is enough budget in the appropriate revenue or other financing source account to cover the additional budgeted expenditures. If there is not enough budgeted revenue or other financing sources, then the Accountant shall not post the budget adjustment and shall send it back to the original requestor, unless it is approved.

PERFORMANCE MEASUREMENT
 Every year, the City shall review its Strategic Plan that identifies the Strategic Priorities for the following year, with the goals and objectives to be achieved.  Annually, each department shall develop departmental performance measures that support achieving successful results of those goals identified within the Strategic Plan. The measures should be a mix of different types, including effectiveness, efficiency, budget, demand, and workload. Measures should have performance indicators that ensure continuous improvement. o Department Directors shall establish performance measures for each division or program within their department to monitor and project program performance.

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28 o Quarterly summaries of the progress on departmental performance measures shall be submitted to the City Manager or designee.

SECTION 18: APPROPRIATIONS
LEGAL LEVEL OF CONTROL:

Policy reference

1. The City council of the City of Compton does herby resolve……..that the City Manager may transfer appropriations from the proposed general Fund contingency within the adopted budget. A quarterly report shall be made by the City Manager describing each transfer and a reason, therefore (Resolution No. 21,619).

2. The City council of the City of Compton does herby resolve……..that the City Manager may transfer funds within, but not between, each of the budgeted departments as required to achieve the purpose of said departments. A quarterly report shall be made by the City Manager describing each transfer and the reason, therefore (Resolution No. 21,619).

3. At any meeting after adoption of the budget, the City Council may amend or supplement the budget by motion adopted by the affirmative votes of at least four members so as to authorize the transfer of unused balances appropriated for one purpose to another purpose, or to appropriate available revenue not included in the budget (Charter Sec. 1408).

4. That the City manager may transfer budgeted amounts from one object to another object if they are within the same fund group, by no more than $5,000 per object. A budgetary transfer shall be reported to the City Council on a monthly basis in a report prepared by the City Controller (Resolution No. 21925).

5. That administrative accounting for budgetary transfers is performed by the City Controller.

All such transfers shall be reported to the city council on a monthly basis in a report prepared by the City Controller
ENCUMBRANCES:

Funds that are restricted by law or contract to a particular use shall be reserved for the specified use, shall be encumbered to that use, and shall be appropriated to the proper department or departments that are responsible for the specific use. Such encumbered funds shall not be reassigned for any use other than what is proscribed by the law or contract for the said fund.

LAPSE IN BUDGET:

In the event the City Council has not adopted a combined Budget resolution prior to the beginning of a new fiscal year, the City will continue to operate and meet those obligations necessary to maintain existing service as prioritized by the City Manager. In this event and at the direction of the City Manager, the City Controller will temporarily appropriate funds necessary for each department upon City Council adoption of a combined budget

CITY BUDGET POLICY
29 resolution, the city controller will adjust the temporary appropriation so that they match the appropriations adopted by the City Council in the adopted budget resolution.

SECTION 19: TRANSFERS
TRANSFERS OF APPROPRIATIONS:

The City Controller or Designee, upon approval of the Council, may transfer any unused balance or portion thereof from previously appropriated funds to augment existing appropriations. The City Controller or designee shall notify the CM and the Council of any transfer of funds made pursuant to this section which exceeds ten percent (10%) of the original appropriation to which the transfer is made.

City departments may need to request expenditure budget transfers under certain circumstances. It may be necessary to transfer funds from one activity or project to another to reflect the realignment of priorities, duties, or reorganization. Transfers among objects of expenditure within a department also may be needed to adjust budget estimates to meet actual operating realities. The following represent restrictions on budget transfers:
 Appropriations carried forward from the prior year(s) cannot be used for budget transfers
o Carryforward appropriations are not surplus and must be used for the purpose originally budgeted and approved for carryforward.  The following types of budget transfers require approval from the Council:
o Transfers involving salaries
 Transfers from professional services contracts to salaries require approval
o Transfers involving new equipment budget.
 Equipment can only be purchased using appropriations
specifically for equipment. Note that such transfers can only be from non-salary appropriations
TRANSFER PROCEDURES:

The City Manager may transfer budgeted amounts from one object to another object to another object if they are within the same fund group, and by no more than $5,000 per object per fiscal year. This allows the city manager to transfer up to $5,000. From one

CITY BUDGET POLICY
30 object to another within the same fund group, without requiring City Council adoption by resolution. Budget transfers procedurally are to follow these guidelines. a) Budgeted amounts transferred from one object to another object within the same classification, department, and fund require department head approval. b) Budgeted amounts transferred from one object to another object within the same department and fund, but within a different classification require City Manager approval if for an amount less than $5,000 per object per fiscal year. If the amount is greater than $5,000 then the City Council adoption by resolution is required for approval.
c) Budgeted amounts transferred from one object to another object within the same fund, but within a different classification and department require City Manager or designee approval if for an amount less than $ 5,000 per object per fiscal year. If the amount is greater than $ 5,000 then City Council approval is required for adoption.
d) Budgeted amounts transferred from one object to another object within a different fund require city council adoption by resolution.
e) Accounting for any transfers of funds is performed by the controller’s office. All such transfers shall be reported to the city council on a monthly basis in a report prepared by the controller’s office.
f) If and when the budget transfer request is completely approved, the City Controller’s Department is responsible to enter a budget transfer journal entry in the financial system
o Before entering the budget transfer into the finance software, City Controller Dept. staff must:
 Verify completeness of information and reasonableness of justification
 Verify funding availability and appropriateness (e.g., budget carried forward from the previous fiscal year cannot be the funding source of a budget transfer)
 Verify the accurate use of the accounting codes, budget unit codes, and object codes
 Return to the department if the request is being rejected or requires substantial changes
 Review data entry for accuracy of data based on the
approved budget transfer requests.
 At fiscal year-end, the City Controller shall notify the CM

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31 and the Council of any transfer of funds made which
exceeds 10% of the original appropriation to which the
transfer is made. If multiple transfers were made at
different times of the year, the individual transfer, as well as the cumulative transfers exceeding the 10% threshold, will be reported.

TRANSFERS OF RESERVES:

In the event, the Liquidity cash account balance exceeds the established aggregate maximum (if applicable), excess monies will be transferred annually into the Capital cash account. On an as-needed basis, money from the Emergency Account of the Liquidity Fund can be moved to the Operating Reserve Account to pay for operating emergencies to supplement the Liquidity Funds. The City Council shall approve any reallocation of reserve funds or any transfers among such funds.

SECTION 20: CARRYOVERS
On an annual basis, the CC or designee shall produce a schedule of all fund surpluses and deficits, with projections of reserve requirements and a plan for the use of an excess surplus for the current year. These will be Carryovers.

Automatic Carryovers include:
 Contractual commitments
 Grant, restricted donation, and capital project appropriations which are considered life-cycle appropriations (active, under construction)  June Council items (appropriation items)
June Council items and active/ongoing CIP carryovers are automatic. CIP projects that are under construction, in the process of design and specification development or production of bid documents will automatically be carried over for both encumbered funds and unencumbered funds.

Carryovers that are not automatic: Projects that have been on the CIP list for multiple years that are not proceeding to design, bid, or construction should provide a more detailed explanation of their status and a justification for the continuing need for the project funding. These projects will be closed out unless the department provides sufficient justification to keep them open. The justification should contain the information necessary to determine the status of the project and its continuing justification. Carryovers can only take place once the last invoices for the fiscal year have been paid and charged

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32 against the fiscal year that is ending. The Carryover Request forms will be closed on July 1st of every year. Any subsequent carryover requests will need to be taken to the Council by the requesting department.

Amounts carried over are subject to change depending on completion of the annual financial audit for that fiscal year and the resulting calculation of the availability of underspent budget balances.

City of Compton
Billing Policy
City of Compton Billing Policy
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Table of Contents
SECTION 1: RESPONSIBILITIES ...................................................................................3

1. The staff members belonging to a Billing Division or by responsible Department Head designee (or any division of the City that prepares bills even if not involved with Utility Billing) have the responsibility to: ...................................3

2. A (designated) Billing Supervisor (regardless of the City department that they are in) has the responsibility to:........................................................................4

3. The City Controller or City Manager (when applicable) or Designee has the responsibility to: .........................................................................................................5 SECTION 2: COMMUNICATION AND SOURCES OF BILLING ....................................6 a. APPLICATION FOR NEW WATER OR UTILITY SERVICE..............................6 b. METER READING ..............................................................................................6 c. SERVICE ORDER TYPES AND SERVICE ORDER MONITORING..................7 d. BROKEN METERS.............................................................................................9 SECTION 3: BILL GENERATION....................................................................................9 SECTION 4: DATA ENTRY ...........................................................................................10 SECTION 5: SENDING BILLS.......................................................................................10 SECTION 6: ACCOUNTING FOR BILL GENERATION................................................11 SECTION 7: CUSTOMER PAYMENTS.........................................................................11

1. Interactive Voice Response (IVR)…………………………………………………..11

2. Internet Payments……………………………………………………………………..12
City of Compton Billing Policy
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SECTION 1: RESPONSIBILITIES
The following represents the responsibilities to be borne by each party involved in the Billing and Cash Receipts cycle:

1. The staff members belonging to a Billing Division or billing function of their department by responsible Department Head or designee (or any division of the City that prepares bills even if not involved with Utility Billing) have the responsibility to:
a. Daily, maintain customer billing information electronically in a secure manner
b. Daily, maintain sufficient communication with sources that provide data for bill generation; they must also keep the billing system up to date with transaction information for billable transactions and creating bills when appropriate. This shall include communication with City Department Heads or their designees in regard to service orders, grant processing, subrecipient processing, with appropriate City officials regarding property ownership status, and/or any other internal or external source. c. Daily, ensure that the customer listing within the billing system is complete and that duplicate customer names or numbers are removed d. Weekly, reconcile the balance of customer deposits, and initiate procedures to increase deposit balances when necessary and when approved by the acting agent in the department, Department Head or designee. The balance of customer deposits is considered a liability of the City until appropriately earned.
e. Weekly, ensure that billing rates, billing codes, and related general ledger account-code-string assignments are appropriately maintained in the billing system, if applicable. Any changes must be approved by the Department Head or designee and/or the City Controller or designee. f. If any irregularities in billable transaction data or billable service order data are found, Billing staff must communicate these immediately to their designated Billing Supervisor and/or to the City Controller, or designee. g. After data entry or import into the billing system, all supporting documents must be systematically filed and retained for audit purposes by Billing staff and must be accessible by the Billing Supervisor and/or to the City City of Compton Billing Policy
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Controller, or designee.
h. Log out of the billing software when not in use.
i. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.
j. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest. k. Additional responsibilities are stated in the remaining sections within this policy.

2. A (designated) Billing Supervisor, (regardless of the City department that they are in) or Supervisor over billing responsibilities, has the responsibility to:
a. Monitor changes to customer information within their related billing system at least weekly. This shall include additions or deletions/de-activations of customers. This may include reviewing reports of changes to the system.

The Supervisor over billing functions shall follow up and resolve any concerns in a timely manner.
b. Monitor and search for any irregularities with equipment or systems to measure inputs to revenue generation, (such as metering-equipment-water -usage-data), weekly. If found, then the Supervisor over billing functions shall follow up timely and resolve the issue with the appropriate parties.

Likewise, the Supervisor over billing functions shall also monitor and search for any irregularities contained in any other source of information that will be used for bill preparation (such as service orders or grant expenditures).

Any irregularities found shall be resolved timely with the appropriate party.

Further any irregularities found must be communicated with the Department Head and/or City Controller or designee to assist with prevention of these irregularities in the future.
c. Monitor, review, and approve changes to the billing rates, billing codes, transaction codes, and related general ledger account-code-string assignments. Any such changes must be accompanied by supporting documentation that shall be maintained by billing staff and must be City of Compton Billing Policy
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accessible by the Supervisor over billing functions. The Supervisor over billing functions shall also ensure that accurate bill generation and bill mailing dates are posted to customers’ accounts in their related billing system, timely.
d. Monitor and direct the process for sending bills, statements, and notices to customers to ensure the list of customers is complete and that customers receive the bills, statements, and notices that are essential for them to pay the appropriate amount they owe to the City, timely. If a third-party vendor is involved in assisting with this process, the Supervisor over billing functions shall periodically audit and monitor the vendors’ services and reports of their results. This process should be done for grant bills, miscellaneous bills, as well as for routine utility bills. e. Make recommendations for allowance for bad debt or uncollectible account estimates to be used by the City Controller or designee, on an annual basis, or more frequently as requested by the City Controller or designee f. Monthly, participate in and monitor the process for delinquent account collection, shut off noticing, lien certificate preparation, and referrals to collection agencies, and write-offs, if applicable.
g. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.
h. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest. i. Additional responsibilities are stated in the remaining sections within this policy.

3. The City Controller or City Manager (when applicable) or Designee has the responsibility to:
a. Maintain billing systems’ settings and system design to make sure the settings result in the accurate, efficient, and effective reporting or transmission of financial data
b. Oversee the general ledger account-code-string assignments to bill codes City of Compton Billing Policy
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and transaction codes within billing software, if applicable c. Ensure that billing or other financial software systems used by staff should regularly prompt users to change their password. Industry standards indicate passwords should be changed every 60 to 90 days and users should not be allowed to reuse old passwords. Frequently changed passwords have the benefit of preventing predictability and provide greater protection of confidential customer information. d. To the greatest extent possible, assist with the maintenance of water meters and/or other machines/equipment/software that facilitate the billing process.

SECTION 2: UTILITY COMMUNICATION AND SOURCES OF BILLING a. APPLICATION FOR NEW WATER OR UTILITY SERVICE
The Customer Service Division shall collect the necessary customer information and add new accounts to the billing software. New accounts that have been added shall be reviewed by Billing Division staff to ensure they are included during bill processing and sending. Customer Service Division staff shall collect proof from the new customer in the form of a final, recorded deed, or equivalent, or rental agreement.

The Customer Services Division shall also be responsible for de-activating accounts that shall no longer be billed. This division shall also be responsible to collect the necessary customer information to make the determination that an account shall be deactivated. Once the account is Deactivated, the staff in this division shall verify with the Billing Division and/or designated Billing Supervisor or designee that bills will no longer be sent to the deactivated or closed customer account.

For all new accounts, a pre-payment is required. The customer shall be billed for the pre-payment amount by the Billing Division and then the Customer Service Division shall process the receipt of payment. Please see Section 18 for more information about the Deposit process. Further, for new customers a credit check is required. A credit app shall be completed by the customer, and the Utility Department Head or designee shall review and approve it.
b. METER READING
The reads used in the field on the meters are uploaded directly to the system City of Compton Billing Policy
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by Billing Division staff daily. There is no manipulating of the data or formatting to upload/interface. It is all done automatically. Approximately 6- 7 days after the meters are read the Bill is ready to be sent via the thirdparty billing company. During processing, Billing Division staff shall run exceptions reports that will “flag” accounts that exhibit no/or an unusual read. If an irregularity is discovered by a Billing Division staff member, it may be determined that a re-read be performed to ensure accuracy of meter read. If a re-read is deemed necessary, this staff person will send to a machine reader via their device.

Depending on consumption uses, the Billing Division staff member will initiate the review of each account and on a case by case basis send out a “consumption report” to the property as a courtesy. The Billing Division staff member shall run a “non-read” report, daily, which lists any meters that were not read during the cycle, due to miscellaneous reasons such as pest control needed or battery bad/low on reader. These “non-reads” shall be reviewed and resolved as necessary by a Billing Division staff member.

The Non-read reports are also part of the “Census Report” and shall be given to the Meter Supervisor by a Billing Division staff member, daily. The master route reader schedule shall be scanned for any obvious errors as well. After the reports have been reviewed and service orders and flagged accounts have been cleared, an updated “Census Report” is then given to the Meter supervisor for review and confirmation of cleared issues. c. SERVICE ORDER TYPES AND SERVICE ORDER MONITORING
The City's ability to respond to customer requests and concerns depends heavily on effective communication between Customer Service, field personnel, and Billing. A service order is the document that is printed and routed through these departments.

Service orders are to be monitored by Billing Division staff to identify those that are not returned from the field within an acceptable time frame after the scheduled completion date. Service orders are due within two (2) business days, (with the exception of those listed in Exhibit 2), after the scheduled completion date. All service orders that are not returned within that time frame will be considered missing. Follow up actions will be initiated for missing service orders once they are identified.

Billing Division staff shall complete the service orders in the service order software or billing software (if more appropriate) and shall follow all instructions per Administrative Policy #2: Service Order Types, shown in Exhibit 3. Further, Billing Division staff shall run the "Missing Service City of Compton Billing Policy
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Orders" (or equivalent) report, daily. This report will identify any service orders that have not been returned within two (2) business days of the scheduled completion date, (with the exception of those listed in Exhibit 2), and are still designated as "pending completion" (PC) in the service order software.

Daily, Billing Division staff shall:
 Verify that the "missing" service orders are in fact missing  Check to see if the service order may be attached to a related service order, (for example a missing "Turn On- New Sign Up" service order may be attached to a "Tum Off - Closing Read" service order).  Check the scanned service order files to see if the service order was received, but not completed in the service order software.  Check the completed service order file folders to see if the service order was received, but not completed in the service order software.  Check with the other Billing Division staff to see if they received the service order due to some exception.
 Complete any "missing" service orders that were found.  Submit a report to the Billing Supervisor with the recommended follow up action(s) for the service orders that remain "missing". For example:
• "Allow one more business day for the service order to come in from the field."
• "Service order involves a meter change. Allow two more business days for the work report to be processed by the Operations staff." • "Re-print/re-issue the service order for completion." • "Request follow-up action from the Meter Supervisor."  Execute the recommended actions of the Billing Supervisor and provide status Updates to the Billing Supervisor as needed The Billing Supervisor shall:
 Review, daily, the list of "missing" service orders and the recommended actions.
 Approve the recommended actions or provide alternate instructions.  Intervene and/or escalates the follow up actions as needed City of Compton Billing Policy
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[Note: Any service order types added after the date of this policy are due by the next business day after the scheduled completion date, unless specifically indicated otherwise]
d. BROKEN METERS
All customers shall be accurately billed based upon meter readings for each account. If a meter becomes inoperative or inaccurate, the Billing Division should bring this to the attention of the Meter Supervisor so that the meter can be repaired immediately. Follow up shall be done by the Billing Division until the meter is repaired.

A customer may request that a meter be tested for accuracy. The customer must pay a deposit with the City to cover the cost of the test. If it is found that the meter does not register more than 2% above true registration, the deposit will be retained by the City. If the meter is found to register more than 2% above true registration, another meter will be installed by the City, the deposit will be returned to the customer and an adjustment of charges will be made to the three previous bills
 Intervene and/or escalates the follow up actions as needed [Note: Any service order types added after the date of this policy are due by the next business day after the scheduled completion date, unless specifically indicated otherwise]
SECTION 3: UTILITY BILL GENERATION
Billing is performed monthly per each route. Unless otherwise approved by the Water Department Head, or designee, a third-party billing company shall generate the bills and send them to customers as listed in the billing software. The party preparing the bills shall rely on the billing software for a complete listing of active and de-activated customers, as well as for up-to-date account status and balance information. Therefore, it is critical that Billing Division staff, with the assistance of Customer Service staff, perform detailed reviews of their data entry, run reports daily or weekly, to search for irregularities in customer information, customer transactions, and balances. The reports that they need to run and investigate are listed in the various sections of this policy in their respective categories. Further, performing a daily reconciliation of tender received with transactions entered into the billing software, (or equivalent module used for cashiering), shall be done daily, without exception. This reconciliation also assists with finding irregularities in customers’ accounts that would lead to inaccurate or inappropriate bills being sent.

If there is a third-party billing company, it shall be the responsibility of the Water City of Compton Billing Policy
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Department Head or designee to monitor and evaluate the quality of work done by the company. This shall be done by making sure there are sufficient checks-points of work (such as reports, flags, or prompts) built into the set-up of the billing software. If applicable, it shall also be the responsibility of the Water Department Head or designee to follow up on irregularities or errors that are found to have been caused by the billing company, fully resolve them, and prevent them from happening again.

SECTION 4: DATA ENTRY
When performing data entry, it is the responsibility of Customer Service and any staff performing billing functions to:
a. Review source documents to ensure information is complete and accurate prior to data entry.
b. Contact appropriate work units to verify the accuracy of data and to obtain information needed to correct or complete source documents. c. Proofread and check data to verify accuracy and completeness and to correct errors.
d. Double-check other members’ data entry amongst Customer Service and Billing staff, respectively within each Division.
e. To reduce error, staff shall not rush and shall avoid excessive conversation during transaction.

SECTION 5: SENDING UTILITY BILLS
As mentioned in the previous section, billing is performed monthly per each route. The third-party service provider is responsible for ensuring that bills are sent to the appropriate customers who are contained in the billing software. The third-party billing company is responsible for printing, addressing envelopes, stamping, stuffing, and mailing the bills to the correct customers. Further, the third party billing company shall be responsible to ensure that supporting documentation of their work, or a trail of date stamps of their work exists within the software so that City Billing Division staff can follow along with what was done for each account when the bills were sent.

MAIL THAT HAS BEEN RETURNED
All returned mail must be processed within two business days to ensure that every reasonable effort has been made to deliver the bills to customers in a timely fashion.

The Billing staff shall be responsible for:

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1. Obtaining the returned mail and maintaining a copy of the envelope and/or other correspondence.

2. Reviewing the status of and comments within the customer’s account.

3. Calling the customer at the phone number listed on the account to verify if there is a new address and to resolve the issue. Billing staff shall leave a voicemail message if there is no answer.

4. Issuing a service order if:
a. the account has previous returned mail, and is delinquent, or b. an non-payment service order has been processed, or
c. there is documentation that the house is vacant.

5. Notifying Supervisor over billing functions if the billing address information was entered incorrectly.

6. Making any necessary changes in the customer's account, (address correction, new address, new phone number, etc.).

7. If applicable, entering comments in the customer's account to indicate:
a. Mail was returned, (type of correspondence returned and the reason it was returned).
b. Contact was made or attempted, and the results

8. If applicable, making a screen print of the customer's account and attaching it to the returned mail. Writing the route number on the returned mail and filing it in the current month's service order folder for that route.

9. Re-mailing a copy of the bill to the customer.

SECTION 6: ACCOUNTING FOR BILL GENERATION
On a daily basis, or whenever bills are generated for routine utility consumption or for miscellaneous bills, it shall be the responsibility of staff performing billing functions to prepare an interface into the general ledger summarizing the days transactions into the appropriate general ledger object and budget unit codes. It is the responsibility of staff performing billing functions to review the accuracy of data being transmitted, and address any irregularities, if discovered, on a timely basis.

SECTION 7: CUSTOMER PAYMENTS

1. INTERACTIVE VOICE RESPONSE (IVR):

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The IVR method of customer payment collections starts by customers calling into the designated IVR phone number, which they can do 24/7. The customers will be greeted and guided through a series of prompts. The customer will enter their payment reference number which can be their invoice number or account number.

At this time the IVR will interact with the billing software to validate the information provided by the customer. It will also present the customer with the balance on their account and amount of their invoice.

When the customer is ready to pay, they will enter their credit card or debit card information which will be authorized in real time as the IVR system is connected to the merchant processor. The customer will then receive a confirmation number and may also receive a text message to their mobile number for a written confirmation if desired. Each transaction is transmitted to the merchant processor in real time and is immediately available to be viewed on the merchant processor online statement if desired.

Further, since the IVR is connected to the billing software, the customer’s account will also be posted with the payment information in real time.

Given that this method of payment is fully automated, it is still imperative that reconciliations be done daily for these types of transactions as well, to verify and confirm the reliability of the system and to check for any possible errors.

Therefore, on a daily basis, Customer Service Division staff shall reconcile the transactions posted to the billing system from the prior day’s batch and reconcile that batch of transactions to the merchant processor’s online statement for the batch of transmitted transactions during the prior day. Additionally, it shall be the responsibility of the Customer Service Supervisor to ensure that IVR transactions receive their own transaction type or method of identification within the billing software to be able to run reports of those types of payments. This will facilitate the reconciliation process.

Since the IVR payments shall be included in the billing system’s batch before being interfaced to the general ledger, it shall be the responsibility of Customer Service Division staff to include the merchant processor’s batch transmission report as part of the supporting documentation of that batch. This supporting documentation should be filed in a format similar to that prescribed in the section above for “Cash Drawers”.

2. INTERNET PAYMENTS:

Internet payments are also automated and are completed in a manner similar to IVR. The customer will log into the designated website, be prompted for their City of Compton Billing Policy
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payment reference number which can be their invoice number or account number.

The website will interact with the billing software to validate the information provided by the customer. It will also present the customer with the balance on their account and amount of their invoice. When the customer is ready to pay, they will enter their credit card or debit card information which will be authorized in real time as the website is connected to the merchant processor. The customer will then receive a confirmation number and may print out the confirmation if desired.

Since the website is connected to the billing software, the customer’s account will also be posted with the payment information in real time.

Given that this method of payment is fully automated, it is still imperative that reconciliations be done daily for these types of transactions as well, to verify and confirm the reliability of the system and to check for any possible errors.

Therefore, on a daily basis, Customer Service Division staff shall reconcile the transactions posted to the billing system from the prior day’s batch and reconcile that batch of transactions to the merchant processor’s online statement for the batch of transmitted transactions during the prior day. Additionally, it shall be the responsibility of the Customer Service Supervisor to ensure that internet transactions receive their own transaction type or method of identification within the billing software to be able to run reports of those types of payments. This will facilitate the reconciliation process.

Since the internet payments shall be included in the billing system’s batch before being interfaced to the general ledger, it shall be the responsibility of Customer Service Division staff to include the merchant processor’s batch transmission report as part of the supporting documentation of that batch. This supporting documentation should be filed in a format similar to that prescribed in the section above for “Cash Drawers”.

City of Compton
Cash Receipts Policy
City of Compton Cash Receipts Policy
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Table of Contents
SECTION 1: RESPONSIBILITES ....................................................................................3

1. Customer Service staff, Cashiers, persons opening the mail and collecting tender, or persons accepting tender over the phone:...............3

2. The Supervisors of Cashiers and/or Customer Services staff:............4

3. The City Manager or Designee: ...............................................................7 SECTION 2: RECEIPT OF REVENUE PAYMENTS........................................................8

1. Locations of Tender Acceptance: .............................................................8

2. Balancing the “Register” and Reconciling...............................................9

3. Procedures for Tender Acceptance ........................................................10

1. Receiving Payment..........................................................................................10

2. Credit/Debit Card Security:.............................................................................12

3. Handling Paper Receipts:...............................................................................13

4. Cash Drawer/Register Maintenance: .............................................................13

5. Closing the Daily Revenue Batch: .................................................................14 SECTION 3: OVERCOMING OBSTACLES ARISING FROM VARIOUS TENDER TYPES:...........................................................................................................................20

1. Credit Card Transactions That do Not Settle and Charge-Backs: .......20

2. Counterfeit Currency..............................................................................21

3. Contaminted Currency ...........................................................................21 APPENDIX 1: STRAPS………………………………………………………………………23
APPENDIX 2: BANDS………………………………………………………………………..24
APPENDIX 3: BUNDLES…………………………………………………………………….25
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SECTION 1: RESPONSIBILITES

1. Customer Service staff, Cashiers, persons opening the mail and collecting tender, or persons accepting tender over the phone have the responsibility to:
a. Maintain a sufficient amount of training, knowledge, skills, and abilities to:
i. Appropriately answer and help resolve customer issues. ii. Select the most appropriate transaction codes to reflect customer account activity when entering transactions into the billing software (or equivalent software used for cashiering functions). iii. Balance the “register” daily for each tender collection point which are listed in the Tender Table in Section 8.
b. If a Customer Service staff member, Cashier, persons opening the mail and collecting tender, or persons accepting tender over the phone believe they have a deficiency in any knowledge, skill, or ability, it is that person’s responsibility to inform their supervisor and participate in training when available.
c. Investigate and resolve any cash register shortages or overages on a daily basis.
d. Balance the cash register daily, including against deposit slip copies. e. Ensure that Cash counts certified by two employees should occur for all deposits prepared for armored courier pickup.
f. Ensure that required signatures are collected on reconciliation documents (indicating their presence for the cash deposit reconciliation) and that totals agree.
g. Ensure that cash drawers are locked when not in use. h. Log out of the billing or cashiering software when not in use. i. Search communications from the City Manager or designee in order to properly reject checks or credit/debit card payments from customers with multiple returned (or NSF) checks or multiple baseless credit/debit card City of Compton Cash Receipts Policy
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disputes.
j. Employees shall not initiate the processing of transactions that may cause them to exceed the day’s closing time. They should complete all transactions before closing at the end of their shifts. k. In the event that an emergency requires that the staff evacuate from the area, all negotiable instruments must be locked and secured immediately.

The key to the cash drawers will remain in the possession of the assigned cashier. All checks and any unopened mail must be placed in a secure location. After all items are locked up, the building must be evacuated immediately until further instructions from authorized personnel. l. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.
m. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest. n. Additional responsibilities are stated in the remaining sections within this policy.

2. The Supervisors of Cashiers and/or Customer Services staff have the responsibility to (when applicable):
a. To observe and verify each cashier’s cash count for end-of-day balancing and ensure that any supervisory action that is taken shall be signed or initialed.
b. Ensure that Cash counts certified by two employees should occur for all deposits prepared for armored courier pickup.
c. Ensure that Cash acceptance certified by two employees should occur for incoming armored courier shipments.
d. Ensure that individuals present during cash counts and acceptances should sign directly on the Cash Count Forms
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e. Ensure that at least two staff should be present to open a safe f. Ensure that staff who prepares the deposit(s) should not be responsible for processing non-sufficient fund (NSF) checks.
g. Ensure that cash registers allow individual users to input a unique log-in code when they conduct a transaction. This will help track any shortages or overages, or misappropriation of cash so they can be properly investigated and resolved.
h. Remind employees to log out of the credit/debit card payment platform, billing, accounts receivable or cashiering system when not in use i. Maintain sufficient communication with and monitoring of the bank, armored car pick-up services, or any other third-party services to ensure the safety and accountability of City assets. This shall include periodic testing of services, transactions, or reports for evaluation of proper handling by the third-parties.
i. In all circumstances, funds collected directly by the City or through a third-party service provider must be deposited no later than the next business day
j. Monitor, review, and approve changes to the register codes, transaction codes, and related general ledger account-code-string assignments. Any such changes must be accompanied by supporting documentation that shall be maintained by Customer Service or Cashiering staff and must be accessible by their designated supervisors, and the City Controller or designee.
i. The City Controller, or designee, shall provide updated chart of accounts for the cashiering system at least annually. The Accounting Supervisor shall check the final Springbrook chart of accounts to verify accuracy after implementation.
k. Ensure that each tender collection point has a cashier or customer service staff person assigned to it to be responsible to (a) balance the register for that location and (b) prepare the general ledger interface for that location, daily
l. Provide access for Customer Service and Cashiering staff members to run batch transmission and settlement reports from credit/debit card gateway City of Compton Cash Receipts Policy
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and merchant processor websites. This is in order for them to have sufficient information to balance their register for any particular location that accepts credit cards as tender.
i. The staff members should also be able to see credit card transactions that failed to receive an authorization code and are therefore not going to get settled with the batch transmitted to the merchant processor. Having access to seeing these will assist in the procedures that must be followed for delinquent customers. m. Provide approval for ordering change from the bank for the cashiers, as needed
n. Provide approval, when appropriate, for customer refunds. o. Monitor whether sufficient supporting documentation is being maintained by Customer Service and Cashiering staff for daily deposits and recording of transactions, and to follow up on and resolve any deficiencies. p. Securing the custody of cash receipts
i. Cashier areas must be restricted to cashier personnel and other authorized persons. Access doors to area should be locked at all times.
ii. During business hours, all active cash drawers should be secured in a locked drawer at the cashier window, including lunches and breaks.
iii. The key to the cash drawer should remain in the sole custody of the cashier and should never be given to anyone else or left in the drawer when the cashier is away from the window. iv. Unused cash drawers must remain in vault storage during the day. v. Cashiering staff must avoid counting cash in view of the public during hours of operation.
q. Implementing a detailed annual training program of cash-handling procedures.
i. Ensuring back-up staff’s ability to perform each segregated set of cash-handling functions.
ii. Documenting all training that is provided.
iii. Exploring ways to train staff involved in collections to increase their ability to detect counterfeit currency, such as using a counterfeit pen or counterfeit detector.

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r. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.
s. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest. t. Additional responsibilities are stated in the remaining sections within this policy.
u. Ensure security of cash receipts by:
i. Securing buildings, facilities, and conveyances for incoming cash receipts. The City Treasurer or designee shall, (in addition to the CM or designee), analyze the security needs of each cash collection point and strengthen security controls whenever necessary. This might include installing security cameras that can monitor all areas where cash is collected and handled, providing additional security guards, and securing the safe and cash registers or drawers. v. Perform annual monitoring of internal and of third-party vendors’ compliance with PCI regulations, financial stability requirements, and/or industry ratings in the service being provided
w. Document and maintain a list of names and titles of all staff who collect cash; record cash receipts; deposit cash; reconcile cash; have access to safes, prepare accounting entries; or manage petty cash funds.

3. The City Manager or Designee has the responsibility to:
a. Ensure security of cash receipts by securing buildings, facilities, and conveyances for incoming cash receipts. The CM or designee must analyze the security needs of each cash collection point and strengthen security controls whenever necessary. This might include installing security cameras that can monitor all areas where cash is collected and handled, providing additional security guards, and securing the safe and cash registers or drawers.
b. Timely and effectively alerting and communicating to the City Treasurer, or designee, customers from whom the City should not accept checks or City of Compton Cash Receipts Policy
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credit/debit cards as forms of payment for City services. c. Must monitor the revenue budget against actual revenues posted to those budgets at least monthly, and must follow up with the City Controller, City Treasurer, or City Manager or their designees if significant deviation is suspected.

SECTION 2: RECEIPT OF REVENUE PAYMENTS

1. LOCATIONS OF TENDER ACCEPTANCE:

The following are the various revenue collection locations and gateways used by the City as well as the tender accepted at each location [The “Tender Table”]. The table below additionally includes the types of documentation that City Treasurer or designee should maintain for reconciling and audit purposes:

Item
No.

Location Tender Accepted Documentation to be kept by
City Treasurer Staff, Daily
1) Over the counter at the
City Treasurer’s
Counter
Cash, Check, Debit
Card and Credit Card
Deposit slip copy, Merchant
processor batch
transmission and settlement
report, credit or debit card
authorization signature
receipt, Remote Deposit
bank confirmation notice
2) Phone-in credit card
payments made to the
City Customer Service
Division, if applicable
Debit Card and Credit
Card
Merchant processor batch
transmission and settlement
report
3) Night Drop Lock Box at
the City property
Check, Cashier’s
Checks and Money
Orders
Deposit slip, and/or Check
21 (remote deposit) bank
deposit confirmation notice;
Merchant processor batch
transmission and settlement
report, remittance advice
including copies of any
special notes in envelopes
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received from customers
4) Bank Lock Box Check, Cashier’s
Checks and Money
Orders
Bank lock box transaction
transmission file report,
bank prepared deposit slip
images, images of
remittance advices, images
of any special notes in
envelopes received from
customers;
5) Internet payments
through the City’s
website
Debit Card and Credit
Card
Merchant processor batch
transmission and settlement
report, data/report of
transactions from website
host
6) Automated Phone
System (IVR)
Debit Card and Credit
Card
Merchant processor batch
transmission and settlement
report, IVR software system
report of transactions
7) Customer initiated ACH
Credit or wire to the
City’s bank account
ACH Credit or Wire Bank statement, Bank ACH
Credit notice, or wire notice
with addenda
8) If applicable, Satellite
Lock Box locations that
get forwarded to the
City’s property and then
to the Bank Lock Box
Check, Cashier’s
Checks and Money
Orders
Bank lock box report and
transaction transmission file
copy, bank prepared
deposit slip images, images
of remittance advices,
images of any special notes
in envelopes received from
customers;

2. BALANCING THE “REGISTER” AND RECONCILING
Each point/location of tender acceptance shall initiate the process of eventual bank settlement and of posting credit to customers’ accounts in the respective billing software, when data is available in singular or in batch form. A Customer Service Rep or Cashier (or more than one as to be determined by the City Treasurer or designee) shall be assigned to each one of these locations. This person (or persons) must prepare a City of Compton Cash Receipts Policy
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reconciliation and summary of daily transactions that were “rung up” while balancing to the total dollar amount of transactions that were transmitted to the bank [via deposit slip, remote deposit, merchant services batch transmission, ACH Credit or via wire] for deposit. This is to be done daily, before the billing software interfaces to the general ledger. This is to ensure that all locations’ transactions have been properly accounted for on a daily basis, and that a direct trail of supporting documentation can be traced directly from the general ledger to the bank statement. This shall be done to easily provide evidence of cash transactions. The reconciliation(s) must be accessible to all Customer Service Division, City Treasurer staff as well as Accounting staff, and/or City Controller or designee.

Supporting documentation being generated from each of the tender acceptance locations must also be maintained by Customer Service Division staff, organized in a central location.

Additionally, to assist with reconciling over the counter payments, a system report of sequential receipt numbers shall be run by the cashier and reviewed by the Customer Service Supervisor, weekly, to ensure that there were no irregularities.

3. PROCEDURES FOR TENDER ACCEPTANCE

1. RECEIVING PAYMENT
A. CASH
The Cashier shall:
1) Cashier shall recount in front of the customer to verify amount received or customer change
2) Cashier shall leave money in the customer‘s view, but out of reach of the customer.
3) Counterfeit Money — Cashier shall check for watermarks, security thread, color shifting ink, and by feel of the paper. If in doubt, Cashier shall check with their supervisor. All currency in the amount of fifty (50) dollars and above shall be checked with a counterfeit money detector pen prior to acceptance to verify the bills are not counterfeit. 4) Foreign currency and coin shall not be accepted. Only currency and coins issued by the United States Federal Reserve Board are legal tender. Traveler’s checks must state “U.S. Dollars”.
5) No mutilated currency or coin, including bent coins, shall be accepted.

B. CHECKS
The Cashier shall:
1) Never leave their drawer unlocked when they are not present.

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2) Review checks to ensure check is made out to the “City”, is signed, and the numeric value of the check amount and handwritten value matches. a. Departments receiving checks as payments (such as for grants or sales of old equipment) shall require the maker of the check to make it payable to “City”. Under no circumstances shall a check for the City be made payable to an individual or left blank. 3) Ensure current date on checks (postdated checks shall not be accepted) 4) Review the check to determine that:
a. There were no apparent alterations made to the check b. Bank name and routing number are printed on the check c. If temporary check, payer’s name and address written on check 5) Immediately Endorse the check
a. A separate endorsement stamp shall be maintained in a secure location to be used as a backup in case of emergencies or in case the endorsement machine malfunctions. This secure lo shall only be assessable by the Customer Service Division staff.
6) Issue a receipt only for the amount that is handwritten on the check. 7) Not accept third party checks (non-customer-check-payments for customer accounts are acceptable though)
8) Not provide change back from checks
9) Not provide check cashing for customers
10) Not cash employee checks
C. CREDIT CARD
The Cashier shall:
1) Only accept Visa, MasterCard, or Discover Card
2) Verify the name and signature of the credit card with a valid identification 3) Check the expiration date
4) Swipe card and enter the amount
5) Have the customer sign the credit card receipt
6) Not provide cash back
7) Return the customer’s credit card promptly upon completion of a transaction. No staff member should take possession of a customer’s City of Compton Cash Receipts Policy
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credit card at any time.

D. DEBIT CARD
The Cashier shall:
1) Add a convenience fee, to be determined by the City Treasurer or designee, for processing fee to the amount to be paid
2) Swipe card and enter the amount
3) Have customer enter PIN number
4) Not provide cash back
5) Return the customer’s debit card promptly upon completion of a transaction. No staff member should take possession of a customer’s debit card at any time.

E. BY PHONE USING CREDIT OR DEBIT CARD
The Cashier or Customer Service staff member shall:
1) Only accept Visa, MasterCard, or Discover Card
2) Manually enter credit card number, three-digit security code at the back of the card, and billing zip code for the card
3) Enter amount
4) Provide authorization or confirmation number to the customer 5) On the credit card receipt enter the customer’s account number and phone number

2. CREDIT/DEBIT CARD SECURITY:
a) No Customer Service Staff member shall transmit any credit or debit card data information, such as Primary Account Number (PAN), Personal Identification Number (PIN) and Card Verification Code or Value (CVV) via end- user messaging technologies. Also, staff shall not store or retain this data information
b) Credit/debit card information must be treated as confidential and paper containing credit/debit card data must be physically secured (e.g. locked in a locker, cabinet, desk, storage bin).
c) If credit/debit card information is taken by fax, the fax machine must be in a secured and locked area with only limited access.
d) Credit/debit card information shall not be taken over email at any time. e) Storage
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1) Credit/debit card information should not be stored on the computer or on a memory disk at any time.
2) Printed reports containing cardholder data are to be physically retained, stored or archived only within secure City office environments, and only for the minimum time deemed necessary for their use.
f) Destruction
1) Credit/debit card information may only be destroyed by shredding and in accordance with the Records Retention Policy.

3. HANDLING PAPER RECEIPTS:
a) Immediately receipt all payments in the billing software (or equivalent module used for cashiering services), and store securely in the drawer. b) Every over the counter customer must receive their copy of the billing software (or equivalent module used for cashiering services) receipt and credit or debit card receipt
c) All handwritten receipts, if ever used such as in an emergency, shall be prenumbered and issued from receipt books issued by the City Treasurer’s department to account for lapsed sequence.
d) Cashier’s receipt must note customer’s phone number at all times e) Credit or debit card receipts must be stapled together with billing software (or equivalent module used for cashiering services) receipt f) Large bills such as $50 and $100 must record serial number in the receipt by entering it in billing software (or equivalent module used for cashiering services)
g) Check number must be entered in the receipt by entering it in billing software (or equivalent module used for cashiering services)
h) Receipts must match payment type code with customer’s payment. i) Void receipts must be made aware of the circumstances to the supervisor and receipt must be initialed by the supervisor

4. CASH DRAWER/REGISTER MAINTENANCE:

To the extent staffing levels permit, separation of duties from the function of custodian of cash balances and the accounting and record keeping of the same, shall be maintained. The following represents the parameters as to how the cash drawer shall be operated and the responsibilities to be taken by Cashiering staff:
a) The cashier is responsible for the contents, security, and keys for their cash City of Compton Cash Receipts Policy
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drawers. The Cashier shall never leave their drawer unlocked when they are not present.
b) Each drawer, when activated each day, shall contain
$300 cash, with maximum coin change accumulation as follows:

The coin and cash should be arranged in a consistent manner. Separate compartments shall be used for different currency denominations and checks. Using standard bank practice of locating smaller denominations to the far right and larger denominations to the left helps prevent accidental distribution of incorrect denominations. (Banking practice, left to right: $20, $10, $5, $1, etc.)
c) Every morning, each cashier shall start a new “drawer” in the register and will use the same drawer for the entire day. Every cashier before going to lunch shall set aside all bills, except for an amount needed for change as required by the City Treasurer or designee, and shall double count the value of these bills with the appropriate supervisor and shall obtain the supervisors signature or initial on the amount of the count. Then the cashier shall place the counted bills in the safe with supervisor being present. This batch of bills shall remain in the safe for rest of the day. This same procedure is repeated before at the day’s “close-out” of the register.
d) In the case of cashier or supervisor absences, the City Treasurer or designee must arrange for the secure custody of funds in the registers and in the safe, and must maintain secure custody until sufficiently trained staff can continue the proper close-out procedures and proper supervision procedures as described within the policy. The City Treasurer or designee must also arrange for the Cash Count and preparation of the Cash Drawer Reconciliation Worksheet, (or a worksheet that properly reconciles the tender received with the transactions rung up in the register), to be completed and signed-off with proper separation of duties and performed by sufficiently trained staff .
e) The amount of cash in the drawer should balance the Cashiering Software’s Cash Edit Listing, (or equivalent module), at all times, if applicable. Cashiers will reconcile their receipts by using the Cash Receipts worksheet and e-mail it to Cashiering supervisor or designee. Random checks of this may be made at any time by the City Treasurer or designee.

5. CLOSING THE DAILY REVENUE BATCH:

1. CASH DRAWERS
a) Daily, every cashier before going to lunch shall set aside all bills, except for City of Compton Cash Receipts Policy
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an amount needed for change as required by the City Treasurer or designee, and shall double count the value of these bills with the appropriate supervisor and shall obtain the supervisors signature or initial on the amount of the count.

Then the cashier shall place the counted bills in the safe with supervisor being present. This batch of bills shall remain in the safe for rest of the day. b) Prior to leaving each day, a report(s) from the billing or cashiering software (or equivalent module) exhibiting all transactions, subtotals if applicable, and totals that were rung up by account code, by tender type, as well as by customer name and number, for each cashier, shall be run by the cashier, signed off by the City Treasurer or designee, and the cashier shall ensure that this report(s) gets placed into the vault. They must be placed into the vault alongside the related batches of tender that are to be included in the preparation of the bank deposit(s) the next day. Additionally, the City Treasurer or designee signed or initialed Cash/tender count verification sheet (inclusive of the balance of cash or tender counted before it was placed into the vault before lunch), for each cashier, shall also be attached. A report of Cash short/over, verified and signed off by the City Treasurer or designee, must also be attached.
c) Daily, the Cashier shall E-mail the above-mentioned report(s) to the Cashiering Supervisor.
d) Daily, the City Treasurer or designee, which is not the Cashier, will count and/or observe the drawer content and review and approve the Cashier’s reconciliation of the daily receipts in the afternoon and will review and approve with their signature the Cashier (or other appropriately designated Customer Service staff member)’s reconciliation worksheet or equivalent report that properly reconciles tender received to transactions rung up in the system(s), and that notes any discrepancy, and whether or not that discrepancy was approved.
e) The cash drawer should balance with the billing or cashiering software (or equivalent module used for cashiering services) Cash Edit Listing minus the beginning cash balance of $300.
1) In event of a discrepancy, the cashier will be requested to reconcile with the following procedure:
i. Compare each check, credit and/or debit card receipt copy and ensure correct amount is entered and payment code is appropriate.
ii. If a payment code is entered incorrectly, the Cashier shall go to billing software (or equivalent module used for
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cashiering services) and change the receipt and print the new receipt. The old and new receipt shall be stapled
together
iii. Count the number of receipts and compare it to the billing software (or equivalent module used for cashiering services) Cash Edit Listing. If a receipt is missing print the receipt again.
iv. Check if credit or debit card transactions were transmitted to the merchant processor. Ensure total batch transmission amount matches billing software (or equivalent module used for cashiering services) Cash Edit Listing. The batch
settlement to the bank account takes a few days for the merchant processor to perform, so on a daily basis, for a current batch, settlement information will not be available. v. Ensure that a combination of payment codes is recorded appropriately. Highlight or mark the receipt for these types of transactions.

Recount cash in drawer minus the beginning balance cash balance of $300
vi. The City Treasurer or designee shall submit cash variances to Accounting Division weekly
f) The Cashier shall complete the bank deposit slip and shall take a deposit bag to enclose cash, checks, and original deposit slip. All deposits not made daily shall be held in a secured location such as a safe, which shall only be accessible by cashiering staff. Further, upon placing cash in a safe, it is the responsibility of the Cashier to count the cash (with at least one witness), bundle it and label it with the amount counted and their signature and date on the label. Any witnesses during the count shall also sign and date the label.

Once the bundle of cash is taken out of the safe the next morning, it shall be counted again (with at least one witness) and documented if there were or were not any discrepancies between that count and the previous count. If there were discrepancies, then those irregularities need to be reported to the Supervisor and resolved immediately.
1) Anytime cash changes hands between City staff, it shall be counted, witnessed and documented to maintain the chain of custody. g) The Cashier shall scan the deposit slips, along with the plastic strip number from the deposit bag, to a centralized location.

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h) The Cashiering Supervisor and/or Customer Service Supervisor shall give access to the credit and debit card batch transmission and batch settlement reports to Accounting for each merchant ID number and terminal ID number. i) Customer Service staff shall file all receipts, remittance advices, check stubs, any other cash receipt back up documents, all deposit slip carbon copies, all credit/debit card batch total submission reports, all online (or automated phone system/IVR if applicable) credit or debit card receipt and/or submission batch totals, all lockbox (including bank lockbox) reports, all utility billing reports per batch, all reports of all transactions by account code, by customer, by tender type, with related totals and subtotals, all cash count reports, all Cash short/over reports, as well as any related report or reconciliation in a manila envelope and provide physical documents to City Controller or designee.
1) On the manila envelope Customer Service staff shall enter the following:
• Employee number
• Employee name
• Label as “Cash Drawer”
• Date
• Batch name/number(s)
• Total Cash
• Total Check and/or total lockbox, and/or remote deposit • Total Deposit
• Total Credit/Debit Card
• Enter cash variance if applicable
a. Once the Controller or designee receives the file, Controller or designee shall scan it to a central location where
Controller staff will have viewing access.
b. In the name of the scanned file, it should identify:
• The batch date
• The batch name/number(s)
j) Finally, Customer Service or Cashiering staff shall initiate the interface (or send the interface file) of the batch to the general ledger or to the Accountant who is responsible for uploading the transactions to the general ledger.

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2. MAIL IN CHECK DEPOSITS
Check deposits are done through the bank’s hi-speed check scanning deposit service (sometimes referred to as Remote Deposit, or Check 21) which uses an electronic hi-speed scanning machine. A bank deposit report is created upon completion of deposit. This hard copy must be filed and scanned in a central location by the Cashiering or Customer Service Division staff. This shall be included in the file of all receipts, alongside the Cash Drawer Reconciliation worksheet, and Billing software (or equivalent for cashiering functions) Cash Edit Listing, deposit slips and credit/debit card merchant processor batch transmission report. This should be filed in a format similar to that prescribed in the section above for “Cash Drawers”.

3. BANK LOCK BOX, AND SATELLITE LOCKBOXES, AND ON-CAMPUS

LOCKBOX IF APPLICABLE
The City has several lockbox options for customers to mail in or drop off their payments. Customers can (1) mail in their payments to the Bank Lockbox directly, (2) If applicable, they can drop off their payments at a lockbox at one of the City’s satellite locations, and (3) they can drop of their payment at a lockbox at the City property. For payments that were dropped off at the satellite locations, if applicable, and/or at the City property, City Treasurer or designee is responsible for collecting the payments and sending them to the Bank Lockbox. An armored car pick-up service shall be used when transporting customer payments and shall be arranged for and monitored by the City Treasurer or designee.

The bank lockbox is opened daily by the bank’s lockbox service provider. The envelopes with the customer payments, remittance advices, and any customer correspondence are opened and scanned. The lockbox service provider will prepare a file of all the scanned images, as well as a file of customer payment information that is in a format which is upload-able into the billing software. For all payments received in the lockbox, when the lockbox is opened, the payments contained get combined into a deposit and get credited to the City’s account that same day.

On a daily basis the lockbox service provider will transmit the lockbox payment file, deposit slip copy, and the file of images to City Customer Service staff. Once obtained, Customer Service staff will upload the file to the billing software to post the customer payments. On a daily basis, Customer Service Division staff shall reconcile the transactions posted to the billing system from the prior day’s lockbox batch and reconcile that batch of transactions to the deposit slip copy provided by the lockbox service provider.

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Additionally, it shall be the responsibility of the Customer Service Supervisor to ensure that lockbox transactions receive their own transaction type or method of identification within the billing software to be able to run reports of those types of payments. This will facilitate the reconciliation process.

Since the lockbox payments shall be included in the billing system’s batch before being interfaced to the general ledger, it shall be the responsibility of Customer Service Division staff to include the copy of the deposit slip and lockbox service provider’s daily batch report of transactions as part of the supporting documentation of that interface batch. This supporting documentation should be filed in a format similar to that prescribed in the section above for “Cash Drawers”.

4. ACH CREDIT & WIRE-IN PAYMENTS
There are instances where customers, granting agencies, or others make payments to the City through ACH credits or wire-in payments to the City’s bank account. In these instances, it is imperative that the customers include their account number or another piece of identifying information included in the addenda of the electronic transaction. This will show up on the City’s bank statement or bank notice of such account credits.

For customer payments such as these, it is the responsibility of the City Treasurer Department’s staff to view the bank account online statement and bank notices daily to obtain customer payment information and to post the payment to the billing or cashiering system. Once posted, a screen shot of that posting shall be forwarded to the Accounting Division for accounting staff to track and incorporate into their monthly bank reconciliation process. If the City Treasurer Department staff member is not sure which accounting code to use, it shall be their responsibility to ask the City Controller or designee.

ACH credits and wires-in, once posted shall also fall into the daily interface batch to be initiated from the billing or cashiering module. It shall be the responsibility of City Treasurer Department staff to include the copy of the bank’s ACH Credit or wire notice as part of the supporting documentation of that interface batch. This supporting documentation should be filed in a format similar to that prescribed in the section above for “Cash Drawers”.

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SECTION 3: OVERCOMING OBSTACLES ARISING FROM VARIOUS TENDER TYPES:

1. CREDIT CARD TRANSACTIONS THAT DO NOT SETTLE AND CHARGEBACKS:
 A transaction that has failed to settle within the specified period of time will require a second authorization from the cardholder. If the second cardholder’s authorization is not obtained, the transaction will result in lost revenue.
 A “chargeback” (also known as a reversal) represents the amount of the original transaction that the credit card network debited from the merchant statement based on an item that was successfully disputed by the customer on his or her credit card statement. The City will receive chargeback notifications from the Merchant Processor for over-the-counter transactions and from the vendor for web and IVR transactions. The City Treasurer or designee must respond directly to the Merchant Processor within the “respond by” date provided in the chargeback notification and provide the requested information and appropriate documentation to demonstrate legitimacy and accurate processing of the original transaction. The Merchant Processor or vendor has sole authority to determine if the chargeback will be reversed and a credit will be issued to the City.  The City Treasurer’s Department staff shall ensure that Billing Division staff have access to view online the merchant processor’s notifications of customer disputes and chargebacks. In very rare cases where staff can foresee that they will not be able to submit everything within the required time frame set by the merchant processor, the Billing Supervisor shall ensure that staff contact the merchant service provider to ask for a special extension. There is no guarantee that merchant services provider will provide an extension, but it is important to communicate with them.  The process for recording chargebacks into customer accounts shall follow the same process for recording NSF checks into customer accounts.  Even though the City, as the merchant, is given some time to retrieve the documentation related to the charge, the merchant services processor will debit its merchant account right away upon the receipt of the disputed charge from the credit card network. If the claim turns out to be in the City’s favor, a credit will appear in its merchant statement and, at that time, the City can record the revenue again.

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2. COUNTERFEIT CURRENCY
If staff discover the counterfeit currency before deposit, they shall send the money to the bank for investigation. If the bank contacts the City Treasurer’s department to let it know about the counterfeit currency, then Accounting staff should record cash shortage since the bank does not give credit for the counterfeit deposit. Since it was cash, staff would not be able to identify which customer account should be adjusted. It is the responsibility of Cashiers to review currency to ensure it is not counterfeit.

3. CONTAMINATED CURRENCY
According to the Federal Reserve Bank, certain procedures must be followed when depositing currency that has been damaged by or exposed to a contaminant or impurity that poses a health hazard or safety risk.
a) Currency may become contaminated due to:
 Prolonged exposure to water or other liquids that results in the existence of mold.
 Exposure to blood, urine, feces or any other bodily fluids, including removal from any body cavity, corpse or animal.
 Exposure to sewage.
 Exposure to any chemical, liquid or foreign substance that may pose a health hazard or safety risk.
 Exposure to tear gas used in most dye packs. Note: The dye used in dye packs is not considered a contaminant. Notes stained from the dye alone should be deposited normally.
b) Procedures for Depositing Contaminated Currency

1. Separate contaminated currency from normal deposits.

2. If contaminated notes are old United States currencies or high denomination notes ($500s and above), they must be packaged separately.

3. Contaminated currency must be prepared by denomination, in straps (see Appendix 1) of 100 notes and in bundles (see Appendix 3) of 10 straps.

4. Rubber bands must be used to secure multiple full straps (100 notes of a single denomination) and, contrary to normal deposit procedures, should be securely placed around the middle of the bundle.

5. Partial straps of 50 notes or less of a single denomination must be fanned in a way that allows for more than 50 percent of each note to be clearly visible through all of the packaging material. Staples should be used to City of Compton Cash Receipts Policy
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secure the fan before the notes are placed into the bag.

6. Partial straps containing between 51 and 99 notes of a single denomination must be wrapped with a paper band (see Appendix 2). The band must be marked with the piece count and dollar amount.

7. Contaminated currency must be double-bagged, and the bags must be large enough to permit movement of the currency inside the bag for initial visual inspection.

8. Both bags must be clear, plastic and have tamper evident seals.

9. The word "CONTAMINATED" must be written in permanent marker and large letters on the outside of the outer bag. Any exterior printing on the bags must not inhibit the view of the bagged contents.

10.Do not include any extraneous items (paper clips, deposit documents, bag tags, dye pack mechanisms, etc.) inside or between the inner and outer bags. Staples used to secure fanned notes are allowable. The presence of extraneous items will result in your deposit being returned.

11.Provide advance written notification to your local Federal Reserve Bank cash office by completing the Contaminated Currency Notification form.

When completing the form, be sure to provide as much information as possible regarding the type and extent of the contamination. Failure to provide this information will result in your deposit being returned.

12.Complete a separate Federal Reserve Bank deposit document or electronic deposit notification form that includes the denominational breakdown and total of the contaminated currency. The deposit document should accompany the contaminated deposit.

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APPENDIX 1: STRAPS
Before depositing currency, currency must be prepared according to denomination. For $1 through $20 denominations, your deposit(s) must contain full bundles. If depositing $50 or $100 denominations, they must be in full straps and/or full bundles.

All Denominations:
 All notes in a deposit must be clearly more than 50 percent of a note to receive credit.
 Notes must be piece counted and verified for authenticity before depositing.  Unfit currency, currency that is not suitable for further circulation due to its physical condition (torn, dirty, limp, worn or defaced), should be included in your regular deposit(s).
 Notes should be straightened, and all corners and edges should be aligned.

A. PREPARING CURRENCY STRAPS
 A strap is a package of 100 notes.
 All straps must contain 100 notes of the same denomination and must have only one band around them.
 Include only U.S. currency. Under no circumstances should coin or other valuables be included.
 Notes within the strap may be packaged without regard to direction or facing.  All paper clips, staples, rubber bands and excess tape on the notes (causing notes to unnecessarily stick together) must be removed.

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APPENDIX 2: BANDS
 A band is a strip of paper material used to bind or hold together a strap.  Each strap must be bound by only one band.
 Bands must be applied to the middle of each strap.
 Bands should be secured around the strap without the band adhesive or securing tape unnecessarily sticking to the notes within.
 Bands must be white paper and color-coded (along the edges) to conform to existing standards of the American Bankers Association ("ABA").  Band material must be between 1.00 to 1.57 inches wide with an approximate weight of 100 g/sqm, made of paper and not synthetic materials.  Bands should indicate the dollar amount of currency in the strap, the date of verification and the initials or names of the persons who verified the strap.  The length of the band must be such that the band wraps the strap once with minimal overlap, so no loose flaps (such as a tail) are remaining beyond the adhesive.
 For correct placement of bank stamps refer to section “Stamps”.

A. BAND STAMPS
 Each band must be stamped with the following information:
o Institution's name;
o ABA routing number; and
o Four-digit endpoint number (branch number) of the depositing office (a band without an office identification number is deemed to be from the institution’s head office).
 Use black or dark ink (not red) on the stamp to help ensure good quality images.  Use large and easy-to-read font on your stamp.
 Refresh ink pads frequently.

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APPENDIX 3: BUNDLES
 A bundle consists of 1,000 notes of the same denomination in ten equal straps of 100 notes each.
 All strap edges must be vertically aligned into a single organized stack and oriented in the same direction.
 Straps must be bound together.
 Securing the straps together to make a bundle may be achieved through the use of rubber bands or other tension material. The bundle tension material:
o Must be secured enough to remain intact through transportation and handling: (1) not too tight as to overstress the notes causing them to bend/crease within the bundle; or (2) not too loose where the notes or straps move around or the tension material breaks or falls off of the bundle;
o Must be secured across the short side at both ends of the bundle (and not on subgroupings of straps within the bundle); and
o Must allow for clear view of the currency strap band.

All Denominations:
 Straps within the bundle must be arranged such that all bank stamps face the same direction.

City of Compton
Accounts Payable Policy
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Table of Contents

Section 1. Purpose .....................................................................................................4 Section 2. General Policy & Objectives ....................................................................4 Section 3. Internal Controls Surrounding the Accounts Payable Process ...........5 Section 4. Standards of Conduct in the Accounts Payable Process.....................7 Section 5. Responsibilities ......................................................................................10 Section 6. Exceptions from Centralized Procurement..........................................22 Section 7. Review Audits .........................................................................................23 Section 8. Opening the Mail.................................................................................... 23 Section 9. Invoices ...................................................................................................24 Section 10. Data Entry................................................................................................25 Section 11. Retention Payables Procedure..............................................................26 Section 12. Check Signing.........................................................................................27 Section 13. Check Printing & Mailing .......................................................................28 Section 14. Payment Cancellation ............................................................................30 Section 15. City Controller Review of Demand Report & Other Monitoring Reports ..........................................................................................................................31 Section 16. Sales & Use Taxes ..................................................................................32 Section 17. 1099 Reportable Payments ....................................................................34 Section 18. No 1099 Payments to City Employees..................................................35 Section 19. Requests for Checks With or Without an Encumbrance/P.O. ............35 Section 20. One Time Payments to One Time Vendors ..........................................36 Section 21. Year End Procedures .............................................................................36 Section 22. Emergency Procedures..........................................................................37 Section 23. Credit Memorandum...............................................................................39 Section 24. EFT Upload for Landlord Payments………………………………………40 Section 25. Unclaimed and Uncashed Check Policy…………………………………41 City of Compton Accounts Payable Policy
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Exhibit A. Signature Authorization Card ...............................................................43 Exhibit B. Stop Payment Request Form……………………………………………...44 Exhibit C. Request for Warrant/Payment Form.....................................................45 Exhibit D. Vendor Profile Application & New Vendor Request ...........................46 Exhibit E. Partial Payment Form………………………………………………………47
Exhibit F. Employee Reimbursement Form…………………………………………48 Exhibit G. Travel Expense Request Form……………………………………………49 Exhibit H. Mileage/Parking Reimbursement Form…………………………………50

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SECTION I: PURPOSE
This Policy establishes general standards for implementing City financial transactions and procedures. This policy includes guidelines for processing invoices and other documents to make prompt and proper payments, incur obligations, and to assist in administering City appropriated funds. It provides general guidance for the implementation of management controls and the proper internal controls to safeguard City assets. Combined with the other manuals and user guides of the Purchasing Policy, the Purchase Card Policy or resolution, and the Travel Policy, it facilitates the accurate recording of commitments, obligations, expense accruals, and payments.

SECTION 2: GENERAL POLICY & OBJECTIVES
The general policy surrounding Accounts Payable procedures requires all City staff to efficiently and effectively obtain the fair and accurate financial data that represent the City’s obligation to pay for goods and services to vendors and employee expenses, including the necessary and sufficient supporting documentation, vouchers, and proper authorizations required to issue payment. Further, all City staff are required to act ethically, honestly, and remove all conflicts of interest when (a) making and accounting for payments to vendors and/or employees, (b) when handling or maintaining vendor data, (c) vouching for the receipt of goods and services that are obtained by the City, and (d) when performing any other procedure related to the payment process as described in this policy.

Applicability:

The policies and procedures contained in this Accounts Payable policy apply to all types of payments (except Payroll, for which the Payroll Policy should be followed) needed for the business operations of the City including, but not limited to expenditures covered by the Purchasing policy, Purchase card policy, and Travel policy. This policy will apply to all City departments and staff who seek to issue payments to City vendors and/or employees for expense reimbursement. It further applies to City staff responsible for check approval, printing, and internal control framework surrounding the payment process.

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SECTION 3: INTERNAL CONTROLS SURROUNDING THE ACCOUNTS PAYABLE

PROCESS
Effective internal control should provide management with reasonable, but not absolute, assurance that assets are safeguarded from unauthorized access, use or disposition; transactions are executed in accordance with management’s authorizations; financial and statistical records and reports are reliable; applicable laws, regulations and policies are adhered to; and resources are efficiently and effectively managed. Control systems shall be continuously evaluated by the City Controller or designee, and weaknesses, when detected by any City staff member, must be reported to the City Controller immediately, for prompt corrective action to be taken by the City Controller, CM, or other appropriate authority, or designee. A satisfactory system of internal control shall be monitored and implemented by all Departments by implementing these policies to achieve, but not be limited to, the following:

A. Control Objectives

1. Operational Objectives

2. Safeguarding of Assets

3. Reporting Objectives

4. Compliance Objectives
B. Control Environment

1. Supportive Attitude

2. Integrity of Competent Personnel

3. Supervision and Accountability

4. Providing discipline and structure

5. Risk Assessment

1. Specifying objectives with clarity

2. Identifying risks to achievement of objectives

3. Fraud awareness and prevention

6. Control Activities

1. Authorization, execution, and recording of transactions

2. Segregation of duties

7. Information and Communication
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1. Documentation of system

8. Monitoring Activities

1. Performing ongoing evaluations/monitoring

2. Communicating deficiencies in a timely manner for corrective action Safeguarding of Assets
Access to City assets should be limited to authorized personnel who require these assets in the performance of their assigned duties. Access can be defined as both direct physical access and indirect access through the preparation or processing of documents that authorize the use or disposition of resources.

Supportive Attitude
It is the responsibility of all City staff to participate in and maintain a supportive attitude towards internal controls. In particular, the controls surrounding the Accounts Payable cycle stated in this policy must also be adhered to. Further, all City staff must follow the City’s code of conduct and address deviations in a timely manner.

Integrity and Competent Personnel
All staff should exhibit high standards of integrity, and shall be responsible for maintaining competence through education, training, or experience, as needed, to accomplish their assigned duties.

Supervision and Accountability
It is the responsibility of all managers to ensure they remain qualified in order to provide continuous supervision in order to assure that approved procedures are followed and are operating as intended. All Department Heads and their designees have the responsibility to make lines of personal responsibility and accountability clear to staff on a continuous basis.

Segregation of Duties
It is the responsibility of the CM and/or City Controller or designee to divide and segregate key duties and responsibilities among different staff to reduce the risk of error or fraud. For example, ordering, receiving, approving invoices, and processing payment should not be done by the same staff person. The extent of controls that this A/P policy City of Compton Accounts Payable Policy
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will be putting into the payment process will be designed to mitigate risks such as misappropriation.

Assuming that the departments have complied with the City’s Purchasing, Travel, and Purchase Card policies or resolutions, the process for receiving, reviewing, and approving payments must follow appropriate internal controls. This involves certifying that all transactions are valid, legal, and properly authorized. Also required is a segregation of duties for each part of the payment process and that all transactions and supporting documents are accurately and properly recorded.

Departments shall develop a plan of organization that provides segregation of duties appropriate for proper safeguarding of the City’s assets. A satisfactory internal control system depends largely on the elimination of opportunities to perpetrate and then conceal errors or irregularities. This, in turn, depends on the assignment of work in such a fashion that no one individual controls all phases of an activity or transaction.

Signature cards for employees authorized by their department to approve financial documents must be submitted to the City Controller, or designee. They must also be reviewed and updated at least annually by Department heads. It is the responsibility of A/P Staff to circulate the Signature cards to department heads annually and follow up on their completion and return, so that they could be maintained in a central location.

Please see Exhibit A for the Signature Authorization Form.

SECTION 4: STANDARDS OF CONDUCT IN THE ACCOUNTS PAYABLE

PROCESS
Conflict of Interest
No member, officer, or employee of the City, or their designees or agents, and no public official who exercises authority over or responsibility with respect to purchasing, or accounts payable, during his or her tenure, or for one year thereafter, shall have any interest, direct or indirect, in any purchase, agreement or sub agreement, the proceeds thereof, in the authorization of payment, or in the vouching of goods or services received for any purchase or purchase agreement. The full Conflict of Interest Code of the City is incorporated herein by reference.

Employees must follow the Conflict of Interest Code adopted by the City Council.

Employees must follow applicable laws, rules, and regulations in regard to conflicts of interest including, but not limited to, the Political Reform Act, the prohibition against City of Compton Accounts Payable Policy
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contractual conflicts of interest, and guidelines in the California Code of Regulations regarding accepting of gifts.

Vendor Gifts and Gratuities
The receiving of gifts and/or other symbols of appreciation may compromise the integrity of professional relationships and can lead to inappropriate business practices.

Subject to guidelines in the California Code of Regulations, no officer, or employee, shall receive or agree to receive, directly or indirectly, any compensation, reward, or gift from any source except from his or her appointing authority or employer, for any action related to the conduct of City’s business, except as set forth below:

A. Acceptance of food and refreshments of nominal value on infrequent occasions in the ordinary course of a breakfast, luncheon, or dinner meeting or other meeting or a tour where the arrangements are consistent with the transaction of official business
B. Acceptance of transportation, lodging, meals or refreshment, in connection with attendance at widely attended gatherings sponsored by industrial, technical or professional organizations; or in connection with attendance at public ceremonies or similar activities financed by non-governmental sources where the officer’s or employee’s participation on behalf of City is the result of an invitation addressed to him or her in his or her official capacity and the transportation, lodging, meals or refreshment accepted is related to, and is in keeping with, his or her official participation.

C. Purchase of items or entry fees at advantageous rates where such rates are offered to City personnel as a class, such as discounts provided to government employees.

D. Acceptance of unsolicited advertising or promotional material, such as pens, pencils, note pads, calendars, or other items of nominal value, not exceeding $50.

E. Acceptance of incidental transportation from a private organization provided it is furnished in connection with the performance of the officer’s or employee’s official duties and is of a type customarily provided by the private organization.

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F. Acceptance of commendations, certificates, or plaques for outstanding individual service or work on City projects.

G. A gift or gratuity, the receipt of which is prohibited under this section shall be returned to the donor within 30 calendar days. If return is not possible, the gift or gratuity shall be turned over to a public or charitable institution within 30 calendar days without being claimed as a charitable deduction and any other requirements for disposition of such gifts.

Personal Purchases from Suppliers, Vendors, or Contractors A. Employees of the City or their immediate relatives are NOT to utilize the employee’s position with the City to solicit or utilize discounts, promotions, or other concessions from City suppliers, vendors, or contractors to purchase supplies, equipment, tools, etc. Further, employees of the City are NOT to utilize the employee’s position with the City to authorize the City’s payment of personal or non-business-related expenses from City vendors or from any other vendor.

B. Employees of the City or their immediate relatives are permitted to utilize discounts, promotions etc. offered to the general public by City suppliers, vendors, or contractors
Ethical Procurement Practices
A. It is the policy of the City to maintain good working relationships with its vendors, suppliers, as well as the community at large. Every employee has the ability to influence the opinions of others through daily interaction with the business community. In personal contacts with vendors and suppliers, employees shall represent the best interests of the City by conducting business in a fair, equitable, and ethical manner.

B. The City subscribes to the following Principles and Standards of Ethical Supply management conduct:

1. Avoid the intent and appearance of unethical or compromising practice in relationships, actions, and communications

2. Avoid any personal business or professional activity that would create a conflict between personal interests and the interests of the City.

3. Avoid soliciting or accepting money, loans. Credits, or preferential City of Compton Accounts Payable Policy
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discounts and the acceptance of gifts, entertainment, favors, or services from present or potential suppliers that might influence, or appear to influence, supply management decisions.

4. Handle confidential or proprietary information with due care and proper consideration of ethical and legal ramifications and government regulations

5. Conduct supply management activities in accordance with state, national, and international laws, customs, and practices, City policies, and these ethical principles and standards of conduct.

6. Develop and maintain professional competence
SECTION 5: RESPONSIBILITIES
A. The Accounts Payable Staff members (and also staff members who initiate wires or ACH payments) responsibilities include:

1. Review the required vendor forms for completeness and reasonableness.

If incomplete, then A/P staff must return the forms back to the vendor and accept them only when they are complete. In order to do this, A/P staff may communicate with the vendors or with the requesting City department staff member that has business in contact with the vendor representative. i. Vendor forms include W-9 or equivalent and New/Change Vendor Information Form (See Exhibit D).

2. Assign a unique vendor number to each new vendor and ensure there are no duplicate vendor records in the City’s Vendor File, if the Accounting Specialist assigned to Purchasing is unavailable. Purchasing and A/P staff only may do this, even if it is for wires or ACH payments. .

3. Notify the vendor, the requesting City Department(s), in the absence of the Accounting Specialist assigned to Purchasing with the new vendor number after the vendor has been set up in the City Vendor File. When the Accounting Specialist assigned to Purchasing is available, then that staff member must perform this.

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4. Maintain and update vendor profile and status information when information has changed, in the absence of the Accounting Specialist assigned to Purchasing (Purchasing and A/P staff only may do this, even if it is for wires or ACH payments). When the Accounting Specialist assigned to Purchasing is available, then that staff member must perform this.
i. Annually, A/P staff shall identify those vendors whose 1099 indicators are not set up correctly in the City Vendor File. A/P staff or the Accounting Specialist assigned to Purchasing shall follow up with those vendors to confirm and update the 1099 indicators as appropriate
ii. Annually, A/P Staff shall request vendors to review their existing profile information and notify the City if any information has changed.

5. Respond to inquiries from vendors.

6. When presented with an invoice for payment, confirm invoice is an original. i. If the original invoice is missing, the duplicate invoice must be signed by the Department Head or approved designee with: 1) an explanation of why the original invoice is unavailable, and 2) a statement certifying that no payment has been made on the original invoice. The signature card of the approved designee certified by the Department Head must be on file with the Accounts Payable Division.
ii. If an original invoice is not available and a copy of an invoice must be used, then the Department Head or any of his/her authorized representatives must mark on the invoice copy, "Accept as originaloriginal lost, not received or misplaced." Quotes, vendor statements and Request of Warrant without supporting original invoices should never be used to process payments.
iii. Deviations from existing policies and procedures should be properly documented and approved by the City Manager or designee. iv. If the original invoice was in the form of email or in the form of an email attachment, this shall be indicated on the Payment Request City of Compton Accounts Payable Policy
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Form.

7. Review the invoice for completeness and accuracy. Confirm the invoice has not already been paid.
a. Ensure that invoices have been validated against
accompanying ordering and receipt documents, as follows:
b. Amounts and prices on invoice match ordering and receipt documents
c. Invoice and associated documents are dated and signed by authorized staff
d. Vendor compliance is verified
e. Vendor insurance coverage is current (See Purchasing Policy)
f. Vendor payment address is accurate, and matches ordering documents
g. Contract retention/liens are recorded, if contract related h. Prior payments are reflected, as needed
i. Proper sales tax rates are used
j. If sales tax is missing or incorrect, additional accruals are required
k. If discounts are available, expedite processing to realize discounts.
l. Discount terms should be clearly stated in the procurement contract. If not specified, the department should always take discount as specified on the vendor invoice. It is the
departments’ responsibility to ensure the discount is actually taken.

8. Cost center for payment is identified.

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9. The date of the invoice could be added or used alone to allow for a unique invoice reference, if none exists on the invoice.

10.Ensure that object codes that are being used in payment requests represent the fairest and best description to properly reflect the financial transaction being recorded. If the fairest and best description to properly reflect the financial transaction was not approved by the Department before reaching A/P, then A/P staff may NOT change the account code requested or assigned on the PO in order to pay the invoice. A/P staff must then return the invoice to the Department. Payment out of liability object codes shall not be made unless they are pre-approved by an Accountant 11 or higher level staff.

11.In the event that there are check runs for more than one checking account, it is necessary to use the appropriate check stock for the related expenditures. It is also necessary to have each disbursement accounted for in the accounting system with the use of the appropriate account string which accurately reflects which checking account is making the disbursement.

12.In the event that the A/P module within accounting software has been programmed with edit checks, or with controls to prevent misappropriation of City assets, A/P staff may not override those controls without documented supervisor approval.
i. Eg: The accounting system warning on duplicate entry of an invoice cannot be overridden, unless it has been verified with supervisor approval that the original payment has been lost or payment was previously voided. This verification should be done via signing off on a batch report by the Deputy City Controller or designee, and by an A/P staff member. These batches must be kept in a central location accessible by Controller Department staff.

13.When reviewing employee reimbursements, the A/P division is responsible for:
i. Ensuring expenditures are reasonable.
ii. Reviewing and auditing for compliance with Purchasing, Purchase Card if applicable, Travel, and A/P Policy.
iii. Requesting additional documentation, information, justification from employee as needed.

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iv. If unallowable expenses are found, then A/P staff must return the request to the employee.
v. Verifying authorized approver.
vi. Ensuring all appropriate/required supporting documentation is submitted and maintained in A/P files. This includes Employee Reimbursement forms (see Exhibit F) and files of rejected electronic payments which need to be properly reflected in the software.
vii. After data entry into the financial system, invoice and supporting documents must be systematically filed and retained for audit purposes.
a. If scanning for filing, then A/P staff must properly and consistently label the scanned items and must maintain them in a central location accessible by City Controller Department staff. Additionally, the hard copies of scanned items must be boxed and labeled and held in storage in an organized
manner.
b. If filing manually, then A/P staff must properly file the payment supporting documentation in order of vendor name and then by check number.
c. There shall be no deletions of any data in the financial software. An auditable trail of transactions must always exist.

14.Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.

15.Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.

16.Additional responsibilities are stated in the remaining sections within this policy.

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B. The Accounting Specialist assigned to Purchasing responsibilities in relation to the Accounts Payable Process include:

1. Enter insurance and contract expiration dates into a (finance) software that can track them and be easily accessed by A/P or departmental staff when researching in order to permit the mailing of checks to vendors.

2. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.

3. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.

4. Additional responsibilities are stated in the remaining sections within this policy.

C. Department Head (including the CM, ACM(s), and City Controller, if applicable) or designees responsibilities shall include:

1. Responsible for completing the Data and Menu Access Request Form to request access for department finance-software-users to view City vendor data in the finance software, when applicable. This form must be approved by the City Controller or designee for such access to be granted. i. Such users shall not be allowed to view social security numbers

2. Department Heads must identify “who can approve for what” via Signature Authorization Forms (see Exhibit A).

3. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.

4. For approvals for payment:
i. The approval covers the funding source, budget units, project codes, and object codes being charged, vouching of the date and existence of receipt of goods or services for business purposes, the appropriateness of the dollar amount, the implied adherence to the purchasing policy, travel policy, grants policy, and purchase card policies, and the implied verification that there is sufficient City of Compton Accounts Payable Policy
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budget or funding to cover the cost within the object code being proposed for charging. The approval also implies that the approver is the appropriate person (or one of the appropriate persons) to make the approval.

5. When reviewing employee reimbursements, the Department Head or designee of at least managerial level, is responsible for:
i. Ensuring expenditures are reasonable, necessary, and for official business purpose.
ii. Reviewing and auditing for compliance with Purchasing, Purchase Card, Travel, and A/P Policy.
iii. Requesting additional documentation, information, and justification from employee as needed.
iv. Deducting unallowable expenses.
v. For project or grant funded business expenses; reviewing to ensure the request is in compliance with project/grant
requirements.
vi. Ensuring all appropriate/required supporting documentation submitted is maintained in department files, including the Employee Reimbursement Form.

6. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.

7. Additional responsibilities are stated in the remaining sections within this policy.

D. Departmental representative that has contracted with the vendor, or designee responsibilities include:

1. When an invoice arrives, write the initials or name of the person, or stamp the division, receiving the invoice

2. Mark the invoice with the “date received” (e.g., use a date stamp).

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i. Ensuring that the invoice will not be paid late, unless already mutually agreed to in writing with the vendor

3. Match the invoice to evidence of receipt of goods or services. Examples include:
i. Goods – packing slip or copy of the invoice signed and dated by staff who received the goods on the date of delivery
ii. Professional services – status or milestone report; product being delivered
iii. Maintenance Service – service call documentation or copy of the invoice signed and dated by staff who received the service on the date of service
iv. Construction – refer to contract for documentation required for progress and final payments, this may include documentation related to sub-contractors

4. If there is an invoice dispute, notification must be made to the vendor specifying reasons and corrective actions within seven (7) calendar days of the date of invoice receipt
i. If there is an invoice dispute, then the vendor must provide a new invoice with the revised amount. Crossing off amounts on invoices in order to make partial payments on invoices are not allowed.

5. Submit the invoice to the authorized staff member for review. i. Note: Payment documents must be reviewed and approved by a staff member other than the payment initiator and the purchase requestor. “Payment initiator” refers to the staff who initiates payments in the City’s financial system. “Purchase requestor” refers to the staff who makes the purchase request
ii. Make sure that the invoice is unpaid by verifying the invoice date and number and checking individual entries to determine if any of the charges have already been paid.
iii. Verify purchase orders, contracts, receiving documents, and other City of Compton Accounts Payable Policy
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forms of documentation to confirm that the invoice is in accordance with the terms agreed upon. Verify quantities and check prices of products or services if they are consistent with agreed amounts. iv. Proof of clerical accuracy of the invoice with respect to extensions, footings, and deductions of discounts.

6. Obtain approval for payment by authorized staff member. i. Note: Department Heads must identify “who can approve for what”.

Invoices must be signed and dated. Signatures in electronic forms (e.g., PDF) are acceptable. Printed E-mails with language indicating that an invoice has been approved can be used in place of signatures.
ii. The approval covers the funding source, budget units, project codes, (G/L codes) and object codes being charged, vouching for the date and existence of receipt of goods or services for business purposes, the appropriateness of the dollar amount, the implied adherence to the purchasing policy, travel policy, grants policy, and purchase card policies, and the implied verification that there is sufficient budget or funding to cover the cost within the object code being proposed for charging. The approval also implies that the approver is the appropriate person (or one of the appropriate persons) to make the approval.

7. Obtain review and approval of the invoice by secondary approver, if required.
i. Note: If there are multiple funding sources, approvals from other Department Heads, the City Controller, and/or the CM may be needed.

8. Ensure a discount is taken if available

9. Ensure the Accounting Specialist assigned to Purchasing has the appropriate insurance and contract expiration supporting documentation prior to payment being initiated.

10.Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.

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11.Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.

12.Additional responsibilities are stated in the remaining sections within this policy.

E. The City Controller or designee’s responsibilities include:

1. Setting up department users who are authorized to access the City Vendor File. Only Accounts Payable and Accounting Specialist assigned to Purchasing staff in the City Controller’s Department have update capability.

2. Approving the printing of checks and finalization of the ACH batch file (including reviewing the file after it has been uploaded to the finance software and making sure the upload was successful and no unauthorized changes were made, as this person cannot be anyone who prepares or enters payments into the financial system. This person must be of management or executive level.

3. Review the pre-check register or edit list by informally auditing check entries according to their professional judgement. Particularly this person should follow up on any vendors or accounts used that appear questionable.

4. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.

5. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.

6. Direct and manage the preparation, designing, implementation, monitoring, and evaluation of internal control policies and procedures

7. Additional responsibilities are stated in the remaining sections within this policy.

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F. The City Manager or designee’s responsibilities include

1. Direct and manage the preparation, designing, implementation, monitoring, and evaluation of internal control policies and procedures

2. Have a back-up protocol to ensure continuity and timeliness of operations during vacations and other leaves.

3. Must actively participate in and support the implementation of the internal controls contained in this policy, and immediately follow up if deviation is suspected, in order to avoid the appearance and existence of fraud, misappropriation of City assets, or of conflicts of interest.

4. Direct and manage the preparation, designing, implementation, monitoring, and evaluation of internal control policies and procedures

5. Additional responsibilities are stated in the remaining sections within this policy.

G. Responsibilities for Payments Using a City Credit Card include:

1. Purchases made by City staff will be paid by the City Controller Department. However, the certification and account coding assigned by the cardholder has to be completed for each transaction.

2. The cardholder is responsible for reviewing the purchase card statement of activity and to note any errors on the bill.

3. The City Manager, or designee, will be responsible for reviewing cardholder statements, items purchased, and account code assignment.

City Manager, or designee, will also need to resolve any questions on the purchases, as well as sign off on the statement indicating that each item has been reviewed and approved. The City Manager’s designee for "Supervisor Reviewed" signoffs must be of management status or above.
a) The "Statement of Account" requires the cardholder and the City Manager, or designee, to review the statement and to note any errors on the bill. Further, the cardholder will be required to fill in account code information as well as a certification that the transactions on the Statement of Account are accurate. While City of Compton Accounts Payable Policy
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viewing the statement of account, the cardholder and the City Manager, or designee, will be required to check off that both individuals have reviewed and approved each transaction, as well as the account coding assigned. Such information will be obtained from the City Controller Department, reviewed for completeness, and entered into the accounting system. Non-compliance with these procedures may mean denial of future use.
b) Purchase card issuer will issue the "Statement of Account” the same day each month.

If the cardholder will be absent from work (whether for travel or leave of absence) when the Statement of Account is issued and will not be able to review the Statement and fill-in the account codes, it will be the responsibility of the cardholder to seek the approval of the City Manager, or designee, for that month’s transactions. The City Manager, or designee, will either certify or dispute the transactions and then send a copy of the signed statement for the absent employee to the City Controller Department. Alternatively, the City Manager, or designee, may sign off on the cardholder’s statement indicating that the transactions and the assigned account coding are approved. The original cardholder statement will be signed by the employee at the time he/she returns.
c) All of the payment and invoice procedures described in this section must be completed within one week of when a transaction gets posted to the purchase card issuer’s statement.

H. Vendor Responsibilities

1. Vendors who wish to do business with the City to provide goods and services are responsible for completing various required and supplemental forms. If applicable, then the forms shall be submitted to the Accounting Specialist assigned to Purchasing or the A/P Division as follows. The Divisions noted should also retain a copy of these records in a centralized location:
i. Provide Departmental staff information for the Vendor Profile Application (See Exhibit G) – To The Accounting Specialist assigned to Purchasing
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ii. IRS W-9 Form – To Accounts Payable

2. Insurance Requirements – To their City contact person

3. Invoices – To their City contact person

4. Other vendor responsibilities are stated in the remaining sections of this policy.

At no time can purchases be “split” or otherwise billed separately to circumvent the spending authority.

SECTION 6: EXCEPTIONS FROM CENTRALIZED PROCUREMENT
A. Any purchase for supplies, materials, equipment and/or services, other than those exceptions listed below, shall not be made outside of the purchasing process without the approval of the City Controller or the City Manager.

B. Any purchase made without issuance and approval of a purchase order will be deemed void and of no effect and will be subject to non-payment. The individual employee responsible for creating the unauthorized obligation may be subject to disciplinary action and/or subject to termination.

C. Purchases that are exempt from the centralized procurement process are limited to the following, and authorization for these transactions shall be in accordance with the approval limits and dollar thresholds set forth in this Policy.

1. Application Fees – To be paid via Request for Warrant/Check

2. Payment of Debt Service – To be paid via wire request

3. Checking account Bank Charges and Fees – The Bank debits the City’s account. Trustee fees are not included.

4. Bond Transactions – Paid Via Trustee Bank escrow instructions

5. Easements - To be paid via Request for Warrant/Check City of Compton Accounts Payable Policy
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6. Environmental Fees and Permits - To be paid via Request for Warrant/Check

7. Insurance Premiums - To be paid via Request for Warrant/Check

8. Purchase of Real Property - To be paid via Request for Warrant/Check or via Wire request to escrow company

9. Claims - To be paid via Request for Warrant/Check

10.Payroll Expenses – To be paid via the Payroll process

11.Petty Cash – See Section 24 regarding Petty Cash procedures

12.Refunds (Constructions & Billing) - To be paid via Request for Warrant/Check

13.Stipends - To be paid via Request for Warrant/Check

14.Training (Offsite) - To be paid via Request for Warrant/Check

15.Travel Expenses, Lodging, Meals, and Transportation - To be paid via Request for Warrant/Check

16.Utilities - To be paid via Request for Warrant/Check SECTION 7: REVIEW AUDITS
Compliance with this policy is subject to review at any time by internal or external auditors. It is the responsibility of City staff members (and their managers) to implement and adhere to all internal controls and procedures stated in this policy.

SECTION 8: OPENING THE MAIL
It is the responsibility of all City staff to communicate their up-to-date Name, Title, Address (including Suite number), Phone number, and email address to vendors, customers, and other governmental entities that they engage in business with if it is foreseeable that those vendors, customers or governmental agencies will send them City of Compton Accounts Payable Policy
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mail in the course of their business dealings. In-coming mail may only be opened by the person, title, or division to which it is addressed. Opening the mail of other people could be considered mail tampering and may come with legal liabilities. If a letter comes in the mail and it is not clear who the intended recipient should be, then that letter should be returned to the sender with a note requesting that the sender clarify who the intended recipient of that letter should be.

SECTION 9: INVOICES
This section discusses the types and formats of invoices that departments can accept from external parties. It also describes the steps that must be completed to properly review and approve invoices.

Historically, most vendors have submitted their invoices in paper form. In recent years, Vendors have desired to send electronic invoices via e-mail, fax, or other format.

Departments that want to accept electronic invoices from vendors or contractors must develop and maintain their own effective department policies and procedures for receiving, tracking, and processing electronic invoices. Each department should communicate to their staff the internal controls they have implemented to ensure adequate tracking of invoices and avoidance of duplicate billing/payment.

The following controls must be maintained for accepting electronic invoices:

A. Vendors must submit a letter to the department authorizing electronic invoicing prior to submission of electronic invoices. The letter must indicate which form of electronic invoicing the vendor will use (e-mail, fax, or internal contracting systems). Vendors must clearly state that no other method of invoicing will be used. Once the letter is received and approved by the department, vendors may begin invoicing electronically.

B. The department should designate a single point of contact (e.g., a designated e-mail account) for electronic invoices to be centralized.

C. Vendors must assign unique invoice numbers to electronic invoices to avoid duplicate invoice numbers. If this is not completed by the vendor, then the contracting department must follow up with the vendor to obtain the unique invoice number.

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D. Departments may keep a hard copy of the invoice for authorization and record retention.

Invoices submitted by vendors to departments must contain certain required data elements. In order to be considered acceptable, vendor invoices must include, but are not limited to, the following elements:

A. Vendor Name
B. Unique invoice number
C. Invoice date
D. Description of the item(s) billed
E. Service period for services
F. "Shipped to" or “delivered to” address
G. Vendor remittance address
H. Mode of shipment
I. Sales tax
J. Discount or deferred terms (if any)
K. Total amount due
L. Purchase order number generated by the City’s financial system The following elements are highly recommended:
 Order date for materials and supplies
 Shipping date for materials and supplies
SECTION 10: DATA ENTRY
When performing data entry, it is the responsibility of Accounts Payable staff to:

A. Review source documents to ensure information is complete and accurate prior to data entry
B. Contact appropriate work units to verify the accuracy of data and to obtain information needed to correct or complete source documents C. Proofread and check data to verify accuracy and completeness and to correct City of Compton Accounts Payable Policy
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errors
D. Double-check other members’ data entry amongst A/P staff E. Sensitive bank information should not be printed on AP pink copies, EFT green copies, and green check stock.

F. It shall be noted that Voided checks that get reissued shall not have the same check number as the check that was voided
G. When a request for warrant is presented, for employee reimbursements to the City (for payment to CalPERS for example) then A/P staff as well as the person preparing the RFW need to check system reports to verify amounts being paid in by employees are equal to amounts being transmitted to third parties (including CalPERS).

SECTION 11: RETENTION PAYABLE PROCEDURES
Retention Payable is a liability account reflecting amounts due on construction contracts not paid pending final inspection of the project or the lapse of a specific period, or both.

The unpaid amount is usually a stated percentage of the contract price. In order to ensure that the contract payable account is accurate, the following must be performed each time an invoice is presented for payment from the vendor:
 The invoice or request for warrant with a copy of the vendor contract attached must indicate the dollar amount or percentage of retention. The Accounting Specialist must enter the dollar amount for the proper expenditure account as well as the dollar amount that will be assigned to the retention payable liability account. This is to be done during the data entry process that is done for the check process. The Accounting Specialist must verify that the appropriate supervisor has signed off on the request for warrant and must verify that the approval covered the use of the retention payable liability account for the specified dollar amount or percentage. Further, when the Accounting Specialist enters the payment information, he/she shall also enter the contract number into the description field of the finance software that is related to the amount of the retention payable. This must be done each time an invoice is paid that requires retention payable. This is critical since there may be vendors that have multiple contracts with the City, and the retention payable for each contract must be readily identifiable.

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 When the initiating department requests for any part of the retention to be paid, that department must document and approve that the criteria to release the retention were met. Further, during this time the Accounting Specialist must run a report of entries that were made to the Retention Payable Liability account for that contract number, and must verify with the initiating department that the correct amount was retained and also that the correct amount is being released.

SECTION 12: CHECK SIGNING
There are two signatures required on checks. They are the City Controller (or designee), and the City Treasurer (or designee). All check signers should be authorized by the City Council through a resolution. The authorized signatories of the City Treasurer's Office are the City Treasurer, the Chief Deputy Treasurer or the Deputy Treasurer while that of the City Controller's Office are the City Controller or the Deputy City Controller.

A. When checks are being signed manually, it is the responsibility of the Accounts Payable Division to place behind each check, the related supporting documentation obtained during processing, and to organize the checks (and their back up) in a batch that mirrors the order of the check register. The check register must be printed immediately after the printing of checks.

1. Once the batch of checks is ready for signature, then the A/P Staff member(s) must arrange a time to drop off the checks to the authorized signer to sign them. If the printed checks must be held before they are dropped off with an authorized signer, then they must be held in a secure location only accessible by A/P Staff. If the checks have already been dropped off, and if the authorized signer cannot sign the checks right away, they must be kept in a secure location where only that signer has access to them. While the authorized signer reviews the checks and their supporting documentation, before signing each check, they may ask A/P staff for more information regarding the payments if desired. Anytime the batch of checks changes hands, there must be a sign off on the accompanying check register by the person dropping off and by the person accepting the batch of live checks. The signature will signify that the batch is complete and matches what has been printed on the accompanying check register. This is so that the chain of custody of the City of Compton Accounts Payable Policy
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checks will be clearly documented. Any irregularities shall be investigated and resolved by either party.

2. Once all the checks in that batch are signed by the signer(s), then that signer must sign off on and date the check register, communicating that they signed and have included the complete batch of checks that are ready for pickup for signature and mailing by the City Treasurer or designee.

3. If at any time the checks are held overnight before mailing, then they must be held in a secure location at all times, that is only accessible to City Treasurer staff.

4. On a weekly basis, A/P staff must submit a copy of the signed check register (as well as a batch report of ACHs or wire transfers) to the City Controller to maintain proper information and communication as to all payments that were issued and signed or approved during the week.

5. The City Controller Office representative signs all checks after the Tuesday check run, and takes them to the City Treasurer's Office for signature.

6. After the checks are signed by the Treasurer's Office, all checks should be mailed out, unless unauthorized by the Controller's Office or City Manager's Office.

7. Departments should have no interaction with physical checks unless the City Controller authorizes the City Treasurer to release it to them.

SECTION 13: CHECK PRINTING AND MAILING
A. Checks are printed every Tuesday afternoon, unless subject to change because of Holidays.

B. To have a payment included in a Tuesday check run, the documents submitted to the Controller's Office should comply with all the requirements aforementioned.

These documents should be received by the Controller's Office by 12:00 noon on Monday, the week before the check run. In other words, if an invoice is received before noon this Monday, it should be included in next week's check run.

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C. If the guidelines are not met, then the payment will not make that Tuesday’s check run.

D. A/P Staff must monitor the supply of check stock after each check run, and plan adequately in advance when to order more check stock.

E. The weekly check or the weekly/daily ACH payment to any vendor reflects the total amount paid to the particular vendor throughout the City during the period covered. For special circumstances when vendors require single checks, Departmental staff shall submit the request to A/P staff.

F. Non-payroll checks will be distributed by mail through the US Postal Service ONCE every week on Thursday by the City Treasurer or designee. Before sealing the envelopes with checks inside, City Treasurer or designee must verify that the payee and address that the check is going to matches the payment request and invoice and/or supporting documentation provided. If there are any discrepancies with the address on the invoice and the address from the W-9 provided by the vendor, then the A/P staff member must investigate and resolve the discrepancy before having the check forwarded to the City Treasurer’s Department.

G. If Departmental staff would like for the Accounts Payable Division to place other inserts, such as memos or invoice copies, into the envelope with vendor payments, then they must clearly notify A/P staff on the Request for Warrant (Payment) of this type of request.

H. The staff member matching the check register to the batch of checks to be mailed shall sign and date the check register to vouch that the checks mailed were in a complete batch that matched the check register.

I. A/P staff must stamp each invoice that is related to the printed checks as having been paid, and must file them in a central location so City Controller Department staff can easily reference the paid invoices when needed.

J. A number of hand-sorted, non-payroll checks include employees’ travel and training reimbursement checks. Accounts Payable staff should exercise extra diligence in verifying employee addresses when processing employees’ reimbursement check requests; in general the work location address should be used.

K. Any adds/changes to vendor addresses should continue to be submitted to the City of Compton Accounts Payable Policy
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A/P Division.

L. For those extraordinary circumstances that require special check handling/pickup, email a request to the A/P division.

SECTION 14: PAYMENT CANCELLATIONS
This section provides guidance on how to handle instances where the department might need to cancel payment to an outside vendor.

A. If a payment request needs to be cancelled after the check has been cut but not yet mailed, the requesting department representative may contact A/P staff via email and request the cancellation. A/P Staff will remove the check before it goes to the City Treasurer’s Department to be mailed.
o Voided checks that get reissued shall not have the same check number as the check that was voided
B. If an incorrect check is mailed to the vendor, then A/P staff or the department must call the vendor and request that the check be returned. A/P staff must void the check when it is received back. If the check is not returned, then Accounts Payable staff must request to the City Treasurer staff to issue a stop payment as described, after confirmation that the check is outstanding, below i. If a stop payment is being requested for a check, after it has already been issued and mailed out to a vendor, an email must be sent to the Accounts Payable division which should contain detailed check information and the reason for the stop payment. The Accounts Payable division will communicate with the City Treasurer or designee to process the stop payment by communicating with the bank. Once the stop payment is processed, the Accounts Payable division will cancel the check in the financial system. The requesting department can then submit a new payment request.

C. If an issued check has been lost, the requesting department and the vendor, jointly, shall complete the Lost Check Form, Exhibit C, and submit it to the Accounts Payable Division. The A/P Division will then review and process the form and communicate with the City Treasurer or designee to process the stop payment request to the bank. Once the stop payment process is completed by City of Compton Accounts Payable Policy
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the bank then the A/P Division will cancel the check in the finance system. The requesting department can then submit a new payment request.

D. The Accounting Specialist in the Accounts Payable Division shall confirm with the City Treasurer’s department in writing whether a check has already been cashed or not before it is voided in the system. The Accounting Specialist shall not place a void without this written confirmation, of which a copy shall be kept in a central location on the shared drive.

E. The Deputy City Controller or designee, shall run a report, monthly, of voided checks and confirm with the City Treasurer’s department, or with the supporting documentation already maintained by the A/P division, that those checks were not already cashed. If a check was found to be cashed and voided and reissued in the A/P module, then the Deputy City Controller or designee shall investigate the origin of this incident, and shall invoice the vendor or withhold future payment from the vendor as necessary in order to avoid double payment to the vendor.

SECTION 15: CITY CONTROLLER REVIEW OF DEMAND REPORT AND OTHER

MONITORING REPORTS
After checks are printed but before they are mailed, the City Controller or designee (other than an A/P Division staff member) shall review the check register, inclusive of payees, check amount, funding source, budget unit code, project code, G/L code, object code, and expense description data, and then sign and date the report. Any perceived irregularities shall be investigated and resolved by the City Controller or designee. This report must be kept in a centralized location. This report must also be submitted to the City Council, for review and filing in compliance with the City Council’s/City’s code to provide a Check Register Report (or equivalent) at periodic meetings, if applicable.

Other reports that should be reviewed by the City Controller or designee on a monthly basis for proper monitoring of the A/P process include:

A. Reviewing Budget vs Actual expense data for all budget units, project codes. G/L codes, and object codes. The review should check for reasonableness, irregular patterns, irregular spending progress made on projects or on on-going operations. Any perceived irregularities must be investigated and resolved.

B. Reviewing all payments charged to internal service chargeback codes, nonbudgetary expenditure/expense, revenue, asset, liability, or equity object codes.

The review should check for reasonableness, and for irregular patterns. Any perceived irregularities must be investigated and resolved.

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o Particularly, a report of retention payable liability balance-make-up and roll forward schedule (including beginning balance, additions, deletions, and ending balance) should be reviewed monthly. This report should be tested monthly for accuracy for each applicable contract.

C. Reviewing a report of new vendors added to the finance system, or for any changes in vendor information within the finance system. The review should include an informal, random selection of changes made, and should be tested by reviewing the supporting documentation maintained for those changes. Any perceived irregularities must be investigated and resolved.

D. Matching of the vendor payments file (including addresses) with the employees file to:

1. report to Payroll the additional income to the employee, and

2. inactivate the employee’s vendor number if necessary E. Quarterly review of payments using 1099-reportable object codes to vendors without W-9 tax identification information
F. Quarterly, the Sales and Use tax report that has been prepared by Accounts Payable staff should be reviewed before filing and before payment is made to the State.

SECTION 16: SALES AND USE TAXES
The California Department of Tax and Fee Administration (CDTFA) promulgates guidelines for the administration of Sales and Use Tax Programs. Here is a link to the CDTFA website: https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx The CDTFA regularly changes its rules and regulations regarding the State’s Sales and Use Tax Programs and it is the requesting department’s responsibility to ensure that it has checked the CDTFA website in order to be compliant. This includes ensuring that purchase orders factor in the appropriate amount of sales tax to their total dollar amount.

A. Sales and Use Tax Definition”
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1. The California “sales tax” is imposed on all California retailers. Sales tax is tax collected by the retailer in California and the retailer is responsible for reporting and paying the tax to the State. California law requires tax on in-state purchases, and also requires tax on items purchased out-ofstate for use in California.

2. When an out-of-state or online retailer doesn’t collect the tax for an item delivered to California, the purchaser may owe “use tax”, which is simply a tax on the use, storage, or consumption of personal property in California. Use tax liabilities are often created by Internet or mail order purchases with out-of-state retailers not required to collect the tax. The use tax, which was created in July 1935, is a companion to California’s sales tax that is designed to level the playing field between in-state retailers who are required to collect tax, and some out-of-state retailers who are not. Generally, use tax also applies to foreign purchases of tangible personal property brought into California for storage, use, or other consumption.

3. The State’s sales tax and use tax are “mutually exclusive”, which means either one or the other applies to a single transaction, but not both. The sales and use tax rates are the same within the same area or jurisdiction.

4. Certain products and/or services are tax-exempt. Items that are exempt from sales tax are exempt from use tax as well.

B. Department Staff Responsibilities:

1. When purchasing from California or out-of-state retailers, departments must review invoices to make sure sales tax is charged and the rate is correct.

2. Departments must verify that they are charged the proper rate of tax for the area where they use, store, or consume the merchandise. The rate of use tax is determined where the property will be used, stored, or consumed, regardless of where the sale takes place. Tax rates may vary from cities and counties in California where the materials are put into use C. Accounts Payable Division Staff Responsibilities:

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1. If insufficient sales or use tax is specified on an invoice, the A/P Division must accrue sales or use tax in the financial system through journal entries, or through any existing, specialty-use-tax-feature that the finance software may contain, regardless of the dollar amount involved, on or about the same time that the invoice is processed.

2. If the accrual of use tax causes the purchase order dollar limit to be exceeded, then the Accounts Payable Division must inform the requesting department to initiate a change order and shall not release the check to the vendor until the change order is completed and the total purchase order amount will cover the cost of the goods being purchased.

SECTION 17: 1099 REPORTABLE PAYMENTS
The Accounts Payable Division shall prepare and file IRS 1099-Misc forms annually. The A/P Division must file Form 1099-MISC (Miscellaneous Income) for each person, non-employee and individual contractor or sole proprietor, to whom the City has paid during the tax year.

A/P and Departmental staff should refer to the IRS for guidelines on what is and is not 1099-reportable. Related link follows: https://www.irs.gov/pub/irspdf/i1099gi.pdf The IRS regularly changes its rules and regulations regarding 1099 reporting and filing requirements and it is the Department’s and Accounts Payable staff joint responsibility to ensure that it has checked the IRS website in order to be compliant.

Departments must ensure that they receive an IRS Form W-9 prior to paying any vendor that will receive either a one-time payment or cumulative payments greater than $600 (excluding refunds). Having correct information on the W-9 is essential; Departmental staff must review the W-9 to ensure that the information is complete and looks correct. Departments must submit completed W-9 forms providing tax identification information to the A/P Division in order to set up a vendor number in the financial system. The A/P Division must also make sure that the vendor is flagged as 1099-reportable in the finance software.

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SECTION 18: NO 1099 PAYMENTS TO CITY EMPLOYEES
An active City employee who provides service to the City should do so under an arrangement other than independent contracting. Departments should pay employees for all employment services and fringe benefits through the City’s payroll system.

Employees should not be compensated through vendor payments; rather, all pay to an active employee should be part of taxable employment compensation. Examples include:

A. Any employee taxable fringe benefits, including assignment allowance B. Professional services from workers employed by other departments, e.g., interpreter services. Arrange a work order with the appointing department to pay the employee through payroll.

An active City employee must have all City income reported on IRS Form W-2, never on an IRS Form 1099. Departments should ensure that all income paid to City employees are taxed and reported to the IRS by paying all compensation to employees through the payroll process. If a department is in doubt about whether payments to employees should be included in wages, it should consult with the City’s Legal Counsel.

SECTION 19: REQUESTS FOR CHECKS WITH OR WITHOUT AN
ENCUMBRANCE/P.O.

A Request for Warrant/Payment Form (see Exhibit C) without a purchase order is an exception to the City’s standard procurement practices. Each request, regardless of the dollar amount, needs to be reviewed by Accounts Payable staff.

A/P staff shall follow up and resolve the following questions with the Accounting Specialist assigned to Purchasing or with the requesting department:

1. What happened to cause the need for a check request without a purchase order?

2. If no error occurred, then why wasn’t there an encumbrance and who authorized this situation?

3. Why is the price reasonable or how do we know it is a good deal for the City?
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4. What steps are being taken to ensure that this doesn’t happen again, if applicable?
SECTION 20: ONE TIME PAYMENTS TO ONE TIME VENDORS
The one-time payment process in the City’s financial system is only for authorized nonrecurring and non- 1099 reportable payments to one-time vendors. These usually are paid out of liability accounts, agency obligations, special programs or funds. One-time payments are not for employee reimbursements and should not be used for purchase of materials and supplies, or services. Refer to Section 17 for 1099 Reportable Payments below for more information about what is and is not 1099-reportable.

Allowable non-1099 reportable one-time vendor payments include:

A. Non-1099 reportable Claims and Judgments as well as Litigation expenses for settlement of claims generally processed by the City legal counsel or CM, and other responsible departments
B. Refunds of security deposits from liability or deferred credit account It is the department’s responsibility to ensure that taxable payments will be recorded and reported to the IRS correctly.

SECTION 21: YEAR END PROCEDURES:

In order to prepare the annual financial statements for the City, certain procedures shall be established to properly record year-end expenditures. The key factor in determining the fiscal year to which an expenditure is to be charged is the date of the receipt of goods and/or services.

A. If goods and/or services are received on or before June 30th, the expenditure shall be charged to the fiscal year that has just ended. This is contingent upon the relative invoices being received by the Accounts Payable Division no later than July 31st. Therefore, it is the departmental staff responsibility to contact vendors early to obtain invoices as soon as possible. For submissions of invoices to the Accounts Payable division after July 1st, departmental staff must indicate whether they would like their invoices to be charged to the fiscal year that has City of Compton Accounts Payable Policy
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just ended, or to the new fiscal year.
o The City Controller/Deputy City Controller shall notify all Department Heads of the cut-off date for submission of invoices.

B. If goods and/or services are received on or after July 1st, the expenditure will be charged to the new fiscal year.

C. No new purchase orders may be initiated after June 15th, unless they are related to a City Council item during the month of June.

D. Annual blanket purchase orders will terminate on June 30th. Any remaining balances in such purchase orders will be closed at year-end and will not be carried into the new fiscal year. This is subject to certain exceptions for special cases (after conferring with the Accounting Specialist assigned to Purchasing).

E. Non-blanket purchase orders will also terminate June 30th by default. To carryover non-blanket purchase orders for specific goods and/or services, a request needs to be made to the Controller’s office (see Budget and Reserve Policy).

For the Carryover policy, please see the Budget policy. Please note that Carryovers can only take place once the last invoices for the ending fiscal year have been paid and charged against that year, so it is important for departmental staff to contact their vendors to get their invoices in as soon as possible.

SECTION 22: EMERGENCY PURCHASES:

Emergency purchases may be made without competitive bidding when time is of the essence and shall be made only for the following reasons:

1. To preserve or protect life, health, or property, or

2. Upon natural or declared disaster, or

3. To forestall a shutdown of essential services

4. Supplies/services are needed for immediate use and are vital to the public's health, safety and welfare.

5. A break down or shut-off of essential service(s) is imminent and can only be averted by an emergency check run.

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6. Work stoppage or idle time will occur if a check is not immediately issued.

7. Late fees will be assessed against the City and be
unavoidable unless an emergency check is issued.

8. Court ordered or settlement claims of an urgent nature must be paid.

9. City of Compton bank accounts require immediate
replenishment.

10.A City of Compton real estate purchase requires an
immediate payment.

11.Any other urgent need that the City Manager deems
appropriate and necessary to the City's operations.

If an emergency does arise, then the Emergency Warrant Request form may be filled out and given to the Controller's Office. It should be signed by the Department Manager and City Manager. The emergency check will be printed within 48 hours or 2 working days and will not be printed sooner unless it is a matter of health, life or natural disaster. The check shall have two signatories, one from the City Controller' Office and the other from the City Treasurer's Office.

Since emergency purchases do not normally provide the City an opportunity to obtain competitive quotes, sound judgement shall be used in keeping such orders to an absolute minimum. In addition, the following requirements shall apply:

A. The Acting Purchasing Agent (Accounting Specialist) shall be contacted as soon as possible for an advance purchase order number, which may be given verbally, to cover the emergency transaction. If unable to contact the Acting Purchasing Agent, then the employee should place the order and contact the Acting Purchasing Agent the next workday.

B. A completed purchase requisition shall be submitted within two working days, or as soon as the information is available. All purchase requisitions for emergency purchases shall be approved electronically by the appropriate Department Head or designee, and or City Manager or designee.

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C. Documentation explaining the circumstances and nature of the purchase shall be submitted by the Department Head or designee, and or City Manager or designee as follows:

1. Purchases less than $25,000: Use standard purchasing procedures

2. Purchases in the amount of $25,000 - $75,000: require the approval of the City Manager. The City Manager may delegate the authority to approve emergency purchases less than $75,000 to the Acting Assistant General Manager or to the Director of the Emergency Operations Center if any such facility is open during a declared disaster.

3. Purchases above $75,000 require the approval of the City Council, or of the Acting City Council during a declared disaster.

4. If the emergency purchases cause any budget line item to exceed the approved budget, it shall be the responsibility of the department requesting the purchase to obtain subsequent City Council approval for reserve funding or to make a budget transfer to cover the purchase. Approvals for a budget transfer must be given by the appropriate Department Head or designee, and or City Manager or designee as determined by the Authorization Table.

5. If the emergency purchase involves Force Account Work in association with a declared disaster (e.g. FEMA), detailed records of work must be documented including scope of work, daily staff time and equipment used. Depending on the scope of the disaster, Force Account Work may involve CIP.

SECTION 23: CREDIT MEMORANDUM
A credit memo may be issued by a vendor because the City returned goods to the vendor, or there is a pricing dispute, or a marketing allowance, or other reasons under which the City will not pay the vendor the full amount of the invoice.

A. If the City has not yet paid the vendor, the City can use the credit memo as a partial offset to its invoice-based payment to the vendor. Departments can net the credit memo with the invoice and A/P staff will input the netted amount in the City of Compton Accounts Payable Policy
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financial system as the amount being paid. A/P staff should make sure to enter the credit memo number in the “Invoice Number” field. If there is not enough space, A/P staff should make sure to include the credit memo number in the description field.

B. If the City has already paid the full amount of the invoice, the City has the option of:

1. Using the credit memo to offset a future payment to the vendor:

OR

2. Using the credit memo as the basis for demanding a payment refund in exchange for the credit memo.

SECTION 24: EFT UPLOAD FOR LANDLORD PAYMENTS
The City shall ensure that Electronic Fund Transfers (EFT’s) are properly documented, authorized and approved in accordance with federal and state statute.

A. Local Housing Authority shall email the City Controllers’ Office and the City Treasurer’s Office with the Landlord Payments Spreadsheets.

B. The Accounts Payable Staff is responsible for uploading and distributing the batches into the financial software for payment and providing the check register to the General Ledger A
C. The General Ledger Accountant is responsible for verifying the accuracy of the check register with the Local Housing Authority spreadsheets. After verification, the check register is submitted to City Controller/Deputy City Controller for review and approval.

D. The approved file is submitted to the bank by General Ledger Accountant and ACH reports from the upload are provided to Accounts Payable Staff and Treasurer’s Office.

E. The Treasurer’s Office is responsible for confirming the disbursed amount with the spreadsheets provided by Local Housing Authority.

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SECTION 25: Unclaimed & Uncashed Check Policy
The purpose of this policy is to provide the proper mechanism to take possession of long standing unclaimed checks in accordance with government statutes and to ensure the propriety of the related accounting transactions.

This Policy will comply with the standards set by the Governmental Accounting Standards Board (GASB) or other applicable government accounting standards and with Generally Accepted Accounting Principles (GAAP), as well as California Code 50050-50057. The City Controller's Office is responsible for implementing this policy.

A. Definitions
Outstanding Check: Any City check that has not cleared the bank, been canceled, or written off. Outstanding checks include both uncashed and unclaimed checks.

Outstanding Check List: A list of outstanding checks.

Stale Dated: A check that is older than six months.

Uncashed Check: A check mailed or delivered to the payee that has not been cashed.

Unclaimed Check: Funds which are not the property of the City but remain in the City Treasury for three or more years without a claim being filed by the legal owner(s).

B. Procedure
Every month the Accountant will review the City's outstanding (issued but not cashed) check list and identify stale checks. Payees will be notified by e-mail, letter or a phone call to the contact information on record and given the opportunity to submit a claim form to have the check reissued.

See Exhibit C
All unclaimed checks of less than fifteen dollars ($15) which are outstanding for more than one year from issue date will revert to the City immediately without public notice of any kind.(Gov. Code Sec. 50055)
Stale checks which are over $15.00 will remain on the outstanding check list for three years. After three years, the City will publish a notice in a local newspaper of general circulation, once per week for two successive weeks (Government City of Compton Accounts Payable Policy
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Code Section 50050). The notice will include the payee name, amount of the check, the City fund, and the date the money will be returned to the City if it is not claimed (not less than 45 days or more than 60 days from the date of the first notice-Government Code Section 50051).

Claimants may submit a claim to the City Controller's Office, which must include the claimant's name, address, amount of claim, and grounds on which the claim is founded (Government Code Section 50052). If the City Controller's Office accepts the claim, the original check will be voided and a new check issued. If the claim is rejected, the claimant may appeal such decision by filing a written notice of appeal with the city clerk, stating the grounds for why such decision is not proper and thus being contested (AV Municipal Code - Chapter 1.10-Appeal Procedures). If no claim is filed by the date listed in the notice, the check will be voided and the cash returned to the City account from which the check was issued.

The City Controller may release to the depositor of the unclaimed money, their heir, beneficiary, or duly appointed representative, unclaimed money if claimed prior to the date the money becomes the property of the City upon submitting proof satisfactory to the Controller. (Gov. Code Sec 50052.5).

When the unclaimed funds become the property of the City of Compton and are in a Special Fund, the City Council may transfer them by Resolution to the General Fund. (Gov. Code Sec 50053)
Accounting Transactions and Documentation
The City will make all appropriate accounting entries in order to substantiate any action that results from this policy, and will retain all records necessary to document this action taken.
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Exhibit A:

Department Name
Date
I hereby authorize
(Print or Type Name) (Title) (Job Class)
Whose signature appears below, to sign and/or approve my department/division:

Employees Travel and Training Reimbursement
Requests Invoices
Purchase Ordes Certify Copy Invoices as Originals
Journal Entries Retrieve Checks
Petty Cash Reimbursements Other Documents: (please explain in the space below) Date
Effective Date of Cancellation Date
Controller Use Only:

Date
Section I – Declaration of Department Head
•This section is to be signed by the department head. Only the department head has the authority to delegate signature authority for departmental activities. •This Section is also used by City Controller to have the department head’s signature on file.

Section II- Authorize a Designee
•The name, title, and the job code of the person authorized to sign documents on behalf of the department head •Only check which categories of documents the person is authorized to sign •Please Include initials if the authorized designee uses their initials to sign documents.

Section III- Cancel a Signature Authority
•Date of cancellation or revocation of signature authority. This must be signed by the department head and cannot be delegated. •Checking the box in each category gives the designee the authorization to go sign those particular documents or to retrieve checks from the A/P Division.

Signature Authorization Card
Section I. Declaration of Department Head
I,_____________________, am the head of the above named City department. As such, I am authorized to sign all documents used to conduct City buisness.

Department Head Signature
Section II. Authorize a Designee
Signature of Designee
Section III. Cancel a Signature Authority
Department Head Signature
Approved By
Please use this form for authorizing a designee to sign documents or retrieve checks from the Controller's Department on their behalf. This signature authority will be used to verify proper authorization during our Post Audit process.
•Leaving the department/ division field blank will authorize for all department’s documents. Only complete the department/division if you wish to limit the authority for the person.
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Exhibit B:

STOP PAYMENT REQUEST FORM
DATE:

BANK ACCOUNT NAME:________________C__IT__Y_O__F__C_O_M__P_T_O__N_______ BANK ACCOUNT NUMBER:______________6_7_9_0_2_0_9_9_0__________________________________________ CHECK NUMBER:

CHECK AMOUNT:

CHECK DATE:

PAYEE:

REASON FOR STOP PAYMENT:

DURATION OF STOP PAYMENT 6 MONTHS X 12 MONTHS

REQUESTING STOP PAYMENT APPROVED REQUEST
********************************************************************* Complete by Treasurer's Office
PROCESSED STOP PAYMENT BY__________________________________ DATE___________________________
TRACER #_______________________
(See attached Confirmation Report)
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Exhibit C:

City of Compton

REQUEST FOR

WARRANT TO BE

PREPARED
DATE Vendor #
P.O. NO.

VENDOR NAME AND ADDRESS Date Requested
Return Warrant to
Check Date
Check No.

REASON FOR WARRANT REQUEST
Account No.
$ -
TOTAL $ - City Manager's Approval
Warrant Requested By
Department Manager's Signature

CONTROLLER'S OFFICE USE ONLY AUDIT STAMP

AUDITED BY
Approved by V#
City Controller P.O.#
A/C#
DATE
Rev. 07/01/2021 CO
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Exhibit D:

VENDOR REQUEST FORM
Date:

Requesting Dept: Name:

Company Name:

Federal Tax I.D. #:

Address: P.O. Box:
(If Known)
City, State, Zip Code:

Contact Person:

Telephone # Fax #
Remittance Address_______________________________________________________ For DBA's (Doing Business As):

Person's Name: S.S.N.:

Business Name: Address:

City State, Zip Code:

Telephone No: Fax No:

Assigned Vendor Number:
(Controller's Office Use)
REV. 06/30/2019 CO
FILL OUT AND RETURN THE ATTACHED W-9 WITH REQUEST
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Exhibit E:

DEPARTMENT P.O. #
VENDOR
VENDOR # DATE
Account #
Goods Received By
Department Manager
Approved For Payment
Previous Balance
Deduct
NewBalance
`
REV. 7/1/2021 CO
$ -
$ -
QTY. INVOICE #/DESCRIPTION
City of Compton

PARTIAL PAYMENT FORM
AMOUNT
Account Payable
TOTAL
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Exhibit F:

DATE:

TO: CONTROLLER'S OFFICE
FROM: VENDOR #:

Please reimburse me $ for expenses incurred on
in connection with
This expenditure is to be charged against Account Number:

Rev 7/1/2021 CO
Department Manager
City Manager (if $20.00 or more)
Controller
Account Number
Claimant Signature

CITY OF COMPTON

EMPLOYMENT REIMBURSEMENT
Print Claimant Name
Claimant's Department
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Exhibit G:

INSTRUCTIONS:

PART I - TRAVEL AUTHORIZATIONComplete items 1-9
PART II - EXPENSE REPORT Complete "Estimate" column only. Miscellaneous costs will require a separate explanation. Make two (2) copies. Submit original to the City Manager for approval at least 30 days prior to travel.

Part III - CERTIFICATION Upon return, with your second copy, complete "Actual" column. When the Actual column exceeds the Estimated amount, reimbursement of additional expense shall be made at the discretion of the City Manager. The completed form shall be submitted to the Controller along with any renumeration to the City.

PART I: TRAVEL AUTHORIZATION 1. Date:

2. Name 5. Vendor #

3. Title 6. Account #

4. Dept.

7. Explanation for Request for Travel 8. Total Estimated Expense Total Advance Requested

9. Date Check is Requested FOR CONTROLLER DEPT USE ONLY:

Audited by
City Controller
PART II: EXPENSE REPORT (Please place an asterick next to prepaid items and circle mode of transportation)
Estimate Actual
PART III: CERTIFICATION I certify that the foregoing expenses were incurred in the conduct of City business. I hereby request reimbursement in the amount of .

Date
Rev. 7/1/2022

CITY OF COMPTON

TRAVEL REQUEST EXPENSE REPORT AND CERTIFICATION
(Requester) (Department Manager)
(City Controller) (City Manager)
(Department Manager) (City Manager)
Total Travel Expense
Less Total Prepaid Items
Amount of Advance Request/Amount Due
Transportation
Registration/Dues
Per Diem
Miscellaneous - Shuttle/Uber/Lyft
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Exhibit H:

NAME (Please print) DATE
DEPT

START END
Total Cost to be reimbursed:

Purpose of the trip:

SIGNATURE:

APPROVED BY:

TITLE:

APPROVED BY:

APPROVED BY:

Rev. 7/1/2022

CITY OF COMPTON

MILEAGE/PARKING REIMBURSEMENT

CLAIM FORM

VENDOR NUMBER
TOTAL
MILES

PARKING
COST
COST

ODOMETER
(DEPARTMENTHEAD)
(CITY MANAGER)
(CITY CONTROLLER)

I HEREBY CERTIFY THAT THE ABOVE TRIP(S) WERE NECESSARY IN THE PERFORMANCE OF MY DUTIES.

DATE ORIGIN DESTINATION

CURRENT

MILEAGE
RATE
March 14, 2023
TO: MAYOR AND CITY COUNCIL MEMBERS
FROM: CITY MANAGER
SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

COMPTON ACCEPTING MEMBERSHIP IN THE GATEWAY

CITIES AFFORDABLE HOUSING TRUST, A JOINT POWERS

AUTHORITY AND AUTHORIZING THE MAYOR TO EXECUTE

THE JOINT EXERCISE OF POWERS AGREEMENT

SUMMARY
Staff recommends that the City Council authorize joining the Gateway Cities Affordable Housing Trust (Trust), a Joint Powers Authority (JPA) formed among the cities within the Gateway Cities region. The Trust provides funding to preserve and produce affordable housing. These funds improve the financial viability of individual housing projects and programs. This funding can also increase each project’s competitiveness for additional state and federal funding sources. Additionally, the Trust works with a variety of government and philanthropy groups to attract more housing funds to the Gateway Cities region. Joining the Trust would support the City to achieve the stated goals and objectives of the 6th Cycle Housing Element and support the region as a whole to bring new dollars to help fund more affordable housing development.

To become a member, the City Council would adopt the attached resolution authorizing the Mayor to execute the Joint Powers Agreement.

BACKGROUND
The Gateway Cities region of Los Angeles County includes 27 cities located along the I710 corridor in eastern Los Angeles County. Early in 2021 the Gateway Cities Council of Governments (GCCOG) obtained State funding from the Southern California Association of Governments (SCAG) to explore the formation of an affordable housing trust within the region.

Since then, GCCOG and their consultant conducted the following activities:
 Interview the GCCOG cities to determine their housing needs and priorities, explain the concept of the Trust, and investigate their interest in being a member.

5. City Council Meeting
February 28, 2023