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Staff Report
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Report To: Audit and Accountability Committee
Date of Meeting: June 29, 2021 Report Number: FSD-034-21
Submitted By: Trevor Pinn, Director of Financial Services/Treasurer
Reviewed By: Andrew C. Allison, CAO By-law Number:
File Number: [If applicable, enter File Number] Resolution#:
Report Subject: Bank Signing Authority Policy
Recommendations:
1. That Report FSD-034-21 be received;
2. That the draft Bank Signing Authority Policy, as attachment #1, be approved;
3. That the draft by-law, as attachment #2, to repeal Bowmanville By-law 1786 and Town
of Newcastle By-law 88-97 be approved; and
4. That the Municipality's banking institutions, and any delegations, be advised of
Council's decision.
Municipality of Clarington Page 2
Report FSD-034-21
Report Overview
With the recent changes in the organizational structure of the Municipality, including changes
in the organization of the Financial Services Department, Staff have reviewed the
appropriate signing officers for cheques and payments from the Municipality's bank
accounts.
The attached policy will determine who will have signing authority on disbursing funds from
the Municipality's bank (general, reserve, trust) accounts.
1. Background
1.1 The Municipal Act, 2001 s.286(1) states that "a municipality shall appoint a treasurer
who is responsible for handling all of the financial affairs of the municipality on behalf of
and in the manner directed by the council of the municipality..."
1.2 Subparagraph (c) goes further to state that the treasurer is responsible for "paying all
debts of the municipality and all other expenditures authorized by the municipality."
1.3 A best practice is for Council to designate individuals authorized to sign cheques and
approve payments on behalf of the Municipality. Clear delegation ensures that there is
proper review of payments and provides our financial institutions designated individuals
who may conduct banking on behalf of the Municipality.
1.4 With the recent organizational structure change, Staff were reviewing the signing
authorities to determine the proper positions authorized to sign on behalf of the
Municipality.
1.5 It was determined that two currently enacted by-laws spoke to signing authority. Further,
there appears to be Council approval after these by-laws that provides for
additional/contradictory signing approval.
1.6 The first by-law was By-law 1786 from the Town of Bowmanville was enacted in 1960.
This by-law provided the authority to the Treasurer or Deputy Treasurer and Mayor or
Reeve to sign for banking transactions of the Town of Bowmanville.
1.7 Secondly, it was determined that Town of Newcastle By-law 88-97 was still in effect.
This by-law, when bank accounts were established with the Bank of Nova Scotia,
authorized the Treasurer, Deputy Treasurer and Mayor to act as signing officers.
1.8 In Report FND-022-11, the CAO, Treasurer and Deputy Treasurer were approved as
the authorized signatories on the account with the Manulife Bank of Canada and that a
combination of two of the signatories may be authorized to sign agreements and other
documents related to that account. This resolution mirrored the process that was in
place for the other banking agreements starting either in 2007 or 2010 upon the change
of mayor. It should also be noted that effective 2006, the Municipal Act, 2001 repealed
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Report FSD-034-21
s.288 which required that the Mayor and Treasurer sign cheques (there is now no
specific requirement for who signs cheques).
1.9 The adoption of the attached policy follows current practice, is a best practice, and
would eliminate inconsistencies in our records. The Municipal Clerk recommends that
the two previous by-laws be repealed if Council were to adopt this policy to ensure there
is no confusion on where the signing authority is provided.
2. Proposed Policy
2.1 The proposed policy provides for four signing officers; this provides back-up if the
primary signors are away and unable to approve the payments. Either the CAO or the
Director of Legislative Services must be one signature. The other signature is either the
Director of Financial Services/Treasurer or the Manager of Accounting Services/Deputy
Treasurer.
2.2 Staff are proposing these positions to ensure that at least one financial person is signing
the cheques but that there is also oversight from a non -financial person. It is strongly
suggested that wording such as "Any two of..." not be included because this could result
in a situation where two non -financial parties sign cheques, or that two financial parties
circumvent reasonable oversight.
2.3 By not explicitly naming individuals, the authority remains when individuals change
positions. In addition, this eliminates the need to come back to Council each time there
is a change in signing officers, which expedites the ability to update signing officers with
the bank.
2.4 The policy allows for both mechanical and "wet" signatures on cheques. The
Municipality has been electronically affixing signatures to cheques for several years,
and it is an effective means of producing cheques. The Municipality continues to
transition vendors to Electronic Funds Transfer (EFT) as payment; however, not all
vendors are set up to receive payments electronically.
2.5 Transfers between accounts happen several times throughout the week and are part of
rebalancing the Municipality's bank accounts. Transfers between accounts do not
require the approval of the CAO or Director of Legislative Services but must be
approved by the Director of Financial Services/Treasurer or Manager of Accounting
Services/ Deputy Treasurer for oversight.
2.6 Any funds leaving the Municipality's bank accounts for an external source (including an
investment account held by the Municipality) will follow the cheque signing
requirements, regardless of whether the process is a cheque or electronic means.
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Report FSD-034-21
3. Concurrence
Not Applicable.
4. Conclusion
It is respectfully recommended that the attached Bank Signing Authority Policy be
approved and that the previously approved by-laws in the Town of Bowmanville and
Town of Newcastle be repealed.
Staff Contact: Trevor Pinn, CPA, CA, Director of Financial Services/Treasurer, 905-623-3379
ext. 2602, tpinn@clarington.net
Attachments:
Attachment 1 — Bank signing authority policy
Attachment 2 — Draft By-law to Repeal Town of Bowmanville By-law 1786 and Town of
Newcastle By-law 88-97
Corporate Policy
Attachment 1 to FSD-034-21
ciffboon
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POLICY TYPE:
SUBSECTION:
POLICY TITLE:
POLICY #:
POLICY APPROVED BY
EFFECTIVE DATE:
REVISED:
APPLICABLE TO:
1. Purpose
Financial
Internal Control
Bank Signing Authority Policy
Council
July 6, 2021
1.1 The purpose of this policy is to establish the rules and practices for the approval of
disbursements from bank accounts held by the Municipality.
2. Scope
2.1 This policy applies to all Municipal departments, boards, committees, and other
organizations within the reporting requirements of the Municipality of Clarington.
3. Policy
3.1 All transactions affecting bank accounts of the Municipality require two signatures
or electronic approvals from the appropriately designated persons.
3.2 Either the Chief Administrative Officer or Director of Legislative Services together
with the Director of Financial Services/Treasurer or Manager of Accounting
Services/Deputy Treasurer are designated to sign cheques and approve electronic
fund transfers from bank accounts of the Corporation or a trust under the control of
the Corporation.
3.3 The Director of Financial Services/Treasurer and the Manager of
Accounting/Deputy Treasurer are authorized to designate staff to be given
permission to conduct the day-to-day electronic bank transactions including, but
not limited to, payment disbursement services, wire payments, remote deposit
capture, and account transfers.
Policy Number/Name Page 1 of 2
Corporate Policy
Attachment 1 to FSD-034-21
ciffboon
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ordinator at 905-623-3379 ext. 2131
3.4 For further clarity, a transfer between accounts held by the Corporation are not
considered to be cheques or electronic funds transfers and would only require the
approval of two individuals, one being the Director of Financial Services/Treasurer
or the Manager of Accounting Services/Deputy Treasurer.
3.5 The signatures of designated bank signing persons may be written, printed or
otherwise mechanically or electronically reproduced on cheques.
3.6 Any mechanical equipment owned or used by, for or on behalf of the Corporation
for the reproduction of the signatures as contemplated in paragraph 5.4 hereof
shall be in and under the care, custody and control of the Director of Financial
Services/Treasurer or any other person, duly authorized in writing by the Director
of Financial Services/Treasurer.
3.7 Each board, committee, agency within the reporting requirements of the
Municipality shall establish a procedure for the approval of disbursements which
shall include a minimum dual signature requirement for all disbursements.
4. Policy Review
4.1 This policy shall be reviewed no less than once per term of Council or if deemed
necessary.
Policy Number/Name Page 2 of 2
Attachment 2 to FSD-034-21
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The Corporation of the Municipality of Clarington
By-law 2021-XXX
Being a by-law to repeal previous by-laws establishing signing authority in the Town of
Bowmanville and the Town of Newcastle.
Whereas Report FSD-034-21 was approved for the Municipality of Clarington
establishing signing authority for banking purposes;
Whereas there remains two by-laws passed by former municipalities providing for
signing authority that is contrary to the aforementioned adopted policy; and
Whereas Council wishes to remove the previously adopted signing authorities.
Now therefore the Council of the Municipality of Clarington enacts as follows:
1. That the Town of Bowmanville By-law 1786 be repealed.
2. That the Town of Newcastle By-law 88-97 be repealed.
3. That this by-law shall come into force, and effect, upon the date of passing.
Passed in Open Council this 6 day of July, 2021.
Adrian Foster, Mayor
June Gallagher, Municipal Clerk