2638 ORDINANCE NO. 2 6 3 "
AN ORDINANCE TO ADOPT AN ELECTRONIC FUNDS/WIRE
TRANSFER POLICY FOR THE CITY OF WEST MEMPHIS,ARKANSAS,
AND FOR OTHER PURPOSES.
WHEREAS,to be in compliance with Arkansas Code Annotated Section 1459-105 and
Arkansas Legislative Audit Information Systems Best Practices the City Council of the City of
West Memphis desires to adopt an Electronic Funds/Wire Transfer Policy;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF WEST MEMPHIS,ARKANSAS, THAT:
SECTION 1. The Electronic Funds/Wire Transfer Policy of the City of West Memphis is
adopted to read as follows:
City of West Memphis Electronic Funds/Wire Transfer Policy
I. Scope
This Electronic Fund Transfer Policy ("Policy") applies to all staff who are approved
to utilize electronic funds transfers, such as Automated Clearing Houses ("ACH") and
wire transfers for payments made on behalf of The City of West Memphis. Please see
Section IV below for the definitions of terms contained in this Policy.
II.'Policy Statement
Electronic Funds Transfer("EFT") offers an efficient way to move funds but possesses
inherent risks. This Policy is intended to establish effective controls surrounding EFT
processing requirements. The purpose of this Policy is to ensure that EFTs are
initiated, executed, and approved in a secure manner through effective controls in
order to mitigate risk.
There are two types of EFTs:
• Payments to vendors or suppliers, and
• Transfers of investment monies.
III. Policy
This Policy requires that appropriate internal procedures are utilized in the processing
of EFTs in order to ensure that adequate banking controls are maintained and to
prevent any fraudulent or unauthorized payments. An EFT will be used only when a
situation requires immediate funding, or when a paper check is not an acceptable form
of payment.
To support the safety of City of West Memphis funds in the EFT environment, the
procedures to initiate and process EFTs are subject to the same financial policies,
procedures, and controls that govern disbursements of City of West Memphis funds by
any other means (i.e. check disbursements).
For all EFTs, the Initiator will initiate the wire and send written notification with
supporting documents to trigger an action that a wire is ready for approval. Only
authorized signatories or their designees, may approve an EFT. The City has
established the authority to initiate EFTs with associated financial limits and
confirmations of executed transfers. There must be assurance that adequate separation
of duties exists. There must be controls in place in regard to authorization,
reconciliation, and review of these transactions.
For ALL EFT requests, the source must be verified and the request approved.
Verification procedures include:
1. Creating a written verification process (listed on Exhibit A) for all wire transfer
requests,
2. A confirming follow-up using another mode of communication should be completed
(i.e. if it is an email request, call the requestor back to speak with them in person),
3. Including a multi-person approval process, and
4. Training all staff who may receive these requests to ensure that everyone understands
the process.
ACH payments are utilized on a limited basis and are automatically withdrawn from
the City's bank account. Payments that are withdrawn from that account typically
include, but are not limited to: payroll, payroll taxes, credit card payments, benefits,
and certain utility payments. ACH payments require approval from the City's Finance
Director.
Security Administrators are assigned to set up, monitor, and protect user profiles,
rights, and access. All persons using the EFT system must be assigned individual users
by Security Administrators.
Reconciliation of banking activity with regard to EFTs and ACHs to the City's general
ledgers will be complete in a timely manner with proper investigation and resolution of
reconciling items.
IV. Definitions
Approver/Authorized Signatory: The staff member responsible for completing and
verifying the funds transfer. The Approver is an authorized signatory officer for the
City or their designee. The current approvers are Finance Director, City Treasurer,
and Budget Committee Chairman.
Automated Clearing House (ACH): An electronic network for financial transaction in
the United States. ACH processes large volumes of credit and debit transactions in
batches. Both the government and the commercial sectors use ACH payments.
Businesses increasingly use ACH online to have customers pay, rather than via credit
or debit cards.
Electronic Funds Transfer(EFT): The electronic transfer of money from one bank
account to another, either within a single financial institution or across multiple
institutions,via computer-based systems,without the direct intervention of bank staff.
Initiator: The staff member responsible for processing EFTs for the City. The Initiator
is most often in an Accountant or disbursement capacity role.
Security Administrators: Senior individual within the business operations with the
authority to create users and assign security profiles to individuals for the preparation
of EFTs.
Vendor: Any person or organization being paid from the City's Accounts Payable
Department.
Wire transfer: A method of electronic funds transfer from one person or entity to
another.A wire transfer can be made from one bank account to another bank account
or through a transfer of cash at a cash office. Transactions made by wire transfers can
typically be transferred within a day. As opposed to ACH payments,wire transfers are
often used for individual transactions.
V. Effective Date
This Policy is effective on the date that it is signed by the Mayor.
VI. Date of Approval
6/1/2023
SECTION 2. All ordinances or parts of ordinances in conflict herewith are hereby
,repealed•to the extent of any such conflict.
PASSED AND APPROVED this / day of (//2t' , 202.3
MARCO M. McCLENDON, MAYOR
ATTEST:
PATRICIA BO JOPLIN, CITY CLE
SPONSORED BY:
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