City of La Verne

Accounting Policies and Procedures Manual

City of La Verne

Accounting Policies and Procedures Manual

Table of Contents

Introduction 1

Organizational Chart 2

Division of Duties 4

Cash Receipts Procedures 8

Cash Disbursements Procedures 10

Reconciliations & General Ledger 11

Treasury & Cash Management 13

Staff/Commission Expense Reimbursement 14

Petty Cash Fund 16

Purchasing 18

Fixed Asset Management 23

Payroll 24

Financial Reporting 25

Identity Theft Prevention 26

Fraud in the Workplace 31

Disposal of Surplus Equipment and Property 36

Computer Access Policy & Access to City’s Computer Resources 38

Selection Procurement of Vehicles & Equipment 43

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Introduction

This manual has been prepared to document the internal accounting procedures for the City of La Verne Finance Department. Its purpose is to ensure that assets are safeguarded, that financial statements are in conformity with generally accepted accounting principles, and that finances are managed with responsible stewardship.

All personnel with a role in the management of La Verne's fiscal operations are expected to uphold the policies in this manual. It is the intention of City of La Verne Finance Department that this accounting manual serve as our commitment to proper, accurate financial management and reporting.

Revised 4/29/2013

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City of La Verne

CITY MANAGER

City Manager/ Administrative

Functions

Information Systems

Personnel/ Risk Manager

Finance

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City of La Verne

City Council

City Manager/ Administrative

Functions

City Clerk

City Attorney

City Engineer

Police

Community Development Department

Community Services

Public Works

Fire

Citizens

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Division of Duties

The following is a list of personnel who have responsibilities within the accounting department:

Finance Officer: 1. Direct and participate in the development and implementation of goals, policies, and priorities relating to financial management, budget, and accounting activities. 2. Respond to requests for information and advise City departments, governmental agencies, and the public of City finance and accounting policies improvement budgets, and budget control activities. 4. Develop and implement financial statement formats in accordance with generally accepted accounting principles and legal requirements. 5. Review and recommend improvements to accounting, budgeting, and reporting procedures, and implement new procedures. 6. Assume duties of a disaster worker in the event of a locally declared emergency. 7. Direct the coordination and preparation of external audit materials and external financial reporting. 8. Administer City business license regulations. 9. Perform prudent cash flow management of City resources and invest available funds in accordance with City Council’s approved investment policy. 10. Reviews all vouchers and invoices for payments which are included on the register of audited demands requiring his or her approval. 11. Reviews and approves all contracts for goods and services that require a City issued purchase order. 12. Reviews and approves adjusting journal entries prepared by the Accounting Manager. 13. Supervise the preparation of special reports and analyses for the City Manager and departments. Accounting Manager: 1. Reviews all vouchers, invoices and checks. 2. Downloads bank statements through online banking web site. 3. With the Finance Officer, and input from the Council Members and Department Heads,

develops the annual budget. 4. Reconciles the statement of credit card service charges and postings to bank account. 5. Prepares all bank accounts to general ledger 6. Reviews and posts the payroll summary for the correct journal entry, cash disbursements,

and reconciles to the payroll. 7. Manages the fixed asset worksheets and general ledger accounts. 8. Posts all receipts and disbursements to the general ledger. 9. Maintains and reconciles the general ledger monthly. 10. Prepares all monthly financial reports, for distribution to Department Heads and Mid-

Managers. 11. Performs moderate to complex tasks in governmental and enterprise accounting and

budgeting, treasury and debt management, statistical and financial analysis, and financial reporting.

12. Prepares financial statements and other supporting documentation in preparation of the annual external audit. 13. Prepares annual fund-level financial statements.

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14. Prepares journal entries and budget transfer entries. 15. Prepares and enters correcting and adjusting journal entries to update the general ledger and other financial reports. 16. Prepares and reviews the operating and capital improvement budgets as part of the preparation of monthly Financial Reports. Accountant/Payroll Specialist: 1. Processes the payroll, including payroll tax returns. 2. Reconcile Cash Receipts of bank account. 3. A payroll clerk records payroll, tax information, settles deductions and insurance policy costs. 4. Payroll clerk duties may include keeping documentation of retirement payments, non- taxable earnings, maternity, vacation and sick leave. 5. Prepares and files various bi-weekly, monthly, quarterly, and annual reports. 6. Performs reconciliation of various accounting and banking activity. 7. Verifies salary claims, computes and proves payroll deductions, prepares the City payroll, and maintains department payroll records. 8. Audits insurance billings, balance and prepare payments to insurance companies. 9. Prepares personnel projection report for preparation of City budget. Account Clerk III: 1. Responsible for the preparation and processing of accounts payable. 2. Reviews payment requests from departments for compliance with City internal control

policies. 3. Reviews invoices to determine appropriate coding and procedures. 4. Receives copies of purchase orders and vendor invoices to verify description, quantity, price,

extension, discounts, freight and taxes. 5. Enters accounts payable invoices and claim forms and verify input against the source

documents. 6. Uses computer applications, including electronic spreadsheets and word processing

software, prepares reports, memos, and supporting documentation; prepares financial and statistical statements and reports.

7. Works closely with vendors, payers, City staff, and other agencies. Answers inquiries related to department records; works with the vendors in receiving complaints and attempting to resolve them; explains rules, policies, and procedures; explains the proper use and completion of forms and documents.

8. Prepares vendor checks for mailing. 9. Maintains accurate paper and electronic documentation, including files. 10. May be assigned as the principal assistant to the department payroll clerk in the keeping of

personal and time records and preparation of payroll. Account Clerk II: 1. Performs a variety of routine to complex administrative and technical account support duties related to accounts receivable, utility billing, business licensing, and/or department – specific

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technical account duties, including posting, balancing, adjusting, and maintaining manual and computerized account and financial records according to established policies and procedures. 2. Calculates necessary fees; accepts and processes payments at the front counter and by mail; makes changes as necessary and maintains cash drawer as appropriate; balances payments and posts transactions in the accounting system daily. 3. Manage petty cash fund. 4. Prepare final notices for mailing to delinquent utility customers; maintain collection records and submit files to the collection agency. 5. Maintains a variety of ledgers, registers, and journals according to established account

policies and procedures; reconciles transactions and data as directed; records changes and resolves differences; maintains the accuracy of accounting and financial records.

6. Maintains business license database; researches new businesses and notifies them of licensing requirements; mails application materials; processes closing accounts; reviews and reconciles payment ledger against database of notices. 7. Performs general office support duties such as opening and routing mail and deliveries;

preparing correspondence; filing and record keeping; duplicating and distributing various written materials; and ordering and keeping inventory of office supplies.

8. Oversee and participate in performing data entry; post receipts and other information to various city accounts and funds.

9. Perform a full range of customer service duties related to area of assignment; respond to public inquiries in a courteous manner; provide information to the public and City staff requiring the use of judgment and the interpretation of policies, rules, and procedures; resolve complaints in an efficient and timely manner.

10. May be assigned to Accounts Payables department. Account Clerk I: 1. Receive, open,/process, sort in-coming mail and distribute to the appropriate person 2. Perform a full range of customer service duties related to area of assignment; respond to public inquiries in a courteous manner; provide information to the public and City staff requiring the use of judgment and the interpretation of policies, rules, and procedures; resolve complaints in an efficient and timely manner. 3. Perform a variety of general office support functions including typing, record keeping, filing, proofreading, and forms and report generation. 4. Assist in department operations evaluations and make recommendations on improved office procedures. 5. Processes the City’s financial transactions in a timely manner in compliance with laws, regulations, and City policy, working closely with staff in all City departments and outside City contacts. 6. Count the Cashier cash drawer each evening; reconcile daily cash totals, generate reports, and prepare the deposit. 7. Compile, ascertain, and report Utility User Tax exemption and information to appropriate agencies and keep a record. 8. Ensure that all monies from the Cashier area are locked in the vault each night. 9. Act as a receptionist; receive, screen, and direct calls; provide information related to area of assignment as necessary. 10. Research accounts as needed, and perform related duties as required.

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All Department Heads: 1. Develops first draft of department budgets and works with the Finance Officer and City

Manager to finalize. 2. Accountability to approved departmental budgets in purchasing decisions and in preparing

check request vouchers with the proper account code.

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Cash Receipts Procedures

The Account Clerk I receives all incoming mail. All checks received should be recorded on a cash receipts receipt which states the department to which the income is attributed, and stamped for deposit only. A copy of the validated cash receipt will be given to the department that the income is credited to as well as keeping a copy in the Finance Department on a daily basis.

The deposit is prepared by the Account Clerk each day. On days when there is a “due date” for utility payments the day shall close no earlier than 5 p.m., all other days the close-out may begin after 2 p.m. A deposit not taken to the bank should be locked in the Finance Department safe. The deposit should be taken to the bank by the Finance Officer each day. The deposit for Thursday shall be locked in the safe and taken to the bank on the next work day.

Funds Received by Wire Transfer:

The Accounting Manager will access the online banking information daily.

Where appropriate – wire payments received will be forwarded to the Cashier who processes a receipt and enters the information into the cash receipts system.

Next, the Accounting Manager will monitor the transfer of funds and maintain the appropriate records of this transaction.

Funds received from Credit Card Charges:

Funds received form credit cards shall be posted to the appropriate account with the daily deposit. The credit cards are reconciled once a month to verify that the correct amounts were applied.

Deposit preparation procedures Supplies needed: Endorsement stamp & Deposit ticket (department specific - bank supplied)

Deposit bag(s) (bank supplied) Guidelines Checks and cash can be deposited using the same deposit ticket. Check deposit

• Endorse all checks on back of check, in the designated area. • If there are more than seventeen checks in the deposit, prepare an excel spreadsheet

listing of the check amount. • Photo copy or print an additional excel spreadsheet and add to the daily reports. • Write the total of all checks at the bottom of the individual listing column and also in the

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“Total Deposit” area of deposit ticket. • Prepare a bundle of checks and place corresponding deposit ticket on top of bundle and

secure with rubber band. Cash deposit

• Separate cash and coins into denomination stacks. Total the cash, beginning with the largest denomination.

• Write the total of the currency in the currency section of the “deposit ticket” portion of the deposit ticket.

• Total all coins and write the total in the coin section of the “deposit ticket” portion of the deposit slip.

• Add currency and coin amounts and write total at the bottom of the individual listing column and also in the “Total Deposit” area of deposit ticket.

• Bundle the currency and place corresponding deposit slip on top of bundle and secure with rubber band or paper clip.

Place currency, coins, checks and the deposit ticket in the deposit bag.

• Deliver deposit along with reports and Daily Cash Balance Sheet to the Finance Officer by 10:00 a.m.

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Cash Disbursements Procedures

1. Incoming invoices will be logged in by the Account Clerk and delivered to the responsible staff person for his/her approval and to prepare a check request voucher prior to disbursement dates.

2. The staff person responsible for ordering the product or service will check the validity of the invoice against proposals/bids, etc. and work accomplished/delivered and prepare a check request voucher prior to disbursement dates.

3. A check request voucher should then be completed by the department purchasing person who attaches the original vendor invoice, purchase order, and/or any other supporting documentation. The voucher should include the account codes to which the expense will be applied.

4. After inputting all the check requests, the Account Clerk III will prepare a master list of all checks to be paid.

5. Once the final check register has been processed it will be submitted to the Finance Officer. The remittance advice will be attached to the invoices and other supporting documentation as part of the review package.

6. All checks will be mailed as soon as this process is completed.

7. Supporting documentation should be filed by the Account Clerk III in appropriate vendor files.

8. The Account Clerk III will utilize the paid invoice files to respond to any discrepancies which arise with vendors or other payees.

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Reconciliations & General Ledger

Bank Reconciliations:

1. Bank statements are to be downloaded via the online banking system by the Accounting Manager. The Accounting Manager should review the contents for inconsistent check numbers, signatures, cash balances and payees and endorsements at a minimum. After this cursory review is conducted, the Accounting Manager should initial and date the bottom, right hand corner of the first page of each bank statement reviewed. At the earliest opportunity, the Accounting Manager should reconcile each account to the City’s general ledger.

2. When reconciling the bank accounts, the following items should be included in the procedures:

a. A comparison of dates and amounts of daily deposits as shown on the bank statements with the cash receipts journal.

b. A comparison of inter-organization bank transfers to be certain that both sides of the transactions have been recorded on the books.

c. A comparison of wire transfers dates received with dates sent. d. A comparison of canceled checks with the disbursement journal as to check number,

payee and amount. e. An accounting for the sequence of checks both from month to month and within a

month. f. An examination of canceled checks for authorized signatures, irregular endorsements,

and alterations. g. Investigate and write off checks which have been outstanding for more than six

months. 3. Completed bank reconciliations should be reviewed by the Finance Officer and initialed and

dated by the reviewer.

4. The Accounting Manager upon receipt of the Finance Officer reveiwed bank reconciliations prepares any general ledger adjustments.

Review of Other General Ledger Accounts:

1. Each month the Accounting Manager and Finance Officer should review each fund’s ending balance shown on balance sheet such as the cash accounts, accounts receivable, accounts payable and deferred revenue.

2. Assets - These accounts will include cash, petty cash, prepaids, property, equipment and fixtures.

a. Cash - The balance in pooled cash Fund 800 should agree with the balances shown on the bank reconciliations for each month.

b. Petty Cash - The balance in this account should always equal the maximum amount of all petty cash funds.

c. Property, Equipment & Fixtures - The amounts in this account should equal the totals

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generated from the audited depreciation schedules. When additional purchases are made during the year, the balances in the accounts will be updated at fiscal year end.

3. Liabilities - These accounts are described as accounts payable, payroll tax liabilities, loans payable, and amounts due to others.

a. Accounts Payable - The balance in this account should equal amounts owed to vendors at the end of the accounting period.

b. Payroll Tax Liabilities - The amounts in these accounts should equal amounts withheld from employee paychecks as well as the employers portion of the expense for the period, that has not been remitted to the government authorities.

c. Due to Others - If there are any amounts owed to others at the end of the period they should be recorded and the correct balance maintained in the general ledger accounts.

4. Income/Expenses - These accounts are described as income from all City sources and expense line items such as salaries, benefits, consulting fees, and other operating expenditures.

a. Income - The amounts credited to the various revenue accounts should be reviewed and any discrepancies should be brought to the attention of either the Finance Officer or the Accounting Manager.

b. Expenditure Accounts - The balances in the Expenditure accounts should be reviewed and any discrepancies should be brought to the attention of either the Finance Officer or the Accounting Manager.

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Treasury and Cash Management

Treasury & Cash Management Goals and Investment Objectives: The City’s cash management system is designed to monitor and forecast cash flows so as to enable the City to invest funds to the fullest extent possible. The City attempts to obtain a market rate of return on funds as long as investments meet the criteria for safety and liquidity as contained in the current City Council approved Investment Policy (Resolution No. 06-04). The cash management system of the City is designed to - a) Safeguard and protect the principal of the funds b) Ensure that the City has adequate cash to pay for budgeted expenditures and other operating costs c) Achieve a return on the funds invested d) Comply with applicable laws governing investment of governmental funds Reporting: Each business day the Accounting Manager will access the City’s checking account information through on-line services and provide the Finance Officer with summary or detail transaction reports. The Finance Officer will evaluate the cash balances and determine whether monies on hand are adequate; available for investment; or that funds need to be drawn down from liquid funds on deposit with L.A.I.F (Local Agency Investment Fund). Generally on a monthly basis, the Finance Officer will provide the City Treasurer with investment information in order to update and prepare the Monthly Treasurer’s Report. The Monthly Report will be submitted to the City Council for review and approval. It will contain information that lists all investments owned; current market values of the investment portfolio; purchase and maturity dates; interest rates and other appropriate investment information.

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Staff/Commission Expense Reimbursement (administrative regulation)

Number: 201 Issued: 5-1-89

Effective Date: 10-1-98 Revised: 2-2-06

Subject: STAFF/COMMISSION EXPENSE REIMBURSEMNT

I. PURPOSE: To establish guidelines for reimbursing City employees and commission members for travel, meetings and conference expenses incurred while on official business for the City of La Verne.

II. GENERAL POLICY: Any commissioner or employee who is required to travel in the performance of duty, to attend authorized meetings or conferences which are of benefit to the City, or to incur costs on behalf of guests of the City shall be reimbursed for expenses incurred for transportation, lodging, meals, and incidental expenses up to the limits set forth in this policy document. It shall generally be the employee’s responsibility to travel so that the least amount of time is spent away from the job site. All allowances are subject to budgetary limitations, the provision of receipts for expenses, and department head approval.

III. PROVISIONS:

a. SEMINAR/CONFERENCE REGISTRATION AND AIR TRANSPORTATION: Registration and air fare for professional development seminars, workshops and conferences will be paid in full by the City within budgetary limitations and upon approval of the department head.

b. PER DIEM REIMBURSEMENT: Employees and Commissioners who attend an out-of-town seminar, conference or workshop shall be entitled to expense reimbursement up to a per diem limit of $100. This limit of $100 per day shell constitute the maximum reimbursement they will be paid by the City to cover costs associated with transportation (other than air fare), lodging, meals and miscellaneous expenses. Any expenses beyond the per diem limit will be the financial responsibility of the individual employee. Any reimbursements which exceed the $100 per diem or include transportation out of state must be approved by the City Manager.

c. APPROVALS:

i. Budget Approval: Conference attendance of staff and commission members must be budgeted in advance.

ii. Advance Payment of Expenses: Whenever possible, payment for airline tickets, conference registrations, and hotel deposits shall be made beforehand, This minimizes the need for cash advances and reduces the likelihood of duplicate payments.

iii. Cash Advances:

1. Cash advances are generally discouraged, as conference expenses should be paid in advance to the extent possible.

2. Any commissioner or employee who attends an authorized conference on behalf of the City may obtain a cash advance upon authorization of the City Manager or Finance Officer. The request should be submitted to Finance by Wednesday so that a check can be issued by the following

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Tuesday. Advances for single meetings may be obtained through petty cash procedures.

3. Advances shall be accounted for promptly by submitting the statement of meeting and travel expenses. If a commissioner or employee fails to account for an advance within 30 days following receipt of such advance, it may be deducted from the next reimbursement request.

iv. Reimbursement: Claims for reimbursement of expenses shall be submitted within 30 days to the Finance Division on the attached City approved form completed in detail and signed as required.

v. P.O.S.T. Training: P.O.S.T. reimbursable training programs will be subject to per diem rates in accordance with State approved formulas. The per diem rate includes the cost of lodging, meals and transportation. An itemized accounting with receipts is not necessary provided that the individual attends the entire program for which an advance has been received.

vi. Vacation Cash-Out: Employees authorized by their respective department head and the City Manager to attend an out-of-town seminar, conference or workshop may be permitted to “cash-out” up to one week of accumulated vacation hours in conjunction with the seminar, conference or workshop. To be eligible to cash-out accumulated vacation, an employee must retain a minimum vacation accrual balance of three (3) weeks after the cash-out. Said vacation cash-out shall be processed a minimum of two (2) weeks prior to the scheduled out-of-town seminar, conference or workshop.

Administrative Regulation No. 201, Staff/Commissioner Travel Expense Reimbursement 2/2/2006

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Petty Cash Fund (administrative regulation)

Number: 203 Issued: 5-1-89

Effective Date: 10-1-88 Revised: 8-1-00

Subject: PETTY CASH FUND

I. PURPOSE: To establish a policy for the request, approval, and use of petty cash funds.

II. GENERAL POLICY: Two separate petty cash funds exist to provide reimbursements to employees who incur expenses while on City business or when purchasing minor items for the City. These funds have been established at various City facilities and shall be utilized by the department and divisions located at these facilities.

III. PROVISIONS:

a. EXISTING FUNDS: The following table presents the established funds, the authorized amounts, reimbursement limits, and assigned custodians. Authorized Reimbursement Assigned

b. Location Amount Limit Custodian

City Hall $1,000 $50 Finance Division Cashier Police Dept $500 $50 Police Chief’s Secretary

c. CASH LIMIT: Employees may request reimbursement for expenses incurred or to purchase minor items for the City up to the established reimbursement limit. Any amount in excess of these limits must be approved by the Finance Officer.

d. PETTY CASH REIMBURSEMENT:

i. Requests for reimbursement of petty cash expenditures shall be submitted on an approved petty cash voucher (Attachment A). All vouchers shall be approved by the department or division head, and invoices, receipts, or appropriate supporting documentation must be attached.

ii. Approved petty cash vouchers with supporting receipts shall be submitted to the fund custodian who shall disperse the reimbursement accordingly. The party receiving the funds shall sign the voucher in the space provided as evidence of the reimbursement. The custodian shall initial the voucher as further evidence that the monies were properly dispersed.

e. REPLENISHMENT OF PETTY CASH FUND: When the petty cash fund is depleted or completely expended, a demand with substantiating petty cash vouchers and receipts shall be submitted to the Finance Division for replenishment. A check shall be issued to the custodian who shall then endorse the check and place the proceeds in the fund. As a reminder, the total petty cash on hand plus the amount of signed receipts or petty cash vouchers at any one time must equal the total amount of petty cash authorized.

f. SECURITY: Petty cash funds represent City assets in the form of currency and coin.

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To guard against the misappropriation of such funds, strict security shall be enforced. All petty cash funds shall be maintained under lock with access limited to the fund custodian and/or specified designee. It is the custodian’s and department head’s responsibility to ensure that appropriate security measures are enforced.

Administrative Regulation No. 203, Petty Cash Fund 8/1/2000

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Purchasing (administrative regulation)

Number: 204 Issued: 5-1-98

Effective Date: 5-1-98 Revised: 10-1-07

Subject: PURCHASING

I. PURPOSE: To establish guidelines for purchasing which financially obligates the City of La Verne.

II. GENERAL POLICY: The City utilizes a decentralized purchasing system. Any official or employee who is required to purchase materials, supplies or services on behalf of the City for their department shall use purchasing practices set forth in this document. It is the responsibility of each department to solicit selected vendors in order to purchase or contract for services, supplies, and materials in an economic and prudent manner. The City desires to procure the best quality in services, supplies, and equipment at the least expense; and expects each department to supervise the inspection of all purchases to ensure conformance with specifications. All purchases are subject to budgetary limitations and department head approval. Departments are strongly encouraged to use local vendors whenever economically feasible.

III. PROVISIONS:

a. GENERAL: All purchases or transactions which financially obligate the City should be preceded by the issuance of a purchase order (P.O.). No P.O. is required when there is an executed contract or blanket P.O. in effect between the City and the vendor; the transaction with the vendor is for purchase(s) under $5,000; or is exempt in accordance with those provisions in Section IV.

b. PURCHASE ORDERS:

Definition – The purchase order provides a means of encumbering funds which reserves a portion of an appropriation until actual payment is made. Under the purchase order system, it is assumed that there will be a time lag between the time the order is placed and the time of delivery. In order to ensure that all terms and conditions of the purchase order are met by the vendor, payment is not made by the City until the services and supplies have been received as ordered and an invoice is received from the vendor. All purchase orders must be approved and signed by the department head or designee and properly recorded by the Finance Division before the purchase is made. All capital outlay purchases over $10,000 which are charged to operational budgets must also be approved and signed by the City Manager or designee.

The Finance Division shall distribute numerically sequenced batches of purchase orders to departments and shall maintain a control log of all purchase orders issued, voided, and unused. Periodically, the departments shall be required to account for any gaps in the control number sequences. A purchase order shall specify date, the vendor name and address, the purchase price including freight and all applicable taxes along with the appropriate account coding on copy #2 (yellow). In the event the purchase price cannot be precisely stated, it shall be stated as an

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estimate and so noted. All purchase orders will be valid at face value plus 15%. Any actual purchase price over the P.O. amount plus 15% must have a claim form for the difference.

Confirming Purchase Order – If an emergency arises and it is impossible to obtain a P.O. prior to making the purchase or placing an order, a confirming P.O. should be completed as soon as possible. The P.O. will include all information as above and the word “CONFIRMING” should be typed in the Date Required are. All confirming purchase orders over $10,000 must be signed by the City Manager or his designee.

Payment – After a purchase order is filled out, it must be sent to the Finance Division. After the Finance Division has approved and recorded the purchase order, the signed copies will be returned to the appropriate department. A purchase order has four copies. Copy #1 (white) is to be sent to the vendor by the department requesting services or supplies, Copy #2 (yellow) remains in the Finance Division and Copy #3 (pink) remains in the department until the goods are received. Once received, Copy #3 is signed off by the appropriate person and forwarded to Finance with the invoice, Copy #4 (goldenrod) is to remain in the department’s files for their future reference.

c. BLANKET PURCHASE ORDERS: Each department shall receive a list of blanket purchase orders authorized and issued for the fiscal year. When it is anticipated that several deliveries or purchases will be made from the same vendor during a fiscal year, the Finance Officer may issue a blanket purchase order that is valid only for the existing fiscal year. Blanket purchase orders shall be reviewed annually and if the requirement continues, they will be renewed. Bills may be coded and signed directly on invoices and submitted to Finance for payment. If a purchase is over the blanket limit, a claim form should be issued for the entire invoice amount.

d. CLAIM FORMS: Claim forms or other similar representations will be accepted for purchases not requiring a P.O. The documents must have the appropriate bill included and signed by the department head or designee. It must include vendor name, address, description and proper account codes on the form.

e. CONTRACTS: Executed contracts on file in City Clerk’s Office can be coded and signed directly on the invoice by department head. Turn invoice into Finance Division for processing. Formal contracts, public works projects as defined in Public Contract Code Section 22002, or bids for amounts set forth in 22032(c) of the Public Contract Code must be approved by City Council. Change orders exceeding 10% of the original award on formal bids and public projects must also be approved by City Council. A purchase order will be issued for internal purposes only. Informal bids, public projects and change orders on such informal contracts up to the limits set forth in Section 22032 (b) of the Public Contract Code do require City Manager or designee approval.

f. PUBLIC PROJECTS: When expenditures required for a public project exceed the limits established in Section 22032(c) of the Public Contract Code, the project shall be contracted for and let to the lowest responsible bidder after notification in accordance with the Public Contract Code Sections 20160 et al. The City Council, in awarding public project contracts, shall adhere to all provisions of the State

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Labor Code pertaining to public projects. When expenditures required for a public project are less than the limits established in Section 22032(c) of the Public Contract Code, the project shall be contracted out in the manner as specified in the City’s Municipal Code Chapter 13.40 – Informal Public Construction Bidding.

g. BID PROCESS: Unless previously approved by City Council, any purchases of materials or supplies in excess of $15,000 shall be made only after competitive quotes or proposals have been received and documented by the department from at least three (3) vendors. Such documentation should be maintained by the department for 12 months from the date of purchase. Certain Federal or State grants may require additional purchasing procedures. Departments are responsible to perform and maintain necessary documentation as required.

h. PAYMENT: All requests for payment are paid by Finance within 30 days. Special requests for payment must be received in Finance by noon on Wednesday for payment the following Tuesday.

IV. EXEMPTIONS: The City has a number of cooperative purchasing arrangements with various governmental agencies as well as needing services from vendors, which are not routinely available in competitive markets. Accordingly, certain forms of procurement and/or vendors will be exempt from provisions contained in Section III above and are listed below:

• Purchases through federal, state, county or other governmental cooperative contracts.

• Billings from the utility companies (i.e. electric, gas, water, telephone, communication, etc.)

• Billings from government agencies (i.e. post office, county and city fees and charges, school districts, etc.)

• Other specific vendors as approved by the City Manager and Finance Officer whose listing is maintained on file in the Finance Division.

• Annual service contracts as may be approved by the City Council.

• Emergency projects as provided for in Public Contract Code Sections 22035 and 22050.

• Professional services (i.e. legal, engineering, financial, and other consultants).

• Certain vendors approved by the City Manager and Department Heads that are determined to be a sole source provider of products or services.

Administrative Regulation No. 204, Purchasing.10/1/2007

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Credit Card Purchases:

The City issues credit cards to select individual officeholders. City officeholders may use these credit cards for such purposes as airline tickets and hotel reservations by following the same procedures for cash advances. Receipts documenting expenses incurred on City credit cards and compliance with this policy must be submitted within five (5) business days of return. Maximum charge per transaction is $1000.00. City credit cards may not be used for personal expenses, even if the official subsequently reimburses the City.

Authorized uses of the credit card include:

a. Airline or rail tickets (at coach class or lower rates) for properly authorized business trips.

b. Lodging and meal charges that do not exceed the authorized reimbursement rate for persons traveling on official City of La Verne business

c. Car rental charges (for mid-size or smaller vehicles) for properly authorized business trips

d. Properly authorized expenditures for which a credit card is the only allowed method of payment (such as monthly internet access)

3. Receipts should be compiled and submitted with an expense report on a weekly basis.

4. Unauthorized use of the credit card includes:

a. Personal or non-business expenditures of any kind.

b. Expenditures which have not been properly authorized.

c. Meals, entertainment, gifts or other expenditures which are prohibited by:

1. City of La Verne budget and/or policies

2. Federal, state, or local laws or regulations

3. Grant conditions or policies of the entities from which City of La Verne receives funds.

Proper Documentation for all Purchases, including City of La Verne Credit Card Purchases:

Every instance of credit card or other purchase use must be documented with travel authorizations, receipts, individuals paid for, nature of business, etc. before the expense will be considered authorized and will be approved for reimbursement. See details below.

A. Lodging - Provide an itemized receipt from the hotel detailing every charge and the name of the person(s) for whom lodging was provided.

B. Meals/Entertainment - Provide a receipt showing separately the cost for food/beverage and gratuities, and including the names of every person for whom food or beverage was provided and the specific business purpose which was furthered by the expenditure. For example, A luncheon Meeting with Nancy Neville, president of the Des Moines Economic Development Corporation, and Reginald Burke, executive director of the California Housing Partnership, to finalize the speakers and program for the January 10-12, 2011 HTE annual conference in Las Vegas, Nevada.

C. Other Expenditures - A receipt from the vendor detailing every individual good or service

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purchased (including class of service for commercial transportation) accompanied by an explanation of the specific business purpose which was furthered by each expenditure. For example, A round trip coach flight Los Angeles to Las Vegas for Conference Director Susie Reed to review hotel proposals and facilities for the 2011 HTE annual conference.@

The Fiscal Manager will double-check all reimbursement requests against receipts provided and run a calculator tape which will be attached to the reimbursement form.

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Fixed Asset Management

1. A permanent property log or database is to be maintained by the Accounting Manager for all fixed assets purchased by City of La Verne.

2. The log should contain the following information:

a. date of purchase

b. description of item purchased

c. received by donation or purchased

d. cost or fair market value on the date receipt

e. donor or funding source, if applicable

f. funding source restrictions on use or disposition

g. identification/serial number (if appropriate)

h. depreciation period

i. vendor name and address

j. inventory tag number (all fixed assets should be tagged with a unique identifying number)

3. At least bi-annually, a physical inspection and inventory should be taken on half of the fixed assets and reconciled to the general ledger balances. Adjustments for dispositions should be made.

4. The Accounting Manager should be informed, in writing, via an interoffice memorandum of any material changes in the status of property and equipment. This should include changes in location, sale of, scrapping of and/or obsolescence of items and any purchase or sale of real estate.

5. All capital items which have a cost greater than $5000.00 will be capitalized and depreciated.

6. Certain capital items below the value of the $5000.00 may be maintained for control purposes on the fixed asset system.

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Payroll

Personnel:

1. The Personnel Officer is charged with the responsibility of maintaining personnel files on staff person(s).

2. Each personnel file should contain the following information, at a minimum.

a. Employment application or resume

b. A record of background investigation

c. date of employment

d. position, pay rates and changes therein

e. authorization of payroll deductions

f. earnings records for non-active employees

g. W-4 Form, withholding authorization

h. I-9 Immigration Form

I. termination data, when applicable

3. All personnel records are to be kept locked in a locking file cabinet in the City Managers office. Access to these files other than by the City Manager, Personnel Officer , Authorized Person or the auditor should be requested in writing to the City Manager.

Timekeeping:

1. All employees will be issued a time sheet on a bi-weekly basis.

2. Adequate information will be contained on the time sheet to support hours worked, overtime, leave time, and other applicable pay codes.

3. Completed time sheets will reflect employee signature and proper approval by appropriate supervisors.

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Financial Reporting

Monthly Reports:

The Accounting Manager should prepare a set of monthly financial reports for distribution to the City Manager, Department Heads and designated staff. The reports should include: revenue and expenditures by fund for each department (operating, capital); budget-to-actual information will be included as well.

The monthly statements should be reviewed by each department and possible adjustments submitted to the Accounting Manager for the adjusting journal entries in the following month.

Year-End Report/Audit:

At fiscal year-end, a preliminary year end financial report should be prepared summarizing the total revenue and expenditure activity for the year. A trial balance by fund should be prepared as of June 30 and should be attached to the revenue and expenditure report.

An independent auditor will conduct a review of year end reports in accordance with governmental accounting and auditing standards. The audit (CAFR) will generally be available by December 31st.

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Identity Theft Prevention Program (administrative regulation)

NUMBER: 414 ISSUED: 1-12-09 EFFECTIVE DATE: 1-12-09 SUBJECT: IDENTITY THEFT PREVENTION PROGRAM I. PURPOSE: The purpose of the program is to establish an Identity Theft Prevention Program designed to detect, prevent and mitigate identity theft in connection with the opening of a covered account and to provide for continued administration of the Program in compliance with Part 681 of Title 16 of the Code of Federal Regulations implementing Sections 114 and 315 of the Fair and Accurate Credit Transactions Act (FACTA) of 2003. II. DEFINITIONS: Covered Account means:

A. An account that a creditor offers or maintains, primarily for personal, family, or household purposes that involves or is designed to permit multiple payments or transactions. Covered accounts include utility accounts; and

B. Any other account that the creditor offers or maintains for which there is a reasonably

foreseeable risk to customers or to the safety and soundness of the creditor from identity theft, including financial, operational, compliance, reputation or litigation risks.

Credit means the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefore. Creditor means any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit. Identifying information is any name or number that may be used, along or in conjunction with any other information, to identify a specific person, including: name, address, telephone number, Social Security number, date of birth, government issued driver’s license or identification number, alien registration number, government passport number, employer or taxpayer identification number, unique electronic identification number, computer’s Internet Protocol (IP) address, or routing code. Identity theft means fraud committed or attempted using the identifying information of another person without authority. Red flag means a pattern, practice or specific activity that indicates the possible existence of identity theft. III. THE PROGRAM: City of La Verne establishes an Identity Theft Prevention Program to

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detect, prevent, and mitigate identity theft. The Program shall include reasonable policies and procedures to:

A. Identify relevant red flags for covered accounts it offers or maintains and incorporate those red flags into the program.

B. Detect red flags that have been incorporated into the Program. C. Respond appropriately to any red flags that are detected to prevent and mitigate identity

theft; and D. Ensure the Program is updated periodically to reflect changes in risks to customers and

to the safety and soundness of the creditor from identity theft. The program shall, as appropriate, incorporate existing policies and procedures that control reasonably foreseeable risks. IV. IDENTIFICATION OF RELEVANT RED FLAGS: In order to identify relevant Red Flags, the locality considers the types of accounts that it offers and maintains, the methods it provides to open its accounts, the methods it provides to access its accounts and its previous experience with Identify Theft. The locality identifies the following red flags, in each of the listed categories:

Notifications and Warnings from Credit Reporting Agencies Report of fraud accompanying a credit report; Notice or report from a credit agency of a credit freeze on a customer or applicant Notice or report from a credit agency of an active duty alert for an applicant; and Indication from a credit report of activity that is inconsistent with a customer’s usual

pattern or activity.

Suspicious Documents Identification document or card that appears to be forged, altered, or inauthentic; Identification document or card on which a person’s photograph or physical

description is not consistent with the person presenting the document; Other document with information that is not consistent with existing customer

information (such as if a person’s signature on a check appears forged); and Application for service that appears to have been altered or forged.

Suspicious Personal Identifying Information Identifying information presented that is inconsistent with other information the

customer provides (example: inconsistent birth dates); Identifying information presented that is inconsistent with other sources of

information (for instance, an address not matching an address on the credit report);

Identifying information presented that is the same as information shown on other applications that were found to be fraudulent;

Identifying information presented that is consistent with fraudulent activity (such as an invalid phone number or fictitious billing address);

Social Security number presented that is the same as one give by another customer; An address or phone number presented that is the same as that of another person;

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A person fails to provide complete personal identifying information on an application when reminded to do so (however, by law social securing numbers must not be required); and

A person’s identifying information is not consistent with the information that is on file for the customer.

Suspicious Account Activity or Unusual Use of Account Change of address for an account followed by a request to change the account

holder’s name; Payments stop on an otherwise consistently up-to-date account; Account used in a way that is not consistent with prior use (example: very high

activity); Mail sent to the account holder is repeatedly returned as undeliverable; Notice to the locality that a customer is not receiving mail sent by the locality; Notice to the locality that an account has unauthorized activity; Breach in the locality’s computer system security; or Unauthorized access to or use of customer account information.

Alerts from Others Notice to the locality from a customer, identity theft victim, law enforcement or other

person that it has opened or is maintaining a fraudulent account for a person engaged in Identity Theft.

V. DETECTION OF RED FLAGS:

A. New Accounts. In order to detect any of the Red Flags identified above associated with the opening of a new account, the City’s personnel will take the following steps to obtain and verify the identity of the person opening the account:

• Require certain identifying information such as name, date of birth, residential or business address, principal place of business for an entity, driver’s license or other identification;

• Verify the customer’s identity (for instance, review a driver’s license or other identification card);

• Review documentation showing the existence of a business entity; and • Independently contact the customer.

B. Existing Accounts. In order to detect any of the Red Flags identified above for an existing account, the City’s personnel will take the following steps to monitor transactions with an account.

• Verify the identification of customers if they request information, whether in person, via telephone, via facsimile, or via e-mail;

• Verify the validity of requests to change billing addresses; and • Verify changes in banking information given for billing and payment purposes.

VI. RESPONSE TO SUSPECTED IDENTITY THEFT. In the event, the City’s personnel detect any identified Red Flags, such personnel shall take one or more of the following steps, depending on the degree of risk posed by the Red Flag:

• Continue to monitor an account for evidence of identity theft; • Contact the customer; • Change any passwords or other security devices that permit access to accounts;

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• Not open a new account; • Close an existing account; • Reopen an account with a new number; • Notify the Program Administrator for determination of the appropriate Step(s) to take; • Notify law enforcement; or • Determine that no response is warranted under the particular circumstances.

In order to further prevent the likelihood of identity theft occurring with respect to utility accounts, the City will take the following steps with respect to its internal operating procedures to protect customer identifying information:

• When “Epay” service becomes available, ensure that its website is secure or provide clear notice that the website is not secure;

• Ensure complete and secure destruction of paper documents and computer files containing customer information;

• Ensure that the office computers are password protected and that computer screens lock after a set period of time;

• Cashier shall keep secure papers containing customer information; • Ensure computer virus protection is up to date; and • Require and keep only the kinds of customer information that are necessary for utility

purposes; • Only authorized personnel may access sensitive information such as a Social Security

number or driver’s license on computer records. VII. UPDATING THE PROGRAM: The Program shall be updated periodically to reflect changes in risks to customers or to the safety and soundness of the organization from identity theft based on factors such as:

• The experiences of the organization with identity theft; • Changes in methods of identity theft; • Changes in methods to detect, prevent and mitigate identity theft; • Changes in types of accounts that the organization offers or maintains; • Changes in the business arrangements of the organization, including mergers,

acquisitions, alliances, joint ventures, and service provider arrangements. VIII. ADMINISTRATION OF THE PROGRAM:

• The City Manager, the City Council, or a designated employee at the level of senior management shall be responsible for the development, implementation, oversight and continued administration of the Program.

• The Program shall train staff as necessary to effectively implement the Program; and • The Program shall exercise appropriate and effective oversight of service provider

arrangements. IX. OVERSIGHT OF THE PROGRAM:

1. Oversight of the Program shall include: a. Assignment of specific responsibility for implementation of the Program to the City

Manager or designee. b. Review of reports prepared by staff regarding compliance; and

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c. Approval of material changes to the Program as necessary changing risks of identity theft.

2. Reports shall be prepared as follows: a. Staff responsible for development, implementation and administration of the

Program shall report to City Manager or designee at least annually on compliance by the organization with the Program.

b. The report shall address material matters related to the Program and evaluate issues such as:

• The effectiveness of the policies and procedures in addressing the risk of identity theft in connection with the opening of covered accounts and with respect to existing covered accounts;

• Service provider agreements; • Significant incidents involving identity theft and management’s

response; and • Recommendations for material changes to the Program.

X. OVERSIGHT OF SERVICE PROVIDER ARRANGEMENTS: City will require any collection service it contracts with to verify its activity is done in accordance with reasonable policies and procedures designed to detect, prevent, and mitigate the risk of Identity Theft. This will include:

• Written verification that service providers have such policies and procedures in place; and

• That service provider has reviewed this Administrative Regulation and report any Red Flags to the Program Administrator.

XI. DUTIES REGARDING ADDRESS DISCREPANCIES: The locality shall develop policies and procedures designed to enable the organization to form a reasonable belief that a credit report relates to the consumer for whom it was requested if the organization receives a notice of address discrepancy from a nationwide consumer reporting agency indicating the address given by the consumer differs from the address contained in the consumer report. The locality may reasonably confirm that an address is accurate by any of the following means:

1. Verification of the address with the consumer; 2. Review of the utility’s records; 3. Verification of the address through third-party sources; or 4. Other reasonable means.

If an accurate address is confirmed, the locality shall furnish the consumer’s address to the nationwide consumer reporting agency from which it received the notice of address discrepancy if:

1. The organization establishes a continuing relationship with the consumer; and 2. The organization, regularly and in the ordinary course of business, furnishes information

to the consumer reporting agency.

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Fraud in the Workplace (administrative regulation)

NUMBER: 415 ISSUED: 6-27-11 EFFECTIVE DATE: 6-27-11 SUBJECT: FRAUD IN THE WORKPLACE I. PURPOSE: To establish policy and procedures for clarifying acts that are considered to be fraudulent, describing the steps to be taken when fraud or other related dishonest activities are suspected, and providing procedures to follow in accounting for missing funds, restitution and recoveries. II. GENERAL POLICY: The City of La Verne is committed to protecting its assets against the risk of loss or misuse. Accordingly, it is the policy of the City of La Verne to identify and promptly investigate any possibility of fraudulent or related dishonest activities against the City and, when appropriate, to pursue legal remedies available under the law.

This policy applies to any irregularity, or suspected irregularity, involving employees, consultants, vendors, contractors, outside agencies, and/or any other parties with a business relationship with the City.

Any investigative activity required will be conducted in an objective and impartial manner without regard to the suspected wrongdoer’s length of service, position, title, or relationship to the City.

All employees are responsible for the detection, reporting and prevention of fraud, misappropriations, and other irregularities. III. DEFINITIONS: A. Fraud – the intentional false representation or concealment of material fact for the purpose

of personal gain for oneself or others; or inducing another to act similarly. Fraud and other similar irregularities include, but are not limited to: 1. Claim for reimbursement of expenses that are not job related or authorized by the

current policies, Resolutions, Ordinances, and Memorandums of Understanding. 2. Forgery or unauthorized alteration of documents (checks, time sheets, independent

contractor agreements, purchase orders, budgets, etc.) 3. Misappropriation of City assets (funds, supplies, furniture, equipment, etc.) 4. Improprieties in the handling or reporting of money transactions. 5. Authorizing or receiving payment for goods not received or services not performed.

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6. Computer related activity involving unauthorized alteration, destruction, forgery, or manipulation of data or misappropriation of City-owned software.

7. Misrepresentation of information on documents. 8. Any apparent violation of Federal, State, or Local laws related to dishonest activities or

fraud. 9. Seeking or accepting anything of material value from those doing business with the City

including vendors, consultants, contractors, lessees, applicants, and grantees.

B. Employee – In this context, employee refers to any individual or group of individuals who receive compensation, either full-time or part-time, from the City of La Verne. The term also includes any volunteer who provides services to the City through an official arrangement with the City or a City organization.

C. Management – In this context, management refers to any administrator, manager, director,

supervisor, or other individual who manages or supervises funds or other resources, including human resources.

D. Internal Auditor – In this context, Internal Auditor refers to any person or persons assigned

by the Department Head and City Manager to investigate any fraud or similar activity. E. External Auditor – In this context, External Auditor refers to independent audit

professionals who perform annual audits of the City’s financial statements. IV. PROVISIONS: A. It is the City’s intent to fully investigate any suspected acts of fraud, misappropriation, or

other similar irregularity. An objective and impartial investigation will be conducted regardless of the position, title, length of service or relationship with the City of any party who might be or become involved in or becomes the subject of such investigation.

B. Each department of the City is responsible for instituting and maintaining a system of internal

control to provide reasonable assurance for the prevention and detection of fraud, misappropriations, and other irregularities. Management should be familiar with the types of improprieties that might occur within their area of responsibility and be alert for any indications of such conduct.

C. The Internal Auditor, in conjunction with the City Attorney, has the primary responsibility

for the investigation of all activity as defined in this policy. D. Throughout the investigation, the Internal Auditor will inform the Department Head and City

Manager of pertinent investigative findings. E. Employees will be granted whistle-blower protection when acting in accordance with this

policy. When informed of a suspected impropriety, neither the City nor any person acting on behalf of the City shall: 1. Dismiss or threaten to dismiss the employee. 2. Discipline, suspend, or threaten to discipline or suspend the employee.

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3. Impose any penalty upon the employee, or 4. Intimidate or coerce the employee Violations of the whistle-blower protection will result in discipline up to and including dismissal.

F. Upon conclusion of the investigation, the results will be reported to the Department Head and City Manager.

G. The City Manager, following review of investigation results, will take appropriate action

regarding employee misconduct. Disciplinary action can include termination and referral of the case to the District Attorney’s office for possible prosecution.

H. The City will pursue every reasonable effort, including court ordered restitution, to obtain

recovery of City losses from the offender, or other appropriate sources. V. PROCEDURES: A. Mayor, City Council and Commissioner Responsibilities

1. If the Mayor, a City Council Member, or a Commissioner has reason to suspect that a fraud has occurred, he or she shall immediately contact the City Manager.

2. The Mayor, City Council Member, or Commissioner shall not attempt to investigate the suspected fraud or discuss the matter with anyone other than the City Manager.

3. The alleged fraud or audit investigation shall not be discussed with the media by any person other than through the City Manager in consultation with the City Attorney and the Internal Auditor.

B. Management Responsibilities 1. Management is responsible for being alert to, and reporting fraudulent or related

dishonest activities in their areas of responsibility. 2. Each manager should be familiar with the types of improprieties that might occur in his

or her area and be alert for any indication that improper activity, misappropriation, or dishonest activity is or was in existence in his or her area.

3. When an improper activity is detected or suspected, management should determine whether an error or mistake has occurred or if there may be dishonest or fraudulent activity.

4. If management determines a suspected activity may involve fraud or related dishonest activity, they should contact their immediate supervisor not involved in the alleged misconduct – and together with that supervisor inform their Department Head and City Manager. If the alleged misconduct is said to involve the Department Head and/or City Manager, the City Attorney may be substituted for one or both.

5. Management should not attempt to conduct individual investigations, interviews, or interrogations. However, management is responsible for taking appropriate corrective actions to ensure adequate controls exist to prevent reoccurrence of improper actions.

6. Management should support the City’s responsibilities and cooperate fully with the Internal Auditor, other involved departments, and law enforcement agencies in the detection, reporting, and investigation of criminal acts, including the prosecution of offenders.

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7. Management must give full and unrestricted access to all necessary records and personnel. All City furniture and contents, including desks and computers, are open to inspection at any time. There is no assumption of privacy.

8. In dealing with suspected dishonest or fraudulent activities, great care must be taken. Therefore, management should avoid the following: a. Incorrect accusations. b. Alerting suspected individuals that an investigation is underway. c. Treating employees unfairly. d. Making statements that could lead to claims of false accusations or other offenses.

9. In handling dishonest or fraudulent activities, management has the responsibility to: a. Make no contact (unless requested) with the suspected individual to determine facts

or demand restitution. Under no circumstances should there be any reference to “what you did”, “the crime”, “the fraud”, “the misappropriation”, etc.

b. Avoid discussing the case, facts, suspicions, or allegations with anyone outside the City, unless specifically directed to do so by the City Attorney.

c. Avoid discussing the case with anyone inside the City other than employees who have a need to know such as the City Manager, Internal Auditor, or City Attorney or law enforcement personnel.

d. Direct all inquiries from the suspected individual, or his or her representative, to the City Manager or City Attorney. All inquiries by an attorney of the suspected individual should be directed to the City Attorney. All inquiries from the media should be directed to the City Manager or the City Attorney.

e. Take appropriate corrective and disciplinary action, up to and including dismissal, after consulting with the City Manager, in conformance with the City’s Personnel Policies and Procedures or the appropriate Memorandum of Understanding.

C. Employee Responsibilities

a. A suspected fraudulent incident or practice observed by, or made known to, an employee must be reported to the employee’s supervisor for reporting to the proper management official.

b. When the employee believes the supervisor may be involved in the inappropriate activity, the employee shall make the report directly to the next higher level of management and/or the City Manager.

c. The reporting employees shall refrain from further investigation of the incident, confrontation with the alleged violator, or further discussion of the incident with anyone, unless requested by the City Manager, Internal Auditor, City Attorney, or law enforcement personnel.

d. Employees must cooperate with the Internal Auditor. Refusal, or the conveyance of inaccuracies, may subject an employee to disciplinary action up to and including dismissal.

D. Internal Auditor Responsibilities

a. Upon assignment by the City Manager, the Internal Auditor will promptly investigate the fraud.

b. In all circumstances where there appears to be reasonable grounds for suspecting that a fraud has taken place, the Internal Auditor, in consultation with the City Attorney, will contact the La Verne Police Department.

c. The Internal Auditor shall be available and receptive to receiving relevant, confidential information to the extent allowed by law.

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d. If evidence is uncovered showing possible dishonest or fraudulent activities, the Internal Auditor will proceed as follows:

1. Discuss the findings with the Department Head. 2. Advise Department, if the case involves staff members, to meet

with the City Manager (or his designated representative) to determine if disciplinary actions should be taken.

3. Report to the External Auditor such activities in order to assess the effect of the illegal activity on the City’s financial statements.

4. Coordinate with the City’s Risk Manager regarding notification to insurers and filing of insurance claims.

5. Take immediate action, in consultation with the City Attorney, to prevent the theft, alteration, or destruction of evidentiary records. Such action shall include, but is not limited to:

1) Removing the records and placing them in a secure location or limiting access to the location where the records currently exist.

2) Preventing the individual suspected of committing the fraud from having access to the records.

e. In consultation with the City Attorney and the La Verne Police Department, the Internal Auditor may disclose particulars of the investigation with potential witnesses if such disclosure would further the investigation.

f. If the Internal Auditor is contacted by the media regarding an alleged fraud or audit investigation, the Internal Auditor will consult with the City Manager and the City Attorney, as appropriate, before responding to a media request for information or interview.

g. At the conclusion of the investigation, the Internal Auditor will document the results in a confidential memorandum report to the Department Head, City Manager and the City Attorney. If the report concludes that the allegations are founded, the report will be forwarded to the La Verne Police Department.

h. Unless exceptional circumstances exist, a person under investigation for fraud is to be given notice in writing of essential particulars of the allegations following the conclusion of the audit. Where notice is given, the person against whom allegations are being made may submit a written explanation to the Internal Auditor no later than seven calendar days after notice is received.

i. The Internal Auditor will be required to make recommendations to the appropriate department for assistance in the prevention of future similar occurrences.

j. Upon completion of the investigation, including all legal and personnel actions, all records, documents, and other evidentiary material, obtained from the department under investigation will be returned by the Internal Auditor to that department.

VI. EXCEPTIONS: There will be no exceptions to this policy unless provided and approved by the City Manager and the City Attorney in writing.

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Disposal of Surplus Equipment & Property (administrative regulation)

NUMBER: 606

ISSUED: 1-12-99

EFFECTIVE DATE: 11-26-01 REVISED: 11-26-01

SUBJECT: DISPOSAL OF SURPLUS EQUIPMENT AND PROPERTY

I. PURPOSE: To establish policy guidelines for the disposal of City owned vehicles, equipment, tools, real property, office equipment, machines, furni,ture and other miscellaneous property.

II. GENERAL POLICY: It shall be the responsibility of the operating department to identify surplus property, obtain necessary approvals, including Council authorization, and to coordinate arrangements for departmental transfer, bidding, auction or private sale of the items. The operating department shall also inform the finance division, in writing, about the disposition of the property. This notification shall include, at minimum, a listing of the items sold, authorization to surplus received from, the price received for each, the name and address of the buyer (or auctioneer) and the asset tag or other identifying number, such as a vehicle number, if available.

III. PROVISIONS: An operating department must notify all City departments in writing of the availability of surplus property and offer such property to interested departments prior to initiating any public bidding or other sale of the property. The transfer of surplus property from one department to another having potential use of the property shall be at the sole discretion of the City Manager. A. Approvals. The following approvals shall be required to declare property as surplus:

1. Vehicles and Heavy Equipment. Property in this category shall be declared surplus by an action of the City Council.

2. Real Property. Property in this category shall be declared surplus by an action of the City Council.

3. Hand Tools, Office Equipment, Furniture and Fixtures. Department Heads are authorized, from time to time, to sell or exchange any and all hand tools, office equipment, materials, furniture, fixtures, and other personal property of the City having a salvage value of less than $500 and which is obsolete or unserviceable, or is surplus to the City, or for which replacement is to be purchased. The Department Head may sell the same for the best price obtainable in the open market or, when he or she deems it advisable. to the highest bidder at a public sale. or he or she may exchange the same for other property or for credit on other property. The approval of the City Manager shall be secured prior to the sale or exchange of any surplus item having a salvage value of $500 or more. In the event the Department Head determines that any such obsolete or surplus property has no salvage value, he or she may dispose of it as he or she deems advisable.

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4. Miscellaneous The disposal of all property not categorized above shall require the approval of the City Manager.

B. Disposal of Surplus Property. All property declared surplus should be disposed of using the following priorities:

1 Transfer. Surplus property shall first be offered to all City departments for their potential use.

2 Public Sale or Auction. Property not transferred to another department shall be publicly sold using accepted methods or through an approved auction process. If a department chooses to conduct an in-house sale process of equipment, the department head must submit a written list of guidelines to the City Manager for approval prior to advertising the sale. At a minimum, these guidelines must include the following:

• How the sale will be advertised • An estimate of item's value and the source. • Noticing a sealed bid process and the methodology for selecting the highest bid. • Noticing the City has the right to reject any and all bids. • Noticing the minimum bid amount. • Scheduled date and location of public opening of the bids. • Department Heads and Mid Management employees are not eligible to purchase their

department’s surplus property. • Verification from Finance of whether the item requires reporting of sales tax. If so,

indicate in bid that sales tax will be added to final bid. • Indication on the bill of sale that the sale of the item is final and sold "As is” with no

promises or warranties provided. • Notification to Finance of sale with name of purchaser and sale amount and sales tax to be

reported if applicable.

3. Dismantled and All remaining items as well as those previously declared nonfunctional, unserviceable and obsolete may be dismantled and discarded using appropriate means.

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Computer Access Policy (administrative regulation)

NUMBER: 608 ISSUED: 10-25-99 EFFECTIVE DATE: 10-25-99 REVISED: 05-25-05 SUBJECT:COMPUTER ACCESS POLICY AND REVISED: 11-25-08 ACCESS TO CITY OF LA VERNE COMPUTER RESOURCES I. PURPOSE: To establish guidelines and inform employees of the proper use of City computing resources, Internet usage, and computer security. II. GENERAL POLICY: City computing resources are made available to individuals to assist in the pursuit of organizational goals. Users are expected to cooperate with each other to promote the most effective use of computing resources, and to respect each other’s work even though it is in electronic rather than printer form. Individuals and departments will be held no less accountable for their actions involving computers than they would be in other situations. Failure to comply with this policy and the following guidelines for acceptable use of computing resources is a serious matter and will result in loss of computer access privileges and disciplinary action, up to and including termination. The City seeks to protect the confidentiality of City records stored on its computer system. Rules prohibiting theft or vandalism apply to software and data as well as to physical equipment. All software, data, reports, messages and other products created using the City’s computer resources are the property of the City of La Verne. The City has no control over the content of messages or information postings on the Internet or on-line services. The City uses currently available proxy filtering technology to screen out information that may be offensive; since new sites and content are added daily, this technology cannot block all sites that may contain offensive material, nor can the City prevent transmission and/or receipt of offensive e-mail messages. The City’s computer systems require that each user have a unique identity, referred to as a “User-ID”, protected by a “password”, to gain access to the system. The User-ID represents a user in various system activities, provides access to certain software and data based on his/her department-established authorization, and associated his/her own software and data with his/her identity. As such, this User-ID is another instrument of identity and its misuse constitutes forgery or misrepresentation. During the use of City communication resources (including, but not limited to, computer equipment, network, storage, cellular phone, radio) there is no expectation of privacy. Access logs are scanned and reports are generated based on use and abuse of resources and all transmissions are subject to public records requests.

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III. PROVISIONS: An employee’s password and User-ID are unique, identifying him/her as the user accessing a particular workstation or PC. The employee is responsible for any modifications or access to system information made using his/her User-ID. Every change to computer information is logged with the identification of the person who signed on. Therefore, it is imperative that users do not share passwords, and that no PC, terminal, or workstation is left unattended while logged on. Users should be aware that merely turning a PC off does not always log the user off the system. Each employee may perform specific functions, as authorized by his/her Department Head, which are identified through use of the User-ID. Employees may have access to large volumes of information, much of which may be confidential to the Department of the City. It is important that the employees know and understand what information may be shared with others in the work unit, in the department, with personnel in other departments, and with the general public. Employees who are uncertain as to the confidentiality of data should request clarification from their supervisor immediately. A. Use of E-Mail services provided by the City of La Verne. All electronic mail messages are

considered City Records. The City reserves the right to access and use for business purposes the contents of all messages sent over its electronic mail systems, including electronic mail sent over the Internet. Employees should not expect or assume any privacy regarding the content of electronic mail communications. Users of City-provided e-mail systems are expected to use these systems in a professional manner. Incidental and occasional personal use of electronic mail is permitted within the City, but such messages will be treated the same as other messages. Such messages will be deleted according to the schedule maintained by the City’s Information Systems Division. All electronic mail communications will be purged from the system every 30 calendar days. Electronic mail communications will not be included as part of any system or file backup.

B. Guidelines for Access to City Computer Systems and the Internet. Users of computer

services provided by the City are required to: 1. Make a reasonable effort to inform themselves of these access guidelines, acceptable

and unacceptable uses of the City computer system, the Internet and other general on-line services. The burden of responsibility is on the user to inquire as to acceptable and unacceptable uses prior to accessing the system. Compliance with use restrictions is mandatory.

2. Use City provided computers, Internet, and other on-line services for City related activities and not for personal business.

3. Respect the rights of others. Conduct which involves the use of City computing resources to violate another user’s rights includes: a. Invading the privacy of an individual by using electronic means to ascertain

confidential information; b. Copying or altering another user’s software or data which has been obtained by

illegal means;

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c. Abusing or harassing another user through electronic means; d. Storing audio, video, and/or complete disk images in any form that is protected by

copyright on City owned equipment without prior permission. C. Respect the legal protection provided to programs and data by copyrights and licenses.

Users may not copy City-owned or licensed software or data to another computer system or source for personal or external use without prior written approval of the City’s IS Manager.

D. Respect the integrity of computing systems connected to the City network, the Internet and other on-line services.

E. Know and follow the generally accepted etiquette of E-mail, the Internet, and other on-line services.

F. Avoid uses that reflect poorly on their department, the City, or government in general. G. Under no circumstances is any City employee allowed access to the Internet or another on-

line system from a City computer system without requesting in writing and obtaining the prior approval of the IS Manager. All requests must include a statement including the reasons and types of information sought on the Internet or on-line system. Testing and analysis shall be performed and reviewed for any specific software needed to be installed for access to the service.

Users should remember that existing and evolving rules, regulations, and guidelines on ethical behavior of government employees and the appropriate use of government resources apply to the use of electronic computing and communications systems supplied by the City. The City reserves the right to monitor the content of all usage by all employees. Specifically Acceptable Uses 1. Communication and information exchange directly related to the City or Department

mission, or to the user’s City work tasks. 2. Communication and exchange for professional development, to maintain currency of

training or education, or to discuss issues related to the user’s government activities. 3. Use in applying for or administering grants or contracts for City programs. 4. Use for advisory, standards, research, analysis, and professional society activities related to

the user’s governmental work tasks and duties. 5. Announcement and/or tracking of new laws, procedures, policies, rules, services,

programs, information, or activities. 6. Any other governmental administrative communications not requiring a high level of

security. 7. Communication incidental to otherwise acceptable use, except for illegal or specifically

unacceptable uses. Examples of Unacceptable Uses 1. Use of City computer systems, the Internet, or any on-line service for any purposes that

violate the law. 2. Use for any for-profit activities unless specific to the mission or duties of the user’s

department. 3. Use for purposes not directly related to the mission or work tasks of the user’s department. 4. Use for private business, including commercial advertising and sending or replying to

email. 5. Sending or soliciting sexually oriented content.

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6. Libelous, offensive, or harassing statements, including disparagement of others base on their race, national origin, sex, sexual orientation, age, disability, religious or political beliefs.

7. Use for access to and distribution of computer games, except for incidental and occasional use of legally obtained games which come pre-installed with the computer’s operating system, as approved by user’s supervisor.

8. Use of City of La Verne provided computer systems, the Internet, and other on-line services so as to interfere with or disrupt network users, services, or equipment.

9. Intentionally seeking out information on, obtaining copies of, modifying, or divulging files, reports, and other data which is private, confidential, or not open to public inspection or release unless specifically authorized to do so once the legal conditions for release are satisfied.

10. Intentionally copying or printing any software, electronic file, program, or data using City provided computer systems, Internet, or other on-line services without a prior, good faith determination that such copying or printing is, in fact, permissible. Any efforts to obtain permission should be adequately documented.

11. Intentionally seeking information on, obtaining copies of, or modifying files or data without proper authorization. Seeking passwords of others or the exchanging of passwords.

12. Users intentionally representing themselves electronically as others, either on the City network or on the Internet or other on-line services unless explicitly authorized to do so by those other users. Users shall not circumvent established policies defining eligibility for access to information or systems. Conduct which involves misuse of computer identities includes: a. Allowing an unauthorized individual to use their identity. b. Using another person’s User-ID, even if that person has neglected to safeguard his/her

User-ID. 13. Intentionally developing programs designed to harass other users or infiltrate a computer or

computing system and/or damage or alter the software components of the same. 14. Use for fund raising or public relations activities not specifically related to City activities. 15. Attempting to modify City-owned or licensed software or data files without prior written

approval by the City’s IS Manager or the manager responsible for maintaining the application.

16. Attempting to damage or disrupt operation of computing equipment or telecommunication equipment or lines.

17. Using City computing resources for purposes other than those intended by Department authorized access, including allowing access by unauthorized persons, even if they are members of the community, City staff, or family.

18. Setting up Virtual Private Networks to other networks outside of the City’s own network. 19. Installing unauthorized software on any City computer. (AOL, P2P Applications, Music

Library Managers, Flash Based Games, etc) Additional Guidelines 1. Any software obtained from a source other than the City IS Division must be checked for

virus, ad-ware, and spy-ware infection. The IS Division has the software necessary to facilitate these needs.

2. Contractors, volunteers, and other non-City employees may be granted access to City provided computer services at the discretion of the City’s IS Manager and are subject to the

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same policies and guidelines as any City employee. Violation of these policies and guidelines will result in loss of privileges and may be cause for terminating contract.

3. Use passwords associated with a City of La Verne information system only on that system. When setting up an account at a different information system that will be accessed using the Internet or other on-line service, choose a password that is different from the ones used on City of La Verne information systems. Do not use the same password for both local and remote systems accessed via the Internet or another on-line service. If the password used at the remote site were to be compromised, the different password used locally would still be secure. Passwords should not be so obvious so that others could easily guess them, and passwords should be changed at least every 90 days.

4. Always make a reasonable attempt to complete the log off or other termination procedure when finished using any computer system or program, especially the Internet and other external computer services. This will help prevent potential breaches of security.

5. Unencrypted electronic mail sent or received on the City’s e-mail system, the Internet or other on-line services cannot be protected. Users should be aware that the sender has no control over what the recipient does with the message, and that messages may be sent to the wrong address or be intercepted by someone with malicious intensions. Use of encryption is encouraged if sensitive content is to be transmitted.

6. The City networks and the Internet connection are shared resources. The City of La Verne’s connection to the Internet is a single static communication line. Large file transfers and intensive multimedia activities will impact the service levels of other users and should be scheduled early or late in the day, at lunch time, or after business hours with a supervisor’s permission.

7. Disclaimers. The public may perceive a user’s postings and e-mail as official City policy. Users must avoid being drawn into discussions where disclaimers need to be used. When using e-mail, the Internet, or other on-line services provided by the City of La Verne, users should remember that they represent the City. Do not make statements of personal opinion, which may be misinterpreted as official policy.

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Selection & Procurement of Vehicles & Equipment (administrative regulation)

NUMBER: 609 ISSUED: 8-15-02 EFFECTIVE DATE: 8-15-02 SUBJECT: SELECTION & PROCUREMENT OF VEHICLES & EQUIPMENT

I. PURPOSE: The purpose of this policy is to establish uniform guidelines for identification, selection and procurement of city vehicles and equipment. The policy is intended to ensure: 1) proper specification of equipment and goods; 2) compatibility with existing equipment; 3) ability of servicing department to service and maintain procured items; and 4) identify and avoid duplication where department sharing may be suitable.

II. GENERAL POLICY: All purchasers of capital items such as vehicles, equipment or commodities that directly or indirectly affect another department shall take steps necessary to ensure that the requested item(s) is consistent with the city’s overall needs.

III. PROVISIONS:

A. Applicability. The provisions of this policy apply to any vehicle or equipment purchase large enough to require approval by the City Manager through the budget process. This includes any additions or modifications to existing vehicles, tractor attachments, small self-powered equipment exceeding $5,000 and computers. Vehicle and equipment purchasing, whether replacement or additive to the fleet, shall be a cooperative effort between the Fleet Maintenance division and the user department. All computer related purchases shall be a cooperative effort between the Information Systems division and the user department.

B. Replacement vehicles. Vehicles that are scheduled and funded through the city’s

Equipment Fund will be replaced as per the replacement schedule. Funding is provided for equivalent vehicles and is coordinated by the Fleet Superintendent. User departments, at the time of replacement, may choose alternatives or upgrades, but will bear the incremental increase in cost within the respective budgets. These issues shall be resolved early in the planning stage.

C. Additional vehicles. New and replacement of vehicles not included in the Equipment Fund,

are the responsibility of the user department and shall be included in respective budget of the requesting department. Although the initial funding obligation lies with the user department, the request for funding should not take place without an evaluation from the Fleet division. Once funding is secured, the specification, selection and procurement is done in cooperation with the Fleet division.

D. Computers (reference Administrative Regulation No. 604). All computer related purchases

exceeding $500, including peripherals, shall be coordinated with and completed by the Information Systems division. Funding of new and replacement equipment shall be the responsibility of the user departments. The request for funding should not take place without an evaluation from the Information Systems division to ensure system compatibility and an adequate funding request.

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E. Budgeting. To ensure adequate funding, as well as exposing any possible indirect expenses,

proposed purchases should be reviewed with all affected departments early in the planning stages, prior to becoming a budget request item.