|The city has a policy to collect its three percent sales tax and four percent bed tax, and city staff has begun enforcing that policy over the past few months. Some businesses are reporting and collecting on a previous two percent sales tax. Businesses under-collecting on sales taxes are receiving letters from the city and from the city’s attorney, and receive penalties and interest on the correct owed amounts if no response is received, in accordance with the sales tax collection policy. Additionally, city staff or contracted accountants will be auditing the books of some businesses where there is suspicion of non-payment or incorrect reporting.
The city utilizes QuickBooks to track all accounts receivable and accounts payable. Each department tracks its own accounts receivable, then provides a report to the treasurer for appropriate deposit, documentation, and follow-up. Purchases are completed through one of three methods. According to one method, department and city staff make purchases on the city’s account at the local store, and then provide a receipt to the treasurer for appropriate accounting and cost allocation. A similar method is utilized with the city’s Amazon.com credit card. Any other purchases require a purchase order form which is pre-approved by the treasurer. All checks are created by the treasurer then signed by two council members. All coding and accounting is completed by the treasurer in accordance with appropriate budget categories and available funds.
When cash is received by each department, it is brought to the treasurer and the treasurer “buys” the cash with a personal check. Each check is photocopied and attached to a copy of the deposit slips. All cash is sent to the bank for deposit. The city does not disburse any cash.
Payroll is also computed using QuickBooks. Employees utilize a uniform timesheet and on a monthly basis the timesheets are signed and turned into the treasurer, who provides pay stubs and processes direct deposits.
The city’s chart of accounts was previously nine pages long, but has since been revamped and is now five pages long. Each account is categorized with a type, such as bank, accounts receivable, assets, liabilities, equity, income, etc. Reconciliations are completed on a monthly basis, and reconciliation details provide evidence of reconciliation of each account within the past month.|