Banking Services Procedure
Purpose statement
This procedure defines the process for the appointment of bankers, use and
management of banking services and bank account reconciliation for the
Town of Oakville.
Scope
This procedure applies to all banking transactions which take place by town
departments and Oakville Public Library for which the town provides banking
services.
Procedure
Appointment of bankers
The appointment of bankers shall be determined by a request for proposal
(RFP) and confirmed by Council resolution. A banking by-law shall be in effect
to identify bankers and designated signing officers for the signing of cheques,
electronic transfers, bank account set up, and investments.
An informal annual review and a formal five-year cost/benefit review on all
banking services will be completed in order to measure the cost effectiveness
of the services. Finance shall issue an RFP if:
1. The annual review process conducted by the Finance department
reveals serious deficiencies in banking services;
2. Where, in the opinion of the Treasurer or Deputy Treasurer, the banker
requests a significant change to the terms of providing banking services,
as contained in the original adopted banking proposal, which would
result in an increase in the cost of such services to the town, or;
3. Where market conditions have changed which would cause staff to
question the competitiveness of the current contract.
The Banking by-law shall be amended to reflect any changes resulting from
an RFP.
Banking signing authority
Municipal Act, Section 287 states that a municipality may provide that the
signatures on a cheque of the municipality be mechanically or electronically
reproduced.
The town must have a current by-law which reflects all positions that may sign
on behalf of the Treasurer and head of council. The town’s by-law reflects the
positions that can sign for either party; no one position is designated signing
authority for both the Treasurer and head of council. The resolution and by-
law must be signed and sealed with the Corporate seal and filed with the town
bankers.
The following transactions must be signed by two signing officers:
1. All cheques issued by the town:
a. Cheques under $50,000 may be signed utilizing electronic
signatories;
b. Cheques over $50,000 must be hand signed by two signatories.
2. Rental and access to safety deposit box.
3. Electronic transfers of funds to external parties through wire or banking
tools – greater than $50,000.
4. Annual debt payments.
5. Investments.
6. Setting up of new bank accounts.
The following transactions must be signed by one signing officer:
1. Credit card merchant accounts.
2. Online banking access.
Bank account management
The Manager of Accounting shall ensure the needs of departments are met as
it relates to the establishment of bank accounts.
1. All primary bank accounts shall be set up with the banker appointed by
the town.
2. Any accounts not set up with the banker appointed by the town must be
in accordance with the Banking by-law.
3. The set up or closing of bank accounts may be requested by
departments but is subject to the approval of the Manager of Accounting
and signed off by the signing officers, as defined in the Banking by-law.
4. New accounts will only be set up if there is a business reason to do so.
Banking deposits and transfers
The Treasurer or Deputy Treasurer shall use every secure means possible to
ensure funds received are deposited promptly to maximize interest income
and reduce the risk of unsecured funds.
1. All funds shall be counted and deposited within the centralized cashier
function at town hall or at Transit (for transit and parking related
deposits).
2. An armoured car service shall transport cash receipts safely and daily to
the central processing depot of the town’s banker. Electronic deposit
technology (if applicable) or daily courier service shall be utilized to
provide cheques to the central processing bank to ensure same day
deposits.
All town staff responsible for collecting revenue shall ensure they understand
and follow all procedures relating to cash handling and ensure all deposits are
submitted in a timely manner to Revenue Services or the bank. Any
alternative method of making deposits must be approved by the Manager of
Revenue Services and Taxation.
Bank account reconciliation
All bank accounts will be reconciled by the Accounting Department on a
monthly basis. Reconciliation shall be done in accordance with the following
process:
1. Reconcile cashed cheques weekly.
2. Any items not reconciled shall be followed up with source documents
within the following month and staff shall ensure controls have not been
compromised.
3. Any fraudulent items will be brought to the attention of the Manager of
Accounting immediately.
4. The Manager of Accounting will take immediate action notifying the
town’s bankers, senior management and/or police in the case of
fraudulent activities, and follow up with departments or staff who are not
complying with cash handling procedures.
5. The Manager of Account will review all monthly reconciliations.
6. Outstanding cheques which have become stale dated will be followed
up quarterly, to ensure that payment is received by vendors.
7. Outstanding, stale dated cheques, for which no response is received
from the vendor, will be held for two years then transferred to corporate
revenue.
8. Outstanding revenue deposits for which no response has been received
by the departments, will be moved to corporate revenues after six
months.
Payment options for revenue sources
There are various payment options available for departments to utilize to
ensure the goods and services provided are paid for and properly receipted:
1. Cash and cheques.
2. Certified cheques and bank drafts/money orders.
3. Payment card services from the town’s approved payment card
provider. Depending on the nature of and reason for the payment,
these could be received in person, via telephone, or online.
4. Third party credit card payment services (property tax payments only).
5. Electronic transfers inclusive of online banking tools.
6. Centralized invoicing (in accordance with accounts receivable
procedure).
Consideration of payment types must be done in consultation with the
Manager of Accounting. The following factors will be considered:
1. Payment terms must be linked with service delivery
2. Revenue volumes must be considered to minimize costs of payment
options and administration
3. The costs of credit cards and associated terminals; these will be
charged to the department(s) utilizing the device when possible
4. Utilization of the town’s payment card service provider
5. The security of payments to ensure that PCI standards are met, and
6. Revenue reporting must be timely, meet with accounting standards, and
satisfy internal reporting deadlines.
Definitions
Banking systems: Systems provided by the banker which record banking
transaction detail, provide statements, and allow access to information. It also
includes any anti-fraud programs which match the information of a Town of
Oakville cheque to the information on cheques cashed against the town’s
bank account(s).
Responsibilities
The following are responsible for:
Departments
Ensuring compliance with these procedures and that revenue is collected and
deposited in a timely manner. Consulting with the Manager of Revenue
Services and Taxation on new revenue sources and appropriate payment
options.
Finance department
Providing depositing, reconciling, and internal control services as it relates to
all banking functions and approving payment options for revenue sources.
Bankers
Ensuring services are provided and advising the town when procedures,
terms of contract, controls or improper signing authority are compromised, or
when there is any indication of fraudulent activity.
References
Municipal Act, Section 286(1) (b) and 287
Banking By-law and related amendments (2019-048)
Banking services contract
Payment Card Industry Standards Data Security Standard (PCI DSS)
GAAP and PSAB requirements
