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STAFF REPORT <br />TO: Mayor Fischer and Members of City Council <br />FROM: Sam Magureanu, Finance Director <br />DATE: January 8, 2025 <br />RE: Amend Finance Policy - Include Electronic Funds Transfer Section <br />BACKGROUND INFORMATION <br />Cities are becoming more transparent with information on the Internet, and electronic banking is <br />becoming widely accepted. Effective internal control policies and procedures must be adopted to <br />protect city funds from fraudulent disbursements. <br />This policy sets citywide guidelines to allow certain electronic funds transfers (EFTs) payments. <br />It also 1) sets guidelines to ensure that the use of electronic funds transfers and receipts are <br />initiated, executed, and approved securely, 2) identifies the proper documents to be completed by <br />city staff who might have a new electronic funds transfer request, receipt, or employee payroll <br />deposit change, and 3) seeks to mitigate the risks of fraud within the electronic funds transfer <br />process. <br />EXPLANATION <br />Beginning with 2024 the city introduced EFT payments to vendors. This payment process has <br />become the norm for many cities and institutions as it become a more secure form of payment <br />than traditional checks. This option has been explored by city staff with our bank and decided <br />that the implementation will be beneficial to reduce the risk of possible payment fraud. <br />Currently city staff is working at transitioning as many vendors as possible to EFT payments. <br />Since not all of the vendors allow for EFT payments, the city will continue to cut checks to <br />vendors as needed. <br />FISCAL IMPACT <br />None <br />RECOMMENDED ACTION <br />Make a motion to approve a resolution to adopt and incorporate the Electronic Funds Transfer <br />Policy as part of the existing Finance Policy. <br />ATTACHMENTS: 1) Updated Finance Policy (new EFT Policy pages 28-31)