17
FISCAL MANAGEMENT AND
AGENCY-OWNED PROPERTY
Standards in this chapter relate to administration, budgeting, purchasing, accounting, and procedures for the inventory and control of agency-owned property.
Authority and responsibilities for fiscal management should be established in writing. There should be provisions for obtaining the input of the heads of major organizational components within the agency and for the agency’s chief executive officer to participate in the agency’s budget deliberations.
No attempt has been made to suggest a preference for any one budgetary system over another, primarily because the nature of the agency’s system is usually determined by the kind of system in use in the government.
There should be provisions for managing the purchasing process consistent with authorized budget approvals and for making purchasing as effective and efficient as possible.
Accounting procedures should be compatible with those of the governing jurisdiction. Many functions/components within an agency receive, manage, and disburse monies. A variety of investigative functions maintain funds for informants, buy-money, and undercover expenses. Support functions may receive cash for fees, licenses, fines, or other purposes on behalf of the agency or to assist another agency after hours or on weekends and holidays. Fees are frequently charged for services, such as photocopying, fingerprinting, and record checks.
Finally, internal activities are sometimes operative which generate funds for the good of all employees, charitable donations, or traveler’s aid. All such funds should be recorded, managed under the same procedural guidelines, and audited. The accounting system is intended to prevent budget discrepancies and to make sure that the projected flow of funds is proceeding as planned.
Lastly, this chapter deals with the management of agency-owned property. Standards address the inventory of existing capital assets, procedures for adding and replacing assets and equipment, and maintaining equipment in a state of operational readiness.
17.1 Fiscal Management
17.1.1 The agency’s chief executive officer is designated as having the authority and responsibility for the fiscal management of the agency, either through a written statement issued by the government, or by a law or ordinance, or by a combination of the two.
Commentary: Although fiscal management functions may be delegated to a designated function or component, the agency’s chief executive officer should have the ultimate authority and accountability over all fiscal matters of the agency.
(O O O O)
17.2 Budget
17.2.1 A written directive describes the agency’s budget process and assigns the responsibility for final budget preparation and management to the fiscal management function.
Commentary: The agency may determine its own method of budgeting. This standard is intended to document that procedure for uniformity and clarity. Deadlines for scheduled activities, types and use of forms, and instructions for preparing and managing the budget should be described.If the agency uses procedures established by another unit of its government, those procedures may be used to comply with this standard.
(N/A O O O)
17.2.2 Major functions within the agency annually prepare written budget recommendations.
Commentary: Commanding officers should be held accountable for those portions of the agency’s budget that relate to their functions. For purposes of this standard, a "major function" is a bureau, division, or other component depicted on the organizational chart as the first or second level below the agency’s CEO, or the CEO may designate the organizational levels or functions for participation.
(N/A O O O)
17.3 Purchasing
17.3.1 A written directive governs procedures for the requisition and purchase of agency equipment and supplies to include, at a minimum:
a. specifications for items requiring standardized purchases;
b. bidding procedures;
c. criteria for the selection of vendors and bidders;
d. procedures for the emergency purchasing or rental agreements for equipment; and
e. procedures for requesting supplemental or emergency appropriation and fund transfer.
Commentary: The intent of the standard is to establish formal procedures for controlling the requisitioning and purchasing of agency supplies and equipment. The standard may be satisfied through evidence of the use of a purchasing procedure in general use by the government, provided the conditions included in the standard are met.
(M M M M)
17.4 Accounting
17.4.1 The agency has an accounting system that includes approval of each account and, at a minimum, provisions for monthly status reports showing:
a. initial appropriation for each account (or program);
b. balances at the commencement of the monthly period;
c. expenditures and encumbrances made during the period; and
Commentary: This standard applies to all functions and components in the agency. The CEO should authorize all accounts or funds within the agency. The accounting system should be compatible with, or may be a part of, the central accounting system of the governing jurisdiction. It is essential that the agency establish such a system to ensure an orderly, accurate, and complete documentation of the flow of funds. Each appropriation and expenditure should be classified, at a minimum, according to function, organizational component, activity, object, and program. Data-processing systems can facilitate rapid retrieval of information on the status of appropriations and expenditures any time the information is required.
It is intended that each function retain its autonomy over operation of its account or fund but that there are uniform guidelines for management and oversight of each.
(M M M M)
17.4.2 A written directive governs the maintenance of all cash funds or accounts where agency personnel are permitted to receive, maintain, or disburse cash and includes, at a minimum:
a. a balance sheet, ledger, or other system that identifies initial balance, credits (cash income received), debits (cash disbursed), and the balance on hand;
b. receipts or documentation for cash received;
c. authorization for cash disbursement, including CEO authorization for expenses in excess of a given amount;
d. records, documentation, or invoice requirements for cash expenditures;
e. persons or positions authorized to disburse or accept cash; and
f. quarterly accounting of agency cash activities.
Commentary: These procedures are inclusive of petty cash funds, cash received in records, investigative funds, and all other instances where cash funds are maintained or cash is received or disbursed.
(M M M M)
17.4.3 A written directive governs procedures for an independent audit of the agency’s fiscal activities.
Commentary: As a basis for determining the financial integrity of the agency’s fiscal control procedures, an independent audit should be conducted at least annually or at a time stipulated by applicable statute or regulation.
(M M M M)
17.5 Agency-Owned Property
17.5.1 If the inventory and control of agency property is regulated by an outside authority, the agency must meet those guidelines. Absent external controlling directives, the agency has a written directive which establishes internal procedures for inventory and control of agency property and equipment.
Commentary: This function may be guided by directives or statutes promulgated outside of the agency. If these guidelines do not exist, the agency should adopt procedures that ensure adequate property control.
(M M M M)
17.5.2 A written directive establishes procedures for issuing/reissuing agency-owned property to authorized users.
Commentary: None.
(O O M M)
17.5.3 A written directive designates that maintaining stored agency property in a state of operational readiness is a responsibility of the person or unit to which the property is assigned.
Commentary: The property management function is responsible for ensuring that stored items of the agency’s equipment--such as radios, handcuffs, batons, and items of special equipment, such as radar, cameras, and closed-circuit TV surveillance devices are maintained in a state of operational readiness. The term "operational readiness" includes care and cleaning, preventive maintenance, repair, workability, and responsiveness. The operational readiness of equipment should be inspected at regular intervals.
(M M M M)