CC 04-16-2024 Item No. 4 Ratifying Accounts Payable_Written CommunicationsWritten Communications
CC 04-16-2024
Item No. 4
Ratifying Accounts
Payable for March
1,8,15,22 & 29
From:Kitty Moore
To:City Clerk; Pamela Wu; Matt Morley
Subject:Re: Written Communications and Questions Item 4 Meeting 20240416
Date:Monday, April 15, 2024 9:49:46 AM
Attachments:image001.png
(Please use the following email with better formatting of the footnotes)
Dear City Clerk and City Manager,
My questions and written communications for Item 4 are below and attached. I have included City Council Resolution 5939 and the City of
Dublin policy for payments.
With regards to the payment register itself, could someone explain why we appear to be paying for Apple retail store burglary prevention
security? Here is a screenshot of PDF 30-31 of the Agenda Packet:
Cupertino City Council Meeting Questions
April 16, 2024
Item 4 Accounts Payable
The Staff Report for Item 4 states:
“Discussion
Unlike the Monthly Treasurer’s and Treasurer’s Investment Reports requiring regular
reporting within a specific number of days, pursuant to California Government Code
Section 41004 and 53607, the frequency of reporting the City’s Payment Register follows the City Resolution No 5939, where the
report will be “presented to the City Council not less often than once a month for ratification.””
Cupertino City Council Resolution No. 5939[1] has not been updated since 1982 and has some portions which could be addressed and updated.
Knowing how much was paid in payroll monthly is an example of information the public may be interested in, which is not in the payment
register.
California Government Code Section 41004, referenced in the Staff Report 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.”
Questions
1. What is the difference between a disbursement as opposed to a payment?
2. Ca. Gov. Code 32708[2] indicates that budgeted payroll will also be brought to the City Council, however the City Council has not been
given this information in several years, is there a reason for this? Should the Council be provided this information?
3. Resolution 5939 states that “All checks so issued shall be serially numbered and a report thereof as to date, payee, amount and purpose
shall be presented to the City Council not less often than once a month for ratification.” In order to ratify the payments we might need
more information, including payroll costs, it may be that a new resolution could incorporate the City of Dublin[3]’s method to bring the
payments to Council monthly, and rely on the ACFR for ratification. Is the Council really just receiving the payment information, not
ratifying it for correctness?
4. Does the ACFR[4] audit all of the payments in accordance with the requirements of Ca. Gov. Code 32708 (c) regarding payment
ratification and make a statement to that effect, taking care of that duty rather than the City Council?
[1] Cupertino City Council Resolution No. 5939: https://records.cupertino.org/WebLink/DocView.aspx?
id=30301&dbid=0&repo=CityofCupertino&searchid=9662159b-8c99-4be5-8c29-89f759a4661c
[2] https://codes.findlaw.com/ca/government-code/gov-sect-37208/
[3] City of Dublin Ratification of Payments Policy: https://citydocs.dublin.ca.gov/WebLink/PDF10/32d58ef4-7dff-4ccf-843f-391f521ed73c/866376
[4] City of Cupertino ACFR: https://www.cupertino.org/home/showpublisheddocument/33507/638242268831070000
Image removed by sender.
Kitty Moore
Councilmember
City Council
KMoore@cupertino.gov
(408) 777-1389
Image removed by sender.Image removed by sender.Image removed by sender.Image removed by sender.Image removed by sender.Image removed by sender.Image removed by sender.
Cupertino City Council Meeting Questions
April 16, 2024
Item 4 Accounts Payable
The Staff Report for Item 4 states:
“Discussion
Unlike the Monthly Treasurer’s and Treasurer’s Investment Reports requiring regular
reporting within a specific number of days, pursuant to California Government Code
Section 41004 and 53607, the frequency of reporting the City’s Payment Register follows the
City Resolution No 5939, where the report will be “presented to the City Council not less often
than once a month for ratification.””
Cupertino City Council Resolution No. 59391 has not been updated since 1982 and has some
portions which could be addressed and updated. Knowing how much was paid in payroll monthly is
an example of information the public may be interested in, which is not in the payment register.
California Government Code Section 41004, referenced in the Staff Report 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.”
Questions
1. What is the difference between a disbursement as opposed to a payment?
2. Ca. Gov. Code 327082 indicates that budgeted payroll will also be brought to the City
Council, however the City Council has not been given this information in several years, is
there a reason for this? Should the Council be provided this information?
3. Resolution 5939 states that “All checks so issued shall be serially numbered and a report
thereof as to date, payee, amount and purpose shall be presented to the City Council not
less often than once a month for ratification.” In order to ratify the payments we might need
more information, including payroll costs, it may be that a new resolution could incorporate
the City of Dublin3’s method to bring the payments to Council monthly, and rely on the
ACFR for ratification. Is the Council really just receiving the payment information, not
ratifying it for correctness?
4. Does the ACFR4 audit all of the payments in accordance with the requirements of Ca. Gov.
Code 32708 (c) regarding payment ratification and make a statement to that effect, taking
care of that duty rather than the City Council?
1 Cupertino City Council Resolution No. 5939:
https://records.cupertino.org/WebLink/DocView.aspx?id=30301&dbid=0&repo=CityofCupertino&searchid=
9662159b-8c99-4be5-8c29-89f759a4661c
2 https://codes.findlaw.com/ca/government-code/gov-sect-37208/
3 City of Dublin Ratification of Payments Policy: https://citydocs.dublin.ca.gov/WebLink/PDF10/32d58ef4-
7dff-4ccf-843f-391f521ed73c/866376
4 City of Cupertino ACFR:
https://www.cupertino.org/home/showpublisheddocument/33507/638242268831070000
RESOLUTION N0. 5939
i A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AMENDING RESOLUTION N0. 3721 ADOPTING STATEMENTS
OF POLICY RELATING TO CITY TREASURY FUNCTIONS
i
I
WHEREAS, good financial planning requires [he development of sound fiacal
policies and adherence thereto in the successful administration of any program;
and,
WHEREAS, there is now a need for said policies to be brought into con-
formance with more current circumstances:
NOW, THEREFORE, BG IT RESOLVED that the Sta[ements of Policy attached
hereto is hereby adopted by the City Council of the City of Cupertino with
the eame [o remain in effect until modified by City Council action.
PASSED AND ADOPTED at a regular meeting of the City Council of the City
oE Cupertino thia 7th day of September, 1982, by the following vote:
Vote Membera of the City Council
AYES:Johnson, Rogers, Sparks, Plungy
NOES:None
ABSENT: Catto
ABSTAIN: None
I
I APPROVED:
I
i
or, C of Cupert
Temp e
i
ATTEST:
i
i City C erk
Deputy
i
f
CITY OF CllPERTINO
STATEMENTS OF POLICY
TREASURY FUNCTIONS
The development and adoption of these policies is for the express purpose of
setting forth procedural guidelines by which the City of Cupertino treasury
functions are to be administered. It ia the intent of the City Council to pro-
vide suitable administrative flexibility in these matters necessary to efficient
operations while at the same time providing adequate internal auditing controls.
Unleas and until there is delegation of authority to the contrary, in wfiich
case these policies must undergo substantial revision, the City Councll reserves
the right to make appointment of the Treasurer and who shall so aerve at the
pleasure of the Council. It also 1s expressly stated that nothing herein
contained shall preclude the functional assistance and direction of the City
Manager with whom close liaison on all fiscal mattera shall be maintained.
A. Office of Treasurer
The Office of Treasurer shall be filled through appointment by the City
Council. There also shall be appointed a Deputy Treasurer to assure
continuity of work during the absence of the Treasurer but with such
appointment being subject to confirmation by the City Council. Incumbents
of both officea shall serve at the pleasure of the City Council.
The Deputy Treasurer shall be empowered [o act as the Treasurer during
the latter's absence. Jhen the duly appointed Depu[y Treasurer is also
a City employee such action shall be [aken only on specific authorization
of the City Dfanager.
B. Investment oE Funds
The Cuper[ino Municipal Code grants authority to the Treasurer to invest
or reinvest funds of the City to the extent as is permitted by State
statute. Such investments shall be made so as to receive the best return
of intereat income for the City consistent with the maintenance of required
minimum 6alances in the commercial bank account and the availability of
sufficient moneys to meet the cash demands of the City.
The placing of moneys in certificates of time deposits is but one form of
inveatment available to the Treasurer. For moneys so placed the following
provisione ahall apply:
1. Said deposits ahall be placed only with financial institutions
located within the State of California. Firs[ conaideration
will be given to those financial inati[utions located within
the city limite who have indicated a deaire to provida euch
aervice for the City.
2. All depoaita ao made will be on the basis of bids aolicited
or received. All such bida received, whether orally or in
writing, will be recorded for sudit purpoaea; and,
3. Awards of such deposita will be made to those submit[ing
the hi6hest bid in such a manner so as to maintain equity
of balances or as near thereto as is practicable.
A summary of.lnvestment types'and depository balances shall be reported
by the Treasurer to the City Council not less often than once a month.
C. Commercial Sank Account
I[ shall be the prerogutive of the City Council to designate [he banking
institution to serve as the depository for [he City's commerciul bank
account. Such designations shall be made without regard to term but will
be made on the bnsis of type and quality of service available as well as
costs of adminiatration, minimum balances required and such other factors
as the City Council may deem appropriate.
D. Issuance of Checks
The Treasurer shall pay out all moneys owed by [he City on certification of
the Director of Finance that such are due and owing. Such payments may be
made without prior authorization of the City Council under the following
provisions and conditiona:
1. Obligations for which any check is issued shall have been
incurred purauant to the purchasing system as set forth in
the Cupertino Municipal Code; or, as may be authorized by
the City Attorney under condemnation proceedings, in payment
of obligations under contract previously approved by the City
Council, and for zefunds of deposit or similar accounts payable.
2. No check shall be issued unless there is an unencumbered appro-
priation available in the appropriate Activity in the annual
Operating and Gonstruction Budget or where moneys are on deposit
or otherwise available where appropriation accounting is not
standard procedure.
3. All checks so iasued shall be aerially numbered and a report
thereof as to date, payee, amount and purpose shall be presen[ed
to the City Council not leas often than once a month for rati-
fication.
othing herein ahall require the Treasurer to iasue a check ei[her in
contravention [o the foregoing proviaions and conditions or when in his
opinion such would not be in the bes[ interest of the City; provided,
however, that any euch request so re~ected will be presented to the City
Council at ita next subsequent regulnrly scheduled meeting unless the
originator of the request withdrawa it during the interim.
E. Check Signatures
All payment of City moneys ahall be by check as provided by the Cupertino
Municipal Code, Section 2.24.020, except ae followa:
1. A Petty Cash Fund may be eatabliahed to permit cash payments for
incidental items that by their nature make it impractical to isaue
a check. The Treasurer shall eatabliah procedurea for adminis-
ration of the Petty Cash Fund.
2 -
Off' nU~~~
ii ~ 111
L~~ - ~ ~~~
DATE:
TO:
FROM:
SUBJECT
STAFF REPORT
CITY COUNCIL
CITY CLERK
File #300-20
November 15, 2011
Honorable Mayor and City Councilmembers
Joni Pattillo, City Manager ° ~'
Establishment of City Council Policy Related to Approval of City Payments
Prepared by Paul S. Rankin, Administrative Services Director
EXECUTIVE SUMMARY:
The City has a long standing practice of including on each agenda a Staff Report which includes
a listing of payments issued. The listing groups the payments into two categories: 1)Pre-Issued
Payments; and 2) Payments to be audited. In order to efficiently process payments for City
purchases a revised report format is proposed. The City Council will consider a policy which
provides for the payment listing to be presented once per month. The report will include all of
the payments issued in the previous month.
FINANCIAL IMPACT:
There is not a direct financial impact from the adoption of the proposed policy. The change will
result in staff time savings due to a reduction in the number of reports prepared. The time will
be utilized for other finance related activities
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution Establishing the Policy for the
Approval and Ratification of City Payments.
Submitted By Reviewed By
Administrative Services Director Assistant City Manager
DESCRIPTION:
The City of Dublin has presented, as part of the regular bi-monthly agenda, a listing of payments
issued. The City issues an average of approximately 330 accounts payable checks each
month. The reporting has been established on a cycle of regular processing of payments due
twice each month. The administrative procedures provide for the actual release of the
payments by the Friday following the City Council meeting. This schedule allows adequate time
for the City to meet its obligations in Standard City Agreements, which call for payment within 30
days of receipt of the billing.
Page 1 of 2 ITEM NO. 4.3
Current Process Two Categories (Preaudited Pavments &Pavments To Be Issued)
In the current process there are times when a payment must be issued prior to the presentation
of the check listing to the City Council. For example, the City sometimes receives utility bills
without sufficient time to process them and have them presented on a Staff Report listing before
they are due. These payments are budgeted items and would be included as part of the
Preaudited" listing. The same situation occurs if a regular City Council meeting is not
conducted twice during the month.
Proposed Change -Monthly Reporting In Arrears
Staff is proposing to maintain the same processing cycle of issuing payments in bulk twice each
month. However, it is proposed that the listing presented to the City Council will be done on a
monthly basis. Because of the timing of agenda deadlines it is recommended that the listing
occurs on the agenda of the second City Council meeting in each month. For example, if the
change is adopted, a listing of all payments issued in November will be part of the Agenda on
December 20, 2011.
The proposed method continues to provide a high level of disclosure for the business activities
undertaken by the City. Staff surveyed the practices used by other public agencies and they
vary widely. The California Government Code allows cities to follow a very rigorous process of
review and auditing all payments prior to their issuance, or if the agency has an annual audited
comprehensive financial report, the required process is no longer required. With the need to
process payments in a timely manner in order to avoid late fees and other impacts it would be
almost impossible to have all payments reviewed by the City Council prior to their issuance.
The more rigorous process is stated as follows:
California Government Code Section 37202. Except as provided in Section 37208, the
legislative body shall approve or reject demands only after such demands have been
audited in the manner prescribed by ordinance or resolution. Such audited demands may
be submitted separately or a register of audited demands may be submitted to the
legislative body for approval or rejection and shall have attached thereto the affidavit of
the officer submitting the demands certifying as to the accuracy of the demands and the
availability of funds for payment thereof.
The proposed monthly report would exceed the requirements in the California Government
Code. Section 37208(c) of the California Government Code states: "...budgeted payrolls and
demands paid by warrants or checks may be presented to the legislative body for ratification
and approval in the form of an audited comprehensive annual financial report." Therefore, the
City publication of the payment listing will be in addition to this requirement.
Staff has prepared a Resolution (Attachment 1) which documents the method being used to
disclose the payments made by the City.
NOTICING REQUIREMENTS/PUBLIC OUTREACH: None
ATTACHMENTS: 1. Resolution Establishing the Policy for the Approval and Ratification of
City Payments
Page 2 of 2
RESOLUTION NO. xx - 11
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
ESTABLISHING THE POLICY FOR THE APPROVAL
AND RATIFICATION OF CITY PAYMENTS
WHEREAS, the City of Dublin has well established policies and procedures for the
processing and issuance of payments for goods and services procured by the City; and
WHEREAS, the current policies and practices are intended to support financial internal
controls as well as compliance with government laws and regulations; and
WHEREAS, Government Code Section 37202 provides a mechanism by which the
legislative body approves or rejects audited demands before the payments are issued; and
WHEREAS, Government Code 37208(c) provides an alternative mechanism of approval
where the legislative approval and ratification is in the form of an audited comprehensive
annual financial report; and
WHEREAS, the City Council of the City of Dublin reviewed its practices and desires to
clearly establish a policy to ratify payments with the audit and to also allow for supplemental
reporting and disclosure.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby establish the following policy for the approval and ratification of City Payments:
A. The City Manager shall be responsible for the establishment and implementation of
internal controls as deemed necessary to administer payments made with public funds.
B. Payments may be issued for payroll and expenditures incurred by the City provided
that they are budgeted or authorized expenditures.
C. Absent other agreed to terms in writing, the standard City practice shall be to issue
payments due within 30 days of receipt of the invoice and confirmation of the billed amount.
D. A listing of all non-payroll payments issued during a month shall be presented to
the City Council in a public report on a City Council Agenda.
E. The monthly report will occur after the payments are issued and released and will
typically be included as an Agenda Item on the City Council Meeting scheduled for the third
Tuesday of the month.
F. In accordance with California Government Code Section 37208 (c) the statutory
obligation for ratification and approval of payments shall be in the form of an audited
comprehensive financial report.
Attachment 1
PASSED, APPROVED AND ADOPTED this 15t" day of November, 2011, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Attachment 1