These best practices criteria assess a community’s internal controls, record keeping, and accounting. Internal controls are necessary to protect the community from waste, misappropriation of assets, and operating inefficiencies. They also ensure accuracy, timeliness, and reliability in accounting and operating data. Having strict receipting policies, deposit ticket policies, and tax collection policies, for example, leads to more effective monetary tracking.
Internal Controls
Expectations
- The local unit of government must maintain strong internal controls.
- The local unit shall review and reconcile records routinely by someone other than the preparer to verify that transactions are properly processed. This includes accounts payable, accounts receivable, cash receipts, and payroll.
- The local unit shall follow statute and the local charter regarding disbursement policies.
- The local unit shall reconcile general ledger balances to the financial statements (Department of Treasury, 2007).
Receipting and Accounting
Expectations
- The local unit shall practice sound receipting policies.
- Deposit tickets (or attached listing to the ticket) must list checks by name or number, and amount.
- Deposits must be made timely and reconciled to official receipts.
- Tax collections must be deposited in a separate bank account in the name of the Treasurer.