Apropos of Mayor Harrington‘s request, at the February 4 City Council meeting, to review city checks before her name would be stamped on them, I met with Sonoma’s Assistant City Manager and Finance Director Sue Casey and asked her about city check-signing policy.
Sue, who also oversees Human Relations and Risk Management for the city, is highly qualified for her job. She has an accounting degree and a wide background in government accounting and finance, including serving as the Administrative Services Director for the City of American Canyon, overseeing Finance, Human Resources, and Information Technology. She worked for the Moraga-Orinda Fire District, also as Administrative Services Director, with the same oversight portfolio. In the private sector, Sue was Corporate Controller for a software development company. She was also Assistant Finance Director for the City of El Cerrito.
For check–signing, four people in the city are authorized to sign checks, and by resolution any two can, and are required to sign every check. The four authorized people are the Mayor, City Manager, City Clerk, and Administrative Services Director. Note, the Finance Director is not one of the people who can sign checks. Once the check is double-signed, the Finance Director provides oversight by looking the check over to make sure the coding is correct and that the proper city budget area was attributed for the expense.
The current city check-signing practice has been in place for five years or more, since before Cathy Capriola became City Manager. The protocol has been for the mayor to sign or have their name stamped, and then another authorized co-signer signs the check. For the record, Mayor Harrington’s name has never actually been stamped on a check; previous mayors’ names were, and previous mayors have reviewed the check register.
This particular practice is “a bit unusual” said Casey, but it complies with government code, and cities do use this method. The code is California Section 37208, and it has three sections, A, B, and C. Cities can go with options A, B, or C, depending on the type of check payment. In this sense, the government code is ambiguous. In many cities, the full city council reviews the check register, and approval of expenses and checks signed is put on the consent calendar. This may be an option proposed by Sonoma staff to change the current system.
Here is the complete text of California Section 37208:
(a) Payroll warrants or checks need not be audited by the legislative body prior to payment. Payrolls shall be presented to the legislative body for ratification and approval at the first meeting after delivery of the payroll warrants or checks.
(b) Warrants or checks drawn in payment of demands certified or approved by the city clerk as conforming to a budget approved by ordinance or resolution of the legislative body need not be audited by the legislative body prior to payment.
(c) Notwithstanding subdivisions (a) and (b), budgeted payrolls and demands paid by warrants or checks may be presented to the legislative body for ratification and approval in the form of an audited comprehensive annual financial report.
It is not clear why the mayor’s stamp was used in the past when any two co-signers would do. For city finances in general, the budget is approved by the city council, and is reviewed every six months. The council decides what monies to allocate where and city staff implements these budget allocations. Check cashing and how checks conform to the council-directed budget, as mentioned, is overseen by the Finance Director.
Given that elected officials are ultimately responsible for government business, it is smart of Mayor Harrington to step up and take the wheel. Having been at the meeting myself and having watched the video as well, this agenda item seemed well done by all parties.
Following this February 4 council meeting, check signing and review by the mayor will be brought back as a future agenda item, and if in the meantime, the mayor is unable to sign in person, any of the other three authorized city signers can sign checks without there being a mayor’s stamp. Presumably the current mayor will review the check register as well.
Mayor Harrington also brought up on this agenda item that monthly financial reporting was required by the Municipal Code, and noted that “we’ve never done that,” but also noted that since this is a fiscal obligation required in the Municipal Code, she would like to have it fixed, i.e., to have the monthly financial reports made to the council.
City Manager Capriola said that yes, “there are a variety of best practices and things that have not been done historically” regarding financial practices. And she said “we will move forward rapidly,” within 45 days, with the monthly report fix. As per Mayor Harrington’s request, the City Attorney will report on how monthly financial reporting will be legal in the meantime.