Town of Forest Heights, MD
Prince Georges County
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Table of Contents
Table of Contents

Section 20.1 Purpose.

The intention of this Article is to ensure that reasonable assurance can be given the public that the Town's assets are properly safeguarded and conserved, and that the Town's elected and appointed officials are dedicated to preventing and detecting errors and fraud.

Section 20.2 Definitions.

(a) 
In general. In this Article, the following words have the meanings indicated.
(b) 
INTERNAL CONTROL — An integral component of an organization's management that provides reasonable assurance that the following objectives are being achieved:
Effectiveness and efficiency of operations,
Reliability of financial reporting,
Compliance with applicable laws and regulations, and
Actions and activities that occur throughout an entity's operations on an ongoing basis.
(c) 
DEPARTMENT HEADS — Managers responsible for the Town of Forest Heights' Police Department, Public Works Department, and Office of Administration (Town Clerk, Treasurer, Receptionist, and other administrative personnel).
(d) 
COUNCIL — The Town Council of Forest Heights.
(e) 
COUNCIL CHAIR — The Mayor.
(f) 
FINANCIAL OFFICER — The Town Treasurer.

Section 20.3 Application of Article.

(a) 
In general: all employees, appointed officials, and volunteers in the Town of Forest Heights.
(b) 
This Article shall be construed so as to be consistent with Maryland Constitution or the Annotated Code of Maryland.

Section 20.4 Procedures.

[Amended 11-2-2009, effective 11-2-2009; 7-20-2011 by Em. Ord. No. 04-11]
(a) 
Procurement. In addition to meeting all of the relevant Charter and state law provision requirements, the procedures for the procurement of services and goods (including related parts and equipment) and the disposal of surplus property shall be as follows:
[Amended 7-18-2012 by Ord. No. 08-12]
(1) 
Except for emergency certifications, all procurement requests shall be precertified prior to purchase by the Mayor or Town Treasurer using the financial form approved by the Council for this purpose (i.e., Check and Credit Card Requisition Form). The purpose of the certification is to verify whether the funds have been appropriated in the budget, that the line item contains adequate funds, and to ensure that the purchase is to be made pursuant to a valid and approved contract. Certification is the process whereby the Mayor or Treasurer officially signifies that funding has been lawfully appropriated by budget and the purchase has been properly approved by the Council or in the case of small or emergency purchases, the Mayor. Certification is not synonymous with approval of the specific purchase or procurement by the Council or the Mayor.
[Amended 2-19-2014 by Em. Ord. No. 02-14]
(2) 
The person who requests an expenditure of funds shall not be the person certifying said expenditure.
[Amended 2-19-2014 by Em. Ord. No. 02-14]
(3) 
All vendors, clearances and certifications shall be identified using the financial form approved by the Council for this purpose.
(4) 
Procurement of an item valued at $10,000 or more, which, in accordance with the Charter, requires competitive bidding and a written contract, shall be advertised in the Town newsletter, newspaper of general circulation or on the Town website and, to the extent the procurement is expected to exceed $25,000 in value, on the eMaryland Marketplace, the internet-based procurement system managed by the Maryland Department of General Services. As determined by the Mayor and Council at its discretion and as permitted by the Charter, such procurement valued at $5,000 or more may require the use of:
(I) 
A request for proposal, in which the Town invites vendors to submit proposals to supply services or goods;
(II) 
An Invitation to Bid, in which vendors are invited to submit proposals to supply goods or services with the understanding that further contract negotiations may be forthcoming; and/or
(III) 
Requests for qualifications, in which the Town requests vendors to submit their qualifications to fulfill procurement needs.
(5) 
Procurement of an item valued in excess of $1,000 but less than $10,000 shall require quotes, bids or proposals from three different vendors. Items valued at $1,000 or less may be purchased without obtaining multiple bids, quotes or proposals.
[Amended 2-19-2014 by Em. Ord. No. 02-14]
(I) 
Small purchases. Except as otherwise stated hereinbelow for emergency purchases, all purchases and contracts made under this subsection less than $1,000 in consideration are hereby preapproved by the Council and if previously appropriated in the budget may be made or entered into solely by the Mayor without further Council approval.
(II) 
Emergency purchases. All emergency purchases and contracts made under this subsection less than $10,000 in consideration are hereby preapproved by the Council. The Mayor without prior specific consent or further approval of the Council, but with the written consent of at least two other Council members, may enter into contracts or make purchases not exceeding $10,000 in value for emergency purposes in order to protect the residents from imminent threat of harm or injury, to protect the health, safety and welfare of the general public from imminent harm, or to prevent the imminent permanent, and substantial loss or damage to Town property.
(III) 
When making emergency purchases under this subsection, the Mayor may exempt said purchase of a good or service from the competitive selection processes but shall provide a report at the next meeting of the Council as to the reasonableness under the circumstances of the sole-source procurement utilized by the Mayor and staff.
(IV) 
The Mayor shall ensure that all purchases made pursuant to this subsection are certified as stated in Subsection (a)(1) and (7) of this section and shall report said purchases and contracts made on a monthly basis to the Council.
(V) 
Except as otherwise provided during a declared state of emergency pursuant to state law or Town ordinance, the Council may suspend the delegation of purchasing and contracting authority bestowed on the Mayor by this subsection by simple resolution of the Council entered into the journal or meeting minutes. The Council may further require by simple resolution that the Council President, the Finance Committee Chair or an appointed official shall co-sign all written contracts or approve in writing all oral agreements authorized under this subsection.
(6) 
Upon written findings entered into the journal, the Mayor and Council may exempt the purchase of a good or service from competitive selection processes when the purchase qualifies as a sole-source procurement as a result of the following circumstances:
(I) 
One vendor is the only one qualified or eligible or is quite obviously the most qualified or eligible to provide the good or service;
(II) 
The procurement is of such a specialized nature or related to a specific geographic location that only a single source, by virtue of experience, expertise, proximity, or ownership of intellectual property rights, could most satisfactorily provide the good or service;
(III) 
Applicable law requires, provides for, or permits use of a sole-source procurement; or
(IV) 
The federal government or other provider of funds for the goods and services being purchased has imposed clear and specific restrictions.
(7) 
As further defined in Subsection (a)(1) above, emergency procurement certifications for goods or services less than $10,000 may be granted after the fact but shall be documented as soon as possible, within 12 hours of the event listed on the financial form approved by the Council for this purpose, but shall require the prior approval of either the Mayor, the President of the Council, or in their absence, the chair of the responsible Council Committee (e.g. Public Safety, Administration, Public Works/Health and Sanitation or Finance) should such committees be established by Ordinance and such Chairmanships be duly appointed by resolution of the Mayor and Council.
[Amended 2-19-2014 by Em. Ord. No. 02-14]
(8) 
Authority for disposal of surplus property. The personal property of the Town shall be reviewed and inspected on a periodic basis to determine if any such property is surplus, obsolete, or unsuitable for a public purpose. A listing of any property determined to be surplus, obsolete, or unsuitable shall be provided by the Mayor to the Council, which shall authorize its disposal by resolution.
(9) 
Method of disposal. Once authorized, the Mayor may dispose of personal property by trade in or exchange for other needed goods, or, after notice in the Town newsletter or in a newspaper of general circulation in the area, by a sealed bid process, or by public auction. If the value of the property to be sold at one time is less than $1,500 as determined by Council, then bids may be solicited by any or all of the following methods: consignment, direct mail request to prospective buyers; by telephone; by advertisement in a newspaper of general circulation, by publication in the Town newsletter, the Town website, or on the Town bulletin board, and/or on the public access channel. Sales of surplus personal property shall be based, whenever possible, upon at least three competitive bids, quotes or offers. In lieu of sale, the Council may convey title to an item at no cost or by donation to a governmental or non-profit organization.
(10) 
Conditions of disposal. All items shall be offered "as is," "where-is" with no warranty or other guarantee as to its condition or fitness for use. All sales must be final. A purchaser or disappointed bidder shall not have any recourse against the Town or any of its officers, employees or agents. The Mayor may recycle or otherwise dispose of property when the Mayor determines the value and condition of the property does not warrant the cost of a sale. No official, employee or volunteer, whether full-time, part-time, temporary, or unpaid, or any member of the official’s, employee’s or volunteer’s immediate family, or any person acting on said person’s behalf may participate in public or private sales if the official, employee or volunteer has had any role in declaring the item surplus, processing the item or related paperwork, or offering it for sale.
(b) 
Accurate posting. All financial transactions are to be timely posted and accurate. The Financial Officer is responsible for assuring that posting errors or adjustments are documented and supported by a description indicating the need for such adjustments.
(c) 
Cash management.
(1) 
All bank account statements must be reconciled to the general ledger monthly by the Financial Officer.
(2) 
All inactive bank accounts are to be closed.
(3) 
The Town receptionist will open the mail, make a control list of all receipts using the financial form approved by the Council for this purpose (i.e., Cash Receipts Form), and restrictively endorse all items received as "for deposit only."
[Amended 2-19-2014 by Em. Ord. No. 02-14]
(4) 
The cash receipts will then be given to the Financial Officer for further processing and deposit to the bank daily.
(5) 
Following all bank deposits, the Police Department Clerk will compare the deposit slips to the control list using the financial form approved by the Council for this purpose to ensure that all funds reflected on the control list have been deposited.
(d) 
Personal property taxes. The Financial Officer is responsible for the timely billing of business personal property taxes. The Financial Officer shall provide a monthly report to the President of the Council of the filings sent out.
[Amended 2-19-2014 by Em. Ord. No. 02-14]
(e) 
Cash disbursements. No checks shall be issued without adequate supporting documentation, including the pre-certified requisition form and/or invoice using the financial form approved by the Council for this purpose.
(f) 
Check and credit card control.
(1) 
Blank checks and credit cards shall be secured in the Police Department's property safe at all times.
(2) 
The Check and Credit Card Pickup Form using the financial form approved by the Council for this purpose shall be used to request checks or credit cards from the Police Department.
(3) 
Check and credit card requests from the Police Department shall be pre-certified by the Financial Officer and by the Chair of the Finance Committee or the Chair of the Council.
(4) 
All credit cards and any unused checks shall be returned to the Police Department's property safe daily.
(g) 
Payroll. The Town Administrator shall review all payroll postings biweekly as follows:
[Amended 1-3-2012 by Em. Ord. No. 01-12]
(1) 
Compensatory time is not budgeted nor is it authorized for payment, except by resolution of Council. All compensatory time shall be agreed upon in writing by the employer and employee.
(2) 
Police officers' regular work schedules shall be adjusted to accommodate court dates to the maximum extent possible.
(3) 
Overtime requests must be approved in advance by the employee's supervisor and the Town Administrator in consultation with the Financial Officer.
(4) 
Reports from outside payroll services shall be reviewed to ensure that they are accurate and reflect correct hourly pay rates, that appropriate taxes and other authorized withholdings are withheld, and that they are consistent with budget appropriations.
(5) 
Payroll adjustments shall be made at the next pay period.
(h) 
Once 75% of any appropriation is expended at any time before the end of the fiscal year's third quarter, no further charges can be made, and the Council must be notified immediately.
(i) 
All records are to be saved for audit.

Section 20.5 Preparation of the quarterly financial report.

(a) 
The Town Treasurer is hereby directed to prepare under the supervision of the Mayor and to submit through the Mayor quarterly financial reports to the Town Council in writing, due within 15 days of the first day of January, April, July, and October. The reports shall provide estimates of the revenues and expenses in the categories provided in the budget resolution effective for the three months preceding the issuance of the quarterly report and for the year-to-date, showing the variances of those items to the budgeted amounts. Furthermore, the quarterly report will include a statement of the estimated assets and liabilities of the Town as of the last day of the quarter being reported.
(b) 
Failure of the Mayor to submit a quarterly financial report to the Council shall result in a fine, not to exceed $100 charged to the Mayor as provided in Article 12 (Anti-Corruption Act).

Section 20.6 Standards to be used for quarterly financial report preparation, publication of same, other reports.

(a) 
Standards to be used for quarterly financial report preparation. The intent of this report is to provide information on the status of the Town's revenues, expenses and assets for current decision-making purposes and estimates are acceptable where final data are not available. Revenues and expenses categories should be reported consistent with the current fiscal year's budget categories, and assets should include total balances in both the general and special revenue (highway) funds for the following items: checking, savings, certificate of deposit and similar accounts, accounts receivable and accounts payable.
(b) 
Publication of the quarterly financial report. The Quarterly Financial Report, upon submission to the Council, shall be a publicly available document open for inspection and copying at the Municipal Building and a notice of its availability shall be inserted in the Town Newsletter, or other newspaper of general circulation within 10 days of submission to the Council. The report shall contain any disclaimers by the Treasurer related to the estimates contained therein and other qualifying factors related to the preparation of the report.
(c) 
Other reports. This Article shall not prohibit the Treasurer from preparing other financial reports as requested by the Mayor or the Town Council.

Section 20.7 Public employee bonds.

[Added 9-6-2011 by Em. Ord. No. 15-11]
(a) 
Consistent with the Town Charter, the Town shall obtain a bond to insure the faithful performance of duty by the Treasurer from a corporate surety having a limit of insurance of not less than $50,000 and a deductible amount not to exceed $1,000.
(b) 
The Town may obtain a bond to insure the faithful performance of duty by any other officers or employees from a corporate surety having a limit of insurance and a deductible amount established by the Town Council by resolution or by an approved motion recorded in the journal.

Section 20.8 Rainy Day Fund.

[Added 10-10-2012 by Ord. No. 10-12]
(a) 
There is established a sub-fund or line item in the general fund of the Town of Forest Heights to be known as the "Rainy Day Fund." The purpose of this undesignated, unallocated or contingency general fund balance is to alleviate significant unanticipated budget shortfalls and to ensure the orderly provision of services to residents.
(b) 
The Rainy Day Fund shall be no less than 2% of the fiscal year 2014 budget or $75,000, whichever amount is smaller, and each fiscal year thereafter shall increase by a percentage equal to the percentage increase in the Consumer Price Index for all urban consumers, Washington-Baltimore, DC-MD-VA-WV (Nov. 1996 = 100) (CPI-U) from January of the second previous fiscal year to January of the prior fiscal year.
(c) 
The Rainy Day Fund may be supported by a budget appropriation from any tax or other revenue source not restricted by law, or also may be supported by a transfer from other unexpended or decreased funds made available by ordinance or formal resolution. The previous year’s balance for the Fund shall become the beginning fund balance in the next annual budget for this sub-fund.
(d) 
Total monies in the Rainy Day Fund shall not exceed 18% of the total general fund revenues, as stated in the Town’s most recent independent annual audit. To the extent that the Rainy Day Fund Balance exceeds the target amount established pursuant to this section, the Council shall draw upon the fund balance to appropriate monies for any lawful governmental purpose. To the extent that the Rainy Day Fund balance does not exceed the target amount established pursuant to this section, the Council may draw upon the fund balance only to provide pay-as-you-go financing for capital projects or for other one-time capital items, provided that the Council enacts a resolution with at least five votes of the full Council authorizing such appropriation.