Title
Resolution Authorizing the City of Greensboro to Engage in Electronic Payments as Defined by Modifications to G.S. 159-28 and to Perform Related Administrative Procedures
Body
Department: Financial & Administrative Services
Council District: All
Public Hearing: N/A
Advertising Date/By: N/A
Contact 1 and Phone: Richard L. Lusk, Finance Director 373-2077
Contact 2 and Phone: Thomas D. Carruthers, City Attorney 373-2320
PURPOSE: To request that City Council authorize the City of Greensboro to engage in certain electronic payment methods such as Procurement Card (P-Card), Travel Card, Fuel Card and other electronic funds transfers in accordance with G.S. 159-28 and to delegate to the Finance Officer the responsibility to implement written policies and procedures governing their use.
BACKGROUND: The 2015 North Carolina legislature modified G.S. 159-28 to allow the Local Government Commission (LGC) to adopt rules to address the execution of the “pre-audit” of obligations and disbursements related to electronic transactions for local governments. These legislative modifications were effective as of November 1, 2017, and exist as part of the North Carolina Administrative Code (20 NCAC 03.0409 and 20 NCAC 03.410). The LGC subsequently provided their guidelines to local governments on March 12, 2018.
As part of the pre-audit process, the Finance Officer (or designee) is required to certify that sufficient appropriations exist in the accounts of the City prior to purchase orders or contracts being entered into or obligations made, as well as before any payments are made during the current fiscal year. A written pre-audit certification is then attached thereto, evidencing that the pre-audit process has been completed. This certification takes the form of “This instrument has been pre-audited in the manner required by the Local Government Budget and Fiscal Control Act”.
Units of government can now be exempt from attaching the pre-audit certificate and disbursement certificate on electronic transactions if they follow the requirements detailed in the new administrative code rules as prescribed by the LGC. The pre-audit function of checking for fund sufficiency must still be performed as originally intended, however attaching a certificate evidencing such, has been eliminated for these electronic transactions.
As part of these LGC rules, the local governmental body is required to adopt a resolution authorizing the unit to engage in electronic payments as defined by G.S. 159-28. Furthermore, the board itself must either adopt policies and procedures for pre-auditing electronic obligations and payments or delegate the authority and responsibility for writing these policies and procedures to the Finance Officer.
In addition, the unit must have an encumbrance system to be able to track obligations, which is currently in place in Greensboro. The governmental unit must also provide training to personnel about the written policies and procedures that must be followed before undertaking an electronic transaction. Finally, the unit must provide its governing board at least quarterly a budget to actual statement by fund that includes budgeted accounts, actual payments made, amounts encumbered (including electronic obligations), and the amount of the budget that has not been spent or obligated. We plan to provide this report monthly, along with the report of monthly disbursements.
BUDGET IMPACT: None. This resolution is made to adopt certain administrative changes regarding electronic transactions.
RECOMMENDATION / ACTION REQUESTED: The Finance and Legal Departments recommend City Council adoption of the attached resolution that authorizes the City of Greensboro to engage in electronic payments and to delegate to the Finance Officer the responsibility to create certain related administrative policies and procedures.