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HomeMy WebLinkAboutResolutions - 2003.03.19 - 27200MISCELLANEOUS RESOLUTION #03059 •Marcll 20, 2003 BY: FINANCE COMMITTEE, CHUCK MOSS, CHAIRPERSON RE: TREASURER'S OFFICE — AUTHORIZATION FOR ELECTRONIC TRANSACTIONS TO: THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen; WHEREAS the State of Michigan, P.A. 738 of 2002, as amended, requires the Board of Commissioners to adopt a resolution to authorize electronic transactions; and WHEREAS the County Treasurer has prepared a written Automated Clearinghouse (ACH) policy as required by the Act, for the purposes of maintaining effective internal control, by clarifying and emphasizing the responsibility of departments initiating ACH transactions through systems provided by the County; and WHEREAS this policy promotes the implementation of department procedures that ensure compliance with State Law, Federal Law and National Automated Clearinghouse Association (NACHA) rules. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners authorizes the County Treasurer to enter into Automated Clearinghouse (ACH) arrangements and to maintain the County's written ACH policy. Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing resolution. FINANCE COMMITTEE Motion carried unanimously on a roll call vote. ACH payment Payments made through an automated clearinghouse; that is, a clearing facility operated for the convenience of financial institutions through the regional Federal Reserve bank. Automated clearinghouses electronically process inter-bank credits and debits. They also handle electronic transfer of government securities and convenience services, such as the automatic deposit of wages, social security payments and payments of bills by financial institutions. ACH Policy 1). The County Treasurer shall be responsible for the County's ACH agreements, including payment approval, accounting, reporting and for generally overseeing compliance with the ACH policy. 2). Employees responsible for disbursements of funds, by AC H, shall submit, documentation detailing goods or services purchased, costs of said goods or services, the date of payment, and the department serviced by the payment. The documentation report can be contained in the County's general ledger system or can be provided as a separate report. 3). The county Treasurer shall design a system of internal controls to monitor the use of ACH transactions by the County. 4). It is the policy of Oakland County to have a party not involved in the voucher entry system approve invoices, for ACH payment, before a ACH transaction is created. INTERNAL CONTROLS FOR ACH TRANSACTIONS For purposes of maintaining effective internal control, this policy clarifies and emphasizes the responsibility of departments initiating ACH transactions through systems provided by the County. Accordingly, this policy promotes the implementation of department procedures that ensure compliance with State Law, Federal Law and National Automated Clearing House Association (NACHA) rules. DEPARTMENT RESPONSIBILITIES Departments are responsible for ensuring that only authorized individuals have access to any system capable of initiating ACH transactions. A current list of persons authorized to initiate and approve electronic funds transfer (EFT) transactions must be maintained by each department. Departments are responsible for ensuring that ACH payments are lawful expenditures of County funds and comply with legislatively approved budgets. Departments are responsible for obtaining proper authorization for debiting or crediting any customer, vendor or payor account via ACH, in accordance with NACHA rules. A file of current authorizations must be maintained by all departments. All authorizations must be retained for two years following termination or revocation of the authorization. Departments must establish and maintain adequate reconciliation procedures which include timely resolution of all material reconciling items. Departments are responsible for ensuring that department staff responsible for ACH activity have the necessary training and knowledge required to effectively perform their duties. Those requiring training, may obtain training through the County Treasurers office. Systems initiating ACH transactions must require unique passwords and User ID's. Shared User ID's are prohibited. Departments must have contingency plans which enables the department to recreate sent ACH data files until such time as the department has verification that the ACH files have been accurately accepted and processed by Treasury. Departments must maintain an adequate separation of duties over ACH processing. At a minimum, there should be separate authorities for initiating, release and reconciliation of ACH batches. Each department will participate in Treasury's annual audit of compliance with the NACHA Operating Rules. • Table Of Contents ELECTRONIC TRANSACTIONS OF PUBLIC FUNDS — Act 738 of 2002 1 124.301 Definitions. 1 124.302 ACE arrangement; scope. 2 124.303 ACH policy; contents. 2 124.304 Noncompliance; order limiting or suspending local unit's authority. 2 124.305 ACH arrangement; validity; compliance. 2 Rendered 212812003 10:01:55 PM Page 3 MCL Complete Through PA 747 of 2002 © 2003 Legislative Council, State of Michigan Courtesy of wwvv.MichiganLegislature.Org ELECTRONIC TRANSACTIONS OF PUBLIC FUNDS Act 738 of 2002 AN ACT to authorize and regulate electronic transactions of public funds involving local units of government; and to provide for powers and duties of certain governmental agencies and officials. History: 2002, Act 738, Imd. Eff, Dec. 30, 2002. The People of the State of Michigan enact: 124.301 Definitions. Sec. I. As used in this act: (a) "ACH arrangement" means the agreement between the originator of the ACH transaction and the receiver of the ACH transaction. (b) "ACH policy" means the procedures and internal controls as determined wider a written policy developed and adopted by the treasurer or the electronic transactions officer of a local unit under section 3. (c) "ACH transaction" means an electronic payment, debit, or credit transfer processed through an automated clearing house. (d) "Automated clearing house" or "ACH" means a national and governmental organization that has authority to • process electronic payments, including, but not limited to, the national automated clearing house association and the federal reserve system. (e) "Electronic transactions officer" or "ETO" means the person designated under this act by charter or by the governing body in a local unit other than a township or county. (f) "Governing body" means any of the following: (1) The council, commission, or other entity vested with the legislative power of a city or village. (ii) The township board of a township. (iii) The county board of commissioners of a county. (iv) The board of county road commissioners of a county. (v) The board of education of a local or intermediate school district. (vi) The board of trustees of a community college district. (vii) The official body to which is granted general governing powers over an authority or organization of government established under the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821. (viii) A community mental health authority created under section 205 of the mental health code, 1974 PA 258, MCL 330.1205. (g) "Local school district" means a school district organized under the revised school code, 1976 PA 451, MCL 380.1 to 380.1852, or a district governed by a special or local act. (h) "Local unit" means any of the following: (i) A village. (ii) A city. (iii) A township. (iv) A county. (v) A county road commission. (vi) A local school district, (vii) An intermediate school district. (viii) A community college district. (ix) An authority or organization of government established under the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821. (x) A community mental health authority created under section 205 of the mental health code, 1974 PA 258, MCL 330.1205. (i) "Treasurer" means the elected treasurer in a township or county. History: 2002, Act 738, lout. Eff. Dec. 30, 2002. 124.302 ACH arrangement; scope. Sec. 2. (1) The treasurer or the ETO of a local unit may enter into an ACH arrangement as provided by this act. Rendered 212812003 10:01:55 PM Page 1 MCL Complete Through PA 747 of 2002 0 2003 Legislative Council, State of Michigan Courtesy of www.MichiganLegislature.Org ELECTRONIC TRANSACTIONS OF PUBLIC FUNDS (2) An ACH arrangement under this act is not subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821, or to provisions of law or charter concerning the issuance of debt by a local unit. History: 2002, Act 738, Imd. Eff. Dec. 30, 2002. 124.303 ACH policy; contents. Sec. 3. A local unit shall not be a party to an ACH arrangement unless the governing body of the local unit has adopted a resolution to authorize electronic transactions and the treasurer or the ETO of the local unit has presented a written ACH policy to the governing body. The ACM policy shall include all of the following: (a) That an officer or employee designated by the treasurer or ETO is responsible for the local unit's ACH agreements, including payment approval, accounting, reporting, and generally for overseeing compliance with the ACH policy. (b) That the officer or employee responsible for disbursement of funds shall submit to the local unit documentation detailing the goods or services purchased, the cost of the goods or services, the date of the payment, and the department levels serviced by payment. This report can be contained in the electronic general ledger software system of the local unit or in a separate report to the governing body of the local unit. (c) A system of internal accounting controls to monitor the use of ACM transactions made by the local unit. (d) The approval of ACM invoices before payment. (e) Any other matters the treasurer or ETO considers necessary. History: 2002, Act 738, Imd. Eff, Dec. 30, 2002. 124.304 Noncompliance; order limiting or suspending local unit's authority. Sec. 4. After notice and hearing as provided under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, the department of treasury may issue an order limiting or suspending the authority of a local unit to make electronic transactions under this act for failure to comply with the requirements of this act or with the requirements of the local unit's ACH policy. History: 2002, Act 738, Ind. Eff. Dec. 30, 2002. 124.305 ACH arrangement; validity; compliance. Sec. 5. (1) This act does not affect the validity of an ACM arrangement entered into by a local unit before the effective date of this act. (2) All electronic transactions made on or after the effective date of this act shall comply with this act. History: 2002, Act 738, imd. Elf. Dec. 30, 2002. Rendered 212812003 10:01:55 PM Page 2 MCL Complete Through PA 747 of 2002 © 2003 Legislative Council, State of Michigan Courtesy of www,MichiganLegislature.Org G. William Caddell, County Clerk Resolution #03059 March 20 2003 _ , Moved by Moss supported by Zack the resolution be adopted. AYES: Crawford, Douglas, Gregory, Hatchett, Jamian, Knollenberg, KowaII, Law, Long, McMillin, Middleton, Moffitt, Moss, Palmer, Patterson, Potter, Rogers, Scott, Suarez, Webster, Zack, Bullard, Coleman, Coulter. (24) NAYS: None. (0) A sufficient majority having voted therefore, the resolution was adopted. I HEREBL FPHQUI---"YHE OREGOINr; nr7s,co i/2y/o3 Date L Brooke P N.snAY Executive STATE OF MICHIGAN) COUNTY OF OAKLAND) I, G. William Caddell, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on March 20, 2003, with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 20th day of March, 2003.