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Snohomish County Department of Finance Policy Manual

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Snohomish County Department of Finance
Policy Manual

Introduction

PURPOSE

This manual establishes and provides written documentation of the policies used by Snohomish County employees and elected officials in conducting the fiscal affairs of the county.

The Policy Manual is the responsibility of the Department of Finance. It includes policies for the operation of the Department and for interaction with other departments in financial matters.

ORGANIZATION

Individual policies are arranged in numeric order of their policy number, denoted by POL-XXXX. The policy categories are:

1000's Budget
1100's Revenue and Receivables
1200's Expenditures and Payables
1400's Interfund Transactions
1700's Purchasing
2000's Grants
2100's Disbursements
2200's General Ledgers
2300's County Funds
2900's Miscellaneous
4000's County Auditor
5000's Fixed Assets

APPROVAL PROCESS

All policies are approved by the Director of Finance under the authority of S.C.C. 2.100. Other specific policies are also approved at the Executive or Council levels. The policy heading identifies the approval level, any references, and the approval date.

POLICY-1111 CASH RECEIPTING - DEPARTMENTS

This policy applies to all cash collected at the department level. "Cash" includes checks, money orders, currency, and coin.

1. Cash Receipting Duties Will Be Adequately Segregated Whenever possible, the person who collects cash, issues receipts, or performs daily reconciliations of cash receipts should not be the same person who deposits cash, records cash in the departmental accounting records, or reconciles the monthly depository bank statement.

2. All Cash Collected By Departments Will Be Appropriately Recorded All cash collected at county departments will be recorded by cash register or on preprinted, prenumbered receipt forms. The receipt forms must be reprinted to include either the county name, the department name, or both. "Rediform" receipt forms are not acceptable. The receipt form must provide spaces for the following information: date of receipt, source of cash received, method of payment (currency and coin, money order, check), dollar amount received, reason for payment, and signature of cashier.

Interdepartmental or intergovernmental payments that don't require a receipt may be recorded directly on the Treasurer's Cash Receipt form (Form TR-01). A single payment or single reimbursement from a vendor that will de deposited directly to the County Treasure upon receipt may also be recorded directly on the Treasurer's Cash Receipt Form.

3. Departments Will Account For All Pre-numbered Receipt Forms The departmental cashier or accounting clerk will account for all pre-numbered receipt forms that are printed for that department. Voided receipt forms will not be destroyed, but kept on file in department offices. All receipt books issued to out- side collection points should be logged out and signed for by the outside cashier. The numerical sequence of receipt books and all pre-numbered receipts issued to outside collection points shall be accounted for.

4. Cash Collected Will Be Reconciled Daily To Prenumbered Receipts Or Tapes The cashier will reconcile cash collections daily with the pre- numbered receipts or the cash register tapes. Overages and shortages will recorded in a separate account from other cash receipts. BARS revenue source code 6981 will be used to record the overages and shortages on the Treasurer's Cash Receipt Form.

5. All Cash Receipts Will Be Deposited Intact Daily Within 24 hours of receipt, all cash received by departments will be deposited directly with the County Treasurer or to a bank depository account in the Treasurer's name. (Exception: If total accumulated receipts amount to less than $200, deposit may be postponed for one week or until the total reaches $200, whichever comes first.) (See Safekeeping guidelines at step 6.) All daily receipts should be deposited together in the order received. All cash collected must be deposited. Cash col- lected may not be used as petty cash for making minor purchases of issuing refunds.

6. Cash Collections Will Be Adequately Safeguarded During the day all cash collections will be kept in locked drawers, cash boxes or cash registers. If a safe is available, all cash kept overnight will be moved into the safe.

All checks will be restrictively endorsed immediately upon receipt. This endorsement should include the department's name.

7. Cash In Depository Accounts Transmitted Monthly to the County Treasurer All receipts which have been deposited in a depository account, will be transmitted monthly to the County Treasurer. All December receipts, however, will be transmitted on or before the last day of the month to ensure proper cut-off for the fiscal year.

8. Deposits & Transmittals To Treasurer Will Be Accompanied By Cash Receipt All cash deposited directly with the County Treasurer and all cash transmitted to the Treasurer from depository accounts will be accompanied by a Treasurer's Cash Receipt form (Form TR-01). All supporting documentation for each deposit and transmittal should be filed in department offices.

9. Treasurer's Cash Receipts Will Show Proper Distribution Of Cash Receipts All Treasurer's Cash Receipt Forms submitted with cash deposits and transmittals will be filled out to show proper distributions of cash received.

a. All cash received by departments as revenue will be recorded using the appropriate BARS revenue source code number. b. All cashier overages and shortages will be recorded using the BARS revenue source code No. 6981. c. All cash received by departments as payment on Accounts Receivable will be recorded on the Cash Receipt Form as a credit to the Accounts Receivable account. d. Cash received by departments because of refunds from vendors will also be recorded on the Treasurer's Cash Receipt Form as outlined in Step 9.e. e. Refunds received during the save accounting period (fiscal year) in which the original expenditure was made will be recorded on the Treasurer's Cash Receipt Form as a reduction of expenditure. (See POL-2112)

Cash refunds from vendors are payments received for returned goods; for services paid for, but not used; or for overpayments. Payments received by any department as reimbursements for the sale of goods or services are not refunds and should be recorded as revenue, not as a reduction of expenditures. If the refund is received after the end of the accounting period in which the original expenditure was made, and the dollar amount of the refund is not material, BARS revenue source code 369.90 will be credited for the amount of the refund.

If the refund is received after the end of the accounting period in which the original expenditure was made, and the dollar amount of the refund is material, BARS revenue source code 388.80 will be credited for the amount of the refund.

A refund will be considered material if the improper clas- sification of it might distort the results of the fund's financial operations or if it might improperly influence a decision of management. Whether or not such a refund is material will be determined by the fund accountant or the Accounting Services Manager.

10. Receipt Of Cash For Refunds Will Be Properly Documented Adequate documentation will be attached to Treasurer's Cash Receipt Forms that record refunds. Documentation must be in sufficient detail for the fund accountant to approve the Cash receipt distribution. (See Step 12) The documentation required for the approval of the Cash Receipt distribution will be determined by the fund accountant.

11. Department Head Will Approve All Treasurer's Cash Receipt Forms All Treasurer's Cash Receipt Forms will be reviewed and approved by department heads or their delegates before transmittal to the County Treasurer.

12. Accounts Receivable/RefundApproval Any Treasurer's Cash Receipt Form that records a payment on Accounts Receivable or the refunds (as defined in step 9.d) must be approved by the fund accountant before transmittal to the County Treasurer. If the Fund Accountant is not available, approval will be obtained through the Accounting Services Manager.

13. Depository Accounts Will Be Established By The County Treasurer New depository bank accounts will be established by the County Treasurer and reported to the Department of Budget and Finance, Accounting Services Division.

1121 DEPARTMENTAL REFUNDS OF CASH RECEIPTS

This policy applies to refunds made at the department level of receipts/revenues which have previously been deposited with the County Treasurer.

1. Department Refunds Will Be Made Through The Warrant Process Refunds of department revenues will be made by warrant. A payment voucher will be prepared and submitted to the Cash Operations and Payables division. The revenue account to which the original receipt was credited, will be charged to reduce revenues by the amount of the refund. Refunds of prior period revenues will be recorded in the current period unless material. If the refund is material, contact your fund accountant.

2. Refunds Will Be Properly Approved and Documented All refunds will be approved and certified by the department head or other person authorized to certify payment vouchers. A copy of the original receipt for which the refund is being made, along with an explanation of why the refund is necessary, will be attached to the payment voucher.

POLICY-1131 BANK RETURNED (NSF) CHECKS

This policy applies to all checks made payable to the county treasurer or a county department which are returned by the bank. The checks may be returned because of insufficient funds, closed account, invalid signature, stop payment, or any other condition making the check invalid. They are often called NSF checks (not sufficient funds).

1. County Will Notify Check Writer Of Returned Check The County Treasurer or county department will send out official written notice to all persons who have a check returned by the bank. The letter will include notice of the processing fee and the action taken to stop service or revoke license or permit. It will state that appropriate collection methods or other legal action will be initiated if the check is not covered in a timely manner. The treasurer or a county department may attempt to redeposit the returned check prior to official notification.

2. County Will Not Accept Checks From Those Issuing Returned Checks The county will accept only the following as payment for a bank returned check: cash, money order, cashier's or other bank check. County departments will maintain lists of persons who have had checks returned by the bank. No checks will be accepted from these customers for a period of one year from the date of the returned check.

3. County Will Stop Service Or Revoke License/Permit For Returned Checks When a check issued in payment of goods or services is returned by the bank, it will be deemed that no payment has been received for the goods or services. When appropriate the service will be stopped, the license or permit revoked, the action voided, or other suitable action taken. No new goods or services will be provided until payment is received for the prior goods or services. The department will adequately document the action taken in their files and records.

4. County Will Charge Fee For Handling Returned Checks In accordance with Executive Order authorized by Snohomish County Code 4.10.010, the county will charge a $15.00 handling and processing fee on all checks that are returned from the bank because of insufficient funds. Payment of the fee, along with the amount of the returned check, will be required before the county will resume service or reissue license or permit. For returned checks which are in payment of accounts receivable, the $15.00 NSF fee will be added to the customer's accounts receivable balance.

5. County Will Take Appropriate Legal Action On Returned Checks Uncollected bank returned checks will be treated as delinquent accounts of the county. Interest or penalties will be charged as appropriate. The accounts will be sent out for collection in accordance with the county's contract(s) with collection agencies for collection service. Other legal action will be taken as appropriate.

6. Council Will Approve Write-offs Of Bad Debts Due To NSF Checks Council will approve the write-off of bad debts due to bank returned (NSF) checks by motion, when all appropriate collection methods have been tried and the account is deemed uncollectible.

POLICY-1151 REVENUES & ACCOUNTS RECEIVABLE - GENERAL

This policy applies to all revenues and accounts receivables recorded in the county's accounting system.

1. Governmental Revenue Recognition For governmental-type funds, revenues and other resources are recognized in the accounting period in which they become susceptible to accrual - that is, when they become both measurable and available to finance expenditures of the fiscal period.

Revenues are measurable when the amount of the revenue is subject to reasonable estimation. In order to be available, revenues must be subject to collection within the current period, or after the end of the period but in time to pay liabilities outstanding at the end of the current period. Application of the "susceptible to accrual' criteria requires judgment, consideration of the materiality of the item in question, and due regard for the practicality of accrual, as well as consistency in application.

2. Proprietary Revenue Recognition Enterprise, internal service, and nonexpendable trust funds will recognize revenues of a full accrual basis. Revenue is considered realized when (a) the earning process is complete or virtually complete and (b) an exchange has taken place. The two conditions (being realized or realizable and being earned) are usually met by the time the product or merchandise is delivered or services are rendered to customers. Revenues from selling activities and gains and losses from sales of assets are commonly recognized at time of sale (usually meaning delivery).

3. County Will Adequately Segregate Accounts Receivable Functions There will be adequate segregation of duties relating to accounts receivable. To the maximum extent possible, the billing, cash collection and recording, and reconciliation functions should be separated.

4. County Will Record All Accounts Receivable The county will accrue revenues as provided in this policy and record the related accounts receivable in the county's financial system in a timely manner.

5. Revenue Report Review Department staff should review county revenue reports (Detail Revenues Ledger - ST600002) monthly to assure that all revenues have been properly recorded and are in agreement with department records.

POLICY-1152 DELINQUENT AND UNCOLLECTIBLE ACCOUNTS RECEIVABLE

This policy applies to all private customer or intergovernmental accounts receivable which are delinquent or uncollectible, except as noted below.

1. County Will Age Accounts Receivable Departments will age the individual accounts in the accounts receivable subsidiary ledger monthly. the aged accounts will show accounts which are 30 days, 60 days, and 90 days overdue, at a minimum.

2. County Will Send Past Due Notices For Overdue Accounts Outstanding receivables will be reviewed on a regular basis for past due accounts. Past due notices will be sent out for all accounts that are 30 days in arrears.

Past due notices for all customer accounts receivable will include a statement that the account will be referred to a collection agency if not paid in a timely manner.

3. County Will Collect Interest and Penalties As Appropriate Interest and penalties will be charged on all accounts as authorized by state statutes and county ordinances.

4. Departments Will Not Provide Services To Delinquent Accounts When applicable, a county department will no longer provide services to a private customer or other government when the individual or organization has a delinquent account balance, unless the service is required by some legal criteria.

5. County Will Send Past Due Accounts Out For Collection Departments will send delinquent private customer accounts to a collection agency in accordance with county contract(s) for collection services. The accounts will be sent no later than 120 days after they become delinquent. Any exceptions must be authorized by the Director of Budget and finance. The customer must have had 30 days notice prior to sending the account to the collection agency.

6. County Will Establish Allowance For Uncollectibles The county will establish an Allowance For Uncollectibles account for all county funds with material customer accounts receivable.

7. Council Will Approve Write-offs of Uncollectible Accounts All write-offs of uncollectible accounts will be authorized by council resolution. The fund manager will prepare a resolution annually, detailing the uncollectible accounts.

1153 DEPARTMENTAL BILLINGS AND PAYMENTS

This policy applies to intergovernmental or customer billings made by county departments for charges for services (excluding those of the public works department done by Accounting Services staff.

1. Departments Will Prepare Invoices The departments will prepare invoices for billing private customers and other governments. Snohomish County invoices will be the standard invoice issued by the departments. Use of an invoice other than a standard Snohomish County invoice must be approved by Accounting Services. It must contain adequate billing and accounting information.

All invoices issued will includes a remittance copy of the invoice for transmittal with payment.

2. Departments Will Send Billing Information To Accounting Services A copy of the invoice or a summary of invoices sent will be transmitted to the fund accountant at least monthly. Minimum information to be transmitted will be invoice date, individual or organization billed, invoice number, amount and the sellers revenue account distribution. Formats used for the summary of invoices shall be approved by fund accountant.

When sending billing information to finance, the departments will segregate billings to private customers, other govern- ments, and other funds. Department records should be adequate to provide this segregation.

3. Fund Accountants Will Record Accounts Receivable Fund accountants will prepare journal vouchers to record revenues and set up accounts receivable for departmental billings. Revenues will be accrued on a monthly basis, at a minimum. Journal vouchers will be prepared by departments only with prior authorization from the appropriate fund accountant.

4. Departments Will Maintain Subsidiary Accounts Receivable Ledgers The departments will maintain subsidiary ledgers recording all accounts receivable transactions. The ledgers will contain, at a minimum, customer name, address, and account number; date, amount, and invoice number for billings; date, amount, and cash receipt number for cash receipts; and outstanding account balance. Formats used for the subsidiary ledgers shall be approved by the fund accountant.

5. Accounts Receivable Control Accounts Will Be Maintained An accounts receivable control account will be maintained for all accounts receivable. A control account summarizes the information contained in the subsidiary accounts. It contains a total outstanding receivables balance which is updated periodically with batch receipts (daily, weekly, etc.) and batch billings.

An LGFS control account will be maintained for all accounts receivables recorded in the accounting system. In addition, departments with large volumes of receivables should maintain a separate control account at the department level.

6. Fund Accountants Will Reconcile Accounts Receivable Quarterly Fund accountants will reconcile general ledger accounts receiv- able control accounts to subsidiary ledgers maintained by the departments at least quarterly.

Departments maintaining an accounts receivable control account will reconcile to the subsidiary ledgers monthly.

7. Departments Will Credit Payments To Accounts Receivable Accounts To prevent double reporting of revenues, the appropriate account receivable account should be credited when payment is made for billings which have already been entered into the sys- tem. Treasurer's Cash Receipt Forms which record payments on accounts receivable will be reviewed and approved by both the department head and the appropriate fund accountant prior to transmittal to the County Treasurer. (See Policy-1111.11 and Policy-1111.12.)

8. New Accounts Will Be Properly Authorized And Documented All new accounts will be properly authorized. New accounts will be supported with the appropriate source documents; con- tracts, agreements, notes, court orders, citations, credit applications, etc.

POLICY-1154 CENTRALIZED BILLINGS AND PAYMENTS

This policy applies to county funds and departments for which the accounting for billings, payments, and accounts receivable is centralized in the Department of Budget and Finance (e.g. public works funds).

1. Departments Will Accumulate Billing Information Public Works or other departments with centralized accounting will accumulate cost information for the billable services. The information will be transmitted to the accounting services division of Budget and Finance on a daily basis.

Accounting services will prepare worksheets with all billable costs to use as basis for preparing billings.

2. Accounting Services Will Prepare Invoices The Department of Budget and Finance will do the billing for departments in which the accounting is centralized. Standard Snohomish County invoices with the appropriate fund information superimposed will be used. A remittance copy of the invoice will be provided for transmittal with payment.

3. Accounting Services Will Record Accounts Receivable Accounting Services will prepare a journal voucher to accrue revenues and record accounts receivable for billing for departments with centralized accounting. Revenues will be accrued on a monthly basis.

4. Accounting Services Will Maintain Subsidiary Ledger And Control Accounting Services will maintain subsidiary accounts receivable ledgers for all funds in which the accounting is centralized, segregated by fund and by type of billings, i.e. customer receivables, due from other governments, due from other funds. An accounts receivable control account will be maintained for each type of billing. The control account will be reconciled to the subsidiary ledgers monthly.

5. Fund Accountants Will Reconcile To LGFS Fund accountants will reconcile the subsidiary ledgers for the centralized funds to the LGFS control accounts on a monthly basis.

6. New Accounts Will Be Properly Authorized And Documented All new accounts will be properly authorized. New accounts will be supported with the appropriate source documents; contracts, agreements, notes, credit applications, etc.

7. Accounting Services Will Age Receivables Monthly Accounting Services will age the individual accounts in the accounts receivable subsidiary ledger monthly. The aged accounts will show accounts which are 30 days, 60 days, and 90 days overdue.

8. Accounting Services Will Follow Up On Past Due Accounts Accounting Services will be responsible for follow up on delinquent and uncollectable accounts for centralized accounts receivable as provided in POLICY-1152.

7------------------------------9 PAGE: 1 OF 5 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 3/22/89

POLICY-1111 CASH RECEIPTING - DEPARTMENTS

This policy applies to all cash collected at the department level. "Cash" includes checks, money orders, currency, and coin.

1. Cash receipting Duties Will Be Adequately Segregated

Whenever possible, the person who collects cash, issues receipts, or performs daily reconciliations of cash receipts should not be the same person who deposits cash, records cash in the departmental accounting records, or reconciles the monthly depository bank statement.

2. All Cash Collected By Departments Will Be appropriately recorded

All cash collected at county departments will be recorded by cash register or on preprinted, prenumbered receipt forms. The receipt forms must be reprinted to include either the county name, the department name, or both. "Rediform" receipt forms are not acceptable. The receipt form must provide spaces for the following information: date of receipt, source of cash received, method of payment (currency and coin, money order, check), dollar amount received, reason for payment, and signa- ture of cashier.

Interdepartmental or intergovernmental payments that don't require a receipt may be recorded directly on the Treasurer's Cash Receipt form (Form TR-01).

A single payment or single reimbursement from a vendor that will de deposited directly to the County Treasure upon receipt may also be recorded directly on the Treasurer's Cash Receipt Form.

3. Departments Will Account For All Prenumbered Receipt Forms

The departmental cashier or accounting clerk will account for all prenumbered receipt forms that are printed for that depart- ment. Voided receipt forms will not be destroyed, but kept on file in department offices. All receipt books issued to out- side collection points should be logged out and signed for by the outside cashier. The numerical sequence of receipt books and all prenumbered receipts issued to outside collection points shall be accounted for.

4. Cash Collected Will Be Reconciled Daily To Prenumbered Receipts Or Cash Register Tapes

The cashier will reconcile cash collections daily with the pre- numbered receipts or the cash register tapes. Overages and shortages will recorded in a separate account from other cash receipts. BARS revenue source code 6981 will be used to record the overages and shortages on the Treasurer's Cash Receipt Form.

5. All Cash Receipts Will Be Deposited Intact Daily

Within 24 hours of receipt, all cash received by departments will be deposited directly with the County Treasurer or to a bank depository account in the Treasurer's name. (Exception: If total accumulated receipts amount to less than $200, deposit may be postponed for one week or until the total reaches $200, whichever comes first.) (See Safekeeping guidelines at step 6.)

All daily receipts should be deposited together in the order received. All cash collected must be deposited. Cash col- lected may not be used as petty cash for making minor purchases of issuing refunds.

6. Cash Collections Will Be Adequately Safeguarded

During the day all cash collections will be kept in locked drawers, cash boxes or cash registers. If a safe is available, all cash kept overnight will be moved into the safe.

All checks will be restrictively endorsed immediately upon receipt. This endorsement should include the department's name.

7. Cash In Depository Accounts Will Be Transmitted Monthly to the County Treasurer

All receipts which have been deposited in a depository account, will be transmitted monthly to the County Treasurer. All December receipts, however, will be transmitted on or before the last day of the month to ensure proper cut-off for the fis- cal year.

8. All Deposits And Transmittals To The County Treasurer Will Be Accompanied By A Treasurer's Cash Receipt Form

All cash deposited directly with the County Treasurer and all cash transmitted to the Treasurer from depository accounts will be accompanied by a Treasurer's Cash Receipt form (Form TR-01). All supporting documentation for each deposit and transmittal should be filed in department offices.

9. All Treasurer's Cash Receipt Forms Will Show Proper Distribution Of Cash Receipts

All Treasurer's Cash Receipt Forms submitted with cash deposits and transmittals will be filled out to show proper distribu- tions of cash received.

a. All cash received by departments as revenue will be recorded using the appropriate BARS revenue source code number.

b. All cashier overages and shortages will be recorded using the BARS revenue source code No. 6981.

c. All cash received by departments as payment on Accounts Receivable will be recorded on the Cash Receipt Form as a credit to the Accounts Receivable account.

d. Cash received by departments because of refunds from vendors will also be recorded on the Treasurer's Cash Receipt Form as outlined in Step 9.e.

e. Refunds received during the save accounting period (fiscal year) in which the original expenditure was made will be recorded on the Treasurer's Cash Receipt Form as a reduction of expenditure. (See POL-2112)

Cash refunds from vendors are payments received for returned goods; for services paid for, but not used; or for overpayments. Payments received by any department as reim- bursements for the sale of goods or services are not refunds and should be recorded as revenue, not as a reduc- tion of expenditures.

If the refund is received after the end of the accounting period in which the original expenditure was made, and the dollar amount of the refund is not material, BARS revenue source code 369.90 will be credited for the amount of the refund.

10. Receipt Of Cash For Refunds Will Be Properly Documented

Adequate documentation will be attached to Treasurer's Cash Receipt Forms that record refunds. Documentation must be in sufficient detail for the fund accountant to approve the Cash receipt distribution. (See Step 12) The documentation required for the approval of the Cash Receipt distribution will be determined by the fund accountant.

11. Department Head Will Approve All Treasurer's Cash Receipt Forms Before Transmittal To County Treasurer

All Treasurer's Cash Receipt Forms will be reviewed and approved by department heads or their delegates before trans- mittal to the County Treasurer.

12. Receipts Involving Accounts Receivable Or Refund Must Be

Approved By The Fund Accountant Prior To Transmittal To The

County Treasurer

Any Treasurer's Cash Receipt Form that records a payment on Accounts Receivable or the refunds (as defined in step 9.d) must be approved by the fund accountant before transmittal to the County Treasurer. If the Fund Accountant is not available, approval will be obtained through the Accounting Services Man- ager.

13. Depository Accounts Will Be Established By The County Treasurer

New depository bank accounts will be established by the County Treasurer and reported to the Department of Budget and Finance, Accounting Services Division.

_ 7------------------------------9 PAGE: 1 OF 1 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY:Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/17/86

POLICY-1121 DEPARTMENTAL REFUNDS OF CASH RECEIPTS

This policy applies to refunds made at the department level of receipts/revenues which have previously been deposited with the County Treasurer.

1. Department Refunds Will Be Made Through The Warrant Process

Refunds of department revenues will be made by warrant. A payment voucher will be prepared and submitted to the Cash Operations and Payables division. The revenue account to which the original receipt was credited, will be charged to reduce revenues by the amount of the refund.

Refunds of prior period revenues will be recorded in the cur- rent period unless material. If the refund is material, con- tact your fund accountant.

2. Refunds Will Be Properly Approved and Documented

All refunds will be approved and certified by the department head or other person authorized to certify payment vouchers.

A copy of the original receipt for which the refund is being made, along with an explanation of why the refund is neces- sary, will be attached to the payment voucher.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + APPROVED BY: Thomas G. Carlson + + + + Executive Order # 90-04 + + 1------------------------------3 EFFECTIVE: 7/1/90

POLICY-1131 BANK RETURNED (NSF) CHECKS

1. County Will Notify Check Writer Of Returned Check

The County Treasurer or county department will send out offi- cial written notice to all persons who have a check returned by the bank. The letter will include notice of the processing fee and the action taken to stop service or revoke license or permit. It will state that appropriate collection methods or other legal action will be initiated if the check is not cov- ered in a timely manner.

The treasurer or a county department may attempt to redeposit the returned check prior to official notification.

2. County Will Not Accept Checks From Those Issuing Returned Checks

The county will accept only the following as payment for a bank returned check: cash, money order, cashier's or other bank check.

County departments will maintain lists of persons who have had checks returned by the bank. No checks will be accepted from these customers for a period of one year from the date of the returned check.

3. County Will Stop Service Or Revoke License Or Permit For Returned Checks

When a check issued in payment of goods or services is returned by the bank, it will be deemed that no payment has been received for the goods or services. When appropriate the service will be stopped, the license or permit revoked, the action voided, or other suitable action taken. No new goods or services will be provided until payment is received for the prior goods or services. The department will adequately docu- ment the action taken in their files and records.

4. County Will Charge Fee For Handling Returned Checks

In accordance with Executive Order authorized by Snohomish County Code 4.10.010, the county will charge a $15.00 handling and processing fee on all checks that are returned from the bank because of insufficient funds. Payment of the fee, along with the amount of the returned check, will be required before the county will resume service or reissue license or permit. For returned checks which are in payment of accounts receiv- able, the $15.00 NSF fee will be added to the customer's accounts receivable balance.

5. County Will Take Appropriate Legal Action On Returned Checks

Uncollected bank returned checks will be treated as delinquent accounts of the county. Interest or penalties will be charged as appropriate. The accounts will be sent out for collection in accordance with the county's contract(s) with collection agencies for collection service. Other legal action will be taken as appropriate.

6. County Council Will Approve Write-offs Of Bad Debts Due To NSF Checks

Council will approve the write-off of bad debts due to bank returned (NSF) checks by motion, when all appropriate collec- tion methods have been tried and the account is deemed uncol- lectible.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 12/14/88

POLICY-1151 REVENUES AND ACCOUNTS RECEIVABLE - GENERAL

This policy applies to all revenues and accounts receivables recorded in the county's accounting system.

1. Governmental-Type Funds Will Recognized Revenues On A Modified accrual Basis

For governmental-type funds, revenues and other resources are recognized in the accounting period in which they become sus- ceptible to accrual - that is, when they become both measurable and available to finance expenditures of the fiscal period.

Revenues are measurable when the amount of the revenue is sub- ject to reasonable estimation. In order to be available, reve- nues must be subject to collection within the current period, or after the end of the period but in time to pay liabilities outstanding at eh end of the current period.

Application of the "susceptible to accrual' criteria requires judgment, consideration of the materiality of the item in question, and due regard for the practicality of accrual, as well as consistency in application.

2. Proprietary Funds Will Recognize Revenues On a Full Accrual Basis

Enterprise, internal service, and nonexpendable trust funds will recognize revenues of a full accrual basis. Revenue is considered realized when (a) the earning process is complete or virtually complete and (b) an exchange has taken place.

The two conditions (being realized or realizable and being earned) are usually met by the time the product or merchandise is delivered or services are rendered to customers. Revenues from selling activities and gains and losses from sales of assets are commonly recognized at time of sale (usually meaning delivery).

3. County Will Adequately Segregate Accounts Receivable Functions

There will be adequate segregation of duties relating to accounts receivable. To the maximum extent possible, the bill- ing, cash collection and recording, and reconciliation func- tions should be separated.

4. County Will Record All Accounts Receivable

The county will accrue revenues as provided in this policy and record the related accounts receivable in the county's finan- cial system in a timely manner.

5. Revenue Reports Will Be Reviewed To Assure Proper Recording Of Revenues

Department staff should review county revenue reports (Detail Revenues Ledger - ST600002) monthly to assure that all revenues have been properly recorded and are in agreement with depart- ment records.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 4/1/89

POLICY-1152 DELINQUENT AND UNCOLLECTIBLE ACCOUNTS RECEIVABLE

This policy applies to all private customer or intergovernmental accounts receivable which are delinquent or uncollectible, except as noted below.

1. County Will Age Accounts Receivable

Departments will age the individual accounts in the accounts receivable subsidiary ledger monthly. the aged accounts will show accounts which are 30 days, 60 days, and 90 days overdue, at a minimum.

2. County Will Send Past Due Notices For Overdue Accounts

Outstanding receivables will be reviewed on a regular basis for past due accounts. Past due notices will be sent out for all accounts that are 30 days in arrears.

Past due notices for all customer accounts receivable will include a statement that the account will be referred to a collection agency if not paid in a timely manner.

3. County Will Collect Interest and Penalties As Appropriate

Interest and penalties will be charged on all accounts as authorized by state statutes and county ordinances.

4. Departments Will Not Provide Services To Delinquent Accounts

When applicable, a county department will no longer provide services to a private customer or other government when the individual or organization has a delinquent account balance, unless the service is required by some legal criteria.

5. County Will Send Past Due Accounts Out For Collection

Departments will send delinquent private customer accounts to a collection agency in accordance with county contract(s) for collection services. The accounts will be sent no later than 120 days after they become delinquent. Any exceptions must be authorized by the Director of Budget and finance. The customer must have had 30 days notice prior to sending the account to the collection agency.

6. County Will Establish Allowance For Uncollectibles

The county will establish an Allowance For Uncollectibles account for all county funds with material customer accounts receivable.

7. Council Will Approve Write-offs of Uncollectible Accounts

All write-offs of uncollectible accounts will be authorized by council resolution. The fund manager will prepare a resolution annually, detailing the uncollectible accounts. _ 7------------------------------9 PAGE: 1 OF 3 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 8/1/90

POLICY-1153 DEPARTMENTAL BILLINGS AND PAYMENTS

This policy applies to intergovernmental or customer billings made by county departments for charges for services (excluding those of the public works department done by Accounting Ser- vices staff.

1. Departments Will Prepare Invoices

The departments will prepare invoices for billing private cus- tomers and other governments. Snohomish County invoices will be the standard invoice issued by the departments. Use of an invoice other than a standard Snohomish County invoice must be approved by Accounting Services. It must contain adequate billing and accounting information.

All invoices issued will includes a remittance copy of the invoice for transmittal with payment.

2. Departments Will Send Billing Information To Accounting Services

A copy of the invoice or a summary of invoices sent will be transmitted to the fund accountant at least monthly. Minimum information to be transmitted will be invoice date, individual or organization billed, invoice number, amount and the sellers revenue account distribution. Formats used for the summary of invoices shall be approved by fund accountant.

3. Fund Accountants Will Record Accounts Receivable

Fund accountants will prepare journal vouchers to record reve- nues and set up accounts receivable for departmental billings. Revenues will be accrued on a monthly basis, at a minimum. Journal vouchers will be prepared by departments only with prior authorization from the appropriate fund accountant.

4. Departments Will Maintain Subsidiary Accounts Receivable Ledgers

The departments will maintain subsidiary ledgers recording all accounts receivable transactions. The ledgers will contain, at a minimum, customer name, address, and account number; date, amount, and invoice number for billings; date, amount, and cash receipt number for cash receipts; and outstanding account bal- ance. Formats used for the subsidiary ledgers shall be approved by the fund accountant.

5. Accounts Receivable Control Accounts Will Be Maintained

An accounts receivable control account will be maintained for all accounts receivable. A control account summarizes the information contained in the subsidiary accounts. It contains a total outstanding receivables balance which is updated peri- odically with batch receipts (daily, weekly, etc.) and batch billings.

6. Fund Accountants Will Reconcile Accounts Receivable Quarterly

Fund accountants will reconcile general ledger accounts receiv- able control accounts to subsidiary ledgers maintained by the departments at least quarterly.

Departments maintaining an accounts receivable control account will reconcile to the subsidiary ledgers monthly.

7. Departments Will Credit Payments To Accounts Receivable Accounts

To prevent double reporting of revenues, the appropriate account receivable account should be credited when payment is made for billings which have already been entered into the sys- tem. Treasurer's Cash Receipt Forms which record payments on accounts receivable will be reviewed and approved by both the department head and the appropriate fund accountant prior to transmittal to the County Treasurer. (See Policy-1111.11 and Policy-1111.12.)

8. New Accounts Will Be Properly Authorized And Documented

All new accounts will be properly authorized. New accounts will be supported with the appropriate source documents; con- tracts, agreements, notes, court orders, citations, credit applications, etc. _ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 12/15/88

POLICY-1154 CENTRALIZED BILLINGS AND PAYMENTS

1. Departments Will Accumulate Billing Information

Public Works or other departments with centralized accounting will accumulate cost information for the billable services. The information will be transmitted to the accounting services division of Budget and Finance on a daily basis.

Accounting services will prepare worksheets with all billable costs to use as basis for preparing billings.

2. Accounting Services Will Prepare Invoices

The Department of Budget and Finance will do the billing for departments in which the accounting is centralized. Standard Snohomish County invoices with the appropriate fund information superimposed will be used. A remittance copy of the invoice will be provided for transmittal with payment.

3. Accounting Services Will Record Accounts Receivable.

Accounting Services will prepare a journal voucher to accrue revenues and record accounts receivable for billing for depart- ments with centralized accounting. Revenues will be accrued on a monthly basis.

4. Accounting Services Will Maintain Subsidiary Ledger And Control

Accounting Services will maintain subsidiary accounts receiv- able ledgers for all funds in which the accounting is central- ized, segregated by fund and by type of billings, i.e. customer receivables, due from other governments, due from other funds. An accounts receivable control account will be maintained for each type of billing. The control account will be reconciled to the subsidiary ledgers monthly.

5. Fund Accountants Will Reconcile To LGFS

Fund accountants will reconcile the subsidiary ledgers for the centralized funds to the LGFS control accounts on a monthly basis.

6. New Accounts Will Be Properly Authorized And Documented

All new accounts will be properly authorized. New accounts will be supported with the appropriate source documents; con- tracts, agreements, notes, credit applications, etc.

7. Accounting Services Will Age Receivables Monthly

Accounting Services will age the individual accounts in the accounts receivable subsidiary ledger monthly. The aged accounts will show accounts which are 30 days, 60 days, and 90 days overdue.

8. Accounting Services Will Follow Up On Past Due Accounts

Accounting Services will be responsible for follow up on delin- quent and uncollectible accounts for centralized accounts receivable as provided in POLICY-1152.

_ PAGE: 1 OF 5

POLICY STATEMENT APPROVED BY Ordinance 90-021 + ORDINANCE: Dated 4/4/90 APPROVED BY: Thomas G. Carlson EFFECTIVE: 5/1/90

POLICY-1211 REIMBURSEMENT FOR TRAVEL AND BUSINESS EXPENSES

This policy governs the reimbursement of county employees, elected officials, and others for travel or other business expenses incurred in connection with official county business. 1. The County Will Reimburse For Business Meals

The county will reimburse county employees and elected officials for meal expenses incurred in conjunction with official county business in the following circumstances: a. When an employee or elected official is required to work outside his/her normal working hours and is unable to eat at home during that period. b. When an employee or elected official is required to attend a meeting of an official organization, commission, or committee at which a meal is served. c. When an employee or elected official is on an overnight business trip.

The county will reimburse for the actual cost of the meal, plus a tip not to exceed 15% of the cost of the meal. 2. The County Will Reimburse For Business Transportation

The county will reimburse county employees and elected officials for transportation expenses incurred while on official county business trips. Personal vehicle mileage will be reimbursed at a rate concise-tent with that of the currently published rate for business travel deductions set by the Internal Revenue Service, unless otherwise provided by law.

POLICY-1211 REIMBURSEMENT FOR TRAVEL AND BUSINESS EXPENSES

The effective date for any revisions to the count rate will be established by the Director of Budget and Finance. The Director of Budget and Finance will notify all department heads and elected officials of the effective date of any revisions. Department heads will notify employees of revisions in the county rate. 3. The County Will Reimburse For Lodging

The county will reimburse county employees and elected officials for lodging expenses incurred while on official county business trips. 4. The County Will Reimburse For Other Travel Or Business Expenses

The county will reimburse county employees and elected officials for other job related travel or business expenses (i.e. registration fees, telephone calls) incurred while on official county business. 5. County Boards, Commissions, and Quasi-Employees

The county will reimburse members of county boards and commissions for mileage to and from meetings and for other expenses approved by the applicable department head to the extent authorized by SCC 2.03.070. The county will reimburse persons who are neither county employees, elected officials, nor members of county boards or commissions for travel and other business expenses where the payment can be reasonably construed to be in consideration for a service performed or other substantial benefit received by the county of commensurate value. In addition to other requirements, this type of reimbursement requires documentation and prior authorization as provided in sections 8 and 9 of this policy.

POLICY-1211 REIMBURSEMENT FOR TRAVEL AND BUSINESS EXPENSES

6. Disallowed Expenses

The county will not provide reimbursement for the following: a. Fines, penalties, and/or forfeitures; b. Tobacco, alcoholic beverages, entertainment, personal clothing, sundries, gratuities except as provided in sec-tion 1 of this policy, personal telephone calls or tele-grams, or other like personal items; c. Meals or lodging in lieu of other meals and/or lodging the expense of which is included in a convention or other registration fee; d. First-class travel accommodations unless coach or economy accommodations are not available; provided that upon writ-ten request stating sufficient reasons the County Executive may waive this limitation; and e. Meals instead of other meals or food service provided during periods of travel by a carrier and included in the fare charged. f. Expenses in excess of amounts deemed reasonable by the appropriate approving authority.

7. County Employees/Elected Officials May Claim Reimbursement For Expenses Incurred On Behalf Of Others County employees and elected officials may claim reimbursement for travel and business expenses as described in sections 1 through 5 of this policy when incurred by them on behalf of others. 8. Prior Authorization Of Certain Expenses Required

County employees and elected officials must obtain prior authorization from both department head and County Executive for out of state travel. Prior authorization for council members and council staff must be obtained from a majority of the County Council.

POLICY-1211 REIMBURSEMENT OF TRAVEL AND BUSINESS EXPENSES

County employees, other than elected officials and department heads, must obtain prior authorization for in state overnight business trips from department head. All expenses of persons who are neither county employees, elected officials, nor members of boards or commissions must be authorized in advance by the County Executive or his desig-nee. All prior authorizations must be written and in the form prescribed by the Department of Budget and Finance.

9. Documentation Of All Expenses Required

All requests for reimbursement must be submitted on a county travel expense voucher in the form adopted by the Department of Budget and Finance. Original receipts must be attached for lodging expenses and for meal expenses exceeding $8.00 for breakfast or lunch and $15.00 for dinner. Receipts must be attached for transportation expenses claimed other than mileage, except when receipts are not issued (e.g. parking meters). When an employee or elected official claims reimbursement for travel or other expenses incurred on behalf of another, in addition to other requirements, a detailed accounting must be attached to the travel expense voucher which includes at least the following: a. Name of the person on whose behalf expenses were incurred. b. Whether the person is a county employee and, if not, the nature of his or her connection with county business. c. Who provided the lodging, meals, or other services. d. A breakdown of amounts by meal, lodging, transportation, or other expense for each person, including the claimant, for whom reimbursement is claimed. e. A statement of the county business that was being carried out when the expenses were incurred.

POLICY-1211 REIMBURSEMENT OF TRAVEL AND BUSINESS EXPENSES In addition to other requirements of this section, vouchers submitted by or on behalf of a person who is neither a county employee, elected official, nor a member of a board or commission must include a description of the service performed or other substantial benefit of commensurate value received by the county. To qualify for reimbursement, expense vouchers of a depart-ment head or elected official must be approved by the County Executive. Expense vouchers of council members and council staff must be approved by two members of the County Council. All other travel expense vouchers must be approved by the appropriate department head or elected official.

7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 4/20/88

POLICY-1212 TRAVEL ADVANCES

This policy applies to all money advanced for travel expenses incurred for overnight or out of state travel while on Sno- homish County business.

1. The County Will Advance Money For Travel Expenses

The County has established an Advance Travel Revolving Fund to be used for advancing money for travel purposes. It will be used to defray necessary costs incurred while performing official duties when such costs would be a hardship on the involved employee.

2. The Revolving Fund Will Be Used Solely For Travel Advances

The Advance Travel Revolving fund will be used solely for travel advances, not direct payments to vendors. It will not be used for personal loans, pre-registration fees, direct payments of airline tickets, or reimbursements to employees or officers for travel already incurred.

3. Travel Advance Requests Must Be Approved

Requests for travel advances will be approved by the depart- ment head and the County Executive, prior to the advance being issued.

Due to time considerations, extradition expenses advanced from the Sheriff's Advance Travel Fund, may be made without prior County Executive approval.

4. Release of Advance Travel Funds

Advances for travel will be released only in the three day period preceding travel. No advance of any kind may be made to any elected official or employee at any time when he/she is delinquent in accounting for or repaying a prior advance.

5. Settlement of Travel Advances

Settlement of advances will be made on or before the 10th day following the close of the travel period by filing an expense voucher with the fund custodian. If the traveler's actual expense is less than the amount of the advance received, his/her voucher will be accompanied by the unexpended portion of the advance in the form of a personal check. If the trav- eler's expenses are in excess of the amount advanced, the excess will by reimbursed by means of a county warrant.

6. Default In Repayment of Advance

Any default in accounting for or repaying the advance shall render the full amount which is unpaid immediately due and payable with interest at the rate of 10% per annum from the date of default until repaid. To protect against any losses on account of advances, Snohomish County will have a prior lien against, and a right to withhold any and all funds pay- able or to become payable to any elected official or employee to whom such advance has been given.

7. Unauthorized Expenditure Of Advance Travel Funds

No advance shall be considered for any purpose as a personal loan to such elected official or employee and any unautho- rized expenditures of such funds shall be considered a misap- propriation of funds.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + Authorize By: Motion 88-065 + + Revised By: Ordinance 91-037 + + + + APPROVED BY: Thomas G. Carlson 1------------------------------3 EFFECTIVE: 5/1/91

POLICY-1213 VEHICLE ALLOWANCE - COUNCIL MEMBERS, COUNTY EXECUTIVE

This policy applies to use of county or personal vehicles by eligible elected official of Snohomish County for officially assigned duties and travel on county business. Eligible elected officials are the following: county auditor, asses- sor, clerk, prosecuting attorney, treasurer, county council members, and county executive.

1. The County Will Provide Transportation

Any county council member or the county executive, at his option, may be assigned a county vehicle for officially assigned duties and travel on county business as authorized by RCW 42.24.090, or may be reimbursed for official travel expenses in using his own vehicle as provided in this policy.

2. Use of County Vehicle

If a county vehicle is assigned and used for travel for county purposes, rental on a monthly basis will be billed against the appropriation and account involved.

3. Monthly Allowance For Use Of Personal Vehicle

Any county council member or the county executive using his own vehicle for travel for county purposes may be reimbursed on a monthly basis. The reimbursement will be for not more than ninety-nine percent of the average monthly Equipment Rental and Revolving Fund cost for replacement, maintenance and fuel expenses of a standard size county pool vehicle as determined by the director of public works. Such costs shall be reviewed annually by the director of public works and established by ordinance effective January 1st of each year.

4. Reimbursement For Monthly Allowance

Any council member or the county executive wishing to claim the monthly reimbursement as provided above, will submit his/her claim upon a county payment voucher each month.

5. Reimbursement For Out Of County Travel

In addition to the monthly reimbursement provided for above, any council member or the county executive may claim reim- bursement for mileage traveled by private vehicle outside Snohomish County for county purposes, at the same rate autho- rized for all other county employees.

6. Reimbursement In Lieu of Monthly Allowance

In lieu of a monthly allowance, any council member or the county executive may elect to be reimbursed for actual mile- age incurred while using his own vehicle for authorized travel for county purposes. The reimbursement will be at the mileage rate authorized for all other county employees, upon submission of appropriate travel expense voucher forms each month.

7. Vehicles Authorized For Reimbursement

Only private motor vehicles equipped with four or more wheels and fully enclosed bodies shall be used for travel for county purposes. No reimbursement shall be made for the use of a personal vehicle not so equipped.

_ 7------------------------------9 PAGE: 1 OF 3 + + + + + + + POLICY STATEMENT + + + APPROVED BY: Thomas G. Carlson + + + + 1------------------------------3 EFFECTIVE: 2/17/88

POLICY-1221 PETTY CASH AND REVOLVING FUNDS

This policy applies to all petty cash funds. Petty cash funds include change funds, revolving funds and stamp funds, or any sum of money or other resources set aside for the specific purpose of minor disbursements, making change or other similar uses.

1. The Executive Will Authorize Petty Cash Funds

Petty cash funds will be authorized in writing by the Executive or his/her representative. In addition, all increases or de- creases in petty cash amounts, or close out of petty cash funds, will be authorized in writing by the Executive or his/her repre- sentative.

The Cash Operations and Payables Manager will maintain a master file of all petty cash funds authorized in the county.

2. The Department Head Will Appoint A Custodian For The Petty Cash Fund

The head of the department in which the petty cash fund is being established will appoint a custodian for the fund. The cus- todian will prepare a petty cash fund authorization card to acknowledge receipt of the funds entrusted to her/him. The origi- nal authorization card will be filed with the Cash Operations and Payables Manager, with a copy being sent to the fund accountant for the department establishing the petty cash fund.

If a new custodian is appointed, the revolving fund will be reconciled, replenished and turned over to the new custodian intact. A new authorization card will be prepared by the new cus- todian and transmitted to the Cash Operations and Payables Man- ager.

3. Petty Cash Funds Will Be Established By Warrant

New petty cash funds and increases in petty cash funds will be established by warrant. A payment voucher will be submitted to the Department of Finance by the department establishing or increasing the fund. The payment voucher will be supported in writing from the Executive or his/her representative.

4. Closed Out Funds Will Be Deposited With The Treasurer

Moneys from petty cash funds which are closed out, or for which the authorized amount is reduced, will be deposited with the county treasurer. A written request from the department head, approved by the Executive or his/her representative will be the authorization for closing out or reducing the amount of a petty cash fund.

5. Petty Cash Will Be Adequately Safeguarded

Petty cash will be kept in a locked box during the day. The custodian and department head or designee should be the only per- sons with access to the fund. Petty cash should be stored in a safe at night, if available.

6. Petty Cash Will Be Reconciled and Replenished Regularly

Petty cash and revolving funds will be reconciled to the autho- rized amounts at least monthly. Reimbursement requests will be prepared and submitted to Cash Operations and Payables with a pay- ment voucher monthly or on an as needed basis.

Reimbursement requests will be submitted for all petty cash funds at fiscal year end to assure that expenditures are recorded in the proper period.

7. Petty Cash Funds May Not Be Used For Personal Advances

Petty cash funds may not be used for personal cash advances, even if secured by check or other I.O.U.'s.

8. Petty Cash Funds Will Be Properly Reported

The authorized amounts for all petty cash funds will be recorded in the county's general ledger and reported in the county's financial statements.

9. All Disbursements Will Have Adequate Documentation

All disbursements from petty cash funds will be supported by a voucher or petty cash receipt showing the date, recipient, pur- pose and amount and signed by the recipient of the funds when applicable. The vendor's original invoice or receipt will be attached to the voucher or petty cash receipt.

10. Petty Cash Funds Will Be Audited On A Surprise Basis

Fund accountants in charge of funds which include petty cash funds will audit the petty cash fund on a surprise basis.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/17/88

POLICY-1411 INTERFUND LOAN TRANSACTIONS

This policy applies to all loans made between two county funds. Interfund loans are temporary borrowings of cash or other assets.

1. The County Council Will Authorize Interfund Loans

The council will approve all interfund loan transactions by motion. The motion will provide a planned schedule of repay- ment of the loan principal as well as setting a reasonable rate of interest to be paid to the lending fund.

2. Interest Will Be Paid On Interfund Loans

The lending fund will charge the borrowing fund a reasonable rate of interest, based on the external rate available to the county. Interest is not required in the following circum- stances, though may be charged:

a. The borrowing fund has no independent source of revenue other than the lending fund.

b. The borrowing fund is normally funded by the lending fund.

c. The lending fund is the Current Expense Fund, which, being unrestricted, can loan interest-free, except to a propri- etary fund.

3. Loans May Be Made Only To Solvent Funds

The borrowing fund must anticipate sufficient revenues to be in a position over the period of the loan to make the speci- fied principal and interest payments as required in the autho- rizing motion.

4. Loans Must Be Of A Temporary Nature

The term of the loan will be for a period not in excess of three years. No permanent diversion of the lending fund shall result from the failure of the borrowing fund to repay the loan.

5. A Fund May Loan Only Inactive Or Excess Monies

Only that portion of a given fund which, in the prudent man- agement of county finances, is clearly inactive or in excess of current needs may be loaned to another county fund.

6. Interfund Loans Will Be Properly Accounted For

All interfund loans and repayments will be promptly recorded in the county's accounting system. Interfund loans receivable and interfund loans payable will be reconciled on a quarterly basis. Payables and receivables should be in balance at all times.

Interfund loan transactions will be recorded on manual journal vouchers, following the policies and procedures set forth in section 2211 of this manual.

7. Interfund Loan Payments Do Not Effect Revenues or Expenditures

The original interfund loan and repayments of the loan are recorded as nonexpenditure disbursements and nonrevenue receipts. Revenues and expenditures are not effected by the payment or repayment of interfund loans.

Loan interest on an interfund loan will be recorded as revenue to the loaning fund, and an expenditure of the fund receiving the loan. Loan interest payments are treated as quasi- external transactions. (See POLICY-1421)

_ FINANCE DEPARTMENT POLICY STATEMENT -------------------------------------------------------------------- PAGE: 1 OF 4

POLICY-1421 INTERFUND TRANSACTIONS

APPROVED: D. Clements EFFECTIVE: 3/31/93

This policy applies to all county interfund transactions.

1A. Quasi-external Transactions Are Treated As External Transac- tions

Quasi-external transactions are transactions between county funds that would be accounted for as revenues, expenditures, or expenses if they involved organizations other than the county.

Examples of quasi-external transactions are:

a. A county fund buys goods or services from another county fund, as if it were from an outside vendor.

b. A county proprietary fund pays for Snohomish County prop- erty, business, or excise taxes.

c. Transfers are made from an agency fund (which is being used as a suspense fund) into any other fund type.

1B. Interfund reimbursements are repayments to a County fund from another County fund.

Interfund reimbursements are incurred when one County fund pays for expenses or incurs expenditures which properly belong to another County fund. The fund to which the expenses or expenditures properly belong must reimburse the fund which made the original payment. The fund which makes the reim- bursement will be called the "reimbursing fund", and the fund which receives the reimbursement will be called the "billing fund".

2A. Quasi-external Transactions Will Be Recorded As Revenues and Expenditures/Expenses

Interfund billings and payments, including interfund payments for Snohomish County taxes, will be recorded as if they were billings and payments to and from outside vendors. The sel- ling fund will record such payments as revenue. The buying fund will record them as expenditures or expenses.

When a county fund receives transfers from an agency fund, the receiving fund will record them as revenue.

2B. The Billing Fund Will Credit Expenditures To Record Reimbursement

When a County fund pays for expenses or incurs expenditures which properly belong to another County fund, it will charge (debit) the appropriate expenditure or expense account at the time the payment is made. When the billing fund later receives the interfund reimbursement, it will back out (credit) the expenditure or expense. The receipt of the interfund reim- bursement will not be recorded as revenue.

Reimbursing Fund Will Record The Expenditure

The fund which makes the reimbursing payment and which has the appropriation authority, will charge the appropriate expense, expenditure, or payable account when the interfund reimbursement is made.

3. Interfund Transactions Will Be Authorized By Interfund Agreements

At the beginning of every fiscal year, selling and buying funds (or departments) will prepare Snohomish County Interfund Agreements. The Interfund Agreements will authorize charges to the buying funds' expenditure accounts.

The standard interfund form will include the text of the Interfund Agreement, account distributions to which the pur- chases can be routinely charged, and the signatures of the department heads or fund managers authorizing transactions and payments.

The Department heads or fund managers may amend the Interfund Agreement by preparing a new document if transactions occur mid year that were not anticipated when the original agreement was prepared.

4. Buying Or Reimbursing Funds Will Provide Expenditure Distributions

As interfund transactions take place, buyers will be responsi- ble for providing sellers with the proper expenditure distri- butions. Routine or recurring interfund purchases will be distributed to the expenditure codes designated on the stan- dard Interfund Agreement. These routine and recurring distri- butions will also be used as "default" distributions. If the seller can't determine the expenditure distribution at the time of the sale, the seller will charge the "default" distri- bution for the amount of the transaction.

When "Point of Sale" transactions between county funds have been authorized by the exchange of documents, the buyer will record the proper expenditure distributions on the documents. (e.g. Print Shop, ERR Auto Rental, Central Stores). If the buyer does not record the expenditure distributions on the documents exchanged, the seller will charge the default dis- tribution recorded on the standard Interfund Agreement for the amount of the transaction.

5. Billing Funds Will Inform Reimbursing Funds of Charges

At least monthly, the billing fund or department will prepare a standard Snohomish County "Advice of Charge" form. The Advice of Charge will indicate the charges which will be made to the reimbursing fund's accounts. The original Advice of Charge, along with appropriate documentation, will be sent to the reim- bursing fund or department. The billing fund or department will maintain copies of all Advices of Charge for their files.

6. Billing Funds Will Maintain Billing Register

Each billing fund or department will maintain a billing regis- ter. On the billing register the billing fund or department will record information from all the Advices of Charge issued to reimbursing funds. The billing fund or department will also record any voided Advices of Charge. The billing register will provide accountability over interfund reimbursements and summa- rize billing information.

Information to be recorded in the billing register will include the following:

a. Date of each interfund transaction b. Departments or funds billed c. Numbers of each advice of charge, including voids d. Amount of each transaction e. Receivable accounts debited and revenue account distributions credited by the billing fund.

7. Fund Accountants Will Record Reimbursable Transactions And Interfund Reimbursements

Billing fund accountants will prepare entries to record inter- fund transactions. Recurring entries will be used for those interfund transactions for which a standard distribution has been established in the interfund agreement.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/17/88

POLICY-1431 INTERFUND REIMBURSEMENTS

This policy applies to all interfund reimbursements made between county funds. Interfund reimbursements are payments received by a fund from another fund for the expenditures/ expenses initially made from it which are properly applicable to another fund.

1. Interfund Reimbursements May Result From Various Situations

The following circumstances would create a reimbursement between funds:

a. One fund makes a single payment for 2 or more funds because the amount attributable to each fund is uncertain or is to be determined at a subsequent date.

b. The reimbursing fund has insufficient funds to finance the initial payment.

c. One fund inadvertently pays expenditures/expenses of another fund.

d. One fund pays expenditures of another as a matter of con- venience, with the understanding that a reimbursement will be made later.

e. A correction of a current period interfund error is needed. (Corrections of prior period interfund errors are charged or credited directly to unreserved fund balance.)

2. Reimbursing Fund Will Record The Expenditure

The fund which reimburses the paying fund, and has the appro- priation authority, will charge an expenditure/expense account for the reimbursement made.

3. Paying Fund Will Reduce Expenditures For Reimbursement

The fund which originally makes payment will charge an expen- diture/expense account at that time. When the reimbursement is received, this fund will reduce the expenditure/expense account. The receipt from the reimbursing fund is not shown as revenue.

4. Interfund Reimbursements Will Be Recorded On Payment Vouchers

The payment voucher will be used to record interfund pay- ments. The transaction will be recorded as a Type 2, transac- tion between funds.

The original invoice will be set up as a receivable/payable by a journal voucher prepared by the fund accountant.

5. Due To and Due From Accounts Will Be Reconciled

Due To accounts and Due From accounts will be reconciled quar- terly. Any differences will be investigated and corrections made to keep the accounts in balance.

6. Interfund Reimbursements Will Be Billed On Standard County Invoices

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/17/88

POLICY-1441 RESIDUAL EQUITY TRANSFERS

This policy applies to all residual equity transfers made between county funds. Residual equity transfers are nonrecur- ring or nonroutine transfers of equity between funds.

1. Residual Equity Transfers Are Of Three Types

Residual equity transfers will result from one of the follow- ing situations:

a. Transfers at the closeout of a discontinued fund or one- time contributions to establish a new fund or increase working capital in an existing fund.

b. The interfund equivalent of a "capital grant" or its repayment. Such transfers must be contributions restricted to capital outlays or the return of such con- tributions.

c. Contributions to an internal service fund to establish or increase its working capital and repayment of such contri- butions.

2. Residual Equity Transfers Increase Operating Capacity

Residual equity transfers will increase operating capacity. They are a permanent or long term movement of resources. Transfers that support the normal level of operations should be treated as operating transfers.

3. Residual Equity Transfers Effect Fund Balance Or Fund Equities

Residual equity transfers are reported as direct additions to or deductions from beginning fund balance in governmental funds. They are reported as direct additions to or deductions from fund equities (retained earnings or contributed capital) in proprietary funds.

4. Residual Equity Transfers Must Be In Balance

Transfers-in and transfers-out must be classified in the same way for any one transaction, so that the total residual equity transfers-in for the entire county equal the total residual equity transfers-out.

Transfer-in and transfer-out accounts will be reconciled quar- terly. Any differences will be investigated and corrections made to keep the accounts in balance.

5. Residual Equity Transfers Must Be Properly Approved

All residual equity transfers must be approved as to form by the Accounting Services Manager.

6. Residual Equity Transfers Will Be Recorded On Payment Vouchers or Journal Vouchers

Residual equity transfers of cash will be recorded on payment vouchers.

Non-cash residual equity transfers will be recorded on journal vouchers.

7. Council Will Authorize Residual Equity Transfers

Residual equity transfers will be authorized by council motion.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/17/88

POLICY-1451 OPERATING TRANSFERS

This policy applies to all operating transfers made between county funds. Operating transfers are recurring periodic transfers made primarily for the purpose of shifting resources from one fund to another.

1. Operating Transfers Are Accounted For As Other Financing Sources Or Uses

Operating transfers are recorded as "Other Financing Sources or Uses". They appear on the operating statement, but do not directly effect operating revenues or expenditures.

The disbursing fund records the transaction as "Other Financ- ing Uses" of resources. The fund receiving the transfer does not record the receipts as revenue, but rather as "Other Financing Sources" of funds.

2. Operating Transfers Support The Normal Level Of Operations

An operating transfer is the interfund equivalent of an oper- ating subsidy. It supports the normal level of operations in a fund.

Transactions which increase the operating capacity in a fund should be recorded as residual equity transfers.

3. Operating Transfers Must Be In Balance

Operating transfers must be treated consistently by all funds involved in the transfers. At the end of the period, the total amount of transfers-out should equal the amount of transfers-in.

Transfer-in and transfer-out accounts will be reconciled quar- terly. Any differences will be investigated and corrections made to keep the accounts in balance.

4. Operating Transfers Will Be Properly Approved

All operating transfers will be approved as to form by the Accounting Services Manager. Timing of the operating trans- fers authorized by the budget will be approved by the Director of Budget and Finance.

5. Operating Transfers Will Be Budgeted

Operating transfers between funds will be budgeted. Operating transfers-in and transfers-out should be in balance within the budget document.

The approved budget will provide authorization for making the interfund transfers.

6. Operating Transfers Will Be Recorded On Payment Vouchers or Journal Vouchers

Operating transfers of cash will be recorded on payment vouch- ers.

Non-cash operating transfers will be recorded on journal vouchers.

_ 7------------------------------9 PAGE: 1 OF 5 + + + + + + + POLICY STATEMENT + APPROVED BY: Thomas G. Carlson + + + + + + 1------------------------------3 EFFECTIVE: 2/26/88

POLICY-1711 PURCHASING GUIDELINES

This policy applies to all purchases made by county depart- ments.

1. Departments May Make Purchases Under $50.00 Without Purchase Orders

Purchase orders are not required for purchases of supplies, parts, materials and equipment under $50.00. The department staff may make the purchases directly from the vendor, after obtaining authorization from the department head. A payment voucher supported by the original receipt or invoice will be submitted to Cash Operations and Payables for payment.

2. Departments May Authorize And Order Purchases Up To $500.00

Equipment, parts, materials and supplies for amounts less than $500.00 may be purchased by county officials and departments. A purchase order number is necessary and can be obtained from the purchasing division over the phone. After placing the order, a confirming purchase requisition must be completed and submitted to the purchasing division. A confirming purchasing order will be issued.

3. Purchasing Will Approve All Purchases Over $500.00

All purchase transactions valued in excess of $500.00 will be approved by a buyer in the purchasing division.

4. Departments May Place Orders Valued From $500 to $1500 With Approval Of Purchasing Division

Purchase transactions valued from $500.00 to $1500.00 will normally be handled by a central purchasing buyer. To expe- dite a purchase, a department shall obtain three telephone quotes in an effort to obtain the best possible price and terms. The process must be coordinated with and approved by a central purchasing buyer.

Upon approval and issuance of a purchase order number, the department may place the verbal order. After placing the order, a confirming purchase requisition must be completed and submitted to the purchasing division. A confirming purchase order will be issued.

5. Informal Solicitations Will Be Used For Purchases Valued From $1500.00 to $5000.00.

Contracts, leases or purchases of personal property, services and public works between $1500.00 and $5000.00 will be made by central purchasing through informal solicitations. The pur- chasing manager, or his designee, will solicit telephone and/or written quotations from at least 3 potential suppliers. The purchasing division will prepare written specifications and post notice of intent to purchase upon its bulletin board for not less than 3 working days prior to making any such con- tract or purchase. (Note: Consulting and special service contracts will be negotiated by department heads and approved by the council or executive. See POLICY-1733.)

Based on the quotations received, the purchasing manager will award the contract to the lowest and best bidder. Immediately after award is made, the bid quotations obtained shall be open to public inspection or telephone inquiry.

To initiate the purchase, the department shall submit a pur- chase requisition and technical specifications (if applicable) to the purchasing division.

6. Purchases Valued Over $5000.00 Will Be Formally Bid

The purchasing division will call for formal bids for all pur- chases, leases, or contracts to purchase or lease personal property, public works, work and materials, or services in excess of $5000.00.

To initiate the bidding process, the department will submit a purchase requisition, bid request form and technical specifi- cations to the purchasing division.

7. Purchase Requisitions Will Be Prepared To Initiate Purchases

Purchase requisitions will be prepared by the interested department, or with assistance of the purchasing division at the request of such department, and submitted for all pur- chases over $50.00 except as noted below.

No purchase requisition or purchase order is necessary for the following types of purchases:

a. Settlements of claims for taxes or damages of any sort, whether based upon tort contract, or otherwise; b. Contracts of employment, whether negotiated through duly authorized labor representatives or not, and payroll dis- bursements or any other payments incidental to such con- tracts; c. Travel and living expenses of officers and employees; d. Insurance and surety bond purchases; e. The following proprietary purchases: (1) Utility billing (telephone, water, power, etc.), (2) Postage, permit, fee, license involving a single source or governmental agency, (3) Foster and other care, training, or professional ser- vices for the physical or mental care of any Snohom- ish County agency; f. Interdepartmental transactions; g. Performance of work by day labor by county employees as allowed by state law;

h. The furnishing of any property, materials, construction, work or labor by any person or entity in accord with any condition of any variance, rezoning, platting, replatting, conditional use permit or any other permit issued by the county; i. Foods. If the products being purchased by the county are of a perishable nature, such as meats, fish, fresh or fro- zen fruits and vegetables, bakery products, dairy and poultry items, the purchase may be made by the department involved by direct negotiation, subject to the approval of the director of purchasing and such regulations as may be required by the county executive. Nonperishable foods (dry stores) shall be placed on bid at least once annually to determine the existence of a competitive base. If such a base at reasonable prices does not exist, the food involved may be purchased by direct negotiation by the department involved, subject to the approval of the execu- tive; j. Purchases, sales, leases, licenses, or other contracts affecting real property; k. Any sale, lease, licensing, or other disposal of any other personal property or services by the county; l. Any acquisition of property by the county by the exercise of the power of eminent domain; m. Any exchange wherein the county receives services or prop- erty in exchange for consideration other than money; n. All contracts funded by a federal and/or state grant-in- aid program or project and which are controlled by appli- cable federal or state law, rule or regulation; and all contracts with subgrantees or subrecipients under grants- in-aid programs; o. Contracts for the purpose of debt collection with collec- tion agencies holding a valid license as required by RCW 19.16 when said contracts have been reviewed and approved by the executive; p. Any purchase transaction valued at fifty dollars ($50.00) or less exclusive of sales tax;

q. Any contract for goods an services required for the pros- ecution of litigation including expert witnesses, expert witness costs, medical evaluations, other expert evalua- tions, transcripts, court reporter's fees, copying and other items relating to litigation, which contracts may be negotiated by the prosecuting attorney; and r. Any other transaction the procedures with respect to which are controlled by any other code section.

All requisitions must be signed by a department head or his representative as indicated on the authorized signature form on file in the purchasing division.

8. Purchasing Will Issue Purchase Orders and Encumber Funds

Upon receipt of a properly approved and completed purchase requisition, the purchasing division will issue a purchase order and will encumber the funds necessary for the purchase. All purchase orders will be approved and signed by the pur- chasing manager.

Purchase order numbers will be required on payment vouchers for all purchases except as noted at (7) above.

_ FINANCE DEPARTMENT POLICY STATEMENT

-------------------------------------------------------------------- PAGE: 1 OF 2

POLICY-1721 DIRECT PURCHASES OF ITEMS UNDER $50.00

APPROVED: J. MARTINIS EFFECTIVE: 3/15/89

This policy applies to all purchases of supplies, parts, materials and equipment under $50.00 made by departments.

1. Departments May Make Purchases Under $50.00 Without a Purchase Order

Purchase orders are not required for purchases of supplies, parts, materials and equipment under $50.00. The department staff may purchase directly from the vendor. A payment voucher supported by the original receipt or invoice will be submitted to the Cash Operations and Payables division for payment.

2. Department Head Must Approve All Purchases

All direct purchases made by county departments will be approved by the department head or his delegate.

3. Responsibilities For Purchases Will Be Adequately Segregated

No one person should be responsible for all phases of the pur- chase. There will be adequate segregation of the duties relating to initiating, approving, ordering, and receiving the purchase at the department level.

4. Purchases Will Be Adequately Documented

An original receipt or invoice will be required to support payment for all items purchased directly from vendors.

5. Departments Will Maintain Documentation of Direct Purchases

Adequate documentation will be maintained by department staff to show, at a minimum, items purchased, vendor, amounts and prior authorization of the department head. Documentation may consist of a purchase log, internal purchase requisition forms, or other means that meet the documentation require- ments.

_ FINANACE DEPARTMENT POLICY STATEMENT -------------------------------------------------------------------- PAGE: 1 OF 2

POLICY-1731 CONSTRUCTION AND REMODELING CONTRACT PURCHASES

APPROVED: EFFECTIVE:

This policy applies to all purchases made through central purchas- ing by means of a construction and remodeling contract.

1. Department Will Issue Purchase Requisition

To initiate a purchase made by means of a construction and remodeling contract, departments will submit a purchase requistion, along with bid request form and technical specifi- cations, to the purchasing division.

Central purchasing will implement the bidding process and award a contract to the sucessful bidder.

2. Purchasing Will Issue Purchase Order

Upon awarding of a contract, the purchasing department will issue a purchase order encumbering funds for the entire award amount.

3. Purchasing Will Enter Change Orders

Copies of all approved change orders will be submitted to the purchasing division. The change orders will be entered as a modification of the original contract encumbered by purchas- ing.

4. Purchasing Will Maintain Files Of Contracts And Change Orders

The purchasing division will keep on file all contracts and approved change orders which result from the bidding process; except public works department construction contracts, which are maintained by that department's contract specialist. The contract administrator will maintain files of all other con- tracts and approved change orders.

5. Cash Operations and Payables Will Make Progress Payments

Cash Operations and Payables, a division of the department of budget and finance, will process a payment voucher in payment of progress payments on construction contracts when accompa- nied by the purchase order, invoice or engineer's certifica- tion and other required documentation. Payment vouchers received without a purchase order attached or reference to a P.O. number will be returned to the department.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 6/27/90

POLICY-2065 GRANT MONITORING

This policy applies to all grant applications and approved grants.

1. Department applying for grants shall prepare an executive memo 33 and a Form sc-17, grant/pending grant data, to accompany each application.

2. The applying department shall submit the grant application, executive memo 33, and form sc-17 to the Department of Budget and Finance for a fiscal impact analysis.

3. The Grants Administration Division of the Department of Budget and Finance will assign a grant application number to each executive memo 33.

4. The Grants Administration Division will review each grant application, and each accompanying executive memo 33 an form SC-17.

5. The grants administration division will keep a control log of all grant applications.

The Grants Administration Division of the Department of Budget and Finance will keep a control log of all grant applications. Included as backup for the log, the Grants Administration Divi- sion will keep photocopies of all Executive Memos and Forms SC-17 submitted with grant applications. The Grants Adminis- tration Division will keep photocopies of the County Council's "Work Session Notes" that indicate whether grant applications were or were not submitted to the funding agency.

6. The applying department shall inform the Grants Administration Division when a grant application is approved or denied by the funding agency.

7. The Grants Administration Division will track all grant applications and maintain an inventory of all approved grants.

The Grants Administration Division will track the disposition of all grant applications. The Grants Administration Division will note in the grant application control log whether the funding agency approved of disapproved the grant application. The Grants Administration division will track approved grants throughout the grant contract period and will log information regarding the disposition of the grant at the end of the con- tract period.

_ 7------------------------------9 PAGE: 1 OF 3 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/26/88

POLICY-2111 CLAIMS VOUCHERS

This policy applies to all vouchers prepared for processing through the claims fund. The following are authorized claims vouchers:

1. Payment Vouchers - County & Outside Districts 2. Travel Expense Vouchers 3. Jury and Witness Fee Vouchers (Superior Court and District Courts) 4. Election Division Vouchers (Poll Workers) 5. Indigent Soldier's and Sailor's Fund Vouchers

1. County Claims Vouchers Will Be Adequately Documented

Adequate documentation will be attached to county payment vouchers to assure that it supports a valid, legally autho- rized purchase. Payments will be made only on original invoices. Properly prepared and approved requisitions, pur- chase orders and receiving reports will be attached when applicable.

If the original invoice has been lost, the preparer should write "Original lost" on the copy. Voucher files should be examined to assure that the original has not been paid.

Claims for travel or other business expenses will be docu- mented as detailed in POLICY-1211.

An approved and certified listing of individuals serving on jury duty, as witnesses or election poll workers will be ade- quate documentation for processing claims for jury and wit- ness fees and election workers.

Original receipts will be provided for assistance claimed on the indigent soldiers & sailors fund vouchers.

2. Claim Vouchers Will Be Properly Approved, Certified and Audited

A designated department official will sign all county claims vouchers, certifying that the "... materials have been fur- nished, the services rendered or the labor performed...and that the claim is a just, due and unpaid obligation against the county...". The budget and finance department will main- tain a list of authorized signatures for certifying claims from each department. Claims for travel expenses will be certified by the individual incurring the travel expense, as well as the designated department official. Expense claims for department heads will be approved by the County Execu- tive.

All claims vouchers will be audited by the budget and finance department prior to payment. All county claims vouchers will be reviewed and approved by the fund accountant prior to entry into the county's financial system.

All claims against the county will be certified by the audit- ing officer, the Director of Budget and Finance, or his dele- gate. The certification will be made on a blanket voucher authorization indicating all voucher expenditures by fund, and supported by listings of the individual vouchers certi- fied. The County executive will provide final approval of all county warrant issues.

Indigent soldier & sailor fund vouchers will be approved by the veteran's organization commander, adjutant and service officer. The corporation, firm, or landlord providing the goods or services will certify that the claim is a just, due and unpaid obligation.

Claims vouchers for outside districts must be certified by the district's auditing officer and approved by the legisla- tive body of each district prior to issuance of warrants by the county.

3. Vouchers Will Be Processed Weekly

The budget and finance department will process vouchers Thursday of each week. Vouchers must be submitted to Cash Operations and Payables by noon on Tuesday to be included in the current week's processing. Claims warrants processed Thursday may be picked up on noon Friday.

4. Payment Vouchers May Not Be Used To Record Personnel Expenditures

Payment vouchers will not be used to record expenditures for salaries or wages, overtime or extra help. All personnel expenditures must be processed through the payroll system.

Payment vouchers will be used to record professional services expenditures for individuals who are not employees of Snohom- ish County.

_ 7------------------------------9 PAGE: 1 OF 3 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 8/1/90

POLICY-2112 VENDOR REFUNDS AND CREDIT MEMOS

This policy applies to cash refunds and credit memorandums received by county departments from vendors for returned goods; for services paid for, but not used; or for overpay- ments.

1. Credit Memos Will Be Recorded On Payment Vouchers

Departments will use payment vouchers to record credit memos given to the county because of returned goods; services paid for, but not used; or overpayments. The department receiving a credit memo will record it of a payment voucher when the memo is received. If the department has a current invoice due to the vendor, the credit should be recorded on the same payment voucher that is used to pay the invoice.

If no invoice is currently due to the vendor, the credit memo will remain in LGFS until a future invoice is paid to that ven- dor. The system will automatically reduce the next voucher payment to the vendor by the amount of the credit memo, and the credit memo will be cleared from the records.

2. Receipt of Credit Memos Will Be Properly Documented

Adequate documentation will be attached to payment vouchers that record credit memos. Documentation must be in sufficient detail for the fund accountant to approve the distribution of the credit. (See Step 3.) The fund accountant will determine what constitutes adequate documentation.

3. Fund Accountant Will Review Posting of Credit Memos

The appropriate fund accountant will review all posting of credit memos before payment voucher is submitted to Cash Opera- tions and Payables.

4. Credit Balances In Vendor Accounts Will Be Reviewed Quarterly

At the end of each quarter Cash Operations and Payables will run an open voucher ledger and will review it for credit bal- ances in vendor accounts. Cash Operations and Payables will notify the appropriate department if it finds a credit balance over six months old in a vendor account. Departments should investigate and request a cash refund if no further invoices are expected to be received from the vendor.

5. Cash Refunds Will Be Recorded On Cash Receipt Form

Cash refunds should be requested when a department does not expect to do further business with a vendor. Cash refunds received from a vendor because of returned goods; services paid for, but not used; or for overpayments will be recorded on a Treasurer's Cash Receipt Form. (See POLICY 1111.8)

If the refund is received during the save accounting period (fiscal year) as the original expenditure was made, the refund will be recorded on the Treasure's Cash Receipt Form as a reduction of expenditures, rather than a revenue. The expendi- ture account to which the original payment was charged will be credited for the amount of the refund.

If the refund is received after the end of the accounting period in which the original expenditure was made, and the dol- lar amount of the refund is not material, BARS revenue source code 369.90 will be credited for the amount of the refund.

If the refund is received after the end of the accounting period in which the original expenditure was made, and the dol- lar amount of the rend is material, BARS revenue source code 388.80 will be credited for the amount of the refund.

6. Fund Accountant Will Determine Materiality of Refunds

A refund received will be considered material if the improper classification of the might distort the results of the fund's financial operations or might improperly influence a decision of management. Whether or not such a refund is material will be determined by the fund accountant or the Accounting Services Manager.

7. Department Will Notify Cash Operations and Payables When Cash Refunds Are Received For Amounts Previously Entered as Credit

Memos

When a department receives a cash refund for an amount which has previously been entered as a credit memo on a payment voucher, the refund should re recorded as noted in the preced- ing paragraphs. In addition, the department must contact Cash Operations and Payables to reverse the credit memo. Cash Oper- ations and Payables will prepare a modified payment voucher reversing the original credit memo entry.

_ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 8/1/90

POLICY-2121 CLAIMS WARRANT ISSUE, CANCELLATION AND RECONCILIATION

This policy applies to all warrants issued through the county's automated disbursement system.

1. Warrant Stock Will Be Controlled And Accounted For

All warrant stock will be prenumbered. A warrant log will be maintained to account for all document numbers of warrants issued and warrants not used due to spoilage or other rea- sons.

The automated disbursement system will assign a warrant num- ber to all warrants issued by the system. This number will be the official warrant number.

2. Warrant Cancellations Will Be Adequately Documented

All warrant cancellation requests must be accompanied by the original warrant which is to be cancelled, or by an Affidavit of Lost/Destroyed Warrant.

3. Warrant Cancellations Will Be Properly Approved

All warrant cancellations will be approved by the Fund Accountant responsible for the fund from which the original warrant was issued.

4. Cancelled Warrants Will Be Segregated By Fund

A listing will be maintained of all cancelled warrants, seg- regated by fund, detailing warrant number, payee, amount and account number.

5. Warrants Will Be Reconciled Monthly

A monthly reconciliation by fund will be made of all warrants issued, cancelled warrants and warrants outstanding. Out- standing warrant balances will be reconciled to the general ledger. _ 7------------------------------9 PAGE: 1 OF 2 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 2/26/88

POL-2122 MANUAL WARRANTS

This policy applies to all claims warrants which are not produced through the automated accounts payable system.

1. Use Of Manual Warrants Will Be Restricted

Manual warrants will be authorized only under the following circumstances:

a. Events beyond the control of the requestor create an immediate need for the warrant, which if delayed would result in a fine, penalty or other costly impact on the County.

b. If the immediate need for the warrant is caused by pro- cessing delays or errors originating in the finance department itself.

c. If the immediate need for the warrant results from a court order or other legal constraint.

d. If the warrant is being issued from a segregated cash account.

2. Departments Will Request Manual Warrants On Authorized Form

All requests for manual warrants will be submitted on the Manual Warrant Request Form, accompanied by a properly prepared, approved and documented payment voucher.

3. Manual Warrant Requests Will Be Properly Approved

Manual Warrant Request Forms will be approved by the depart- ment head or authorized delegate prior to submitting to Cash Operations and Payables.

The accounting technician will approve the preparation of the manual warrant after an audit of the voucher and supporting documents has been completed. The fund accountant will approve as to fiscal period and accounting distribution.

4. Manual Warrants Will Be Adequately Controlled and Safeguarded

Manual warrants will be prenumbered. Warrants issued will be sequentially recorded in a warrant log. Signature machine control number will be recorded and accounted for in the war- rant log.

Blank warrants and signature machine will be stored in a locked drawer or cabinet.

5. Manual Warrants Will Be Processed Daily

Manual warrant requests which are received by noon will be pro- cessed by 1:00 p.m. the same day. Requests received after noon will be processed the following day.

_ 7------------------------------9 PAGE: 1 OF 1 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 9/19/88

POLICY-2123 REGISTERED WARRANTS

This policy applies to registered warrants prepared for districts without sufficient cash to redeem warrants.

1. County Treasurer Will Determine Cash Status Of Districts

When the cash balance of a district is insufficient to cover it's current obligations, the treasurer's office will notify financial services to issue registered warrants.

2. Registered Warrants Will Be Issued In Amounts Of $500.00 Or Less

No registered warrant will be issued for an amount greater that $500.00. For vouchers which are approved for payment in an amount greater than $500.00, sufficient warrants of $500.00 or less will be issued to total the amount of the voucher.

3. Redemption Of Warrants Should Not Result In Negative Cash

Warrants will be redeemed in the order of issue when there are sufficient funds to redeem them. Sufficient funds must be available to pay the interest owed on the warrants, plus the warrant amount, without creating a negative cash bal- ance.

4. Registered Warrants Will Be Called Monthly

RCW 35.29.060 provides that the County Treasurer will make a call for warrants whenever a fund on registered warrants has $500.00 in cash on hand.

At least one call will be made each month, to redeem regis- tered warrants for which there are sufficient funds accumu- lated for redemption. An additional call will be made each month upon the request of a district for which the county treasurer acts as official treasurer. No more than two calls will be made in any one month. _ FINANCE DEPARTMENT POLICY STATEMENT -------------------------------------------------------------------- PAGE: 1 OF 2

POLICY-2211 ADJUSTING JOURNAL ENTRIES

APPROVED: T. G. CARLSON EFFECTIVE: 11/6/87

This policy applies to all county adjusting journal entries manu- ally prepared for entry into LGFS.

1. All Journal Vouchers Will Be Accounted For

The fund accountants will maintain a log of all journal vouchers (J/Vs) prepared or approved by them. The document number will be used to identify the voucher until it is assigned a county number. A notation will be made in the log when the J/V is returned by financial operations and filed. The Cash Operations and Payables Manager will maintain a log of J/Vs prepared for outside districts.

The fund accountants will maintain files of all original county J/Vs filed by fund, accounting period and assigned voucher number. The Cash Operations and Payables Manager will maintain files for outside district J/Vs.

Cash Operations and Payables will maintain accountability over all J/Vs entered into LGFS. A three digit number will be assigned sequentially to all J/Vs entered for each accounting period. This number plus the document number will be the official J/V number recorded in LGFS.

Cash Operations and Payables will maintain a log of all jour- nal vouchers entered into LGFS. The J/Vs will by recorded sequentially in the log and filed by the three digit number assigned for each accounting period's transactions.

2. Journal Vouchers Will Be Adequately Documented

The preparer of the J/V will attach or reference to documen- tation that will adequately explain the journal entry. J/Vs correcting prior entries will be referenced to the orig- inal entry. Documentation will be attached to the original journal voucher filed with the fund accountant.

3. All Journal Vouchers Will Be Approved

J/Vs prepared at the department level will be reviewed and approved by the fund accountant. All county J/Vs will be approved by the Accounting Services Manager prior to entry into LGFS.

4. Only Authorized Personnel May Enter Journal Vouchers

J/Vs will be entered by the Accounting Assistant in the Cash Operations and Payables division. Any exceptions to this must have approval of the Accounting Services Manager or the Cash Operations and Payables Manager.

No journal entries will be entered into the system without an approved J/V document [form GA-01-(1-85)].

5. Corrections of J/Vs Will Be Approved by Fund Accountant

Corrections of or changes to original journal entries will be made by use of an official J/V document approved by the fund accountant.

Use of the LGFS modification procedure to correct data will be authorized only for correcting data entry errors.

_ 7------------------------------9 PAGE: 1 OF 7 + + + + + + + POLICY STATEMENT + + + + + APPROVED BY: Thomas G. Carlson + + 1------------------------------3 EFFECTIVE: 12/2/88

POLICY-2321 ALLOCATION OF INSURANCE FUND PREMIUMS

This policy applies to the computation and allocation of insur- ance fund premiums to county departments for the county's self insurance program.

DEFINITIONS:

Self-Insurance - A program of assuming the risk of loss and estab- lishing adequate finances to pay the losses falling within the self-insured program.

Premium - A charge made to county funds and departments to recover the costs of providing insurance coverage.

Purchased Insurance - Insurance policies purchased from private insurance companies to provide coverage beyond that assumed by the self-insurance program.

Reserved Retained Earnings - A reservation of retained earnings for a specific purpose as required by state or local regulations.

Designated Retained Earnings - A distribution of the total insur- ance fund retained earnings balance to the individual types of insurance coverage provided by the fund.

General Liability - The exposure to third party bodily injury and/or property damage losses attributable to the broad range of governmental activities excluding losses due to the opera- tion of governmental vehicles.

Incurred Losses - The potential payment that may be required to pay damages arising from an event that has already occurred. The event may or may not be reported.

Incurred But Not Reported (IBNR) Losses - Losses which may arise from incidents which have occurred but about which the insured and/or insurer are unaware.

Current Year - Year in which insurance premiums are calculated.

Budget Year - Year in which the premiums are paid by county funds and to which the coverage of the insurance premium applies.

1. Insurance Fund Will Charge Premiums To County Funds

The insurance fund will charge an annual premium to county funds and departments which participate in the county's self- insurance program. Premium amounts charged by the insurance fund will be set to recover all costs of providing insurance coverage to the county. In addition, the premiums may provide for funding of reservations of retained earnings as required by state or local regulations and other contributions to retained earnings.

The total premium will include portions applicable to each type of coverage provided by the insurance fund - worker's compensa- tion, unemployment compensation, and the county's general lia- bility.

The worker's compensation premium will include charges for the payment of estimated claims of the budget year, for administer- ing the safety office, for worker's compensation bond and excess insurance, and for Labor and Industries assessments; and may include contributions to retained earnings designated for worker's compensation.

The unemployment compensation premium will include charges for the payment of estimated claims of the budget year.

The general liability portion of the insurance premium will include charges for the payment of estimated claims of the bud- get year and for the cost of purchased insurance, prosecuting attorney fees, the risk management program, accounting services and other miscellaneous overhead. In addition, the premium may include contributions to retained earnings for fire reserve or general liability.

2. Contributions May Be Collected For Designated Retained Earnings For Worker's Compensation

The Director of Budget and Finance will make a recommendation annually regarding the amount to be contributed to retained earnings designated for worker's compensation. The determina- tion will be made on the basis of the fund's continuing ability to adequately cover worker's compensation claims.

Contributions to the designated retained earnings will be allo- cated based on the department's or fund's five year average loss history. The contributions will be included in the pre- mium amount charged to each fund or department and will be approved by adoption of rates through the annual budget pro- cess.

3. Worker's Compensation Premiums Will Be Allocated On The Basis Of Loss History

The insurance premium applicable to worker's compensation will be allocated on the basis of the fund's or department's five year average loss history. The five year loss history will be provided by the insurance company handling worker's compensa- tion claims for the county.

Contributions in the amount of each fund's or department's five year average loss history, plus an additional amount based on a percentage of the five year loss history, will be collected to cover the estimated claims of the budget year for worker's com- pensation.

Safety office expenses will be allocated to the funds and departments on the basis of their proportionate share of the five year average loss history, except that the minimum amount to be collected from each fund or department will be $100.00.

Expenses for Worker's Compensation Excess Insurance, the Worker's Compensation Bond, and the Labor and Industries assessment will be distributed to each fund or department based on their proportionate share of the five year loss history.

4. Unemployment Compensation Premium Will Be Allocated On The Basis Of Employee Count

The insurance premium will include a contribution for the pay- ment of estimated claims for unemployment compensation for the budget year. The total amount collected will be the amount of the prior year's claims plus an additional amount based on a percentage of the prior year's claims.

The amount will be allocated among the county funds and depart- ments on the basis of employee count.

5. Reserves For Fire Insurance Will Be Maintained At $250,000

The balance in the retained earnings account, Reserved For Property Loss, will be maintained at $250,000. Annual contri- butions will be made by county funds and departments to cover any reduction in the required amount due to claims paid out for the prior year.

Contributions will be allocated on the basis of each fund or department's proportionate share of total building values occu- pied and/or controlled. The contributions will be included in the premium amount to be charged each fund or department.

6. Contributions May Be Collected For Designated Retained Earnings For General Liability

The Director of Budget and Finance will make a recommendation annually regarding the amount to be contributed to retained earnings designated for general liability. The recommendation will be made