CITY COUNCIL STAFF REPORT
Meeting: July 19, 2022
Subject
Consider accepting the Monthly Treasurer's Report Subcommittee's recommendation to include Accounts Payable reports with the monthly Treasurer's Report reviewed by the Audit Committee and accepting staff's recommendation to not include Accounts Receivable reports and checking account statements with the monthly Treasurer's Report Recommended Action
Accept the Monthly Treasurer's Report Subcommittee's recommendation to include Accounts Payable reports with the monthly Treasurer's Report reviewed by the Audit Committee Accept staff's recommendation to not include Accounts Receivable reports and checking account statements with the monthly Treasurer's Report Discussion
Background
Monthly Treasurer's Report
California Government Code Section 41004 states:
Regularly, at least once each month, the city treasurer shall submit to the city clerk a written report and accounting of all receipts, disbursements, and fund balances. The city treasurer shall file a copy with the legislative body.
The City's Municipal Code Section 2.24.030 Monthly Reports states:
The Treasurer shall make monthly reports which conform to the requirements of Government Code Section 41004. Said reports shall be delivered to the City Council, the City Manager and made available for review by such other persons who may so request.
Lastly, the City's Municipal Code Section 2.88.100 Duties-Powers-Responsibilities lists one of the powers and functions of the Audit Committee is "to review the monthly Treasurer's report." On December 13, 2021, the Audit Committee brought State and City code provisions regarding monthly reporting to City staff's attention. The City now submits monthly Treasurer's Reports of receipts, disbursements, and fund balance to the Audit Committee and City Council. As a result, the City is now compliant with State and City code provisions.
Monthly Treasurer's Report Subcommittee
On April 19, 2022, City Council created a subcommittee of the Audit Committee to examine the Monthly Treasurer's Report requirements. The subcommittee comprised Mayor Darcy Paul and Audit Committee Chair and Councilmember Kitty Moore. On May 10, 2022, the subcommittee met with City staff to discuss their recommendations, which included:
Include Accounts Payable reports with the monthly Treasurer's Report Include Accounts Receivable reports with the monthly Treasurer's Report Include account statements with the monthly Treasurer's Report Other recommendations from members of the Audit Committee and City Council included:
Publish the monthly Treasurer's Reports on the City's website Add a link to definitions of funds on the City's website Management Responses
Include Accounts Payable reports with the monthly Treasurer's Report Currently, the City submits weekly Accounts Payable registers to the City Council to ratify the claims and demands described in the registers. The subcommittee recommended that the Audit Committee review the Accounts Payable reports monthly before the reports are submitted to the City Council.
The Audit Committee meets monthly on the fourth Monday of each month. If City Council approves the recommendation, staff will submit the Accounts Payable reports with the monthly Treasurer's Reports for the Audit Committee's review moving forward. After the Accounts Payable reports are reviewed by the Audit Committee, they will be reviewed by City Council. Due to the additional review, City Council's review would move to a later meeting. The following tentative schedule shows when the Audit Committee and City Council would review the Accounts Payable reports, assuming there are no changes to meeting dates:
Tentative Schedule
Accounts Payable for the Month Ending
Date Reviewed by Audit Committee
Date Reviewed by City Council
June 30, 2022
July 25, 2022
August 16, 2022
July 31, 2022
August 22, 2022
September 6, 2022
August 31, 2022
September 26, 2022
October 18, 2022
September 30, 2022
October 24, 2022
November 15, 2022
October 31, 2022
November 28, 2022
December 20, 2022
Include Accounts Receivable reports with the monthly Treasurer's Report Staff does not recommend including Accounts Receivable reports. In researching neighboring jurisdictions, staff found no other agency provides Accounts Receivable reports with their Treasurer's Reports. Lastly, Government Code Section 41004 does not require these reports.
Include account statements with the monthly Treasurer's Report After discussion with the City's bank, staff does not recommend including checking account statements. The City’s bank advised against including the checking account statements because doing so may increase risk to the City and any government agencies, businesses, and residents who engage in financial transactions with the City. The account statements provide additional financial information that may be used to impersonate a company or individual. In researching neighboring jurisdictions, staff found no other agency provides checking account statements with their Treasurer's Reports. Lastly, Government Code Section 41004 does not require these reports.
Investment account statements and reports would continue to be provided with the monthly Treasurer's Investment Reports.
Publish the monthly Treasurer's Reports on the City's website Staff does not recommend publishing the monthly Treasurer's Reports on the City's website. While the staff reports can be posted on the City's website, publishing Accounts Payable reports, Accounts Receivable reports, or checking account statements on the City's website would make it easier for potential cybercriminals to harvest the City's financial data. Publishing the information on the City’s website may increase risk to the City and any government agencies, businesses, and residents who engage in financial transactions with the City.
Add a link to definitions of funds on the City's website Staff is working on adding definitions of funds to the City's website. Currently, descriptions of funds are available in the budget document and Annual Comprehensive Financial Report (ACFR).
Sustainability Impact
No sustainability impact.
Fiscal Impact
No fiscal impact.
_____________________________________
Prepared by: Thomas Leung, Senior Management Analyst
Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Dianne Thompson, Acting City Manager