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Agricultural Associations and Societies - Grants
Allocation of Registered Motor Vehicle Penalties
Annual Reports
100-R and Annual Financial Report
Appropriations
Construction Or Repair Of Bridges
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When Required By County Council Only
Approval of Accounting Forms and Systems
Assessment
IC 5-13-6-3 allows counties to advance taxes units amounting to 95% of the amount such unit would get in a distribution of the taxes collected for the unit at the time of advancement. The term “taxes collected” includes property tax and license excise tax. The request for an advance tax draw must be filed at least thirty (30) days before the treasurer is required to make the advance.
The following procedures should be followed:
1. The collections for each taxing district within the municipal corporation, as shown by the records of the county treasurer, should be multiplied by 95%.
2. Divide the answer under (1) by the total tax rate for the taxing district to obtain the factor to be used in apportioning the tax.
3. Multiply the factor by the tax rate for the fund for which the advance draw is requested, to arrive at the maximum amount which can be advanced.
4. Issue an application to pay and quietus in favor of the county treasurer for the amount to be advanced to the credit of the fund for which advanced and issue a warrant therefore in favor of the proper officer of the municipal corporation.
The treasurer shall enter the advance on line 42 on the left side of the Daily Balance of Cash and Depositories and such amounts are deducted from the amount of total taxes collected shown on line 41. This will leave the total amount of taxes to be settled on line 43.
It is imperative that advances be recorded by the treasurer to insure the proper amounts are distributed at Settlement.
The General Assembly amended IC 6-1.1-15-11, IC 36-2-6-3, and IC 36-2-4.5 so that claims under these codes are no longer required to be published unless it is an allowance made by the court. IC 36-2-6-3 states: “(a) This section does not apply to claims for salaries fixed in a definite amount by ordinance or statute, per diem of jurors, and salaries of officers of a court. (b) The county auditor shall publish all allowances made by courts of the county. Court allowances shall be published at least three (3) days before the issuance of warrants in payment of those allowances. Allowances subject to this section shall be published as prescribed by IC 5-3-1 except that only one (1) publication in two (2) newspapers is required. (c) A county auditor who issues warrants in payment of allowances made by a court of the county, before compliance with subsection (b), commits a Class C infraction. (d) A county auditor shall publish one (1) time in accordance with IC 5-3-1 a notice of all allowances made by a circuit or superior court. The notice must be published within sixty (60) days after the allowances are made and must state their amount, to whom they are made, and for what purpose they are made.” Further explanation and examples of court jurisdiction may be found in the Accounting and Uniform Compliance Guidelines for County Auditor.
AGRICULTURAL ASSOCIATIONS AND SOCIETIES (FAIRS) – GRANTS FROM COUNTY
The board of county commissioners may make an allowance from the general fund to any 4-H Club Association having for its purpose the promotion of agriculture or horticultural interests of the county. A petition signed by thirty or more resident freeholders is required and same petition, without the signatures, must be published in a newspaper of general circulation. If a petition in remonstrance be signed by more resident freeholders than the petition for such grant, the board of county commissioners shall dismiss the first petition and take no further action. Any such petition, after final acceptance, shall be effective for one or more years, not to exceed five years, such time to be determined by the board of county commissioners. (IC 15-14-7-3)
The board of county commissioners may levy an annual tax of not to exceed $0.0333 on each $100 valuation for construction, operation or maintenance of any building owned or operated by such association, only until the building has been constructed, and in no event for a period more than five years.
After a building has been constructed the county council may levy an annual tax of not to exceed $0.0067 on each $100 valuation for operating and maintaining such building. (IC 15-14-7-4)
The county councils and boards of county commissioners may appropriate and pay to any agricultural fair or association or 4-H club, a sum not exceeding four cents ($0.04) on each $100 valuation, from the general fund for necessary costs and expenses, premiums, and judging. This appropriation cannot include purses for speed contests and cannot be extended to any association conducting fair for gain, not to street fairs or exhibitions. (IC 15-14-9-2)
ALLOCATION OF PENALTIES COLLECTED FOR FAILURE TO TIMELY REGISTER MOTOR VEHICLES
IC 9-18.1-2-6 states: “A nonresident may that becomes an Indiana resident may operate a vehicle on a highway for not more than sixty (60) days without registering the vehicle under this article, if the vehicle in registered in accordance with the laws for the jurisdiction in which the nonresident was a resident.”
IC 9-18.1-2-11 states: “A person that fails to register a vehicle that is required to be registered under this chapter commits a Class C infraction.” IC 34-28-5-17(b) states: “In addition to…any judgment assessed under IC 34-28-5…, a person that violates IC 9-18.1-2-3 shall be assessed a judgment equal to the amount of excise tax due on the vehicle under IC 6-6-5 or IC 6-6-5.5…”
IC 34-28-5-17 goes on to require the clerk to collect the additional judgment and transfer the additional judgments collected to the county auditor on a calendar year basis. The auditor shall distribute the funds to the law enforcement agencies, including the state police, responsible for issuing citations to enforce section 1 of this chapter. The percentage of the funds distributed to an agency equals the percentage of the total number of citations issued by the agency for the purpose of enforcing section 1 of this chapter during the applicable period.
Funds distributed under this section shall be used for any law enforcement purpose including contributions to the pension fund of the law enforcement agency.
To facilitate the handling and allocation of these fees under IC 34-28-5-17, the clerk should use General Form No. 367 (1984) entitled “Clerk’s Report to Auditor of Additional Judgments for Excise Tax.” In using this form the following procedures should be observed:
1. The clerk of the court which collects these penalties must include a memorandum with the remittance which shows the number of citations filed in the court by each law enforcement agency for failure to timely register a motor vehicle. Such memorandum could be as follows:
Law Enforcement Agency (Number of Citations)County Sheriff (6)
Urban City Police (2)
Best Town Marshall (2)
Total (10)2. The amount received from the clerk would be receipted to a fund called “Judgments Due Law Enforcement” fund #7305
3. The amount receipted to the Judgments Due Law Enforcement Agencies Fund would then be multiplied by the percentage of the total citations which were filed by each law enforcement agency during the applicable period to determine the amount due each law enforcement agency.
Using the number of citations shown in Item 1 above an example of a worksheet to determine the allocation of funds is as follows:
Amount Received From Court $450.00
Law Enforcement Agency Number of Citations Percentage of Total Amount Due Agency County Sheriff 6 60% $270 Urban City Police 2 20% $90 Best Town Marshall 2 20% $90 Total 10 100% $450 4. After the amount due each law enforcement agency is determined a warrant should be issued to the disbursing officer of the particular governmental unit for the amount due. The warrant should be accompanied by a brief explanation showing the purpose of the distribution.
5. The amount due to the county on account of citations filed by the sheriff’s department should be receipted by quietus to a fund called “Motor Vehicle Registration Penalties” Fund #1214. This fund can be expended for any law enforcement purpose. However, disbursement should be by county warrant and only after a duly itemized claim has been approved by the Board of County Commissioners.
6. Any amount due on account of citations issued by the state police would be sent to the Auditor of State
ANNUAL REPORTS
SUPPLEMENTAL ANNUAL REPORT AND USE BY THE COUNTY AUDITOR FOR THE ANNUAL REPORT
The supplemental annual report forms are submitted by other county offices and departments to be used by the county auditor to provide complete financial information for the annual report by reporting financial activity that is maintained outside of the county auditor’s system. The supplemental annual reports are only to be submitted with financial activity that is not eventually accounted for in the county’s general ledger system. For example, the recorder’s office may maintain a cashbook and an outside bank account, but those receipts are turned over monthly and accounted for monthly in the auditor’s system and so would not be reported on the supplemental annual report, even that portion at year end that has yet to be remitted to the county auditor’s office.
The common financial activities that are maintained outside of the county auditor’s system are the clerk’s trust (including ISETS), jail commissary, sheriff’s inmate trust, county home commissary, and county home residents’ trust. Redevelopment commission funds for capital projects (bond proceeds) and debt service (incremental tax) should also be considered.
There are two exceptions to the rule that only financial activity that is not eventually accounted for in the county’s general ledger system be reported on the supplemental annual report to be included in the annual report by the county auditor.
One exception is the clerk’s trust fund. The clerk’s trust fund includes receipts that are turned over monthly and accounted for in the county auditor’s system. This activity will not be separated out. The financial activity that will be reported on the supplemental annual report by the clerk and in turn reported by the county auditor on the annual report under the clerk’s trust fund will be inclusive of the activity for these receipts.
The other exception is the after December settlement collections by the treasurer. The county treasurer will reflect on the supplemental annual report as the beginning balance the previous year’s ending balance. The disbursements column will be the same as the beginning balance. This has the effect of reversing out the prior year activity. The amount for receipts and ending balance is arrived at by taking the ending balance on the treasurer’s daily cash sheet for the current December 31th balance of taxes to be settled + total other sources. The county auditor will reflect these amounts as the beginning balance, receipt, disbursement, and ending balance on the annual report under the after settlement collections fund. This is the only fund that provides the timing difference of financial activity that has not yet been recorded in the auditor’s general ledger system.
Three resources that should be referred to for any updates to this process are the Accounting and Financial Reporting Regulation Manual, which may be found on our web site under manuals, the user guide for the gateway annual report and instructions for the supplemental annual financial report, both of which may be found on our web site under gateway annual report.
Certified Report of Names, Addresses, Duties and Compensation of Public Employees (100R) and Annual Financial Report (AFR)
Pursuant to IC 5-11-13-1, all governmental units in the state must file the certified personnel report (Form 100R) in January of each year with the State Board of Accounts. Also, pursuant to IC 5-11-1-4, all local governmental units in the state must file an Annual Financial Report (AFR) not later than 60 days after the close of each fiscal year. The Indiana Gateway for Government Units (Gateway) system was created to collect both of these reports.
Due to the importance of these reports, the State Examiner has established the following procedures for reports not filed timely:
If either the 100R or the AFR are not filed by the statutory due date, the State Board of Accounts will subpoena the fiscal officer to appear in our Indianapolis office with the information necessary to complete the 100R or AFR, as applicable. This subpoena will be served either by certified mail or through personal service by a representative of the Office of the Attorney General (OAG).
If the fiscal officer does not appear or does not submit the 100R or AFR in response to the subpoena, the State Examiner will send a notification to the OAG requesting the OAG to compel the fiscal officer to appear in court to answer as to his or her failure to file the report. The State Examiner may also send notification of the officer’s failure to comply with the law to the local prosecuting attorney.
Indiana Code 5-11-1-10 addresses the penalty for not filing a required report and not following the directions of the State Examiner:A public officer who:
(1) fails to make, verify, and file with the state examiner any report required by this chapter;
(2) fails to follow the directions of the state examiner in keeping the accounts of the officer's office;
(3) refuses the state examiner, deputy examiner, field examiner, or private examiner access to the books, accounts, papers, documents, cash drawer, or cash of the officer's office; or
(4) interferes with an examiner in the discharge of the examiner's official duties; commits a Class B infraction and forfeits office. (Our emphasis)
If you need submission rights or have any questions regarding the use of Gateway, please contact our help desk at gateway@sboa.in.gov. Also, please feel free to contact our Directors of Audit Services if you are having difficulty completing your 100R or AFR. Contact information is available on our website at www.in.gov/sboa.
APPROPRIATIONS
It is possible to appropriate more money in a particular year after the budget is approved if the proper officers determine that additional appropriations re needed. See IC 6-1.1-18-5. A public hearing must take place and proper notice must be given in compliance with IC 5-3-1-2. For counties, IC 36-2-5-12 allows the council to make additional appropriations at a special meeting. To determine if the additional appropriations need the approval of DLGF, see IC 6-1.1-18-5 for guidance. If the additional appropriation is for a fund that DLGF has certified the budget, rate or levy, then DLGF must approve any additional appropriation to that fund.
APPROPRIATION FOR CONSTRUCTION OR REPAIR OF BRIDGES
The budgetary laws specifically (IC 36-2-5-7) states in part:
"…the county executive shall prepare an itemized estimate of all money drawn by the members of the executive and all expenditures to be made by the executive or under its orders during the next calendar year. Each executive's budget estimate must include:…(2) the expense of constructing and repairing bridges, itemized by the location of and amount for each bridge;…"
Cumulative Bridge Fund
IC 8-16-3-3(e) states: "An appropriation from the bridge fund may be made without the approval of the department of local government finance if:
(1) the county executive requests the appropriation; and(2) the appropriation is for the purpose of constructing, maintaining, or repairing bridges, approaches, or grade separations."
APPROPRIATIONS CARRIED FORWARD (ENCUMBRANCES)
Appropriations may be carried forward to the following year if any of the following conditions exist:
1. A lawful contract has been entered into with a vendor or contractor on or before December 31 and all or a part of the contract has not been paid.
2. A purchase order has been issued on or before December 31, entered as an encumbrance against an existing appropriation, and isn’t paid as of December 31.
3. Proceeds of a bond issue have been duly appropriated and remain unexpended as of December 31.
4. Appropriations which are obligated by a contract or a agreement executed on or before December 31, between the county and any federal or state agency, such as a criminal justice planning grant, local road and street project, or federal grant requiring local matching funds.
Only the amount required to meet the balance due on a contract or purchase order may be carried forward; the amount remaining in the appropriation account shall revert to the fund from which appropriated.
Whenever a valid appropriation has been lawfully encumbered by a contract or by the issuance of a purchase order, the appropriation to the extent of the encumbrance may be carried forward to the succeeding year and made available for payment of the obligation which encumbered it. Only so much of the appropriation as is lawfully encumbered may be carried forward. All appropriations not lawfully encumbered by contract or purchase order revert at the close of the year.
We suggest the proper officials of the county make a listing of these encumbered items and make it part of their minutes in their last business meeting of the year. The Department of Local Government Finance should be sent a copy of the listing. Keep in mind the appropriations encumbered and carried forward can be used for no other purpose other than the purchase order or the contract for which they were appropriated.
APPROPRIATIONS – PROCEEDS FROM PROPRERTY DAMAGE CLAIMS
IC 6-1.1-18-7 states: “Notwithstanding the other provisions of this chapter, the fiscal officer of a political subdivision may appropriate funds received from a person as defined by IC 6-1.1-1-10 if:
(1) The funds are received as a result of damage to property of the political subdivision; and
(2) The funds are appropriated for the purpose of repairing or replacing the damage property.
However, this section applies only if the funds are in fact expended to repair or replace the property within the twelve (12) month period after they are received.”
IC 6-1.1-18-9 states: “Notwithstanding the other provisions of this chapter, the proper officer or officers of a political subdivision may:
(1) reappropriate money recovered from erroneous or excessive disbursements if the error and recovery are made within the current budget year; or
(2) refund, without appropriation, money erroneously received.”
IC 6-1.1-18-6 states the following, “The proper officers of a political subdivision may transfer money from one major budget classification to another within a department or office if: 1) they determine the transfer is necessary; 2) the transfer does not require the expenditure of more money than the total amount set out in the budget as finally determined by this article; 3) the transfer is made at a regular meeting and by proper ordinance or resolution; and 4) the transfer is certified to the county auditor. A transfer may be made under this section without notice and without the approval of the department of local government finance.”
This statute is addressing transfers from one major classification to another major classification within a department. For example, a transfer in the County Auditor’s budget from a 300 account to a 200 account. No transfers are allowed from one department to another, i.e. from the County Auditor’s budget to the County Treasurer’s budget. To do this would require a budget reduction in one department and an additional appropriation to the other department by the County Council. Transfers within a major classification in a department may be made without County Council action unless your local policy is for all transfers to go before the County Council. (i.e. from a 200 account to another 200 account within the County Auditor’s budget)
APPROPRIATIONS - WHEN NOT REQUIRED
In some instances statutory authority is given the county auditor to make disbursements without an appropriation having been previously made for the specific purpose. Examples are as follows:
1. Premiums on official bonds. (IC 5-4-5-3)
2. Tax refunds. (IC 36-2-9-14)
3. Any money belonging to the state, school fund, or any fund of any township, town or city and commanded by law to be paid to such municipality. (IC 36-2-9-14)
4. Any money collected from a taxpayer from an assessment and is being paid on a public improvement such as ditches and drains. (IC 36-2-9-14)
5. Redemption of property sold at tax sale. (IC 36-2-9-14)
6. Per diem, lodging, and mileage for conferences called by State Board of Accounts. (IC 5-11-14-1)
7. Examination of records. (IC 5-11-4-4)
8. Line fence assessments. (IC 32-26-9-4)
9. Federal grants, if advanced and not received as a reimbursement of expenditures.
10. Advances to conservancy districts on order of court. (IC 14-33-7-15)
11. Surplus tax refunds. (IC 6-1.1-26-5)
12. Refund of money erroneously received. (IC 6-1.1-18-9)
13. Correction of errors in posting. (IC 6-1.1-18-9)
14. Jail commissary fund. (IC 36-8-10-21)
15. Investment of funds.
16. Title IV-D incentive fund (clerk and prosecuting attorney portions). (IC 31-25-4-23)
17. Repayment of temporary loans.
18. Recorder’s records perpetuation fund. (IC 36-2-7-10)
19. Firearms Training Fund. (REFUNDS ONLY) (IC 35-47-2-3).
20. Accident Report Fund. (IC 9-29-11-1)
21. County Law Enforcement Continuing Education Fund. (IC 5-2-8-1)
22. Special Death Benefit Fee Fund. (IC 5-10-10; IC 35-33-8-3.2)
23. Military Fines. (IC 10-16-9-3)
24. Payment of accrued interest on cemetery trust funds paid on the last Monday in January (IC 23-14-70-2).There may be other laws under which funds may be disbursed without appropriation; however,
appropriations are required before disbursements may be made from any fund subject to the Budget Laws
unless specific authority to disburse without appropriation is provided by law.APPROPRIATIONS - REQUIRED BY COUNTY COUNCIL ONLY
The following is a list of funds which require county council approval of an appropriation. Due to the nature of the funds, the Department of Local Government Finance does not require submission of an additional appropriation request before the local appropriation can be approved.
1. County Supplemental Adult Probation Services Fund. (IC 35-38-2-1)
2. County Supplemental Juvenile Probation Services Fund. (IC 31-40-2-2)
3. County User Fee Fund. (IC 33-37-8-6)
4. Plat Book Fund. (IC 36-2-9-18)
5. Local Emergency Right to Know Fund. (IC 13-25-2-10.6)
6. Pretrial Diversion Fund (Excess). (IC 33-37-8-7)
7. Community Corrections Home Detention Fund. (IC 11-12-7-3; IC 35-38-2.5-8)
8. County Extradition Fund. (IC 35-33-14)
9. County Misdemeanant Fund (IC 11-12-2-11)
10. Supplemental Public Defender Services Fund. (IC 33-40-3-2)
11. Emergency Telephone System Fund. (IC 36-8-16.7-38)
12. Cumulative Bridge Fund. (IC 8-16-3-3)
13. Local Health Maintenance Fund. (IC 16-46-10)
14. Vehicle Inspection Fund. (IC 9-17-2-12)
15. Community Corrections Grant and Project Income Fund (IC11-12-2-2)
16. Payments from State or Federal Grant as reimbursement of expenses (IC 6-1.1-18-7.5)
17. Firearms Training Fund. (IC 35-47-2-3).APPROVAL OF ACCOUNTING FORMS AND SYSTEMS
The State Board of Accounts is charged by law with the responsibility of prescribing and installing a system of accounting and reporting which shall be uniform for every public office and every public account of the same class and contain written standards that an entity that is subject to audit must observe. The system must exhibit true accounts and detailed statements of funds collected, received, obligated and expended for or on account of the public for any and every purpose. It must show the receipt, use and disposition of all public property and the income, if any, derived from the property. It must show all sources of public income and the amounts due and received form each source. Finally it must show all receipts, vouchers, contracts, obligations, and other documents kept, or that may be required to be kept, to prove the validity of every transaction. [IC 5-11-1-2]
The system of accounting prescribed is made up of the uniform compliance guidelines and the prescribed forms. A prescribed form is one which is put into general use for all offices of the same class.
Computer hardware, software and application systems can now produce exact replicas of the forms prescribed by the State Board of Accounts. An exact replica of a prescribed form is a computerized form that incorporates all of the same information as the manual prescribed form. Prescribed form replication is the preferred approach from the State Board of Accounts’ position. These exact replicas are the equivalent of the prescribed form and require no further action for the county to install the form within their accounting system.
Governments are required by law to use the forms prescribed by this department. However, if it is desirable to use a form other than the prescribed manual form, that is not an exact replica; the new form must be approved by State Board of Accounts.All forms previously approved by sending copies to State Board of Accounts and receiving a form approval letter are approved with the conditions contained within the letter. All forms previously approved by the adoption of a resolution as allowed by County Bulletin article on Approval of Accounting Forms and Systems, published in Volume 354, pages 13-16 are also considered approved.
After April 1, 2014, if a government implements, consistent with the provisions of Indiana Code and Uniform Compliance Guidelines, an automated accounting system that is to be considered for approval, the responsible official is not required to maintain the prescribed forms replaced by the automated system while awaiting the approval. New forms must be in place during at least one (1) State Board of Accounts audit and must not be an element of an audit finding or audit result and comment that is responsible or partially responsible for an exception found during an audit to be considered approved. The government is responsible for placing on new forms the year of installation in the upper right corner. This reference should be similar to “Installed in ______________ County, (Year).” The county must maintain and present for audit a log of forms installed after April 1, 2014 with the year installed for all forms that replace forms prescribed by State Board of Accounts.
The government agrees to comply with the following conditions, if applicable, for any new forms installed.
1. The forms and system installed are subject to review and/or recommendations during audits of the government to ensure compliance with current statutes and uniform compliance guidelines.
2. The government shall continue to maintain all prescribed forms not otherwise covered by an approval.
3. All transactions that occur in the accounting system must be recorded and accessible upon proper request. Transactions can be maintained electronically, with proper backups, microfilmed, or printed on hardcopy. These transactions include, but are not limited to, all input transactions, transactions that generate receipts, transactions that generate checks, master file updates, and all transactions that affect the ledgers in any way. The system must be designed so that changes to a transaction file cannot occur without being processed through an application.
4. The ability must not exist to change data after it is posted. If an error is discovered after the entry has been posted, then a separate correcting entry must be made. Both the correcting entry and the original entry must be maintained.
5. If the unit owns the source code, sufficient controls must exist to prevent unauthorized modification. If the unit does not own the source code, the vendor shall provide representatives of the State Board of Accounts with access to all computer source codes for the system upon request for audit purposes. In addition, the vendor shall provide representatives of the State Board of Accounts with a document describing the operating system used, the language that the source code is written in, the name of the compiler used, and the structure of the data files including data file names, data file descriptions, field names, and field descriptions for the system.
6. Any receipts, checks, purchase orders, or other forms that require numbering shall be either pre-numbered by an outside printing supplier or numbered by the units computer system with sufficient controls installed in the system to prevent unauthorized generation of the form or duplication of numbers.
7. All receipts must be either in duplicate or recorded in a prescribed or approved register of receipts.
8. All checks must be either in duplicate or recorded in a register of checks generated by the computer.
9. Recap sheets for each deposit for deposit advices, if applicable, will be maintained indicating direct deposits. Individual wage assignment agreements will be kept on file to support direct deposit.
10. "Installed by __________ County, (Year)" shall be printed, in the upper right corner, on each approved form furnished by a printing supplier and, when practical, on those printed from accounting systems at the unit. Upon the installation of a new form the form will be entered on a log for this purpose with the date of installation; and the name and number of the prescribed form replaced. The log must be available for audit.
11. The government officials are responsible to ensure that forms and accounting systems installed comply with the uniform compliance guidelines for information technology services published in the County Bulletin and accounting manuals. This includes ensuring that customization of the system done by the vendor for implementation at the government is done in such a manner that the system remains compliant.
12. In the event a change is required due to the passage of a State or Federal law, the government agrees to implement the change in a timely manner.
ASSESSMENT
"Before the assessment date of each year, the county auditor shall deliver to each township assessor (if any) and the county assessor the proper assessment books and necessary blanks for the listing and assessment of personal property." (IC 6-1.1-3-5)
Per IC 6-1.1-4-13.6, the county assessor shall determine the values of all classes of commercial, industrial, and residential land (including farm home sites) in the county using guidelines determined by the department of local government finance. The assessor determining the values of land shall submit the values, all data supporting the values, and all information required under rules of the department of local government finance relating to the determination of land values to the county property tax assessment board of appeals by the dates specified in the county’s reassessment plan.
If the county assessor fails to determine land values before the deadlines in the county's reassessment plan, the county property tax assessment board of appeals shall determine the values. If the county property tax assessment board of appeals fails to determine the values before the land values become effective, the department of local government finance shall determine the values.
The county assessor shall notify all township assessors in the county of the values. Assessing officials shall use the values determined under this section.
A petition for the review of the land values determined by a county assessor under this section may be filed with the department of local government finance not later than forty-five (45) days after the county assessor makes the determination of the land values. The petition must be signed by at least the lesser of:
one hundred (100) property owners in the county; or five percent (5%) of the property owners in the county.Upon receipt of a petition for review, the department of local government finance shall review the land values determined by the county assessor; and after a public hearing, shall: approve; modify; or disapprove the land values.
ASSESSMENT REGISTRATION NOTICES
IC 6-1.1-5-15 states before an owner of real property demolishes, structurally modifies, or improves it at a cost of more that five hundred dollars ($500) for materials and/or labor, the owner or his agent shall:
1. file with area plan commission or the county assessor an assessment registration notice on a form prescribed by the Department of Local Government Finance, and the commissioner or assessor charges a five dollar ($5) filing fee. or
2. obtain a permit from an agency, official of the state, or a political subdivision, then the owner is not required to file an assessment registration notice.
A township or county assessor shall immediately notify the county treasurer if the assessor discovers property that has been improved or structurally modified at a cost of more than five hundred dollars ($500) and the owner of the property has failed to obtain the required building permit or file an assessment registration notice.
Any person who fails to obtain one of these is subject to a civil penalty of one hundred dollars ($100). The county treasurer shall include the penalty on the person’s property tax statement and collect it in the same manner as delinquent personal property taxes under IC 6-1.1-23. However, if a person files a late registration notice, the person shall pay the fee, if any, and the penalty to the area plan commission or the county assessor at the time the person files the late registration notice. Both the five dollar ($5) fee and the one hundred dollar ($100) penalty would be receipted to the County Property Reassessment Fund.
ASSESSORS - TOWNSHIP - BOND PREMIUM – PAYMENT
The bond premium on the official bond of the township assessor should be paid from county funds and not from township funds.
IC 5-4-1-18 requires the township assessor to file an individual surety bond, blanket bond, or crime insurance policy in the amount fixed by the fiscal body at not less than eight thousand five hundred dollars ($15,000). Statutes do not require the deputy assessor to execute a bond; however, such bond may be required by the elected township assessor. When so required, such bond must be recorded in the office of county recorder.
- B
Bank/Credit Card Payments to Counties
Benefits
Establishing Employee Benefits
Board of Finance
Bonds
Premium and Accrued Interest on Bonds Issued and Sold
Borrowing
Breaks (Paid) for Expressing Milk
BANK RECONCILEMENTS
Indiana Code 5-13-6-1(e) requires that bank reconcilements be completed monthly. During an audit we would expect to see bank reconcilements performed each month. Failure to complete bank reconcilements on a monthly basis could result in an audit finding. This would apply to all county bank accounts including those held outside of the county treasurer, such as held by the Recorder, Clerk, and Sheriff. In addition to compliance with statute, monthly bank reconcilements provide internal controls to achieve the safeguarding of public assets.We have received numerous reports that bank routing and account information is being used to create false checks that are clearing bank accounts and stealing public funds. If the unauthorized payments from the account are brought to the attention of the bank in a timely manner, the bank will replace the amount that was stolen. However, if you are not reconciling monthly, you would not be aware of these fraudulent transactions and the delay in reporting these fraudulent transaction to the bank may make it more difficult to get the bank to restore the funds to the bank account. If the money is being held in trust such as the Sheriff’s Inmate Trust Account or the Clerk’s Trust or ISETS Accounts, the county is responsible to make the accounts whole. If money is misappropriated, the fraudulent activity is not reported timely to the bank, and the delay in reporting is due to a failure to reconcile the bank accounts each month, the elected officer may be held personally responsible for replacing the stolen funds.
We realize that it is possible to have unidentified variances between the bank statements and your record balance and that it may take some time to identify those items and complete the reconcilement. However, do not let those issues prevent you from continuing to reconcile each month, even if you are carrying those unidentified variances forward each month. At the very minimum, you should review the bank statement monthly and verify that all of your recorded deposits are credited to your account and all withdrawals from the account are transactions that trace to checks prepared by your office or electronic funds transfers that you have authorized. In that way you would catch any bank errors in a timely manner. In addition you would be able to identify any fraudulent activity as early as possible.
BANK/CREDIT CARD PAYMENTS TO COUNTIES
A payment to a county may be made by any of the following financial instruments that the fiscal body of the county authorizes for use:
1. Cash
2. Check
3. Bank Draft
4. Money Order
5. Bank card or credit card
6. Electronic fund transfer
7. Any other financial instrument authorized by the fiscal bodyIf there is a charge to the county for the use of a financial instrument, the county may collect a sum equal to the amount of the charge from the person who uses the financial instrument.
If authorized by the fiscal body of the county, the county may accept payments with a bank card or credit card. However, the procedure authorized for a particular type of payment must be uniformly applied to all payments of the same type.
The county may contract with a bank card or credit card vendor for acceptance of bank cards or credit cards. The county may pay any applicable bank card or credit card service charge associated with the use of a bank card or credit card. However, if there is a vendor transaction charge or discount fee the county may collect from the person using the card an official fee that does not exceed the transaction charge or discount fee and/or a reasonable convenience fee. The convenience fee may not exceed $3 and must be uniform regardless of bank or credit card used. (IC 36-1-8-11)
It is our position that such a fee be deposited in the general fund.
RESPONSIBILITY FOR ESTABLISHING VACATION, SICK LEAVE, PAID HOLIDAYS, AND OTHER SIMILAR BENEFITS
IC 5-10-6-1(b) states: “Employees of the political subdivisions of the state may be granted a vacation with pay, sick leave, paid holidays, and other similar benefits by ordinance of the legislative body of a county, city, town, township, or controlling board of a municipally owned utility, board of directors or regents of a cemetery, or board of trustees of any library district.”
It is imperative that the county adopt a policy regarding leave rules and other benefits. The State Board of Accounts will be auditing to see that the employees of the county are following the adopted policy.
BOARD OF FINANCE – ANNUAL MEETING
IC 5-13-7-6 requires each local board of finance to meet annually after the first Monday and on or before the last day of January. At the annual meeting the board of finance shall elect from the board's membership a president and secretary. The officers hold office until the officer's successors are elected and qualified.
The board of finance shall also receive and review the written report of the investing officer that summarizes the county's investments during the previous year. The report must contain the name if each financial institution, governmental agency or instrumentality or other person with whom the county invested money during the previous calendar year.
The board of finance is to review overall investment policy of the county.
Each county treasurer shall deposit the boat excise taxes collected by the Bureau of Motor Vehicles and the boat excise taxes distributed by the Auditor of State under IC 6-6-11-29 into a boat excise tax fund. Such fund shall be accounted for by county treasurers on the Other Sources sections of the Treasurer’s Daily Balance of Cash and Depositories.
IC 6-6-11-33 states: “The county treasurer shall do the following:
(1) At the same time a settlement is made with the county auditor under IC 6-1.1-27, file a report, on a form prescribed by the state board of accounts, with the county auditor concerning the boat excise taxes received during the preceding six (6) month period.
(2) In the manner and at the times prescribed in IC 6-1.1-27, make a settlement with the county auditor for the boat excise taxes received under this chapter.
(3) In the manner prescribed by the state board of accounts, maintain records concerning the boat excise taxes received and distributed.”
Because of new guidance we received from the Attorney General, we are changing our audit position regarding the retention of a bond administrative fee. IC 35-33-8-3.2 states in part regarding surety bonds, cash and security deposits, real estate bonds or any combination of these posted for bail: “…A portion of the deposit, not to exceed ten percent (10%) of the monetary value of the deposit or fifty dollars ($50), whichever is the lesser amount, may be retained as an administrative fee. The clerk shall also retain from the deposit under this subdivision fines, costs, fees, and restitution as ordered by the court, publicly paid costs of representation that shall be disposed of in accordance with subsection (b), and the fee required by subsection (d). In the event of the posting of a real estate bond, the bond shall be used only to insure the presence of the defendant at any stage of the legal proceedings, but shall not be foreclosed for the payment of fines, costs, fees, or restitution. The individual posting bail for the defendant or the defendant admitted to bail under this subdivision must be notified by the sheriff, court, or clerk that the defendant’s deposit may be forfeited under section 7 of this chapter or retained under subsection (b)….”
The Attorney General has clarified to us by advisory letter that conviction is not required in order to retain the administrative fee. After disposition of the charges, whether by dismissal, acquittal, or conviction, the clerk must return to the defendant only the amount not retained. Therefore, during an audit of the county, we will be following this guidance. Conviction will not be considered a requirement to retain the bond administrative fee from a bail bond that is not a real estate bond.
PREMIUM AND ACCRUED INTEREST ON BONDS ISSUED AND SOLDIC 5-1-12-2 requires that:
"Whenever any bonds are sold by any municipal corporation and when the successful bidder agrees to pay and does pay any premium as a part of the bid price of such bonds, any and all premiums so received shall be paid into and shall constitute a part of the fund which is created to retire such bonds and to pay the interest thereon"
In the sale of bonds "accrued interest" is the interest on the obligations from the date of the bonds to date of their delivery to the purchaser. Interest coupons attached to bonds are for exact sums of money which the issuing authority is required to pay, but between the date of bonds and date of delivery and receiving payment of the bid price, no interest is actually earned. The so-called accrued interest is simply a reimbursement to the municipal corporation for the unearned part of the interest the municipal corporation will be required to pay pursuant its interest coupons.
Accrued interest also must be receipted to the bond fund so that same may be used in retiring the bonds and interest. Only the principal sum of the bonds can be placed in the fund to carry out the project for which the bonds were issued.
IC 20-42-2-11 and 20-42-2-12 contain authority for counties to borrow from the Congressional School Fund. Any such loans must be authorized by an ordinance of the county council.
Some of the statutes which authorize other means of borrowing are:
IC 36-2-6-18 through 36-2-6-20 Temporary Loans, Bonds and Tax Anticipation Warrants
IC 5-19-1.5 Grant Anticipation Notes
IC 36-1-8-4 Temporary Loans Between Funds
PAID BREAKS FOR EXPRESSING MILK
IC 5-10-6-2 states: " (a) The state and political subdivisions of the state shall provide reasonable paid break time each day to an employee who needs to express breast milk for the employee’s infant child. The break time must, if possible, run concurrently with any break time already provided to the employee. The state and political subdivisions are not required to provide break time under this section if providing break time would unduly disrupt the operations of the state or political subdivisions.
(b) The state and political subdivisions of the state shall make reasonable efforts to provide a room or other location, other than a toilet stall, in close proximity to the work area, where an employee described in subsection (a) can express the employee’s breast milk in privacy. The state and political subdivisions shall make reasonable efforts to provide a refrigerator or other cold storage space for keeping milk that has been expressed. The state or a political subdivision is not liable if the state or political subdivision makes a reasonable effort to comply with this subsection.”
Plans and specifications for the construction of bridges are not required to be approved by the state highway commission unless Federal funds, disbursed by the state highway commission, are used in the construction of the bridge. The highway commission will render assistance to the county highway department when such assistance is requested, whether or not Federal funds are used.
Construction of bridges may be financed in four manners, funds arising from a separate source for each:
1. County General Fund – IC 8-16-5-3; 36-2-5-7
2. Cumulative Bridge Fund – IC 8-16-3-1
3. Major Bridge Fund – IC 8-16-3.1
4. County Cumulative Capital Development Fund – IC 36-9-14.5According to IC 10-17-10-1, the board of county commissioners may allow for the claim of a burial allowance not to exceed one thousand dollars ($1,000) in an amount set by ordinance for the burial of an individual who:
"….(A) has served as a member of the armed forces of the United States as a soldier, sailor, or marine in the army, air force, or navy of the United States or as a member of the women's components of the army, air force, or navy of the United States, is a resident of Indiana, and dies while a member of the armed forces and before discharge from the armed forces or after receiving an honorable discharge from the armed forces; or
(B) is the spouse or surviving spouse of a person described in clause (A) and is a resident of Indiana…"
The claim must be filed by an interested person with the board of county commissioners of the county of residence of the deceased person and state certain facts; such as, the military service rendered, date of death, and date of discharge (if discharged from service before death), and that the deceased has been buried in a decent and respectable manner in a cemetery or burial ground.
- C
Capital Assets
Establishing the Estimated Cost
CemeteriesSmaller Purchases Not Capitalized
Child Support Program
Claims
Officials' Signatures on Claims, Warrants, and Other Official Documents
Commisary Fund
Community Corrections Programs
Compensation
Changing Compensation of County Officers and Employees
Employee Employed in More Than One Position
Fair Labor Standards Act - Compensatory Time
County Auditor
Clerk of County Board of Commissioners
County Commissioners
County Coroner
Training and Continuing Education Fee
County Council
County Economic Development Income Tax (CEDIT) - Capital Improvement Fund
County Elected Officials Training Fund
County Extradition and Sheriff Assistance Fund
County Law Enforcement Continuing Education Fund
Claims by State Police and DNR
Courts
Calculation of Interest on Judgments
Clerk of the Circuit Court
Bank/Credit Card Payments to the County Courts
Clerk's Record Perpetuation Fund
Use of Record Perpetuation Funds
Judgments Collected on Overweight Vehicles
Court Reporters - Transcript Preparation
Support Order - Residence Change
ESTABLISHING THE ESTIMATED COST OF CAPITAL ASSETS
When it is not possible to determine the historical cost of capital assets owned by a governmental unit, the following procedure should be followed.
Develop an inventory of all capital assets which are significant for which records of the historical costs are not available. Obtain an estimate of the replacement costs of these assets. Through inquiry determine the year or approximate year of acquisition. Then multiply the estimate replacement cost by the factor for the year of acquisition from the Table of Cost Indexes. The resulting amount will be the estimated cost of the asset.
In some cases estimated replacement cost can be obtained from insurance policies; however, if estimated replacement costs are not available from insurance policies, you should obtain or make an estimate of the replacement costs.
If the replacement cost is estimated to be $76,000.00 and the asset was constructed about 1930, then the estimated cost of the asset should be reported as $6,840.00.
$76,000.00 X .07 = $5,320.00
CAPITAL ASSETS – CEMETERIES
County Owned Cemeteries are considered capital assets and need to be properly recorded on General Form 369 – Capital Assets Ledger. The cemeteries are to be reported on General Form 369 – Capital Assets Ledger at the actual or estimated historical cost based on appraisals or deflated current replacement cost. Contributed or donated assets are reported at estimated fair value at the time received. General Form 369 – Capital Assets Ledger does not have a separate classification for cemeteries, so the cemetery ground will be recorded on the capital asset ledger under land, any structures on the cemetery grounds under buildings, and roads and drainage systems will be recorded under infrastructure. There will be no effect on the value of the asset as plots are sold. The purchase of a burial plot is a real estate transaction; however, cemetery plot deeds grant burial rights that create an easement for the specific purpose of burial but do not alter the County’s ownership of the cemetery as a whole.
Each county is required to adopt a capital asset policy that details the threshold at which an item is considered a capital asset. A complete physical inventory must be taken at least every two years, unless more stringent requirements exist, to verify account balances carried in the accounting records.CAPITAL ASSETS – SMALLER PURCHASES NOT CAPITALIZED
Assets include any items that are purchased by the County that will be useful for more than one year. This can include items such as office equipment and furniture as examples. Each County should have a capitalization policy that sets a threshold at which these assets are capitalized and added to the capital asset detail. The threshold amount is a county decision. As an example, if the threshold is set for $5,000 than any asset purchased that costs more than $5,000 is added to the capital asset detail. If the asset costs less than $5,000, it is not capitalized.It is the responsibility of the county to safeguard all assets purchased, even those that are not capitalized. Some purchases, such as electronic equipment (laptops, tablets, cell phones, PC’s etc.) may be at higher risk of loss due to theft or misuse, but still cost less than the capitalization threshold. For those items, the County should have an inventory policy to provide control over those items. This policy could be part of the capitalization policy or a separate policy. The inventory policy would allow the county to track and account for these assets that are not capitalized but still need to be monitored.
You do need to have control procedures in place to safeguard these items. We used electronic items as an example, but there are other items that should also be considered such as copiers, generators, radios and tools. Your policy needs to consider what items are worth the cost of tracking and which are not, for example, a laptop is worth tracking, while a chair may not be. The policy could establish a threshold similar to the capital asset threshold for a dollar amount that would be tracked. Alternatively, the policy could specify particular types of equipment that should be tracked. The County would need to decide based on the risks and resources of the County. The policy should also specify who will do the tracking, for example, in many counties, the IT departments often track all of the electronic equipment. For other items, the Department heads might keep a departmental inventory.
Some additional items to consider:
1. A way to track these items (serial numbers, stickers or other tagging, for example)
2. A complete inventory of these items (using serial numbers, tag numbers, locations) this could be done manually or with a spreadsheet or data base.
3. A physical inventory should be conducted periodically by departments to determine the accuracy of the inventory.
4. Policies and procedures for adding new purchases and removing the items when they are no longer owned by the County.
5. Policies and procedures for missing items.IC 36-1-8-2 states:
“(a) The fiscal body of a political subdivision may permit any of its officers or employees having a duty to collect cash revenues to establish a cash change fund. Such a fund must be established by a warrant drawn on the appropriate fund of the political subdivision in favor of the officer or employee, in an amount determined by the fiscal body without need for appropriation to be made for it.
(b) The officer or employee who establishes a cash change fund shall convert the warrant to cash, shall use it to make change when collecting cash revenues, and shall account for it in the same manner as is required for other funds of the political subdivision.
(c) The fiscal body shall require the entire cash change fund to be returned to the appropriate fund whenever there is a change of the custodian of the fund or if the fund is no longer needed.”
A claim should be filed by the officer or employee designated by the fiscal body. The claim should contain a statement regarding the necessity for such fund together with the statutory reference (IC 36-1-8-2) authorizing its establishment. We do caution officials the amount advanced should not be greater than seems reasonably needed by the officer or employee.
Affected Cemeteries
IC 23-14-67 applies to cemeteries that:
(1) are without funds or sources of funds for reasonable maintenance;
(2) have suffered neglect and deterioration;
(3) may be the burial grounds for Indiana pioneer leaders as well as for veterans of every American war including the Revolutionary War; and
(4) either:
(A) was established before 1875; or
(B) is a burial ground for a veteran of the Civil War.
Appointment and Term of Commission
The board of commissioners of a county may appoint a county cemetery commission of five (5) county residents. County cemetery commission members shall be appointed for a term of five (5) years, staggered by the board of county commissioners to permit an appointment or a reappointment of one (1) commissioner member per year. (IC 23-14-67-2)
Annual Tax Levy and Budget
The commission may request the levy of an annual tax not exceeding fifty cents ($.50) on each one hundred dollars ($100) of assessed valuation of property in the county for the purpose of restoring and maintaining the cemeteries described above. (IC 23-14-67-3)
The county cemetery commission shall present an annual plan and budget to the board of county commissioners and the county council for approval and shall make an annual report to those bodies and the Indiana Historical Bureau. (IC 23-14-67-4) (IC 23-14-67-3.5)
Trusts for Cemetery Associations
IC 23-14-70 authorizes the following:
The board of commissioners of a county may receive from or on behalf of any cemetery corporation, church, association, or organization that has been dissolved or is to be dissolved a deposit of money to be held in trust under terms that are designated in writing. The interest on the money shall be used to keep in good condition any abandoned cemetery, public incorporated cemetery, or lots, monuments, mausoleums, vaults, or other burial structures in any cemetery. The board of commissioners may not expend more for this purpose than the interest earned from the loan or investment of the funds. (IC 23-14-70-1)
All money received by the board of commissioners may be invested in compliance with IC 20-42-1-14. (IC 23-14-70-2)
The county auditor shall make distribution of the interest earned on any cemetery fund or funds on the last Monday of January of each year and to the following person or persons:
(1) To the trustee of the township in which an abandoned or unincorporated cemetery is located.
(2) To the trustee of the township lying on the east or south of the cemetery if the cemetery is located on a county boundary or on a township boundary.
(3) To the treasurer of the board of directors of an incorporated cemetery. (IC 23-14-70-3)
The township trustee or the treasurer of the board of directors shall each make a receipt or voucher for any money paid out, stating the amount paid out, the purpose for which it was expended, and the fund from which it came. The receipts and vouchers shall be filed with county auditor before January 2 each year and shall be presented to the board of commissioners for examination and approval at its January meeting. (IC 23-14-70-4)
The auditor is liable on his bond for any neglect or failure of duty with respect to this fund in the same manner as with respect to the school fund. The county is also liable for the preservation of the principal and the payment of the interest on the fund to the same extent that it is liable with respect to the principal and interest of the school fund. (IC 23-14-70-5)
If a cemetery is under the control of a duly organized board of directors of an incorporated cemetery or the trustees or officers of the church, association, or other organization, the board of county commissioners may, on its own initiative or upon request of the proper officers of the cemetery, pay over or return to the treasurer of the cemetery any money deposited with the county, to be held and managed by the corporation, church, association, or organization in compliance with the terms of the bequest, legacy, or endowment and applicable statutes. (IC 23-14-70-6)
COUNTY UNIFORM CHART OF ACCOUNTS
All counties must implement the use of the new chart of accounts by January 1, 2012. Although the transition may be tedious we are confident the use of a standard chart of accounts will ultimately help with training and reporting of financial information. The chart of accounts, instructions, and other tools for using the uniform chart of accounts are on the State Board of Accounts website at www.IN.gov/sboa/. Look in “Counties” under the topic “Political Subdivisions” and choose the County Auditor link under County Offices. On the County Auditor page, navigate to Overview and Chart of Accounts.
CHILD SUPPORT PROGRAM - ARRA INCENTIVE FUNDS
Indiana counties receive Title IVD incentive funds for participating in the child support enforcement program. The incentive funds are paid to the Prosecutors, Clerk and County. Currently there are six incentive funds being used to account for these funds. Three for regular incentive funds and three for ARRA incentive funds. ARRA funds are no longer being distributed. Counties were encouraged to pay any expenses from the ARRA Incentive funds first so that the funds could be closed out. However, there is still approximately $500,000 in ARRA money remaining in these funds in Indiana. ARRA funds were required to be maintained separately so that they could be reported on ARRA reports.
These accounts on the funds ledger are Prosecutor IV-D ARRA Fund, Clerk IV-D ARRA Fund, and County IV-D ARRA Fund. ARRA funds are treated exactly the same as the regular funds as far as who can use them and how they can be spent. The Department of Health and Human Services (HHS) has provided direction to the Indiana Child Support Bureau (CSB) that oversees the Title IVD program in Indiana, that there is no longer a need to report the ARRA funds separately from the regular incentive funds. HHS has given their approval for the counties to combine the ARRA balances with their corresponding regular incentive funds. The CSB is providing guidance to the County Auditors to transfer the ARRA balance into the respective Incentive fund. The balance in the Prosecutor IV-D ARRA will be transferred to Prosecutor IV-D Incentive fund as will the Clerk IV-D ARRA to Clerk IV-D Incentive and County IV-D ARRA to County IV-D Incentive.
The CSB has directed a check be written from the ARRA funds to the regular incentive funds in order to provide adequate supporting documentation of the transfer.
The CSB will send partially completed Incentive Transfer Forms to Auditors. Auditors are to include dollar amounts and transfer dates. The form is only signed by the Auditor for these ARRA transfers.
Officials have been warned not to close out ARRA funds yet until a revised form is approved. CSB must receive transfer forms and the Quarterly Incentive Balance (QIB) Report with adjustments before 12-31-18 to close out for 2019. If the transfers occur in 2019, then close accounts by the end of year for 2020. The transfer agreement, including ledgers and fund balances, are to be uploaded with the QIB.
IC 33-37-7-6 requires that three percent (3%) of all court costs collected by the Clerk of the Circuit Court to be set aside by the County Auditor in a City and Town Court Cost Fund. Such funds shall be distributed semiannually to each city and town in the county that maintains a law enforcement agency and prosecutes at least fifty percent (50%) of its ordinance violations in a circuit, superior, or county court in the county. If a city or town located in Marion County prosecutes its ordinance violations in a municipal court, then that city or town would qualify for such distribution.
The county auditor shall determine the amount to be distributed to each city and town qualified as follows:
STEP ONE: Determine the population of the qualified city or town.
STEP TWO: Add the populations of all qualified cities and towns determined under STEP ONE.
STEP THREE: Divide the population of each qualified city and town by the sum determined under STEP TWO.
STEP FOUR: Multiply the result determined under STEP THREE for each qualified city and town by the amount of the qualified municipality share.
The county auditor shall semiannually (in June and December) distribute to each qualified city and town the amount computed for that city or town under STEP FOUR.
If no city or town qualifies for a semiannual distribution, the monies shall remain in the city and town court cost fund for future distribution, it is not to be transferred to the County General Fund.
Each city and town that qualifies is encouraged to contact the County Auditor in their county each May and November about the distribution.
Several questions concerning the distribution of the City and Town Court Cost Fund by the County Auditor have been asked by city, town and county officials. The questions, along with our audit positions, are as follows:
Question #1 What must a municipality do to qualify for a share of the City and Town Court Cost Fund?
Answer #1 A municipality must maintain a law enforcement agency and prosecute at least fifty percent (50%) of its ordinance violations in a Circuit, Superior, or County Court located in the county. The County Auditor shall determine the amount to be distributed to each qualified city and town. (IC 33-37-7-6)
Question #2 Does a city ordinance violation filed in County Court qualify the city to receive such funds even if the case is dismissed by the city?
Answer #2 No. The city must prosecute the case in order to qualify.
Question #3 In which semiannual period does the city or town receive a share of such funds assuming only one (1) case is filed? Is it the period in which the case was filed or is it the period in which it was prosecuted?
Answer #3 The period in which the case was prosecuted would govern the period of distribution. Distributions are to be made semiannually (June and December) for the previous six (6) months collections.
Question #4 Can a city or a town with an Ordinance Violations Bureau qualify for the distribution?
Answer #4 Yes. IC 33-36-3-6(b) states that ordinances processed through an Ordinance Violations Bureau are not to be considered in determining whether the unit prosecuted at least fifty percent (50%) of its ordinance violations in a Circuit, Superior, or County Court.
Question #5 To what fund does a city/town receipt the distributions?
Answer #5 Distributions should be receipted to the General Fund.
OFFICIALS’ SIGNATURES ON CLAIMS, WARRANTS, AND OTHER OFFICIAL DOCUMENTS
The State Board of Accounts is often asked to approve the use of rubber stamps or other devices for affixing facsimile signatures of public officials on claims, warrants, and other official documents. The decision as to whether or not the number of documents to be signed justifies the use of a rubber stamp or other device for affixing his/her signature must be made by each official. Since each official is responsible for his/her signature, a rubber stamp or other signing device should be used only under the closest direction of the official and must be properly safeguarded when not in use.
SEMIANNUAL REPORTS OF THE COMMISSARY FUND - SHERIFF
The sheriff is to provide a copy of the commissary fund’s receipts and disbursements to the county council. The semiannual reports are due on July 1 and December 31 of each year. The SBOA has prescribed Form 205, Ledger of Receipts, Disbursements and Balances for the Commissary fund, for use as a semiannual report. The County always has the option to choose an alternative form and have that form (or report) approved as part of the audit process
COMMUNITY CORRECTIONS PROGRAMS
Indiana Department of Corrections (IDOC) provides grant funding to the counties. Historically that has been for one project, the county’s Community Corrections program. The grant was deposited to a grant fund and the Program Income was deposited to a separate fund. With recent legislation, the grant funding has been expanded to include other programs and this has further complicated the accounting for these grants.
The Auditor is the fiscal officer for the grant. The Auditor must have sufficient information on the grant and the grant budget to be able to audit the claims and post receipts to the correct funds. Starting with the 2016-2017 grants, the grant agreement and attachments that contain the approved budgets for the grants are sent to the County Auditors for signature. A copy of these grant documents should be made by the auditor’s office to keep in the grant file. There are two main sources of funding for the Community Corrections which comprise the grant distributions sent from the state each month and project income. The county may also appropriate money the general fund to support the Community Corrections programs.Originally, the Community Corrections was one grant and the collection of user fees related to the Community Corrections program was posted to a separate project income fund (Fund 1122 in the Uniform Chart of Accounts). With the expansion of the grant funding in recent legislation and starting with the 2016-2017 fiscal year, the Community Corrections grant can be awarded to Probation Departments, Prosecutor Diversion Programs and Court Recidivism Programs. In addition, the Community Corrections program for juveniles is now tracked separately from the Community Corrections program for adults. In theory, a county could be awarded as many as five projects from the Community Corrections grant funding. Each project needs to have its own separate grant fund within the fund numbers assigned to State and Local Grants (9000 series in the Uniform Chart of Accounts). At the end of the grant year, the IDOC will evaluate and audit the ending fund balance in the grant funds and determine if the balance is to be returned to the state or may be carried over to a new grant year.
Community Corrections grants are advance grants. IDOC will send out 25% of the total award in the first month of the fiscal year (July). The remaining 75% of the grant is divided over 12 months and 1/12th is sent out each month, also starting with July. The grant agreement will specify how the total grant is to be divided among the approved projects. The payments will be made by EFT and there will be one payment amount each month. Using the grant agreement information, the auditor will have to determine what percentage of the total payment to allocate to each project. The July payment will include the 25% advance and the 1/12th payment for July. Starting with the August payment, the payment amounts should remain consistent and the allocation should remain the same each month. The grant agreement will have attachments that contain the approved budgets for each project. By statute, the council must also approve the appropriations.
For the Community Corrections projects, the Community Corrections Advisory Board will set user fees for participation in the program. Community Corrections personnel collect these fees and the fees would be posted to a project income fund. (Fund 1122). Prior to the 2016-2017 year, both adult and juvenile community corrections were placed in the Community Corrections fund. Now, however IDOC is tracking juvenile programs separately from adult programs and there would need to be a separate project income fund for juvenile program fees if your county has a juvenile community corrections program. The program may also collect user fees that offset the cost of certain services provided to participants, such as educational classes, treatment or drug testing. These fees would also be deposited into the project income fund.
For Probation and Pretrial Diversion programs, user fees for participation in the programs are established by statute. For Court Recidivism (Problem Solving Courts) the court establishes the user fees for participation. In each of these three programs, statute directs these user fees to be deposited into specific funds, such as adult and juvenile supplemental probation funds and appropriate user fee funds for the court. The auditor will continue to post those fees as they have always been posted, and that will not change due to a grant from Community Corrections awarded to those offices. However, if the community correction grant received by one of these offices pays for an educational class, drug testing or treatment and a fee is charged the participants to reimburse the costs of these programs, those user fees would have to be deposited into a separate project income fund for that offices. If the grant does not pay any of these costs, the user fees collected would be posted to the appropriate user fee fund. It becomes extremely important that the project leaders for each office provide sufficient information to allow the receipts to be posted to the correct fund. The only way for the auditor’s office to know how to deposit these collections is for the project directors to provide a report of collections that details how this money is to be posted.
Any balance in a project income fund would remain at the county at the end of each fiscal year. In order to disburse Community Corrections project income funds, the disbursement must be in compliance with the approved budget for the project income. These budgets would be included in the attachments with the grant budgets. Any changes to the approved budgets would need to be approved by IDOC and the project leader should be able to provide documentation of that approval.Employees of a Community Corrections program are to be considered County employees. All claims are to be submitted to the Board of County Commissioners for approval before payment.
COMPENSATION – ANNUAL SALARIES – PROPER PAYMENTS
Indiana statutes require salary ordinances to be enacted annually for all elected and appointed county officials and employees. Historically, even dollar amounts such as $20,000 are set as an annual salary for an employee. With a bi-weekly payroll period established for the unit, it becomes difficult to pay an employee the exact amount of his/her annual salary since twenty-six payrolls (in some years there are twenty-seven) will not divide evenly. Unless an odd amount is paid for the last payroll period, the employee is either over or under paid the amount established in the salary ordinance causing either an unhappy employee or an unhappy local fiscal officer.
It is suggested for salary ordinances enacted in 2003 and all future periods, the employee salaries be established to coincide with the customary work and pay period. (For example, instead of $20,000 annually, adopt $385.00 weekly or $770.00 bi-weekly.) By using this method it will make no difference if there are 52 or 53 weekly pays or 26 or 27 bi-weekly pays.
When using this suggestion and preparing your budget, it will be imperative the proper number of pays be computed in order to not under-estimate the next year’s requirements for personal services and associated fringe benefits. Keep in mind that the salary ordinance and the budget ordinance are two different statutory requirements. You should not attempt to combine the ordinances.
CHANGING COMPENSATION OF COUNTY OFFICERS & EMPLOYEES
The compensation of an elected county officer may not be changed in the year for which it is fixed, unless it is changed for a newly elected officer. IC 36-2-5-13(b) provides the process to change a newly elected officer’s compensation. Otherwise, an elected officer’s compensation may be changed if the amended salary ordinance is enacted in the year PRECEDING the year that salary payment is made.
The compensation of the other county officers who are not elected, deputies, and employees or the number of each may be changed at any time upon proper application and a majority vote of the county fiscal body [IC 36-2-5-13(a)].
EMPLOYEE EMPLOYED IN MORE THAN ONE POSITION
IC 5-11-9-4 requires that records be maintained showing which hours are worked each day for employees employed by more than one political subdivision or in more than one position by the same public agency. We have been asked if for those working in two different positions for the same unit if prescribed form 99A, The Employee Service Record, is sufficient and if one or two service records must be maintained. While form 99A shows the number of hours worked, it does not show which hours were worked in each position. For this reason we require a log be maintained that reflects which hours are worked. If an employee is working in two different positions in the same unit we will not take exception to one form 99A being maintained but a log must also be maintained to reflect which hours were worked in each position.
COMPENSATORY TIME – FAIR LABOR STANDARDS ACTThe following article was contributed by the Indianapolis Office of the Wage and Hour Division of the United States Department of Labor.
Use of Compensatory Time Off Under the Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) is a federal law that sets standards for minimum wage, overtime, and child labor. Under Sec. 7(o), public sector employers may provide compensatory time off in lieu of monetary overtime compensation. The compensatory time off must be at the rate of not less than 1 and ½ hours for each overtime hour worked.
As a condition for use of compensatory time off in lieu of overtime payment in cash, an agreement of understanding must be reached prior to performance of the work. Such an agreement may involve a collective bargaining agreement, a memorandum of understanding, or any other type of agreement between the public agency and the employees’ representative. (If the employees do not have representative, then the agreement must be between the public agency and the individual employee.) The agreement may contain provisions that address the preservation, use, or cashing out of compensatory time, as long as they are consistent with Sec. 7(o).
As an example, if an agreement specifically provides that an employee must use accrued compensatory time prior to the use of vacation leave, then this policy would be within the FLSA, assuming that employees have knowingly and voluntarily agreed to such a provision freely and without coercion or pressure. On the other hand, if the compensatory agreement did not specifically address that issue, then the employer could not require an employee to take their accrued compensatory time prior to vacation leave.
Here’s a different type of example: An agreement states that requests for compensatory time off have to be submitted with adequate advance notice and that management will approve them based on scheduling needs, allowing only one employee off per shift. Sec 7(o)(5) of FSLA says that requests for use of compensatory time off will be permitted within a “reasonable period”, if such use does not “unduly disrupt” the operations of the agency. In this example, the agreement would be inconsistent with the FLSA since it would allow for the denial of a request for reasons other than unduly disrupting the operations of the agency.
Remember, there are ceilings on how much FLSA compensatory time off an employee may accumulate:
480 hours of compensatory time off (representing 320 overtime hours work) for employees engaged in public safety, emergency response, or seasonal activity.
240 hours of compensatory time off (representing 160 overtime hours worked) for all other employees.
When employees reach these ceilings, any additional overtime that is worked must be paid. FLSA compensatory time off stays on the books until the employee uses the time or until it is paid out. Employees cannot “use or lose” compensatory time off.
For answers to other questions on the Fair Labor Standards Act or the Family and Medical Leave Act, contact your nearest U.S. Dept. Of Labor, Wage & Hour office: Indianapolis (317) 226-6801; South Bend (574) 236-8331 or call 1-866-4-USWAGE. You may also visit their website at www.dol.gov/whd.
COMPENSATION OF SPECIAL PROSECUTING ATTORNEYS
IC 33-39-1-6 deals with the appointment and compensation of special prosecuting attorneys. In regard to compensation this statute states:
"If the special prosecutor is not regularly employed as a full-time prosecuting attorney or a full-time deputy prosecuting attorney, the compensation for the special prosecutor's services:
(1) shall be paid to the special prosecutor from the unappropriated funds of the appointing county; and
(2) shall not exceed a per diem equal to the regular salary of a full-time prosecuting attorney of the appointing circuit, and travel expenses, and reasonable accommodation expenses actually incurred.
If the special prosecutor is regularly employed as a full-time prosecuting attorney or deputy prosecuting attorney, the compensation for this special prosecutor's services:
(1) shall be paid out of the appointing county's unappropriated funds to the treasurer of the county in which he regularly serves; and
(2) must include a per diem equal to the regular salary of a full-time prosecuting attorney of the appointing circuit, travel expenses, and reasonable accommodation expenses actually incurred."
IC 33-39-6-5(d) states the State shall pay, from the State General Fund, the minimum annual salary of a prosecuting attorney.
IC 33-39-6-5(a) states that the salary of a full-time prosecuting attorney shall be the same as the salary paid to the circuit court judge of the same judicial circuit.
IC 33-38-5-6 states that the salary of full-time circuit court judged shall be $110,500.
Based on fifty-two (52) five (5) day weeks, (total two hundred sixty (260) days) the maximum daily per diem rate for a special prosecuting attorney who is not regularly employed as a full-time prosecuting attorney or a full-time deputy prosecuting attorney is $425.00.
This rate would also be applicable in the case of reimbursement to another if the special prosecutor is employed as a full-time prosecuting attorney or deputy prosecuting attorney.
Statute
IC 35-44-1-3 is the statute for Conflict of Interest. If any situations exist in your county which might be in conflict with this statute, we suggest you present your questions to the attorney who represents the county for written guidance. In view of the position of public responsibility in which county employees find themselves, any question of conflict of interest should be avoided
Submission of Conflict of Interest Forms
The conflict of interest forms may now be uploaded on the Gateway website, https://gateway.ifionline.org/
You will find the upload link on the right hand side of the Gateway homepage directly under the local officials’ login. You do not need a user id or password to upload the conflict of interest form onto Gateway. On the Report Builder page of the website a reporting tool has been added under Conflict of Interest Disclosure. The public will be able to view the Conflict of Interest forms that have been uploaded. The link to the Gateway website is also available on the State Board of Accounts web page at www.in.gov/sboa/We have received questions in the past regarding who has the legal authority to enter into contracts for the county. Our audit position is this; in general, the county executive – which is the Board of Commissioners – has the authority to contract on behalf of the county. We would not take audit exception if a county officer enters into a contract when statute specifically allows the officer to contract. An example of this would be for the County Sheriff. The Sheriff is charged with the care of prisoners confined to the county jail and implicit in that charge is the authority to enter into contracts to carry out that function. In addition, we would not take audit exception if the particular officer has non-appropriated funds that do not require council to appropriate the funds to fulfill the terms of the contract. An example of this would be the Recorders Perpetuation Fund. The County Recorder has the authority to disburse from the Recorders Perpetuation Funds without appropriation by the County Council. If a contract is to be paid entirely from the Recorder’s Perpetuation funds, we would not take audit exception if the Recorder would enter into a contract for services.
CONTRACTING IN EMERGENCY SITUATIONSWhenever an emergency (defined in IC 5-22 and 36-1-12 as a situation that could not be reasonably forseen and that threatens the public health, welfare, or safety and requires immediate action) exists that requires a purchase of materials or the construction, alteration or repair of any public work the following statutes are to be followed:
Public Purchase (IC 5-22-10-4)
A purchasing agent may make a special purchase when there exists under emergency conditions, a threat to public health, welfare or safety.
Materials are defined to mean supplies, goods, machinery and equipment.
Public Construction (IC 36-1-12-9)
a) The board, upon a declaration of emergency, may contract for a public work project without advertising for bids if bids or quotes are invited from at least two (2) persons known to deal in the public work required done.
b) The minutes of the board must show the declaration of emergency and the names of the persons invited to bid or provide quotes.
Counties may establish a cost saving incentive program to develop and implement cost saving measures. The program may include awards to employees who suggest cost saving measures and must be established by ordinance. (IC 36-1-13)
COUNTY AUDITOR – CLERK OF COUNTY BOARD OF COMMISSIONERS
"The county auditor shall attend all meetings of, and record in writing the official proceedings of, the executive." (IC 36-2-2-11) "If the auditor cannot perform the duties of clerk during a meeting of the county executive, and the auditor does not have a deputy or the auditor’s deputy cannot attend the meeting, the executive may deputize a person to perform those duties during the meeting." (IC 36-2-9-7) No provision is made for anyone else to keep the records or proceedings of the commissioners, except as stated in IC 36-2-2-11 and IC 36-2-9-7.
The executive (Commissioners) shall hold a regular meeting at least once each month and at other times as needed to conduct all necessary business. Dates of regular meetings shall be established by resolution at the first meeting in February of each year. (IC 36-2-2-6)
A county coroner cannot receive compensation for performing autopsies.
IC 36-2-14-6 states in part: "…If the coroner considers it necessary to have an autopsy performed, is required to perform an autopsy under subsection (f), or is requested by the prosecuting attorney of the county to perform an autopsy, the coroner shall employ a:
(1) Physician certified by the American Board of Pathology; or
(2) Pathology Resident acting under the direction of a physician certified by the American Board of Pathology; to perform the autopsy. The physician performing the autopsy shall be paid a fee of at least fifty dollars ($50.) from the county treasury…”
CORONERS TRANING AND CONTINUING EDUCATION FEE (IC 16-37-1-9)
This law establishes a nonreverting State Coroners Training and Continuing Education fund and requires that if the local department of health is charging a fee for a Certificate of Death [under IC 16-20-1-27(a)], a coroners education fee must be added to this rate. The local health department shall deposit this fee with the county auditor within thirty (30) days of collection. The county auditor is to transfer semiannually any coroners continuing education fees to the treasurer of state. The coroners continuing educations fee is:
$1.75 from July 1, 2007 through June 30, 2013
$2.00 from July 1, 2013 through June 30, 2018
$2.25 from July 1, 2018 through June 30, 2023
$2.50 from July 1, 2023 through June 30, 2028
$2.75 from July 1, 2028 through June 30, 2033
$3.00 from July 1, 2033 through June 30, 2038
$3.25 from July 1, 2038 through June 30, 2043
$3.50 after June 30, 2043NOTICE OF COUNTY COUNCIL MEETINGS
The provisions of IC 36-2-3-7 require that the county auditor, president of the council, or a majority of the members of the council calling the meetings to give written notice of the meeting to each member of the county council at least forty-eight (48) hours before the meeting and publish the notice at least one (1) day before the meeting in accordance with IC 5-3-1-4. In addition, in subsection (d), there are provisions when a court orders the county auditor to make an expenditure of county money for which there is no appropriation, the auditor will call an emergency meeting of the council. This meeting must be held within three working days of receipt of the order and notice of the meeting day, time and place is sufficient if given by telephone to the members of the fiscal body and given according to IC 5-14-1.5. (IC 36-2-3-7(d)).
However, notice of the annual budget shall be published twice in accordance with IC 5-3-1 with the first publication at least ten (10) days before the date fixed for the public hearing on the budget. (IC 6-1.1-17-3) The public hearing must be completed at least ten (10) days before the proper officers of the political subdivision meet to fix the budget, tax rate and tax levy. (IC 6-1.1-17-5)
Notices of additional appropriations shall be published at least ten (10) days before the date fixed for the public hearing on the proposed additional appropriation. (IC 6-1.1-18-5; IC 5-3-1-2)
COUNTY ECONOMIC DEVELOPMENT INCOME TAX (CEDIT) – CAPITAL IMPROVEMENT PLAN
A county may use revenue allocated for economic development purposes under IC 6-3.6-6-9 for any combination of the purposes set out in IC 6-3.6-10-2.
An economic development project is defined in IC 6-3.6-2-8.
To receive a share of the allocation of local income tax revenue for economic development purposes, a county, city or town must have developed an economic development plan.
If designation is made, the county treasurer shall transfer the share or part of the share to the designated unit unless the unit does not have a capital improvement plan. A county, city, or town that fails to adopt a capital improvement plan may not receive its fractional amount of the additional revenue or any amount designated for the year or years in which the unit does not have a plan. The county treasurer shall retain the amounts not distributed for such a unit in a separate account until the unit adopts a plan. Interest on the separate account becomes a part of the account. If a unit fails to adopt a plan for a period of three (3) years, then the balance in the separate account shall be distributed to the other units in the county in the same manner that other additional revenue allocated for economic development purposes is distributed.
The requirements for a capital improvement plan may be found in IC 6-3.6-9.5. Such a plan must include the following components:
(1) Identification and general description of each project that would be funded by other additional revenue allocated for economic development purposes.
(2) The estimated total cost of the project.
(3) Identification of all sources of funds expected to be used for each project.
(4) The planning, development, and construction schedule of each project.
A capital improvement plan must encompass a period of no less than two (2) years and must incorporate projects the cost of which is at least seventy-five percent (75%) of the fractional amount of additional revenue allocated for economic development purposes that is expected to be received by the county, city, or town in that period of time.
Local Income Tax for Economic Development funds must be appropriated by the county council prior to expenditure, and may only be used for those items included in the capital improvement plan.
Our audit position that the EDIT fund must be appropriated is based upon the following. IC 36-2-5-2(b) states. "The county fiscal body shall appropriate money to be paid out of the treasury, and money may be paid out of the treasury only under an appropriation made by the fiscal body, except as otherwise provided by law." We do not see anything in IC 6-3.5-7 that specifically allows the EDIT fund to be paid without an appropriation. Therefore, the EDIT fund must be appropriated by the county council but for only those items included in the capital improvement plan
COUNTY ELECTED OFFICIALS TRAINING FUND
As of July 1, 2011, IC 36-2-7-19 required each county to establish the county elected officials training fund. This is fund number 1217 in the new chart of accounts. The fund consists of money deposited under IC 36-2-7.5-6(c)(3) from collections of the county recorder in the form of the county identification security protection fee. Money in the fund shall be used solely to provide training of county elected officials required by IC 36-2-9-2.5, IC 36-2-10-2.5, IC 36-2-11-2.5, IC 36-2-12-2.5, and other similar laws. The offices covered are Auditor, Treasurer, Clerk, Recorder, and Surveyor. The statute was modified in 2019 to include individuals newly elected to those positions and for persons designated by the elected official, if sufficient funds are appropriated.
At this time, these are the only county elected officials and their designees, are eligible to use monies in this fund for training expenses. The statue requiring the creation of this fund does not exempt the fund from requiring appropriations prior to disbursements from the fund. Therefore, appropriation by the county council is needed either during the budget adoption process or through the use of additional appropriations. Since multiple offices can use these training funds if appropriation is provided budgeting this fund needs to be done with the county council’s understanding of the limitations on the fund as well as the coordination of each of the officials eligible to use the fund.
COUNTY EXTRADITION AND SHERIFF ASSISTANCE FUND
IC 35-33-14 establishes in each county a county extradition and sheriff assistance fund for the purposes of providing funding (1) to offset the cost or extraditing criminal defendants; (2) to train and equip law enforcement officers in the county; and (3) to offset other costs incurred by the county sheriff’s department in providing law enforcement services. Money in the fund may not be used for any other purpose. The fund consists of the portion of late surrender fees deposited in the fund under IC 27-10-2-12(i). The fund is to be administered by the county auditor and money left at the end of the calendar year does not revert to any other fund, but remains in the county extradition and sheriff’s assistance fund.
Any police officer incurring expenses in accordance with the Uniform Criminal Extradition Act, IC 35-33-10-3 should file a claim, County Form No. 17, for all expenses incurred in the extradition of prisoners. The claim should be against the county wherein the crime is alleged to have been committed. The expenses should be paid from the County General Fund if the County Extradition Fund established under IC 35-33-14 does not have a sufficient balance to pay the expenses. Assuming appropriations are not available for extradition purposes, additional appropriations should be secured in the proper legal manner.
The amount of reimbursement should be in accordance with IC 35-33-10-3(25) which provides, “The expenses shall be the fees paid to the officers of the state on whose governor the requisition was made, as now provided by law, for all necessary travel in returning such prisoner.”
A county may adopt a local home rule ordinance which provides for travel advances. Naturally, we would expect sufficient documentation such as receipts for all expenses incurred (airline ticket costs, bus travel costs, etc.) The original receipts plus the remaining cash advance must agree with the total of the travel advance. Any differences will be the responsibility of the police officer.
Charges (IC 12-30-4)
The board of county commissioners shall, at their July meeting of each year, fix an amount to be charged for the care and maintenance per person in the county home, such charge to cover the total amount for board, room, medical and nursing care, maintenance, clothing and all other items furnished within the county home, which items shall be available to all residents and patients on the same basis (IC 12-30-4-8). In those cases where facilities are available, the board of county commissioners shall have authority to accept persons in need of care and able to pay all or part of the costs of care on a voluntary basis.
The board of county commissioners shall "periodically" determine the reasonable cost of such service and fix charges for each voluntary resident on the basis of cost of care and the ability of the voluntary resident to pay (IC 12-30-4-9). Each township trustee in the county shall pay to the county the amount so fixed for each person admitted to the county home or other charitable institution from his township, except those otherwise able to pay the cost of their care from their own resources or other assistance awards. The amount of such charge to the township shall not exceed $100 per month , per person. Except in Lake County where the amount charged the township per individual may not exceed forty-eight dollars ($48) per month or twelve dollars ($12) per week. Each township trustee shall levy a tax sufficient to meet said expenses. Payment and settlement shall be made in July and December of each year for the preceding year. (IC 12-30-4-11)If an individual who:
(1) is being supported at public expense in a county home; or
(2) has died while a resident of a county home;is found to have an estate of any kind that is not needed for the support, in whole or in part, of the husband, wife, children, parents, grandparents, grandchildren, brothers, or sisters of the individual, the amount of expense incurred by the county for the treatment and maintenance of the individual shall be charged against the individual's estate, both during the individual's lifetime and after the individual's death. (IC 12-30-5-1)
Maintenance Ledger
The auditor is required to keep a maintenance ledger sheet for each person admitted to the home.
Superintendent's Report
The superintendent of the county home should file a monthly report with the county auditor for the attention of the board of county commissioners. This report should account for all receipts of cash items in the calendar month and should show the payment of same to the county treasury. The prescribed form, Combined Report – County Form No. 77 (1947) requires that the report of residents be made for a period ending on the last day of the last full week in each month. The next report should begin with the day following the ending day of the former report, not by the beginning and ending days of the month.
COUNTY LAW ENFORCEMENT CONTINUING EDUCATION FUND
In each action in which a defendant is found to have:
(1) committed a crime;
(2) violated a statute defining an infraction; or
(3) violated an ordinance of a municipal corporation;
the clerk shall collect a law enforcement continuing education program fee of four dollars ($4). (IC 33-37-5-8)
A county user fee fund is established in each county to financing various program services. The county fund shall be administered by the county auditor.
The county fund consists of the following fees collected by a clerk under this article and by the probation department for the juvenile court under IC 31-37-9-9:
(1) The pretrial diversion program fee.
(2) The informal adjustment program fee.
(3) The marijuana eradication program fee.
(4) The alcohol and drug services program fee.
(5) The law enforcement continuing education program fee.
(6) The deferral program fee.
(7) The jury fee.
(8) The problem solving court fee.
All of the jury fee and two dollars ($2) of a deferral program fee collected under IC 33-37-4-2(e) shall be deposited by the county auditor in the jury pay fund established under IC 33-37-11. (IC 33-37-8-5)
Upon receipt of monthly claims submitted on oath to the fiscal body by a program listed above, the county fiscal body shall appropriate from the county fund to that program or fund the amount collected for the program under IC 33-37-5. (IC 33-37-8-6)
There is established in each county a county law enforcement continuing education program. The program is funded by amounts appropriated under IC 33-37-8-6.
The county law enforcement agency receiving amounts based upon claims for law enforcement continuing education funds under IC 33-37-8-4 or IC 33-37-8-6 shall deposit each fee collected into the county law enforcement continuing education fund.
Distribution of money in the county law enforcement continuing education fund shall be made to a county law enforcement agency without the necessity of first obtaining an appropriation from the county fiscal body.
Money in excess of one hundred dollars ($100) that is unencumbered and remains in a county law enforcement continuing education fund for at least one (1) entire calendar year from the date of its deposit shall, at the end of a county's fiscal year, be deposited by the county auditor in the law enforcement training fund established under IC 5-2-1-13(b).
To make a claim under IC 33-37-8-6 a law enforcement agency shall submit to the fiscal body a verified statement of cause numbers for fees collected that are attributable to the law enforcement efforts of that agency.
A law enforcement agency shall submit a claim for fees in the same county fiscal year in which the fees are collected under IC 33-37-4. We recommend that the county auditor meet with the county sheriff to formulate plans to comply with this law.
The law enforcement continuing education fund may be used for the continuing education and training of law enforcement officers and for equipment and supplies for law enforcement purposes. IC 5-2-8-6
In 2016, IC 11-12-11 was enacted and re-established the County Misdemeanant Fund. Counties will continue to receive distributions to the County Misdemeanant Fund. The uses for this fund have not changed from the uses in the previously repealed code. The fund number from the Uniform Chart of Accounts remains 1175.
A county misdemeanant fund must be used only for funding the operation of the county's jail, jail programs, or other local correctional facilities or community based programs. Any money remaining in a county misdemeanant fund at the end of the year does not revert to any other fund, but remains in the county misdemeanant fund. (IC 11-12-11-5)
The purpose of the fund is to provide funding for various program services. IC 33-37-8-5(b) states: “The County Fund consists of the following fees collected by the Clerk under this article and by the probation department for the juvenile court under IC 31-37-9-9:
1. Pretrial Diversion Program fee (IC 33-37-4-1)
*2. Informal Adjustment Programs fee (IC 33-37-9-9)
3. Marijuana Eradication Program fee (IC 33-37-5-7)
4. Alcohol and Drug Services Program fee (IC 33-37-5-8)
5. Law Enforcement Continuing Education Program fee (IC 33-37-5-8)
6. Deferral Program fee (IC 33-37-4-2)
7. Jury fee (IC 33-37-5-19)
8. Problem Solving Court Fee (IC 33-23-16-23)
*This fee is collected by the probation department and remitted to the County Auditor within thirty days after collection.
All fees collected by the Clerk of the Circuit Court are remitted to the County Auditor along with the Clerk’s Monthly Report of Collections. This report contains a one – line total for all user fee collections entitled “County User Fee Fund”. The Clerk of the Circuit Court is not required to separately report each user fee collected to the County Auditor. However, we believe that to properly administer this fund, the clerk should either break out separately the fees on the Report of Collection or provide the auditor a printout showing the breakdown.
We encourage each Clerk of the Circuit Court who is using (or will be using) an electronic data processing system for processing receipt transactions to have each user fee identified with a monthly summary copy given to the County Auditor. This will eliminate the requirement of further claim verification by the Clerk of the Circuit Court. Otherwise, claims submitted by program department heads will have to be verified by both the County Auditor and Clerk of the Circuit Court to the individual receipts and cause numbers listed on the claims
Upon implementation of the standard chart of accounts for counties, the county user fee fund will be fund number 2500 and will have the attributes assigned in the funds table distributed as part of the standard chart of accounts, including the fund type of special revenue. The county user fee fund will have a separate subaccount established for each of the programs within the county user fee fund. This includes having a separate subaccount for law enforcement continuing education fees for each law enforcement agency the court works with.
Many counties currently have separate funds for each of these fees which will become subaccounts under the standard chart of accounts. The subaccounts may be numbered from 2501 up through 2599. Fund 2500, the county user fee fund, will include the balances, receipt and disbursement transactions from all subaccounts. This means all postings to subaccounts must roll up into and be reported under fund 2500.
However, all claims submitted for Law Enforcement Continuing Education fees by the county sheriff shall be deposited in County Law Enforcement Continuing Education Fund (IC 5-2-8-1).
COUNTY USER FEE FUND – CLAIMS BY STATE POLICE AND DEPARTMENT OF NATURAL RESOURCES FOR TRAINING FUNDSIf the state police department or the department of natural resources file a claim against the county user fee fund, the county auditor shall deposit fees, collected under the cause numbers submitted, to their respective training funds, by writing a warrant to the department’s treasurer. (IC 5-2-8-5 and IC 5-2-8-7)
CALCULATION OF INTEREST ON JUDGMENTS
IC 24-4.6-1-101 states "Except as otherwise provided by statute, interest on judgments for money whenever rendered shall be from the date of the return of the verdict or finding of the court until satisfaction at:
(1) the rate agreed upon in the original contract sued upon, which shall not exceed an annual rate of eight percent (8%) even though higher rate of interest may properly have been charged according to the contract prior to judgment; or
(2) an annual rate of eight percent (8%) if there was no contract by the parties."
County Form 18TJ is the appropriate form to Calculate Interest on Judgments.
Fees
The Clerk of the Court from which an action is transferred shall collect from the party seeking a change of venue a fee equal to that for a civil, criminal or other venuable case. The Clerk of the transferring Court shall forward the fee to the Clerk of the Court to which the action is transferred. Such fee should be placed in trust by the Clerk transferring the fee and paid out in favor of the Clerk of the Court where the case is to be venued.
Claims
In cases where there has been a change of venue from one county to another, the county where the case originated shall pay to the county to which such change of venue has been taken all such expense incurred by the county to which said change of venue shall be taken (IC 34-35-5-1).
The clerk of the circuit court shall certify and deliver to the county auditor a Change of Venue Claim in duplicate. The county auditor in turn transmits one copy to the county auditor of the county of origin. The auditor shall enter such charge in the Venue Record (Form No. 56).
Upon receipt of payment of the claim, the auditor will enter or cause to be entered in the Change of Venue Record (Form No. 40) in the clerk’s office, and under the proper cause number, the name of the county of origin paying the claim, date of receipt of payment and the quietus number issued therefor. The auditor shall record such payment in the Venue Record (Form No. 56)
The chargeable items of expense to be audited and allowed by the court pursuant to IC 34-35-5-2 are:
1. Expense of keeping the prisoner, if any.
2. Expense of transporting the prisoner to or from any penal institution.
3. Any extraordinary expense for safekeeping to the prisoner.
4. The fee set by the venue Court under IC 33-40-2-5 for pauper counsel, if counsel was appointed by the court.
5. Expense of mileage, meals, lodging and per diems paid for or to jurors.
6. The per diems paid jury commissioners for drawing any special venire.
7. $5.00 for each day or part of a day a bailiff is engaged in assisting the court in the trial of the cause.
8. $8.00 for each day or part of a day an official court reporter takes evidence or testimony before the judge or jury concerning the cause.
9. $10.00 per day for each day of the trial for use of facilities and utilities.
10. Notifying the jury not to attend court after having been summoned, the sun of $5.00.
11. The amount telephone or telegraph communications made or authorized by the court.
The State Board of Accounts has always advised clerks of the circuit court to be cognizant of the Indiana Bail Law which may be found in IC 27-10. Accordingly, IC 27-10-2-10(a) provides in part, "Recognizances for the appearance of prisoners shall in all cases and in all courts be in writing, be taken with at least one (1) resident freehold surety or be secured by a surety company, and be substantially in the following form: . . ." A recognizance form is then illustrated.
Also, please be advised, IC 27-10-2-11 provides in part "Such recognizance, together with a transcript of the proceedings and all papers in the case, shall be filed forthwith with the clerk of the proper court, who shall docket the cause and record such recognizance forthwith and enter it on the judgment docket . ."
BANK/CREDIT CARD PAYMENTS TO COUNTY COURTS
The clerk of the court may contract with a bank or credit card vendor for acceptance of bank or credit cards in payment of bail, fines, civil penalties, court fees and costs, or fees for the preparation, duplication, or transmission of documents. However, if there is a vendor transaction charge or discount fee, whether billed to the clerk or charged directly to the clerk's account, the clerk shall collect a credit card service fee equal to the vendor transaction charge or discount fee from the person using the bank or credit card.
The court clerk shall forward credit card service fees collected to the county auditor. These fees may be used without appropriation to pay transaction charges or discount fees charged by the bank or credit card vendor. (IC 33-37-6)
CLERK'S RECORD PERPETUATION FUND
IC 33-37-5-2 requires each clerk to establish a clerk's record perpetuation fund. The following shall be deposited in the fund:
1. revenue received by the court clerk for the transmitting of documents by facsimile machine to a person under IC 5-14-3;
2. document storage fees required under IC 33-37-5-20; and
3. the late payment fees imposed under IC 33-37-5-22 that are authorized for deposit in the perpetuation fund under IC 33-37-7-2.
4. the fees required under IC 29-1-7-3.1 for deposit of a will
5. automated record keeping fees deposited in the fund under IC 33-32-7-2(m)Such fees are to be remitted by the court to the county auditor at the end of each month.
The clerk of the court may use the money in the fund for the preservation of records; the improvement of record keeping systems and equipment, and case management system, the fund would require appropriation. The code does not specifically define what would be considered the preservation of records and improvement of the record keeping systems that the fund can be used for. To determine whether an intended purchase complies with the statute, the County should get the opinion of their legal counsel and provide that opinion as part of the supporting documentation for the purchase.
USES OF RECORD PERPETUATION FUNDS
Clerk - The clerk of the court may use the money in their perpetuation fund for the preservation of records; the improvement of record keeping systems and equipment, and case management system as stated in IC 33- 37-5-2(b). This perpetuation fund requires an appropriation.Recorder - The recorder may use the money in their perpetuation fund for the preservation of records and the improvement of record keeping systems and equipment as stated in IC 36-2-7-10(f). This fund is within the control of the recorder and does not require an appropriation. There is a provision in IC 36-2-7-10.2 that outlines the requirements needed to be followed allowing for the payment of operating expenses of the Recorder’s office
The code does not specifically define what would be considered the preservation of records and improvement of the record keeping systems that the fund can be used for. To determine whether an intended purchase complies with the statute, the County should get the opinion of their legal counsel and provide that opinion as part of the supporting documentation for the purchase.
For the purpose of the preservation of records, both of these funds may be used to pay wages, but only for work done that is directly related to that purpose. For example, if a part-time deputy is hired to scan records and index those scanned records that would be an allowable use. Documentation should be maintained that thework performed was on the preservation of records.
CLERKS OF THE CIRCUIT COURT – JUDGMENTS COLLECTED ON OVERWEIGHT VEHICLES
The clerk of the circuit court shall receipt all overweight infraction judgments separately on the Clerks Official Receipt and post to a separate column labeled “Overweight Vehicles” in the Clerks Cash Book of Receipts and Disbursements. The clerk of the circuit court shall then remit such collections separately to the county auditor on a monthly basis on the Monthly Report - Clerk of the Circuit Court (Form 46CR).
The county auditor shall quietus the collections reported by the clerk of the circuit court to a separate fund entitled “Overweight Vehicles.” Amounts quietused to this fund shall then be remitted semi-annually at settlement to the Auditor of State designated as overweight vehicle fines.
COURT COSTS - GOVERNMENTAL UNITS
IC 33-37-3-1 provides "(a) The fees prescribed in civil actions or paternity actions may not be collected from the state or a political subdivision in an action brought by or on behalf of the state or the political subdivision. (b) This section does not prevent the collection of fees from a defendant when the state or political subdivision is successful in its action."
The State Board of Accounts is of the audit position that the state and any of its political subdivisions (including school corporations) are not liable for costs as provided in IC 33-37-3-1 as stated above. Furthermore, Rule 54 of Trial Procedure provides in part (d) "Except when express provision therefore is made either in a statute or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs in accordance with any provision of law; but costs against any governmental organization, its officers, and agencies shall be imposed only to the extent permitted by law…".
We are not aware of any specific statutes imposing costs against any governmental organization. Finally, we believe the aforementioned audit position pertains to all actions filed in Circuit, Superior and County Court.
COURT REPORTERS – TRANSCRIPT PREPARATION
For the purposes of determining overtime of court reporters performing transcript work, Title 29 of the United States Code (29 USC 207(o)(6)), states:
“(6) The hours an employee of a public agency performs court reporting transcript preparation duties shall not be considered as hours worked for the purposes of subsection (a) of this section if:
(A) such employee is paid at a per-page rate which is not less than—
(i) the maximum rate established by State law or local ordinance for the jurisdiction of such public agency,
(ii) the maximum rate otherwise established by a judicial or administrative officer and in effect on July 1, 1995, or
(iii) the rate freely negotiated between the employee and the party requesting the transcript, other than the judge who presided over the proceedings being transcribed, and
(B) the hours spent performing such duties are outside of the hours such employee performs other work (including hours for which the agency requires the employee’s attendance) pursuant to the employment relationship with such public agency.
For purposes of this section, the amount paid such employee in accordance with subparagraph (A) for the performance of court reporting transcript preparation duties, shall not be considered in the calculation of the regular rate at which such employee is employed.”
DISTRIBUTION OF COURT FEES (IC 33-19-7)
The following should help determine the correct percentage of court costs to be allocated to the City and Town Court Cost Fund. IC 33-19-7-1,2,3 states that 70% collected is state, 27% collected is county, and 3% collected is city and town court costs.
The Clerk of the Circuit Court retains the 70% state share and remits it semiannually to the Auditor of State. The remaining 30% collected for the county and city and town costs is forwarded monthly to the County Auditor. If the Clerk is reporting the Court Costs for the County General Fund and the City and Town Court Costs Fund separately there shouldn’t be a problem. However, a problem or error may occur in calculating the apportionment between the County General Fund and the City and Town Court Cost Fund, if the Clerk reports court costs in total.
If the Clerk reports to the auditor in total the auditor will need to multiply court costs shown on the Monthly Report of Collection by 10% instead of 3%. Let us assume Court Costs in total equals $100 and should be allocated to:
State $70.00
County 27.00
City 3.00If the County Auditor uses 3% of the amount reported as Court Costs Due County on the Monthly Report of Collections, the City and Town Courts will be shorted by $2.10, as shown in the following schedule:
City & Town Costs County CostsTotal on Report $30.00
$30 x 3% $ .90
$30 x 27% $29.10
Total Collected $100
$100 x 3% 3.00
$100 x 27% 27.00Differences ($2.10) $2.10
However, if the County Auditor multiplies the amount of Court Costs due the County by 10% he or she will obtain the correct amount due the City and Town Court Costs Fund, as shown in the following schedule:
Total on Report $30.00
$30 x 10% $3.00
$30 x 90% $27.00Total Collected $100 3.00 27.00
Differences -0- -0-
COURT EMPLOYEES
We are aware that the judicial branch is an independent and separate department of the state government, Ind. Const., Art. 3, § 1. County government has no judicial branch under Indiana law. Art. 6, § 2, of the Indiana Constitution, which designates county officers, contains no reference to judges. Accordingly, Article 2 of Title 36 of the Indiana Code relating to county government makes no reference to any county judicial office. Circuit courts bear the name of the county in which they are located, and the judges are elected at the same time as county officers, but the court is not a part of the county government, and the judges are not county officers. State ex rel. Bailey v. Webb, 21 N.E.2d 421 (Ind. 1939).
Indiana law makes it clear that judges control the administration of their courts including the personnel and terms of employment. County officials cannot control or direct the operation of a court, including questioning the payment arrangement for court personnel, State v. Monfort, 723 N.E.2d 407 (Ind. 2000), State ex rel. Hovey v. Noble, 118 Ind. 350 (Ind. 1889).Indiana law does provide, however, that county government directly finance the operation of Indiana's state trial court system. This includes supplemental payments to the state salaries of judges, together with the entire salaries of support court personnel. State trial court facilities and equipment are also provided directly by county government. Each "county officer" is required to submit a budget estimate each year. Ind.Code § 36-2-5-5. However, since a judge is not a "county officer," each trial court's budget estimate must be prepared by the clerk of the court, approved by the judge, and then submitted to the county auditor. Ind.Code § 36-2-5-6. Pruitt v. Kimbrough, 536 F. Supp. 764 (U.S. District Court N.D. Ind., 1982).
The State Court Administration staff has written articles on the relationship between courts and county government. Please see the article “Should You Have an Employee Handbook” in the December 2012 issue of Courttimes. The second paragraph of the article states:“Courts are different from the county entities in their home county. The judges are state officials rather than county officials. However, the judges’ employees are not state employees. Although the employees receive pay and benefits from the county, they are separate and apart from other county employees. It’s important for each court to consider this when deciding whether to have a handbook just for court employees.”
Please also see the article “Employee Handbooks: Neither Fish Nor Fowl” in the February, 2011 issue of Courttimes. The first paragraph of this article states in part:
“The legal status of court employees is both unique and confounding. A myriad of statutes require the counties to provide space and funding so that the courts may operate. The circuit and superior courtrooms are the showpiece of most county facilities. The healthcare and pension benefits provided to court employees are the benefits provided to other county employees. The court employees receive a paycheck and W-2 from the county that looks like every other county employee’s payroll information. When a county employee has questions about benefits, the employee most likely goes to the county auditor, and the county auditor may well have distributed a county employee handbook to the court employees…”
We receive many questions from both county officers and court officials on the independence of the court from county control. It is our audit position that if the court has established personnel policies for the court employees, we would audit compliance with those policies. However, if the court has determined to rely on the county personnel policies, then we would audit compliance for court employees against the county’s personnel policies. With respect to the time-keeping issue, it is our audit position that although a county judge cannot be required to use the time reporting system utilized by county employees, the judge must require his employees to document their time worked and he must allow the payroll claims for the court employees as required by Indiana Code § 5-11-10-1.6(c)(5).
COURTS GRANTS
The courts are separate from the counties, as the courts are part of the judicial branch of government and not departments of the county. However, the county provides the funding for the court’s operation except for the salaries for the judges, which the county may supplement. The Clerk of the Circuit Court submits the budget for the court, approved by the Judge, to the County Council. Claims, including payroll for court employees, are submitted to the County Auditor for payment. The Judge has the authority to approve the claims of the court, but those claims must be advertised. See IC 36-2-6-3. The Clerk of the Circuit Court collects all court fees and costs for the courts. The Judges can apply for and receive State and Federal grants for court programs. However, those grants must be paid to the County and placed in a grant fund by the County Auditor. All disbursements from the grant funds should be based on claims submitted to the County Auditor. The Court should not have a bank account or hold funds from any source.
During an audit we will be looking at receipts for payments from the court to the county. All collections related to the courts should come through the Clerk or the Probation office as the Court should not have custody of any funds. Grant funds should be paid directly to the county. If there are disbursements from a county fund, such as a grant fund, to the Court, we will follow up on those disbursements as well, as all grant funds should be maintained on the county funds ledger.
State Court Administration has provided the following clarification on charging of fees for hardship
Licenses cases and in judicial review in habitual violator cases. This is further clarification of the article presented in April 2010 County Bulletin Vol. No. 372 on page 11.IC 9-24-15 establishes procedures for a person whose driving license has been suspended under the motor vehicle laws to petition a court to issue a restricted license due to hardship under certain circumstances. IC 9-24-15-5(e) requires that court costs (including fees) must be charged to the petitioner, but doesn’t specifically state which court cost applies. IC 9-30-10-7 provides for judicial review in habitual violator cases. IC 9-30-10-7(f) provides that the court costs (including fees) to be charged for judicial review in habitual violator cases are same as the costs (including fees) that are charged in enforcement of infractions. Because petitions for judicial review under IC 9-30-10 and petitions for restricted license due to hardship under IC 9-24-15 are both assigned the MI case type when filed, to reduce confusion among clerks about which court costs should be assessed --civil costs or infraction costs-- the Division had previously instructed that the infraction costs should be assessed in ALL hardship license cases.
However, based on further review and consideration, the Division’s position with respect to the court costs that should be charged for hardship license cases now is that regular civil costs should be charged in proceedings under IC 9-24-15, and that the infraction costs should only be charged in the judicial review cases. Because both types of proceedings are to be assigned the MI case type, we have a prepared the following chart to help clerks distinguish which type of proceeding is being filed so that the appropriate costs can more easily be identified and assessed.
SMALL CLAIMS PROCEEDINGS – APPEARANCE BY LEGAL COUNSEL FOR CORPORATIONS
For small claims cases exceeding one thousand five hundred dollars ($1,500) a corporation must appear by counsel. For small claims cases not exceeding one thousand five hundred ($1,500), a corporation may be represented by counsel or by a full-time employee of the corporation to appear as the corporation in the presentation of claims arising out of the business of the corporation.
Before a designated employee is allowed to appear in a small claims proceeding, the corporation must have on file with the court exercising jurisdiction of the proceedings, a certificate of compliance with the provisions of Small Claims Rule 8.
No person who is disbarred or suspended from the practice of law in Indiana or any other jurisdiction may appear for a corporate entity.
IC 35-33-8-3.2 requires the Clerk of the Circuit Court and the County Sheriff, if authorized by the Clerk to accept bail bonds and requires the defendant to:
(A) execute a bail bond with sufficient solvent sureties;
(B) deposit of cash or securities in an amount equal to the bail;
(C) execute a bond secured by real estate in the county, where thirty-three hundredths (0.33) of the true tax value less encumbrances is at least equal to the amount of the bail;
(D) post a real estate bond; or
(E) perform and combination of the requirements described in clauses (A) through (D)
The court may require the defendant and each person who makes the deposit on behalf of the defendant to execute an agreement that allows the court to retain all or a part of the cash to pay publicly paid costs of representation and fines, costs, fees, and restitution that the court may order the defendant to pay if the defendant is convicted. The defendant must also pay the fee required by subsection (d).
The clerk of the court shall collect a fee of five dollar ($5) from each bond or deposit. The five dollar ($5) fee is the special death benefit fee and is to be collected in addition to the bail bond for the types of bail listed above.
The five dollar ($5) special death benefit fee should be retained by the Clerk or County Sheriff when the defendant is required to execute a bail bond by depositing cash or securities in an amount not less than ten percent (10%) of the bail. This fee is retained as a condition of bail and is not dependent on the outcome of the case.
At the close of each month the County Auditor should receive all special death benefit fees collected by the Clerk of the Circuit Court and the County Sheriff in the County. Semiannually, the County Auditor shall remit the special death benefit fees to the Auditor of State for deposit into the special death benefit fund of the Public Employees' Retirement Fund.
SUPPORT ORDER – RESIDENCE CHANGED – PROCEEDINGS TRANSFERRED
IC 31-16-20 provides for the transfer of jurisdiction over support orders under certain circumstances when the person having rightful custody of a child is residing in a different county in Indiana from the county in which the dissolution or order was obtained. IC 31-16-20-4 states: "The proceedings that are transferred shall be docketed as other civil matters are docketed, and a civil costs fee as provided in IC 33-37-4-4 shall be collected."
The State Board of Accounts will not take exception to the use of credit cards by a governmental
unit provided the following criteria are observed:1. The governing board must authorize credit card use through an ordinance or resolution, which has been approved in the minutes.
2. Issuance and use should be handled by an official or employee designated by the board.
3. The purposes for which the credit card may be used must be specifically stated in the ordinance or resolution.
4. When the purpose for which the credit card has been issued has been accomplished, the card should be returned to the custody of the responsible person.
5. The designated responsible official or employee should maintain an accounting system or log which would include the names of individuals requesting usage of the cards, their position, estimated amounts to be charged, fund and account numbers to be charged, date the card is issued and returned, etc.
6. Credit cards should not be used to bypass the accounting system. One reason that purchase orders are issued is to provide the fiscal officer with the means to encumber and track appropriations to provide the governing board and other officials with timely and accurate accounting information and monitoring of the accounting system.
7. Payment should not be made on the basis of a statement or a credit card slip only. Procedures for payments should be no different than for any other claim. Supporting documents such as paid bills and receipts must be available. Additionally, any interest or penalty incurred due to late filing or furnishing of documentation by an officer or employee should be the responsibility of that officer or employee.
8. If properly authorized, an annual fee may be paid.
- D
Disposal of Real or Personal Property
Death and Mortgage Release Lists
Deceased Person - Payment of Funds Due
Deferred Compensation Plans
Delinquent Taxes
Personal Property Tax Judgments - Interest Calculation
Tax Liability Under Twenty-Five Dollars ($25)
Remittances to the County Treasury
Destruction of Cancelled Bonds and Coupons
Disabled Veteran or Widow - Credit Against License Exise Tax
Contruction and Maintenance - Use of Own Work Force
Maintenance and Construction or Reconstruction
Penalty on Delinquent Drainage Assessments
DATA COLLECTION FORM INSTRUCTIONS
When a county expends $750,000 or more of federal awards (whether the award is direct or passed-through another entity) in a year the county is required to have a single audit conducted in accordance with the Federal Office of Management and Budget’s Uniform Guidance. This has been a requirement for a number of years and the State Board of Accounts has provided this audit when required.
As part of this requirement a reporting package along with a data collection form is submitted electronically to the Federal Audit Clearing House. It is a requirement that the county certify the data collection form through an electronic process, which is a verification that the data collection form and report posted contains the same information as presented at the exit conference. By certifying, the county is not agreeing with the comments within the auditor’s report, just that the information is the same.
You do have the option to reject the certification. A rejection of the certification should be done in the circumstance where you have determined that the data collection form or the report contains an error. However, we would recommend that you contact the Audit Manager or County Directors before making a rejection to discuss the issue you have found.
This certification is important as the Clearing House does not recognize that the report is filed until all certifications are provided.
Late certification may also activate a Uniform Guidance requirement whereby you as the auditee must be considered high risk and so require a more extensive audit process.
The prompt for certification comes from Internet Data Entry System (IDES) via the e-mail provided to our field examiners.
It is important that the appropriate person, along with the correct e-mail address be provided to our field examiners so that the certification may be made in a timely manner.
Our field examiner will request the contact person at the appropriate time during the audit.
It is up to the county as to who will be responsible for the certification, but it must be someone who will be present at the exit who has been made aware of the report and data collection form, often the county auditor.
At the exit, instructions will be provided to you by the field examiner so that the proper certification process may be completed.
DISPOSAL OF REAL OR PERSONAL PROPERTY (IC 36-1-11 and IC 5-22-22)
The statutes regarding the disposal of county owner property may be found at 36-1-11. Disposal means the sale, exchange, transfer or lease of property.
I. Real Property – The disposal of real property is subject to the approval of the executive or the fiscal body, if there is no executive. A public hearing must be conducted before the executive or fiscal body may approve the disposal of real property. This public hearing is subject to the notices required under IC 5-3-1.
In addition, the fiscal body of a unit must approve:
(1) every sale of real property having an appraised value of fifty thousand dollars ($50,000) or more;
(2) every lease of real property for which the total annual rental payments will be twenty-five thousand dollars ($25,000) or more; and
(3) every transfer of real property that resulted in;
(a) returning gifts back to the original grantor; or
(b) returning a tract transferred as a gift from a not-for-profit.
IC 36-1-11 attempts to cover almost every possible type of property disposal conceivable. For example:
(1) A disposing agent who wants to sell or transfer real property, and as a condition of sale, includes a provision for a leaseback or leaseback with option to repurchase.
(2) A disposing agent who wants to sell or transfer real property not acquired through eminent domain procedures for any of the following purposes:
(a) To promote an economic development project.
(b) To facilitate compatible land use planning.
(3) A disposing agent that may determine for property that is assessed at less than $15,000 or not assessed as part of a public right of way and
(a) the highest and best use of the tract is sale to an abutting landowner;
(b) the cost to the public of maintaining the tract equals or exceeds the estimated fair market value of the tract; or
(c) it is economically unjustifiable to sell the tract under section 4 of this chapter.
(4) A disposing agent who wants to sell or transfer property to a nonprofit corporation
(5) A disposing agent who wants to sell or transfer property acquired by tax default for a nominal consideration to an abutting landowner.
(6) A disposing agent who wants to exchange property with non-governmental entities.
(7) A disposing agent who wants to transfer or exchange property with a governmental entity.
(8) A disposing agent who wants to convey property which was a gift and no public funds had been expended to improve the property back to the original grantor.
(9) A disposing agent who may want to convey a tract transferred as a gift by a not-for-profit back to the original grantor.
The above are very specific exceptions to the disposal of property and we would recommend consulting the attorney representing the county, before proceeding.
A disposing agent who wants to sell or transfer real property must:
(1) have the property appraised by two appraisers. The appraisers must be:
(a) professionally engages in making appraisals;
(b) licensed under IC 25-34.1 or
(c) employees of the political subdivision familiar with the value of the property.
(2) After the property is appraised, the county commissioners shall determine a minimum bid and publish a notice in accordance with IC 5-3-1. The terms and conditions of the sale shall be set forth in the notice.
(3) The notice must state that bids will be received beginning on the specific date and that the sale will continue from day to day for a period determined by the board of county commissioners of not more than sixty days.
(4) The property may not be sold to a person who is ineligible under section 16 of chapter 11.
(5) A bid submitted by a trust (as defined in IC 30-4-1(a)) must identify each
(a) beneficiary of the trust; and
(b) settlor empowered to revoke or modify the trust
(5) A bid must be open to public inspection. A bidder may raise his bid, and the raise takes effect after the board has given written notice of that raise to the other bidders.
(6) The county commissioners may also conduct an auction among the bidders if they consider this appropriate.
(7) The county commissioner may sell the property to the highest and best bidder.
(8) The county commissioners may reject all bids.
(9) The county commissioner may hire a broker or an auctioneer to sell the property. The county may pay the broker or auctioneer a reasonable compensation out of the gross proceeds of the sale. The county commissioners may hire a broker to sell real property directly rather than using the bid process if a notice is published in accordance with IC 5-3-1 and the property has been up for bid for at least sixty days before the broker is hired and either no bids were received or all bids have been rejected.
(10) The county commissioners may conduct a public auction solely by electronic means.
DISPOSAL OF PROPERTY - OTHER PROCEDURES
IC 36-1-11-4 also states, "(e) The disposing agent may also engage an auctioneer licensed under IC 25-6.1 to conduct a sale by public auction. The auction may be conducted either at the time for beginning the sale in accordance with the public notice or after the beginning of the sale. The disposing agent shall give each bidder who has submitted a bid written notice of the time and place of the auction.
(f) The disposing agent may, before expiration of the time set out in the notice, sell the property to the highest and best bidder. The highest and best bidder must have complied with any requirement under subsection (c)(4). However, the disposing agent may sell the property for less than ninety percent (90%) of the appraised value of the tracts only after having an additional notice of the sale published in accordance with subsection (c). The disposing agent may reject all bids. If the disposing agent rejects all bids, the disposing agent must make a written determination to reject all bids explaining why all bids were rejected.
(g) If the disposing agent determines that, in the exercise of good business judgment, the disposing agent should hire a broker or auctioneer to sell the property, the disposing agent may do so and pay the broker or auctioneer a reasonable compensation out of the gross proceeds of the sale. A disposing agent may have a broker to sell real property directly rather than using the bid process under subsections (c) through (f) if:
(1) the disposing agent publishes a notice of the determination to hire the broker in accordance with IC 5-3-1; and
(2) the property has been up for bid for at least (60) days before the broker is hired, and either no bids were received or the disposing agent has rejected all bids that were received.
The disposing agent may hire one (1) of the appraisers as the broker or auctioneer."
IC 36-1-11-5.5 also contains a special provision for the sale or transfer of real property for no compensation or a nominal fee to a not-for-profit corporation created for educational or recreational purposes. Additionally, other possible applicable provisions exist concerning townships; IC 20-26-7-3 and IC 20-6-7-5-, conveyance to a city, etc.
PERSONAL PROPERTYPersonal property subject to disposal (trucks, mowers, desks, tables, chairs and/or other moveable equipment), is governed by IC 5-22-22.
USE OF AUCTIONEER
IC 5-22-22-4 states, "(a) If the property to be sold is:
(1) one (1) item, with an estimated value of one thousand dollars ($1,000) or more; or
(2) more than one (1) item, with an estimated total value of five thousand dollars ($5,000) or more; the purchasing agency may engage an auctioneer licensed under IC 25-6.1 to advertise the sale and conduct a public auction.
(b) The advertising by an auctioneer under this section must include a detailed description of the property to be sold.
(c) The purchasing agency shall pay an auctioneer who conducts a sale under this section from the gross proceeds of the sale received before other expenses and liens are paid.
PUBLIC SALE OR SEALED BIDSIC 5-22-22-5 states, "(a) If:
(1) an auctioneer is not engaged under section 4 of this chapter; or
(2) the surplus property is not sold through an Internet auction site under section 4.5 of this chapter; the purchasing agency shall sell the property at a public sale or by sealed bids delivered to the office of the purchasing agency before the date of sale.
(b) Advertisement of the sale shall be made in accordance with IC 5-3-1.
(c) All sales shall be made to the highest bidder."
PUBLIC OR PRIVATE SALE OR TRANSFER WITHOUT ADVERTISING
IC 5-22-22-6 states, "If the property to be sold is:
(1) one (1) item, with an estimated value of less than one thousand dollars ($1,000); or
(2) more than one (1) item, with an estimated total value of less than five thousand dollars ($5,000); the purchasing agency may sell the property at a public or private sale or transfer the property, without advertising."
EXCHANGE OF PROPERTY BETWEEN GOVERNMENTAL BODYIC 5-22-22-10 states,
"(a) A purchasing agency may exchange property with another governmental body upon terms and conditions agreed upon by the governmental bodies as evidenced by adoption of a substantially identical resolution by each entity.
(b) A transfer under this section may be made for any amount of property or cash as agreed upon by the governmental bodies."
Various other procedures are provided in IC 5-22 concerning internet sales, recyclable and worthless property.
The governing board should seek written advice of the county attorney for interpretation of any of the provisions relating to selling or other disposition of property no longer needed by the county.
After review of IC 36-2-11-14, it appears the transfer on death deed and the affidavit following would both need the county auditor’s endorsement. The deed would be a conveyance of land under IC 36-2-11-14(a)(2) even though it would not take effect until the affidavit is filed. The deed is the conveyance document that would contain the name of the grantor, grantee, legal description, the words of conveyance and other requirements for recording a deed. The affidavit does not seem to be the conveyance document itself as it would not have the legal description and other information required of a deed. Even though we would not consider the affidavit to be the conveyance document it needs to be endorsed by the county auditor because it appears to be a vital part of the documentation that conveys, creates, encumbers, assigns, or otherwise disposes of an interest in the real property.
We realize that the county auditor’s customary endorsement may not fit the needs of the county for the transfer on death deed. IC 36-2-11-14(a) offers three types of endorsements that the auditor can provide, one of which is: “duly entered for taxation subject to final acceptance for transfer.” An additional option for endorsement is also in IC 6-1.1-5-4(b). Because we find no statutory exception for transfer on death deeds from the endorsement requirements of IC 36-2-11-14, we hope the county will find a suitable endorsement for these documents within the Indiana Code. Procedures should be established and maintained in each county to comply with the endorsement requirements of the Indiana Code for transfer on death deeds in addition to the general procedures used for all deeds.
Our position is not a legal opinion but is the position we would take during an audit of the county. During an audit we will respect the written legal opinion of the county attorney regarding the application of and compliance with Indiana Code as it relates to the endorsement of transfer on death deeds
DEATH AND MORTGAGE RELEASE LISTSTo enable the county to administer the change in filing exemptions the following information is required to be furnished the county auditor:
1. IC 16-37-3-9 (d) states: “The local health officer shall, not later than January 31, April 30, July 31, and October 31 of the year, furnish to the county auditor the records of all deaths within the officer’s jurisdiction that occurred during the previous three (3) months.”
2. IC 36-2-11-24 states: “The county recorder shall, on or before the 20th day of each month, furnish the county auditor a list of the mortgage releases recorded during the prior month. The list shall set forth the full name of the mortgagor, the book and page numbers of the original mortgage, the amount being released, and the date of the release.”
We would not take exception during an audit to not providing the list when the mortgage deduction is no longer applicable.
PAYMENT OF FUNDS DUE DECEASED PERSON IC 29-1-8This office is periodically contacted regarding the correct method of making payment of money due an official, employee, or other person who has died. If an executor, administrator or personal representative has been designated by the court, payment should be made to such executor, administrator or personal representative.
IC 29-1-8-1 states in part:
“(a) Forty-five (45) days after the death of a decedent and upon being presented an affidavit that complies with subsection
(b), a person:
(1) indebted to the decedent; or
(2) having possession of personal property or an instrument evidencing a debt, an obligation, a stock, or a chose in action belonging to the decedent; shall make payment of the indebtedness or deliver the personal property or the instrument evidencing a debt, an obligation, a stock, or a chose in action to a person claiming to be entitled to payment or delivery of property of the decedent.
(b) The affidavit required by subsection (a) must be an affidavit made by or on behalf of the claimant and must state the following:
(1) That the value of the gross probate estate, wherever located (less liens and encumbrances), does not exceed fifty thousand dollars ($50,000).
(2) That forty-five (45) days have elapsed since the death of the decedent.
(3) That no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction.
(4) The name and address of each other person that is entitled to a share of the property and the part of the property to which each person is entitled.
(5) That the claimant has notified each person identified in the affidavit of the claimant's intention to present an affidavit under this section.
(6) That the claimant is entitled to payment or delivery of the property on behalf of each person identified in the affidavit.”
Following is a suggested format for an affidavit for transfer of assets without administration. Since this is a legal question and there are statutory changes over time, please discuss this article and the suggested affidavit with your legal counsel.
The affidavit furnished should be similar to the following:
The prosecuting attorney or the attorney for a municipal corporation may establish a deferral program for deferring infraction and ordinance violation cases actions brought under IC 34-28-5-1. Actions may be deferred if:
(1) the defendant in the action agrees to conditions of a deferral program offered by the prosecuting attorney or the attorney for a municipal corporation;
(2) the defendant in the action agrees to pay to the clerk of the court an initial user’s fee and user’s fee set by the prosecuting attorney or the attorney for the municipal corporation in accordance with IC 33-37-4-2(e);
(3) the terms of the agreement are recorded in an instrument signed by the defendant and the prosecuting attorney or the attorney for the municipal corporation;
(4) the defendant in the action agrees to pay a fee of seventy dollars ($70) to the clerk of the court if the action involves a moving traffic offense (as defined in IC 9-13-2-110);
(5) the agreement is filed in the court in which the action is brought; and
(6) if the deferral program is offered by the prosecuting attorney, the prosecuting attorney electronically transmits information required by the prosecuting attorneys council concerning the withheld prosecution to the prosecuting attorneys council, in a manner and format6 designated by the prosecuting attorneys council.
When a defendant complies with the terms of an agreement filed, the prosecuting attorney or the attorney for the municipal corporation shall request the court to dismiss the action. Upon receipt of a request to dismiss an action the court shall dismiss the action. An action dismissed may not be re-filed.
Per information provided by State Court Administration about deferral programs, the defendant initially must pay as part of the program:
(1) a document storage fee of two dollars ($2);
(2) a highway work zone fee of fifty cents ($0.50) or twenty five dollars and fifty cents ($25.50) depending on the offense;
(3) an automated record keeping fee of five dollars ($5); and
(4) court costs of seventy dollars ($70) if the infraction was a moving violation as defined in IC 9-13-2-110.
As part of the deferral agreement, the defendant may be required to pay an initial user fee, not exceeding $52, and monthly user fees, not exceeding $10, for each month the defendant is in the deferral program.
If the defendant fails to complete the deferral program the State will resume prosecution of the infraction. Initial and monthly fees paid for the deferral program are lost. Most deferral agreements incorporate this requirement by stating “failure to comply with each and every requirement of this agreement will result in the forfeiture of all fees paid into the program.” The agreement used by your county’s prosecuting attorney should be reviewed for this or similar language. Additionally, the defendant will be assessed all fees/costs that he or she has not already paid. Costs and fees cannot be charged again because prosecution of the infraction is being resumed. The county is not starting a new prosecution of a new infraction violation.
Therefore, the remaining costs and fees to be charged are as follows:
(1) infraction / ordinance violation costs of seventy dollars ($70), if they were not already collected;
(2) law enforcement continuing education fee of four dollars ($4);
(3) jury fee of two dollars ($2);
(4) public defense administration fee of five dollars ($5);
(5) judicial insurance adjustment fee of one dollar ($1);
(6) judicial salaries fee of nineteen dollars ($19);
(7) DNA sample processing fee of two dollars ($2);
(8) court administration fee of five dollars ($5);
(9) alcohol and drug services fee and alcohol and drug countermeasures fee if ordered by the court for the type of infraction; and
(10) any judgment ordered by the court for the violation of the infraction.
DEFERRAL PROGRAM COSTS AND FEES
State Court Administration has provided the following clarification on court costs and fees for the deferral program only.
In a deferral program the defendant initially must pay:
- document storage fee ($2.00)
- highway work zone fee (may be $0.50 or $25.50 depending on offense)
- automated record keeping fee ($7.00 before 7/1/11; $5.00 now)
And the defendant might be required to pay:
- court costs ($70.00) if the infraction was a moving violation as defined in IC 9-13-2-110
As part of the deferral agreement, the defendant may be requires to pay an initial user’s fee (not exceeding $52) and monthly user (not exceeding $10) for each month the defendant is in the deferral program.
If the defendant fails to complete the deferral program:
- the State will resume prosecution of the infraction
- all initial and monthly fees paid for the deferral program are lost. Most deferral agreements incorporate this requirement by stating “failure to comply with each and every requirement of this Agreement will result in the forfeiture of all fees paid into the Program”. You might want to check the one used by your prosecutor.
- the defendant will be assessed all fees/costs that he or she has not already paid. We can’t charge court costs, document storage fee etc. again because we are just resuming prosecution of this infraction, not starting a new prosecution of a new infraction violation.
Here is the list of what still needs to be charged:
- infraction/ordinance violation costs ($70.00) IF they were not already paid
- law enforcement continuing education fee ($4.00)
- jury fee ($2.00)
- public defense administration fee ($3.00 before 7/1/11; $5.00 now)
- judicial insurance adjustment fee ($1.00)
- judicial salaries fee ($18.00 before 7/1/11; $19.00 now)
- DNA sample processing fee ($2.00)
- court administration fee ($5.00)
- plus, depending on the infraction, the judge may order the defendant to pay the alcohol and drug services fee and the alcohol and drug countermeasures fee
- the defendant must also pay any judgment ordered by the court for the violation of the infraction.
STATE SALARY REDUCTION PLAN – DEFERRED COMPENSATION PLANS
IC 5-10-1.1 authorizes the State of Indiana to enter into a salary reduction (deferred compensation) plan for state employees. This law also includes counties, cities, towns, townships, school districts and city or county hospitals.
However, it should be pointed out that Section 7 of this public law states that any political subdivision (as defined in 36-1-2-13) may establish for its employees a deferred compensation plan. Each plan shall be selected by the governing body of the political subdivision. Participation shall be by written agreement between each employee and the governing body of the political subdivision, which agreement provides for the deferral of compensation and subsequent administration of such funds.
IC 6-1.1-22-14 states in part: “On or before June 1, and December 1 each year…the disbursing officer of each political subdivision…shall certify the name and address of each person who has money due the person from the political subdivision to the treasurer of each county in which the political subdivision is located. Upon the receipt of this information, the county treasurer shall search the treasurer’s records to ascertain if any person so certified to the treasurer is delinquent in the payment of property taxes.”
IC 6-1.1-22-15 states in part: “If the county treasurer finds that a person whose name is certified to him…is delinquent in the payment of his taxes, he shall certify the name of that person and the amount of the delinquency to the official of the political subdivision who is to make payment to the person. The disbursing officer shall periodically make deductions from money due the person and shall pay the amount of these deductions to the county treasurer.”
It is audit position that the disbursing officer of a county is the county auditor.
COMPUTING INTEREST ON DELIQUENT PERSONAL PROPERTY TAX JUDGMENTS
The following procedures should be followed in computing interest where partial payments are accepted on personal property tax judgments certified to the clerk of the circuit court.
1. On the date a payment is received, compute the amount of interest which is due. Multiply the total amount due by the applicable interest rate. Multiply this amount by the number of days since certification and divide by 360.
2. Deduct the amount of interest obtained in step number 1 from the total payment received to arrive at the amount of the payment to be applied against original judgment amount.
3. The amount determined in step number 2 should be deducted from the total amount of the judgment recorded in the clerk’s office.
4. The amount deducted in step number 3, plus the interest less the demand costs, should then be recharged to the tax duplicate by the county auditor. The demand costs should be receipted to the County General Fund.
5. This amount should then be posted against the amount recharged.
6. All subsequent payments should be handled in the same manner by beginning with step number 1.
DELINQUENT PUBLIC UTILITY TAXES
Pursuant to IC 6-1.1-8-38: Taxes which are based upon an assessment which is made under this chapter are a lien upon the property assessed. This lien accrues on the assessment date of the year of assessment. In addition, the taxes are a personal debt of the public utility company in whose name the property is assessed.
If public utility company does not pay the taxes when they are due, the county treasurer shall notify the prosecuting attorney of that fact. The prosecuting attorney shall then bring an action against the company to recover the delinquent taxes or to enforce the lien upon the property, or both. In such an action, the judgment shall include a penalty equal to fifty percent (50%) of the delinquent taxes. This subsection does not apply to taxes on a railroad car company’s indefinite-situs distributable property.
TAX LIABILITY UNDER TWENTY-FIVE DOLLARS ($25)
A county council may adopt an ordinance to require a person to pay his property tax liability in one (1) installment, if the tax liability for a particular year is less than twenty-five dollars ($25). If the county council has adopted such an ordinance, then whenever a tax statement mailed shows that the person's property tax liability for a year is less than twenty-five dollars ($25) for the property covered by that statement, the tax liability for that year is due in one (1) installment on May 10 of that year (IC 6-1.1-7-7 and IC 6-1.1-22-9). The ordinance adopted by the county council should designate which property tax (real estate, personal, or mobile home) the payment applies to. A single ordinance requiring all three types to be paid by May 10 would be proper.
A property tax liability of less than five dollars ($5) is increased to five dollars ($5). The difference between the actual liability and the five dollar ($5) amount that appears on the statement is a statement processing charge. The statement processing charge is considered a part of the tax liability.
The depository law in IC 5-13-6-1 provides that all public funds paid into the treasury of any political subdivision shall be deposited not later than the business day following the receipt of funds on business days of the depository in one or more depositories in the name of the political subdivision. Officials are not required to deposit funds on the business day following receipt if the funds on hand do not exceed five hundred dollars ($500). However, the funds on hand must be deposited not later than the business day following the day that the funds exceed five hundred dollars ($500). It is extremely important that the provisions of this law be strictly followed. Officials would still need to comply with any county policies that may require more frequent or daily deposits. Public funds deposited shall be deposited in the same form in which they were received.
IC 5-13-14-3 provides: "A public servant who violates the depository duties in this article is subject to criminal prosecution under IC 35-44.2-2-1. The public servant also is liable upon the public servant's official bond for any loss or damage that accrues."
All local investment officers shall reconcile at least monthly the balance of public funds, as disclosed by the records of the local officers, with the balance statements provided by the respective depositories. (IC 5-13-6-1(e))
The following guidelines are recommended for compliance with this section of the law:
(1) The cashing of employee payroll checks and employee personal checks should be prohibited.
(2) Checks received in the mail in amounts which are over the amounts due a county for taxes and special assessments shall be applied to the amount of taxes and special assess¬ments due and the remainder applied to the Surplus Tax Fund in accordance with IC 6-1.1-26-6.
(3) Each County Treasurer should establish his/her own policy on receiving overpayments for taxes in the form of checks or money orders paid in person by taxpayers. If checks are made out in error for minimal amounts over the tax liability, change could be given back to the taxpayer for difference. However, we do not recommend making change for taxpayers whose checks are in excesses of the taxes due by large amounts.
(4) Each County Treasurer should establish his/her own policy on whether or not they accept checks for deposit which are made payable to other county departments. For example, checks made payable to the County Health Department.
(5) Overpayments from companies who act as escrow agents for tax payers shall be deposited in the Surplus Tax Fund in accordance with IC 6-1.1-26-6. If it is not practicable to identify the individual components of the amount overpaid by parcel number before the next settlement of taxes, the entire amount could be carried on line 53 of the Treasurer’s Daily Balance of Cash and Depositories, County Form No. 47, until such time as the individual components can be applied by taxpayer and taxing district. Refunds cannot be made until after the overpayments are recorded in the Surplus Tax Fund Ledger and turned over to the County Auditor. As stated in prior articles in this publication, the Surplus Tax Fund Ledger may be turned over to the County Auditor at any time other than at each semiannual settlement.
REMITTANCES TO THE COUNTY TREASURY
Many offices and departments of the county have been authorized to deposit daily into a county bank account and remit collections from those accounts to the County Auditor and County Treasurer at a later date by a county governing body. This policy helps compliance with the daily deposit law in IC 5-13-6-1 in offices and departments that are not located close to the offices of the County Auditor and Treasurer and when the reconciling of the collections is more cumbersome.
For these offices and departments remittance in a timely manner is imperative. Unless otherwise stated in the Indiana Code, remittance is considered timely when made by the 10th day of the month following the month of receipt. This should provide adequate time for reconciling the bank account to the departmental ledger and preparation of the Report of Collections, General Form 362.
DESTRUCTION OF CANCELED BONDS AND COUPONS
A bank serves as trustee for municipal bond issues. They requested our audit position regarding providing issuers with a written detailed disposal document instead of returning the canceled bonds and coupons. The following is our response to their question.
Statutory authorization and procedures to be followed in the destruction of public records may be found at Indiana Code 5-15-6. In reviewing this statute, we find no authorization for use of cremation certificates. With the increased use of registered bonds we have taken the following audit position. Assuming there is no requirement in the bond ordinance that canceled bonds and coupons must be returned to the issuing agency, the State Board of Accounts will not take audit exception if the following conditions are followed. The Trustee provides a properly executed cremation certificate to the issuer clearly listing the individual bonds and coupons destroyed, the date of destruction, and a provision indemnifying the issuer if the listed bonds and coupons are ever presented a second time for redemption.
DISABLED VETERAN OR HIS WIDOW - CREDIT AGAINST LICENSE EXCISE TAX
A disabled veteran or his widow is entitled to a credit against the annual license excise tax pursuant to IC 6-6-5-5(b), which states:
"A person who owns a vehicle and who is entitled to a property tax deduction under IC 6-1.1-12-13, IC 6-1.1-12-14, IC 6-1.1-12-16, or IC 6-1.1-12-17.4 is entitled to a credit against the annual license excise tax as follows: Any remaining deduction from assessed valuation to which the person is entitled, applicable to property taxes payable in the year in which the excise tax imposed by this chapter is due, after allowance of the deduction on real estate and personal property owned by such person, shall reduce the annual excise tax in the amount of two dollars ($2) on each one hundred dollars($100) of taxable valuable or major portion thereof. The county auditor shall, upon request, furnish a certified statement to the person verifying the credit allowable under this section and the statement shall be presented to and retained by the bureau to support the credit...."
Note of emphasis:
It is important to note from the underscored wording that deductions apply as follows:
1. The veteran's deduction shall be first applied to real estate and personal property of the applicant. Any balance of the deduction remaining may be applied against license excise taxes.
2. The deductions applied to excise taxes shall be for the taxes payable in the same year the property taxes are due and payable. Thus, a disabled veteran or his widow that files his or her application for deduction with the County Auditor against taxable real or personal property for which taxes are due and payable in 2017, may apply any balance remaining of his deduction only against license excise taxes payable in 2017
DISINTERMENT, DISENTOMBMENT, AND DISINURNMENT
IC 23-14-57-1(c) states in part: “Before issuing a written authorization under subsection (b), the state department of health shall do the following: (1) obtain written evidence that a licensed funeral director has agreed to be present at the removal and at the reinterment, reentombment, or reinturnment of the remains and cause the completed order of the state department of health to be recorded in the office of the county recorder of the county where the removal occurred.”
The statute does not state that this recording is to be done without a fee being charged. Therefore, our position is that the recording fees as stated in IC 36-2-7-10 apply.
DISASTER RELIEF FUNDS – ACCOUNTING AND BUDGETING
Based upon language contained in IC 10-14-3-17(j)(5) which states that a political subdivision may waive procedures and formalities otherwise required by law pertaining to the appropriation and expenditure of public funds where a national disaster or security emergency had been declared, the following procedures should be followed when disasters relief funds are received.
Money receives or expected to be received from the Federal Emergency Management Agency (FEMA), the State Emergency Management Agency, or the State Lottery Commission for tornado, flood, ice storm, or other types of declared disasters should be accounted for in the following manner:
1. If the money is to be used to reimburse funds for expenditures already incurred and paid and the conditions of IC 10-14-3-12 have been met, the amount received may be added back to the appropriation balances from which the expenditures have been previously made.
2. If the money is to be used for future expenditures, a separate fund should be set up entitled” Disaster Relief Fund.” Such fund would not require appropriation or additional appropriation prior to spending the money in the fund.
It is recommended that all related expenditures records (Claims, minutes, correspondence, contracts, damage survey report, etc) be maintained in separate file for future audits required by State and Federal agencies.
A court shall collect a fee of one dollar ($1) per legal size or letter size page, including a page only partially covered with writing, for preparing a transcript or copy of any record. However, this would not apply to the transmitting of a document by facsimile machine or other electronic device or the preparation or copying a record through the use of enhanced areas under IC 5-14.3 or by a governmental entity using an electronic device. (IC 33-37-5-1)
It is our position that public funds cannot be donated or given to other organizations or individuals unless specifically authorized by law. We would not take exception to the County entering into a written contract or written grant agreement if the contract or grant serves a county purpose. Those decisions would be made by the county. If the county does not have the funding or does not find that the request serves a county purpose, the donation should not be made. We will also expect to see the claim documentation to state the county purpose.
Most counties have funds that have been inactive or dormant for a number of years. A sufficient fund balance should be retained to pay any outstanding obligations, such as bonds and interest coupons not surrendered for payment. However, to the extent of any balance not needed to cover outstanding obligations, every effort should be made by county auditors to eliminate such funds from the records. The following statutory authorities will be found governing the closing out of the above listed funds.
IC 5-1-13-2 provides that when bonds have been issued for any lawful purpose, and the purpose for which the debt was incurred has been accomplished or abandoned, the surplus or balance in such bond fund shall be transferred to the bond and interest redemption fund by the disbursing officer upon order of the legislative body. The funds so transferred are to be used for the payment of interest bearing indebtedness.
IC 36-1-8-5 is a general law which provides that unused and unencumbered balances in county funds which have been raised by levy on all of the taxable property of the county be transferred to the county general fund or rainy day fund, upon authority given by the county council. This section also provides that unused and unencumbered balances in funds for the redemption of poor relief bonds or like obligations for poor relief purposes by levy on all of the taxable property of a civil township be transferred to the poor relief fund of such township.
County auditors should examine any dormant finds carried on their ledgers with the view toward closing out such funds before December 31.
Exemptions from Appropriations:
Recent research and investigation has resulted in a change to our audit position regarding the need for an appropriation of maintenance and reconstruction funds for drainage projects. Based upon review of IC 36-2-9-14 (d) (4), we are amending our position related to drainage maintenance, drainage construction/ reconstruction funds. IC 36-2-9-14 (d) (4) provides an exception, for these funds, to the requirement in IC 36-2-5-2 (b) that funds must be appropriated prior to disbursement.
Chart of Accounts
Each regulated drain or combination of drains that receives an assessment for maintenance should have a sub account within the Drain Maintenance Fund (Fund 2700). The Drain Maintenance Fund is established by IC 36-9-27-44. The Drain Maintenance fund will consist of the money received from annual assessments upon the lands benefited by the periodic maintenance of the drain; penalties received on the collection of delinquent annual assessments for periodic maintenance of the drain and money received from any person as compensation for damages suffered to the drain. If the county surveyor determines that annual maintenance of any drain will be less than $1,500 that drain is exempt from the requirement that a drain maintenance fund be established. Whenever a drain maintenance fund has not been established the costs for the maintenance of said drain would be paid from the General Drain Improvement fund.
The General Drain Improvement Fund (Fund 1158) is established by IC 36-9-27-73. The General Drain Improvement fund is used to account for the maintenance costs of all drains that do not have a maintenance fund as described above and for the construction or reconstruction of a regulated drain or the removal of obstructions from a regulated drain. The proceeds from the sale of bonds or money received from loans under IC 39-9-27-97.5 would be deposited to the General Drain Improvement fund. In addition this Fund would consist of all funds transferred to the fund on January 1, 1985; costs collected from petitioners in a drainage proceeding; money received from the assessments upon land benefited for construction/reconstruction of a drain; interest and penalties received on collection of delinquent drain assessments and interest on deferred payments; appropriations made from the General Fund or taxes levied by the county fiscal body for drainage purposes; and any money repaid from a Maintenance Fund.
The chart of accounts also includes a Fund 2600 entitled Drain Construction/Reconstruction. This fund was not established by statute, but is included in the chart of accounts as a way to allow counties to separately track drain construction or reconstruction projects. From an accounting perspective, the use of this fund would establish a construction account that would track the receipt of bond or loan proceeds and the construction costs of a particular drain and more easily identify the activities for the construction project. The 2600 fund would also allow the county to establish subaccounts if more than one drain was in a construction/reconstruction phase and separately track each drain’s activities. If the county chooses this option, the General Drain Improvement fund (Fund 1158) will still include all of the statutory functions with the exception of the debt proceeds and construction costs. In addition, the assessments collected for repayment of the construction costs would be posted to the Drain construction/Reconstruction Fund (Fund 2600) for all construction not funded by the sale of Bonds. When a construction/reconstruction project is complete, any money remaining in the 2600 fund for that project would be repaid to the General Drain Improvement fund.
When the Drainage Board determines that the final assessment for the construction/reconstruction of a drain cannot conveniently be paid within five years, they must issue bonds to finance the construction/reconstruction. If bonds are issued then the County must establish a Drainage Bond Redemption Fund, which would be in the Debt Service funds (4600 series). The statute for the Bond Redemption fund is IC 36-9-27-97. The assessments paid by landowners (principal, interest and penalty) would be posted to the Drainage Bond Redemption Fund.
We would not take audit exception to either the county’s use of the 2600 Fund for Construction/Reconstruction of drains or the county’s choice to track all construction/reconstruction activity in the General Drain Improvement Fund (Fund 1158).
Expense from Drainage FundsThe operating expenses of the county drainage board are payable from the County General Fund pursuant to valid appropriations being made by the county council. (IC 36-9-27-11)
Such operating expenses include:
a. per diem of members of the drainage board
b. compensation of an attorney employed by the drainage board
c. compensation of an engineer or surveyor appointed by the drainage board pursuant to IC 36-9-27-31d. compensation for secretarial or clerical service to the drainage board
e. mileage; of the drainage board; of engineer or surveyor appointed by the board under c. above; of county surveyor and deputies when engaged in drainage work
f. postage
g. advertising and cost of notices given by the drainage board in projects involving reconstruction or maintenance
h. office telephone
i. official records
j. office supplies
k. office equipment
Under item "c" the rate of compensation paid shall be assessed against the drainage project for which the engineer is employed. (IC 36-9-27-30)
Item "f" does not include postage for sending the notices the attorney for petitioners is required to mail. Such costs are reimbursable to the attorney from the General Drain Improvement Fund after the project has been finally and conclusively established. Reimbursements to the attorney for this expense, as well as his statutory fee under IC 36-9-27-61, shall be delayed until after the time has expired to petition a court for judicial review pursuant to IC 36-9-27-106 to 36-9-27-109. Item "f" does not include cost of mailing notices required by IC 36-9-27-52, involving reconstruction. Cost of advertising and giving notices required by this section are payable from item "g" and are chargeable items of expense against the affected reconstruction projects.DRAINAGE CONSTRUCTION AND MAINTENANCE - USE OF OWN WORK FORCE
IC 36-9-27-77(e) allows the Drainage Board to perform maintenance, construction, or reconstruction by its own work force without awarding a contract. However, this would be subject to IC 36-1-12-5 which states the public work project must be less than $50,000. IC 36-9-27-79.1 was changed in 2019 to increase the cost of projects to $150,000 that can be completed by the Board’s own workforce without contract. IC 36-1-12-5(e) states that the Board may purchase or lease supplies in the manner provided in IC 5-22 and perform the public work by means of its own work force without awarding a public contract.
In summary, the Drainage Board could perform its own maintenance project with the use of its own work force without awarding a contract if the total project costs are less than $150,000 (IC 36-9-27-79.1).
DRAINAGE FUNDS – MAINTENANCE AND CONSTRUCTION OR RECONSTRUCTION
Some counties are advancing money from the General Drain Improvement Fund to pay maintenance expenses or construction or reconstruction costs prior to holding hearings and fixing assessments against the benefited property owners and, in some cases, no assessments have been fixed.
(1) Maintenance Expenses – IC 36-9-27-38 contains the following provisions with respect to periodic maintenance:
"When the board refers a regulated drain classified in need of periodic maintenance to the county surveyor, he shall prepare a maintenance report that includes the following: (1) The estimated annual cost of periodically maintaining the drain…"
This wording is then followed with duties imposed upon the surveyor to include within his report the name and address of each owner, the legal description of the land of each owner and for the drainage board to prepare a schedule of assessments, hold a hearing thereon after giving due notice of such hearing, and to fix annual maintenance assessments for such maintenance expenses.
IC 36-9-27-45 indicates maintenance work shall be paid from the General Drain Improvement Fund when a maintenance fund has not been established; or has been established but it is not sufficient to pay for the work and the General Drainage Improvement Fund shall be reimbursed from the appropriate maintenance fund when it is established or becomes sufficient. However, we can find no authority for the drainage board or for the county surveyor to incur expenses in connection with the periodic maintenance of drains, or to pay any expenses connected therewith, unless the board has referred such drains to the surveyor.
We also recognize that IC 36-9-27-44 authorizes maintenance expenses up to $1,500.00 on any drain to be paid from the General Drain Improvement Fund without annual maintenance assessments being established, subject to a maximum limit in any one year for all such maintenance expenses not to exceed $10.00 per mile of legal drains in the county. However, unless maintenance assessments are established and the General Drain Improvement Fund reimbursed, it will result in the General Drain Improvement Fund being depleted without any provision for advances to be made by the county to cover such expense.
(2) Construction or Reconstruction of Drains – The county auditor shall not pay construction or reconstruction costs in excess of the amount of final costs certified to the county auditor pursuant to IC 36-9-27-86. The items comprising the final costs are enumerated in IC 36-9-27-84 to include: contract price; incidental expense (including advertising, engineering costs, etc.); damages; interest on any bonds issued under IC 36-9-27-94; and attorney fees, if any.
There is no requirement to have assessment rolls recorded in the county recorder's office.
It is the responsibility of the county auditor to see that disbursements for the construction or reconstruction of each drain do not exceed the amount assessed affected property owners on such drain. If costs exceed the assessments, the matter should be immediately referred to the county drainage board.
PENALTY ON DELINQUENT DRAINAGE ASSESSMENTS
Pursuant to IC 36-9-27-86(c), drainage assessments shall be considered taxes and the manner of collection shall be in accordance with the Property Tax Collection Laws (IC 6-1.1). In view of this, a 10% penalty should be added to unpaid drainage assessments due May 10; also, a 10% penalty should be added to all prior years' delinquent assessments unpaid on May 10.
COUNTY DRUG FREE COMMUNITY FUND
In 1990, per IC 5-2-11 a county drug free community fund was established in each county to promote comprehensive local alcohol and drug abuse prevention initiatives by supplementing local funding for treatment, education and criminal justice efforts. The fund consists of fees collected by the Clerk of the Circuit Court: under IC 33-37-7-2(c) and IC 33-37-7-8(e). [IC 5-2-11-2] Specifically:
1. Seventy-five percent (75%) of the Drug Abuse, Prosecution, Interdiction, and Correction Fee under IC 33-7-4-1(b)(5);
2. Seventy-five percent (75%) of the Alcohol and Drug Counter- Measures Fees under IC 33-37-4-1(b)(6), IC 33-37-4-2(b)(4) and IC 33-37-4-3(b)(5). [IC 33-37-7-2(c)]
These fees will be remitted monthly by the Clerk of the Circuit Court to the County Auditor on their Monthly Report of Collections and receipted to the “Drug Free Community Fund.”
The remaining twenty-five percent (25%) of these fees are to be receipted by the Clerk of the Circuit Court to the “State User Fee Fund” and semiannually distributed to the Auditor of State.
The County Auditor shall administer the Drug Free Community Fund which requires local appropriation. The fund is non-reverting.
The County Council shall annually appropriate from the fund amounts allocated by the Board of County Commissioners for the use of persons, organizations, agencies and political subdivisions to carry out recommended actions contained in a comprehensive drug free communities plan submitted by the Local Coordinating Council, established by IC 5-2-11-1.6 and approved by the Commission for a Drug Free Indiana established under IC 5-2-6-16.
The Board of County Commissioners shall allocate the money, based on the recommendation of the Local Coordinating Council and in accordance with the approved plan, as follows:
1. At least twenty-five percent (25%) of the money is to go to persons, agencies, organizations, and political subdivisions providing prevention and education services in the County, and
2. At least twenty-five percent (25%) of the money is to go to persons, agencies, organizations, and political subdivisions providing intervention and treatment services in the County, and
3. At least twenty-five percent (25%) to persons, agencies, organizations, and political subdivisions providing criminal justice services and activities in the County, and
4. The remaining twenty-five percent (25%) in the fund to be allocated by the county fiscal body to persons, organizations, agencies, and political subdivisions to provide services and activities under subdivisions (1) through (3) based on the comprehensive drug free communities plan.
Through the plan the Local Coordinating Council determines the amount of funds the County Council should appropriate to implement the objectives of the plan. If the plan is not approved by the Commission for a Drug Free Indiana the County Council may not appropriate the funds even at the request of the local council.
The fund may not be used to replace other funding for alcohol and drug abuse services provided to the county.
It will be up to the Board of County Commissioners, based on the approved comprehensive plan created by the LLC, to decide what persons, organizations, agencies, and political subdivisions get this money.
As always the recipients of these funds should enter into a contractual agreement with the county commissioners stating:
1. They will use the funds to provide services and activities contained in the plan;
2. The recipient will file periodic financial reports of the services and activities provided; and
3. They will be subject to an audit by the State Board of Accounts.
Additional Clarification
The Commission for a Drug Free Indiana (Commission) approves and appoints the local coordinating council (LCC) which is a countywide citizen body. The purpose of the LCC is to plan, monitor, and evaluate comprehensive local alcohol and drug abuse plans. The LCC works in an advisory capacity to the County Commissioners for the County Drug Free Community funds and develops the comprehensive plan that must be approved by the County Commissioners and ultimately by the Commission.
The County Council will approve appropriations for the County Drug Free Community Fund (fund 1148) and the auditor will administer the funds. Disbursements from the fund must be in compliance with the Comprehensive Plan approved by the Commission. The Indiana Criminal Justice Institute will notify the county auditor when the plan has been approved and provide documentation of the approved plan’s budget. The Auditor will administer the Drug Free Community fund similar to a grant fund although the funding comes from the collection of local fees and not a state grant. The auditor should notify the LCC of the fund balance and any amendments to the original comprehensive plan would have to be approved by the Commission.
The administration costs of the LCC that are approved under the Comprehensive plan will be paid through the county’s claim processing. The county should not turn over any funds from the Drug Free Community fund to the LCC for the LCC to administer. Any payments for equipment or supplies will also be paid through the county’s claims process.
Grant amounts awarded to other entities that will be providing services under the approved plan will be paid by claim, based on the comprehensive plan. The LCC can provide the grant agreement between the county and the other entity, but the Commissioners must approve the agreement. The LCC will monitor the grant activity for the county. The Commissioners should formalize the arrangement between the County and the LCC for implementation of the Drug Free Community plan with a written agreement.
Please contact Sonya Carrico with the Indiana Criminal Justice Institute which supports the Commission for a Drug Free Indiana if you have any questions about this program. Her email is scarrico@cji.in.gov.
All federal grant applicants must have a Dun and Bradstreet “DUNS” number (DATA UNIVERSAL NUMBERING SYSTEM) to apply for a renew grants or submit plans under mandatory grant programs. The DUNS number will be required regardless of whether the applicant is submitting a paper application or electronically filing through the new e-grants web portal: www.grants.gov. The identifier will be used for tracking purposes, and to validate addresses and point of contact information. A universal identifier also eliminates the need for separate identification numbers in different federal agencies.
A DUNS number can be obtained by calling Dun and Bradstreet’s toll free number at 1-866-705-5711 or 1-800-234-3867. A number may also be obtained on-line at www.dnb.com/us/duns update.
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Elected Office and Being Employed
Elections
Campaign Finance Report - Civil Penalty
Election and Registration Fund
Election Division Instructional Meetings
Electronic Funds Transfer for State Distributions
Electronic Funds Transfer With Financial Institutions and Pension
Electronic Map Generation Fund
Electronic Payment of Vendor Claims
Examination of Records and Statement of Engagement Cost
IC 36-8-16.7-24 established a statewide 911 board to implement and oversee the statewide 911 system. The Board establishes the 911 fees and all fees are remitted to the state. The statewide 911 board distributes monies from the statewide E911 fund to the counties based on a funding schedule outlined in 36-8-16.7-37. Public Safety Answering Points (PSAPs) are to use the distributions to pay for expenses outlined in IC 36-8-16.7-38(a). The distributions may not be used for the construction, purchase, renovation or furnishing of PSAP buildings or vehicles.
IC 36-8-16.7-38(e) states: “ A distribution under section 37(a)(2) of this chapter must be deposited by the treasurer of the county in a separate fund set aside for the purposes allowed by subsections (a) and (b). The fund must be known as the _______ (insert name of county) 911 fund. The county treasurer may invest money in the fund in the same manner that other money of the county may be invested, but income earned form the investment must be deposited in the fund set aside under this subsection.”
The fund number from the chart of accounts is 1222.
IC 36-8-16.7-47(c) states: “Subject to subsection (d), after December 31, 2014, a county may not contain more than two (2) PSAPs. However, a county may contain one (1) or more PSAP’s in addition to the number of PSAP’s authorized by this section, as long as any additional PSAP’s are operated: (1) by a state educational institution; (2) by an airport authority established for a county having a consolidated city; or (3) in a county having a consolidated city, by an excluded city (as defined in IC 36-3-1-7)”
ELECTED OFFICE AND BEING EMPLOYED
SECTION 1. IC 3-5-9 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JANUARY 1, 2013]:State Board of Accounts (SBOA) Audit Position: This chapter becomes effective January 1, 2013. Therefore, all "units" as defined within this chapter should be following this section on January 1, 2013.
Chapter 9. Government Employees and Volunteer Firefighters Holding Office
Sec. 1. As used in this chapter, "elected office" refers only to the following:
(1) The executive or a member of the executive body of a unit.
(2) A member of the legislative body or fiscal body of a unit.
SBOA Audit Position: The term "elected office" for the purpose of this chapter, depending on the "unit" of government refers to the executive, executive body, legislative body, or the fiscal body of the "unit" of government. Depending on the "unit," this would include county commissioners, county council members, mayors, city or town council members, township board members, and trustees of each "unit."
Sec. 2. As used in this chapter, "government employee" refers to an employee of a unit. The term does not include an individual who holds only an elected officeSBOA Audit Position: The term "government employee" includes everyone employed by the "unit" that is not a person that holds an "elected office." Therefore, for the purpose of this chapter, county commissioners, county council members, mayors, city and town council members, township board members, and trustees of their respective "units" are not considered a "government employee."
Sec. 3. As used in this chapter, "unit" means a county, city, town, or township.SBOA Audit Position: The term "unit," for the purpose of this chapter, is any county, city, town, or township in Indiana. All elected or appointed officials and all other employees within a "unit" of government are subject to this chapter. Superior Court Judges, Circuit Court Judges, County Prosecutors, county court employees, and county prosecutor office employees are not included in this definition of a "unit" because Superior Court Judges, Circuit Court Judges, and County Prosecutors are elected to a judicial district and not elected to a specific county; therefore, they are not subject to the direction of the "elected office" of the county.
Sec. 4. (a) An individual who is serving as a volunteer firefighter for a volunteer fire department or a fire department that provides fire protection services to a unit:(1) under a contract, excluding a mutual aid agreement; or
(2) as the unit's fire department; may not assume or hold an elected office of a unit that receives fire protection services from the department in which the volunteer firefighter serves.SBOA Audit Position: An individual who is serving as a volunteer firefighter for a volunteer fire department or a fire department that provides fire protection services to a “unit” under a contract, excluding a mutual aid agreement, or as the “unit's” fire department may not assume or hold the position of a county commissioner, county council member, mayor, city or town council member, township board member, or trustee of a unit that receives fire protection services from the department in which the volunteer firefighter serves.
(b) An individual who:(1) is an employee of a unit, serving as a full-time, paid firefighter; or
(2) serves as a volunteer firefighter;in a department that provides fire protection services to more than one (1) unit, excluding fire protection services provided under mutual aid agreements, may not assume or hold an elected office of any unit that receives fire protection services from the department.
SBOA Audit Position: An individual who is an employee of a "unit," serving as a full-time, paid firefighter or serves as a volunteer firefighter in a department that provides fire protection services to more than one (1) "unit," excluding fire protection services provided under mutual aid agreements, may not assume or hold the position of a county commissioner, county council member, mayor, city or town council member, township board member, or trustee of any "unit" that receives fire protection services from the department.
Sec. 5. Except as provided in section 7 of this chapter, an individual is considered to have resigned as a government employee when the individual assumes an elected office of the unit that employs the individualSBOA Audit Position: Any “government employee” of a "unit" is considered to have resigned their position as a "government employee" when the individual assumes the position of a county commissioner, county council member, mayor, city or town council member, township board member, or trustee within the "unit" that employs the individual. See section 7 for exception.
Sec. 6. This chapter does not prohibit:(1) a government employee from assuming or holding an elected office of a unit other than the unit that employs the government employee;
(2) a full-time, paid firefighter or volunteer firefighter from assuming or holding an elected office of a unit other than a unit that receives fire protection services from the department in which the volunteer firefighter serves; or
(3) an individual who assumes or holds an elected office from also being appointed to and serving on a board, commission, or committee of the unit.
SBOA Audit Position: A "government employee" may hold an "elected office" of any "unit" where the "government employee" is not employed. A full-time, paid firefighter or volunteer firefighter may not hold an "elected office" of any "unit" that receives fire protection services from the department in which the volunteer firefighter serves. An individual who assumes or holds an "elected office" may also be appointed to or serve on a board, commission, or committee of the "unit" to which they were elected or appointed.
Sec. 7. (a) Notwithstanding sections 4 and 5 of this chapter:(1) a volunteer firefighter who assumes or holds an elected office on January 1, 2013, may continue to hold the elected office and serve as a volunteer firefighter; and
(2) a government employee who assumes or holds an elected office on January 1, 2013, may continue to hold the elected office and be employed as a government employee; until the term of the elected office that the volunteer firefighter or government employee is serving on January 1, 2013, expires.
(b) After the expiration of the term of the elected office that the volunteer firefighter referred to in subsection (a) is serving on January 1, 2013, the volunteer firefighter is subject to section 4 of this chapter with respect to serving as a volunteer firefighter and assuming or holding an elected office of the unit that receives fire protection services from the department in which the volunteer firefighter serves.
(c) After the expiration of the term of the elected office that the government employee referred to in subsection (a) is serving on January 1, 2013, the government employee is subject to section 5 of this chapter with respect to assuming or holding an elected office and being employed by the unit that employs the government employee.
SBOA Audit Position: A volunteer firefighter who assumes or holds the position of a county commissioner, county council member, mayor, city or town council member, township board member or trustee within the "unit" that employs the volunteer firefighter on January 1, 2013, may continue to hold the "elected office" and serve as a volunteer firefighter until the term of the "elected office" that the volunteer firefighter is serving on January 1, 2013, expires.
A "government employee" who assumes or holds the position of a county commissioner, county council member, mayor, city or town council member, township board member, or trustee within the "unit" that employs the "government employee," may continue to hold the "elected office" and be employed as a "government employee" until the term of the "elected office" that the "government employee" is serving on January 1, 2013, expires.
CAMPAIGN FINANCE REPORT CIVIL PENALTY
IC-3-9-4-17 states, In addition to any other penalty imposed, a person who does any of the following is subject to a civil penalty:
(1) Fails to file with a county election board a report in the manner required under IC 3-9-5.
(2) Fails to file a statement of organization required under IC 3-9-1.
(3) Is a committee or a member of a committee who disburses or expends money or other property for any political purpose before the money or other property has passed through the hands of the treasurer of the committee.
(4) Makes a contribution other than to a committee subject to this article or to a person authorized by law or a committee to receive contributions in the committee’s behalf.
(5) Is a corporation or labor organization that exceeds any of the limitations on contributions prescribed by IC 3-9-2-4.
(6) Makes a contribution in the name of another person.
(7) Accepts a contribution made by one (1) person in the name of another person.
(8) Is not the treasurer of a committee subject to this article, and pays any expenses of an election or a caucus except as authorized by this article.
(9) Commingles the funds of a committee with the personal funds of an officer, a member, or an associate of the committee.
(10) Wrongfully uses campaign contributions in violation of IC 3-9-3-4.
(11) Fails to designate a contribution as required by IC 3-9-2-5(c).
(12) Violates IC 3-9-3-5.
(13) Serves as a treasurer of a committee in violation of any of the following: (A) IC 3-9-1-13(1). (B) IC 3-9-1-13(2). (C) IC 3-9-1-18.
(14) Violates IC 3-9-3-2.5 by making a communication that contains a disclaimer that is not presented in a clear and conspicuous manner. This does not apply to a person whose sole act is, in the normal course of business, participating in the preparation, printing, distribution or broadcast of the communication containing the disclaimer.
This applies to a person who is subject to a civil penalty under subsection (a)(1) or (a)(2) for filing a defective report or statement. If the county election board determines that a person failed to file the report or a statement of organization not later than noon five (5) days after being given notice, the county election board may assess a civil penalty. The penalty is ten dollars ($10) for each day the report is late after the expiration of the five (5) day period, not to exceed one hundred dollars ($100) plus any investigative costs incurred and documented by the board. The civil penalty limit applies to each report separately.
This applies to a person who is subject to a civil penalty under subsection (a)(1) or (a)(2) for a delinquent report or statement. If the county election board determines that a person failed to file the report or statement of organization by the deadline, the board shall assess a civil penalty. The penalty is fifty dollars ($50) for each day the report is late, with the afternoon of the final date for filing the report or statement being calculated as the first day. The civil penalty may not exceed one thousand dollars ($1,000) plus any invest-igative costs incurred and documented by the board. The civil penalty limit applies to each report separately.
If the county election board determines that a person is subject to a civil penalty under (a) (3), (a) (4), (a) (6), (a) (7), (a) (8), (a) (9), or (a) (10), the board may assess a civil penalty of not more than one thousand dollars ($1,000), plus any investigative costs incurred and documented by the board.
If the county election board determines that a person is subject to a civil penalty under (a)(5), the board may assess a civil penalty of not more than three (3) times the amount of the contribution in excess of the limit prescribed by IC 3-9-2-4, plus any investigative costs incurred and documented by the board.
This applies to a person subject to a civil penalty under (a) (11). If the county election board determines that a corporation or a labor organization has failed to designate a contribution in violation of IC 3-9-2-5(c), the board shall assess a civil penalty equal to the greater of two (2) times the amount of the contributions undesignated or one thousand dollars ($1,000). To either of these is added any investigative costs incurred and documented by the board.
If the county election board determines, by unanimous vote of the entire membership of the board, that a person has violated IC 3-9-3-5, the board may assess a civil penalty of not more than five hundred dollars ($500), plus any investigative costs incurred and documented by the board.
If the county election board determines, by unanimous vote of the entire membership of the board, that a person has served as the treasurer of a committee in violation of any of the statutes listed in subsection (a) (13), the board may assess a civil penalty of not more than five hundred dollars ($500), plus any investigative costs incurred and documented by the board.
If the county election board determines, by unanimous vote of the entire membership of the board, that a person is subject to a civil penalty under subsection (a)(14), the board may assess a civil penalty of not more than one thousand dollars ($1,000) for each communication circulated or published (but not for each of the copies of the communication actually circulated or published), plus any investigative costs incurred and documented by the election division.
All civil penalties collected shall be deposited with the county treasurer to be deposited by the county treasurer in a separate account to be known as the campaign finance enforcement account. The funds in the account are available, with the approval of the county fiscal body, to augment and supplement the funds appropriated for the administration of this article.
Money in the campaign finance enforcement account does not revert to the county general fund at the end of the county fiscal year.
Proceedings of the county election board under this section are subject to IC 4-21.5.
Per IC 3-9-4-18 (e) and (f) for a person who:
“(1) is assessed a civil penalty; and
(2) is elected to office in the subsequent election.
The election board may order the auditor of state or the fiscal officer of the political subdivision responsible for issuing the person’s payment for serving in the office to withhold from the person’s paycheck the amount of the civil penalty assessed. If the amount of the paycheck is less than the amount of the civil penalty, the auditor or fiscal officer shall continue withholding money from the person’s paycheck until an amount equal to the amount of the civil penalty has been withheld.
The auditor of state or fiscal officer shall deposit an amount paid, recovered or withheld under this section in the election board’s campaign finance enforcement account.”
ELECTION AND REGISTRATION FUND
IC 3-5-3-2 authorizes the board of commissioners in each county to establish an Election and Registration Fund and annually levy a tax sufficient to meet the average yearly expenditures for elections and registration of voters. This fund, when established, can be used for no other purpose. It is not mandatory, but offers a means whereby the cost of elections and registrations may be spread evenly each year and will not cause the total of county tax rates to be greater in election years than in other years in which no elections are held
STATE ELECTION DIVISION INSTRUCTIONAL MEETINGThe Clerk of the Circuit Court is required by IC 3-6-4.2-14 to attend a meeting called by the State Election Division in which county election boards and the board of registration are instructed on their duties under the election laws. The meeting must be called before the primary election in years in which a primary election is held. The instructional meeting may not last more than two (2) days.
Each member of a county election board or board of registration is entitled to receive a:
(1) per diem of twenty-four dollars ($24) for attending the instructional meeting;
(2) mileage allowance at the state rate for the distance necessarily traveled in going and returning from the place of the instructional meeting; and
(3) reimbursement for the payment of the instructional meeting registration fee.
(4) allowance for lodging for each night preceding conference attendance equal to the lodging allowance provided to state employees in travel status.
The Clerk of the Circuit Court as an ex-officio member of the county election board would be entitled to these reimbursements.
ELECTRONIC FUNDS TRANSFER FOR STATE DISTRIBUTIONSIC 4-8.1-2-7 allows a political subdivision as defined in IC 36-1-2-13 to elect to receive distributions from the State by means of an electronic transfer of funds, and if such election is made, the Treasurer (of State) shall have the funds transferred electronically.
ELECTRONIC FUNDS TRANSFER WITH FINANCIAL INSTITUTIONS AND PENSION
IC 5-13-5-5 states: "(a) The fiscal body of any political subdivision (County Council) may by ordinance or resolution authorize the proper legal officers of the political subdivision to transact the political subdivision's business with a financial institution or a public pension or retirement fund administered by the Indiana public retirement system through the use of electronic funds transfer.
(b) The ordinance or resolution must:
(1) specify the types of transactions that may be conducted by electronic funds transfer; and
(2) require the proper officers to maintain adequate documentation of the transactions so that they may be audited as provided by law."
We would suggest the minimum documentation from the bank to record the transaction could be in the form of a letter, deposit slip, fax etc…and must contain at a minimum:
1. the date of the transaction
2. a description to identify the type of transaction, and
3. the amount of the transaction
ELECTRONIC MAP GENERATION FUND (IC 5-14-3-8.5)
If your county provides an electronic map service, the fees charged will be deposited to an electronic map generation fund. The fund will have to be created by ordinance and will be administered by the public agency that collects the fees. The fees charged are to be based on the units’ reasonable percentage of their direct cost of maintaining, upgrading, and enhancing the electronic map and for the direct cost of supplying the electronic map in the form requested by the purchaser. The fee is subject to the approval of the fiscal body. The fee may be waived if the electronic map will be used for a noncommercial use such as identified under IC 5-14-3-8(k). If the public agency that collects the funds utilizes a bank account for the deposit and remittance of fees, the funds collected would be reported on the report of collections and transferred to the auditor monthly. The agency should be writing receipts for the funds collected. If the agency does not already have prescribed receipts, then general receipt form 352 should be utilized. The electronic map generation fund may be appropriated for the following purposes:
(1) The maintenance, upgrading, and enhancement of the electronic map, and
(2) The reimbursement of expenses incurred in supply the electronic pay in the form requested by the purchaser.
The method for the payment of claims paid on the fund would be in the same manner as other county claims.
ELECTRONIC PAYMENT OF VENDOR CLAIMS
Indiana Code 36-1-8-11.5 allows for the governing body of a political subdivision to pass a resolution that allows the fiscal officer to pay claims by electronic funds transfer. The statue also requires compliance with all other requirements for the payment of claims. Indiana Code 5-11-10-1.6 provides the requirements and procedures to be completed prior to issuing a check. Most of those requirements involve prior approval of a claim and ensuring that bills/invoices have been reviewed. Therefore, we recommend that if a county is going to make payments electronically, that they complete the claims approval requirements, and then work with their depository for a payment authorization process. Except for INPRS remittances as detailed in IC 5-10.2-2-12.5, we would recommend not setting up automatic monthly payments or other instances where vendors are giving access to pull money from the county’s bank account.
ENHANCED ACCESS FUND (IC 5-14-3-8.3)
If your unit has the process of enhanced access, then the fiscal body (County Council) must pass an ordinance establishing an “Enhanced Access Fund”. The fund is to be administered by the public agency or officer designated by the ordinance or resolution. The fees that will be charged will be contractual fees. Contracts entered into must specify that the person will:
(1) Pay the fee for enhanced access and
(2) Not engage in unauthorized access, unauthorized alteration of records, or disclose any confidential public records.
Other fees to be deposited will include permitting a governmental entity to inspect public records by means of an electronic device. The public agency may charge a reasonable fee for the inspection of public records or the public agency may waive such a fee. This should be addressed in the creating ordinance. If the agency that collects funds utilizes a bank account for the deposit and remittance of fees, the funds collected would be reported on the report of collections and transferred to the auditor monthly. The agency that collects the fees should be issuing receipts for the funds collected. If the agency does not already have prescribed receipts, then general receipt form 352 should be utilized. The creating ordinance should specify the use of the fund as defined by statute. The enhanced access fund should be appropriated and expended for:
(1) The replacement, improvement, and expansion of capital expenditures, and
(2) The reimbursement of operating expenses incurred in providing enhanced access to public information.
The method for the payment of claims paid on the fund would be in the same manner as other county claims.
RECORDERS ESCROW ACCOUNTS
It has come to our attention that some Recorders are using 3rd party companies to provide records online. Some of these companies are collecting money on behalf of the county and keeping an escrow account with all revenue received and only releasing it to the county once the balance reaches a certain threshold, along with paying themselves the contracted amount from the escrow.
It is our audit position that companies should not be holding an escrow type account and should be remitting revenues at least monthly to the county to be included on the report of collections and deposited with the treasurer and posted to the county ledger by the auditor. Any payments to these companies to fulfill contractual obligations should go through the normal claim process.
EXAMINATION OF RECORDS AND STATEMENT OF ENGAGEMENT COST
At the end of an audit engagement the State Board of Accounts sends a notice of Statement of Engagement Cost to each political subdivision, including the County. This statement details a summary of the engagement including the number of days spent on the audit, the daily/hourly rate, and any report processing fees. We would like to point out that this statement is not an invoice that is to be paid by the entities.
A separate invoice for payment of these audit costs will be sent to the County for payment in accordance with IC 5-11-4. Immediately upon receipt of the certified statement, the county auditor shall issue a warrant on the county treasurer payable to the treasurer of state out of the general fund of the county for the amount stated in the certificate. The county auditor shall reimburse the county general fund, except for the expense of examination and investigation of county offices, out of the money due the taxing units at the next semiannual settlement of the collection of taxes.
If the county reasonably believes or knows that it does not have on hand or will not have collected enough taxes by the next distribution date for a taxing unit included on the examination of records billing, then the county auditor will send the certified statement to the taxing unit. The taxing unit should then contact the State Board of Accounts for directions on paying for the cost of the examination directly to the State Board of Accounts, instead of using settlement. It is important that the cost be paid off prior to the next audit. If the audit costs, due the State Board of Accounts, are not paid prior to the subsequent audit, it impairs the independence of the State Board of Accounts. This will delay future audits.
As the amount of federal funding to local governments has increased so has the need for single audits and more frequent audits which has helped drive up audit costs. We are now beginning to see this result in semiannual tax distributions that are not sufficient to pay the audit costs. It is important to plan and budget accordingly for these costs. It might be beneficial once an examination of records has been completed for the taxing unit to go directly to the county auditor if sufficient taxes will not be collected to pay the estimated costs of the examination of records. Having this conversation before receiving the certified statement from the county auditor can prepare the taxing unit for the payment of these costs. You can discuss with your field examiner during the exit, how you may best meet the costs. This may involve the use of other funds such as Rainy Day or if there are ARPA funds remaining under the revenue loss category, those can also be used to pay audit costs. If you have questions after the exit, please feel free to reach out to your State Board of Accounts Director for further assistance in looking for funds that can pay the audit costs.
When determining how these costs will be paid, it is also important to plan for the next year. During this determination, take into consideration the amount of federal assistance that you have disbursed during the year. If you have expended $750,000 or more of federal awards (whether the award is direct or passed-through another entity) in a year the taxing unit is required to have a single audit conducted in accordance with the Federal Office of Management and Budget’s Uniform Guidance. Single audits require an annual audit. If your unit does not need a Single Audit, there may be a longer time between your examinations. Since these costs could become an annual expense for the taxing unit, future budgets would need to be adjusted for those costs.
BMV Distributions
The Bureau of Motor Vehicles (BMV) deposits daily into the county’s BMV bank account the excise tax and if applicable the surtax and wheel tax collected. The collections are held by BMV for 14 days from the date payment is made by the taxpayer before distributions are made to the counties. For example, all collections received by BMV on August 11th were processed for distribution on August 25th. On the processing date, BMV compiles all of the excise, wheel and surtax by county for the entire state. BMV then requests that payments be made from the State’s bank to each County’s BMV bank accounts. On the same date, BMV puts three reports and a text file on the FTP site. All of the reports are labeled “For Transactions thru” and the date the collections were made to BMV from the taxpayer. In our example; the reports will be labeled “For Transactions thru: 8/11/14, however the reports will be placed on the BMV FTP site on August 25th. The BMV will authorize that the payments be made from the State account on August 25th and the deposit will reach the County’s bank account on August 26th or 27th.
The text file can be used to interface with the County’s software to post the payments by township to the Auditor’s excise tax ledger. In addition to the text file, three reports are placed on the FTP site each business day. To identify the reports look at the third number of the file name on the FTP site. The first two digits of the report are the county number followed by a one, two or three for the three reports each month. The first report (xx1) is the Auditor Report of Registrations per Township (excise). The second report (xx2) is the Assessor Report of Registration per Township (Surtax and Wheel Tax). The third report (xx3) is the Deposit Report which summarizes the total amount deposited to the county BMV bank account and also gives the breakdown between excise, surtax and wheel tax collections that make up the total deposit. The next eight numbers are the year, month and date. The last four numbers on the file name us the report number.
Both the Treasurer and the Auditor can access the BMV FTP site daily and print the reports or copy them to the County’s hard drive or server. To acquire access to the FTP site, the auditor or treasurer should contact Tamytha Cooper (tcooper@bmv.in.gov) and have her set up an account, user id and password. If you do not access the FTP site for 30 days, the password will expire and if you do not access the FTP Site for 90 days your account for that site is deleted.
Treasurer Procedures For BMV TransactionsWe recommend that the Deposit Reports be accessed and copied or printed daily by the Treasurer’s office. We also recommend that the Treasurer’s cash book be posted daily, however at a minimum, once a month the amount of the excise collected must be posted to the Treasurer’s cash book. A receipt should be issued that shows the date of the deposit (report date), the amount deposited and should also list the transaction date and the report number. If the posting is done weekly or monthly, the receipt should list the range of transaction dates and the range of report numbers include on the receipt. The excise tax should be posted to the Other Sources, Excise Tax Collections. The amount received for surtax and wheel tax should be on a quietus issued by the Auditor’s office and be part of the Funds Ledger on the Cash Book. The total amount deposited should be entered in the bank deposits section of the cashbook. All of these amounts should be taken from the Deposit Report. The Deposit Report is the notification from the BMV of the amount of Excise tax, wheel and surtax collected for your county for that transaction date. If the amount shown as deposited on the bank statement does not match the Deposit Report, the County should contact BMV immediately.
Please note that the process of reconcilement requires you compare your county’s record balance (cash book) to the bank’s record (bank statement). If only the bank statement is used to post the cash book then a true reconcilement has not been done. The deposit report functions in the same way an ACH remittance from the Auditor of State functions for EFT deposits. In addition, the total on the deposit report should also tie to the amount on the last page of the Auditor Report of registrations by Township for the excise tax and to the amount on the last page of the Assessor Report of Registrations by Township for wheel tax and surtax.
State Distributions Treasurer ProceduresThe Indiana Department of Revenue (IDOR) distributes to counties the aircraft excise, quarterly in January, April, July and October. Auto rental excise tax is distributed by IDOR semi-annually in May and November. The IDOR collects wheel tax through the Motor Carrier Division on commercial vehicles. The state distributed this wheel tax monthly. The county treasurer should receipt aircraft and auto excise tax collections to excise accounts in the Other Sources section of the cashbook. Wheel tax should utilize a quietus and be deposited to the county auditor’s Wheel Tax/Surtax Fund and is entered in the Funds Ledger section of the cashbook, just as stated above for wheel tax remittances from the BMV.
The Auditor of State’s office distributes monthly to counties watercraft excise tax, education plate fees and excise tax cut replacement. They distribute annually the final excise tax cut replacement. The county treasurer should be posting watercraft excise tax; monthly excise tax replacement distributions and final excise tax cut replacement to the excise accounts in the Other Sources section of the cashbook. Education plate fees are deposited to the county auditor’s Education Plate Fee Fund by quietus and be entered in the Funds Ledger section of the Treasurer’s Cashbook.
Auditor ProceduresThe County Auditor should have an excise tax ledger to record motor vehicle excise tax, watercraft excise tax, aircraft excise tax, auto rental excise tax, lottery credit and excise tax cut replacement distributions. The ledger should be separated by taxing district but have a control ledger for all excise tax activity. Within each separate or subsidiary ledger for a taxing district there should be separate columns to account for each of the taxes and distributions listed above that are to be included in the ledger. The ledger must be footed by month and have a running balance. The amounts for the motor vehicle excise tax to be posted to the ledger would come from the text file or the Auditor Report of Registrations by Township. If the total of this report does not tie to the Deposit Report for Excise tax, BMV should be contacted to determine the problem. The excise tax from the BMV is posted for the transaction date on the reports. The surtax and wheel tax from the Assessor Report of Registrations by Township should be posted to the Auditor’s Wheel Tax/Surtax Fund by quietus. Receipts for watercraft, aircraft, auto rental excise and final excise tax cut replacement distributions should be posted in the month received. Monthly excise tax cut replacement distributions should be posted in the month received or to the previous month. Posting these monthly distributions to the previous month matches distributions to the lottery credit being replaced by the distribution. County Auditors should be posting the excise tax ledgers at least monthly.
Settlement and ReconcilementThe following should be included in settlement: motor vehicle excise tax, monthly excise tax cut replacement distributions, final excise tax cut replacement distribution for the year, watercraft excise, aircraft excise and auto rental excise tax. The amount of the excise to include in the settlement is the excise tax posted to the county auditor’s excise tax ledger as of the excise tax cutoff date. The cutoff date should be as of the end of a month. For most counties the cutoff dates have been April 30 for June settlement and October 31 for December settlement. Since BMV now has a 14 day lag between the transaction date and the deposit and report date, counties may want to consider backing those dates up to March 31 and September 30.
The Auditor of State’s Office provides a Reconciliation Worksheet that should be used to determine the difference between the excise tax the county auditor is including in the settlement and the excise tax the county treasurer certified on the 49TC. Because the county auditor should be including in the settlement, the excise tax posted to the excise tax ledger as of the cutoff date (based on the transaction date) and the county treasurer should be certifying on the 49TC the excise tax posted to the cashbook (based on the deposit date) as of the date the 49TC is completed, there should be a variance to reconcile using the Reconciliation Worksheet. Once the auditor and treasurer have reconciled the excise tax records of their offices, excise tax allocations can be calculated according to the State Auditor’s instruction. More details on complete excise tax accounting and settlement is provided by the State Auditor’s office.
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Fees
Partial Payment of Criminal Court Costs and Fees
Federal Reimbursement for Housing Federal Prisoners
Financial Assistance to Non-Governmental Entities
Forestry Reserve Distributions
Funds
A court shall collect a fee of one dollar ($1) per legal size or letter size page, including a page only partially covered with writing, for preparing a transcript or copy of any record. However, this would not apply to the transmitting of a document by facsimile machine or other electronic device or the preparation or copying a record through the use of enhanced areas under IC 5-14.3 or by a governmental entity using an electronic device. (IC 33-37-5-1)
IC 9-18.5-15 authorizes the collection of the Education License Plate Fee. The annual fee of this plate is $25. Of this fee, 25% goes to the state superintendent of public instruction and 75% of this fee goes to one of the following: (1) an education foundation or (2) a school corporation.
If an educational foundation that is exempt from federal income taxation under Internal Revenue Code Section 501(c)(3) is established as an Indiana nonprofit corporation for the benefit of a school corporation designated to receive a fee, fees designated to go to the school corporation shall be distributed to an educational foundation that provides benefit to the designated school corporation. A school corporation that receives benefit from an educational foundation that meets the requirements of this section shall:
(1) obtain a certificate from the educational foundation that certifies to the school corporation and the county auditor that the educational foundation:
(A) is exempt from federal income taxation under Internal Revenue Code Section 501(c)(3); and
(B) is established as an Indiana nonprofit corporation to provide benefit to the school corporation’ and
(2) provide a copy of the certificate to the county auditor.
If a school corporation designated to receive a fee does not receive benefit from an educational foundation, the fees designated to go to the school corporation shall be distributed to the school corporation; and may be used only for purposes other than salaries and related fringe benefits.
Before the twentieth day of the calendar month following the calendar month in which a fee was collected, the bureau shall distribute the fees collected to the county auditor of the county in which the designated school corporation’s administration office is located. Each monthly distribution shall be accompanied by a report to the auditor that shows
(1) the total amount of the monthly distribution for all school corporations in the county that were designated to receive an education license plate fee; and
(2) the amount of the fees that are to be distributed to each designated school corporation in the county.
(d) Within thirty (30) days of receipt of a distribution from the bureau, the county auditor shall distribute the fees received to:
(1) an education foundation if the school corporation has provided a copy of the certificate; or
(2) the school corporation; whichever is applicable
The county auditor shall designate which school corporation is to receive benefit in connection with a distribution to an educational foundation. If the school corporation receives benefit from more than one (1) educational foundation, the superintendent of the benefited school corporation shall determine, and inform the auditor in writing, how fees received are to be distributed to the educational foundations. The county auditor shall, simultaneously with a distribution to an educational foundation, send the school corporation to receive benefit a notice of the distribution that identifies the recipient educational foundation and the date and the amount of the distribution.
Funds received by an educational foundation must be used to provide benefit to the designated school corporation.
We would recommend opening a new fund to account for the distribution from the Bureau of Motor Vehicles. A fund table is posted to our website under the Gateway section. This fund would be considered and agency fund. Distribution to the foundation or the school would be made from this fund without an appropriation.
We have been asked several times about facsimile machine transmission fees.
Currently, IC 5-14-3-8 (d) authorizes the fiscal body to establish a fee schedule for the certification or copying of documents.
Prior to July 1, 2007 this subsection allowed for the inclusion of a facsimile machine transmission fee. Effective July 1, 2007 the reference to the inclusion of a fee for facsimile machine transmissions was deleted from this subsection and so it is our position that this subsection no longer supports such a fee.
IC 5-14-3-8(f) states in part: “Notwithstanding subsection…(d)….. a public agency shall collect…. facsimile machine transmission fee… that is specified by statute or is ordered by a court.”
We are not aware of any statute that specifies a facsimile machine transmission fee.
Per State Court Administration, Trial Rule 81(A) does not allow for a standing court order for facsimile fees.
As to the amount of a facsimile machine transmission fee which a court may order on an individual basis, State Court Administration recommends that it should adopt a fee amount that is reasonable and substantially in conformance with those authorized by existing statutes. The parameters specified in IC 5-14-3-8(d) could be used as a guide. A court may decide that a reasonable facsimile fee may be so small as to not be worth collecting.
In an audit, if a facsimile machine transmission fee is collected we would look for either a specific statute authorizing the fee or a court order.
A court may adopt a local rule to impose a late payment fee on defendants paying court costs, fees, fines and civil penalties after the due dates set by the court for payment of such amounts. The clerk of a court that adopts a local rule imposing a late payment fee shall collect a late payment fee of twenty five dollars ($25) from the defendant.
The clerk of the court shall distribute monthly to the county auditor one hundred percent (100%) of the late payment fees collected. The county auditor shall deposit fees distributed by a clerk in the county general fund and the clerk's record perpetuation fund if directed so by ordinance of the county council. (IC 33-37-5-22 and IC 33-37-7-1)
Fines imposed pursuant to the Indiana Military Code IC 10-16 were payable to the county treasurer for transmittal to the Treasurer of State prior to July 2011. IC 10-16-9-3 now provides that fines be collected by payment to the local armory board assigned to the convicted soldier’s unit. Please refer any inquiries of military fines to either the local or state armory board.
PARTIAL PAYMENTS OF CRIMINAL COURT COSTS AND FEES
There is always much discussion surrounding the application of partial payments to court costs. It was brought to our attention that there is guidance for accepting partial payments of court costs on a criminal case that will assist Clerks when the court does not provide specific guidance.
IC 33-37-4-1(e) states: “Unless otherwise directed by a court, if a clerk collects only part of a criminal costs fee from a defendant under this section, the clerk shall distribute the partial payment of the criminal costs fee as follows:
(1) The clerk shall apply the partial payment to general court costs.
(2) If there is money remaining after the partial payment is applied to general court costs under subdivision (1), the clerk shall distribute the remainder of the partial payment for deposit in the appropriate county user fee fund.
(3) If there is money remaining after distribution under subdivision (2), the clerk shall distribute the remainder of the partial payment for deposit in the state user fee fund.
(4) If there is money remaining after distribution under subdivision (3), the clerk shall distribute the remainder of the partial payment to any other applicable user fee fund.
(5) If there is money remaining after distribution under subdivision (4), the clerk shall apply the remainder of the partial payment to any outstanding fines owed by the defendant.”
This statute only applies to criminal cases. For partial payments on other case types look for direction from the Court.
As a general rule, governmental units are exempt from and should not pay any federal excise tax. To obtain the exemption, a properly executed exemption certificate must be filed with the vendor from whom the purchase is made. This exemption certificate may be prepared at the time the order is placed or at the time the payment is made. The exemption certificate may be a printed or mimeographed form and should be substantially in the form currently used. For information concerning the form of the exemption certificate, contact the Internal Revenue Service.
Claims and invoices should be carefully audited to see that no federal excise taxes are included and paid. Disbursing officers should require that invoices show separately the gross price, the amount of the excise tax, and the final price to the governmental unit.
In some instances, a county may have erroneously paid the excise taxes from which they are exempt. In such instances, the county has three years from the date the tax was paid to the Federal Government in which to file for a refund.
To obtain a refund, the county should submit to the seller an exemption certificate for each item on which excise tax was paid accompanied with documentary evidence that the exemption had not been claimed or received. Such evidence may be copies of invoices, affidavits, records, etc.
The Internal Revenue Service will provide forms on which the original taxpayer may claim reimbursement for excise tax erroneously paid by a county.
Any questions concerning federal excise tax should be directed to the Internal Revenue Service.
FEDERAL REIMBURSEMENT FOR HOUSING FEDERAL PRISONERS
All reimbursements to the county sheriff from the federal government for housing federal prisoners shall be turned over to the county auditor for deposit into the County General Fund.
FINANCIAL ASSISTANCE TO NON-GOVERNMENTAL ENTITIES
Counties providing financial assistance to non-governmental entities are required to notify those entities annually in writing the following information:
(1) The Entity Annual Report (E-1) filing requirement established by IC 5-11-1-4 and the audit requirement established by IC 5-11-1-9;
2) The source(s) of the funding provided;
a) Local and/or state funds (in the case of subsidies, contributions, or general aid),
b) Federal grants passed through including the formal name of the program and CFDA number, or
c) Fee for service arrangements,
3) The State Board of Accounts may request documentation to support the categorization of the financial assistance,
4) The E-1 is not to be confused with the Secretary of State’s Business Entity report, and
5) The entity may obtain additional information from the State Board of Accounts at notforprofit@sboa.in.gov.
Furthermore, this financial assistance provided is to be reported by the county on the Annual Financial Report via Gateway.
‘Entity” is defined in IC 5-11-1-16 as “any provider of goods, services, or other benefits that is: (1) maintained in whole or in part at public expense; or (2) supported in whole or in part by appropriations or public funds or by taxation.” This includes for-profit and not-for-profit corporations, unincorporated associations, organizations, individuals, etc. Examples of non-governmental entities are volunteer fire departments, a local YMCA, youth leagues, senior citizen centers, 4-H clubs, daycare centers, health service organizations, emergency medical service organizations, community centers, historical societies, etc.
Mental health facilities that are provided funds by counties under IC 12-29-2-1.2 should file an Entity Annual Report (E-1) with the State Board of Accounts via Gateway. IC 12-29-2-1.2(a) states in part: “the county executive of a county may authorize the furnishing of financial assistance . . . to a community mental health center. . .” Even though the statute provides restrictions on what the financial assistance can be used for, the maximum appropriation/funding allowed, and when and to whom the payments are made (either the division of mental health and addiction or a community health center), the essential nature of the funding as voluntary, financial assistance is not changed. As such, this is considered financial assistance and counties need to notify each entity receiving this funding of their responsibility to report this on the E-1 report.
Financial assistance to non-governmental entities is defined as payments received in the form of grants (whether from local, state, or federal sources), subsidies, contributions as permitted by statute, aid, or other agreements. For more information on what constitutes financial assistance, please refer to the State Board of Accounts’ Uniform Compliance Guidelines for Examinations of Entities Receiving Financial Assistance from Governmental Sources found on the State Board of Accounts’ website at www.in.gov/sboa under Private Examiner Audits/Non-Governmental Entities Receiving Governmental Assistance/Uniform Compliance Guidelines.
Each non-governmental entity receiving financial assistance from governmental units is required to submit a Gateway financial report, the E-1, in accordance with IC 5-11-1-4(a). Information requested includes the source and use of financial assistance provided by governmental units. The entity is subject to a State Board of Accounts audit in accordance with IC 5-11-1-9 if certain funding thresholds are met.FIREARM DEALER'S LICENSE - ISSUANCE - FEE - DISPOSITION OF FEE
IC 35-47-2-15 provides for the issuance of Firearm Dealer's License by the Superintendent of the
Indiana State Police upon application of a person, desiring a retailing handgun dealer's license, to the sheriff of the county in which he resides. The fee for the license shall be twenty dollars ($60) which shall be deposited with the officer to whom the application is made, who shall in turn forward to the superintendent. If the applicant if approved, the officer to whom the application was made shall forward the fee for the license to the superintendent for deposit with the treasurer of state when the application is approved by the superintendent. In the event that the application is disapproved, the fee shall be returned to the applicant along with the complete reasons, in writing.IC 35-47-2-3(b) authorizes the application fee for law enforcement agencies that accept an application for a handgun license. The fee is deposited into the law enforcement agency’s firearms training fund and use to “…train law enforcement officers in the proper use of firearms or in other law enforcement duties, or to purchase firearms or firearm related equipment, or both for the law enforcement officers employed by the law enforcement agency…”
FORESTRY RESERVE DISTRIBUTIONS
The law governing distribution of state forestry earnings can be found in IC 14-23-4-5. This law specifically provides that 15% of such earnings be deposited in the County General Fund of the county in which the state forest is located.
In addition, counties in which national forests are located receive a distribution from the Treasurer of the United States through the State of Indiana. There are only a few counties receiving earnings from the national forest reserves and it has been the policy to receipt all of such funds to the County Highway Fund.
Cash Bonds
Per IC 35-38-8-7(e), if the cash bond is forfeited and the court entered a judgment, any amount remaining after the deduction of the administrative fee, fines, costs, fees, restitution, and the supplemental public defender services fee should be transferred to the State Common School Fund. This is done by the clerk remitting the remaining amount to the county auditor to deposit in the State Fines and Forfeiture Fund for remittance to the Auditor of State who will deposit into the State Common School Fund.
However, IC 35-38-8-7(b) states: “ In a criminal case, if the court having jurisdiction over the criminal case receives written notice of a pending civil action or unsatisfied judgment against the criminal defendant arising out of the same transaction or occurrence forming the basis of the criminal case, funds deposited with the clerk of the court under section 3.2(a)(2) of this chapter may not be declared forfeited by the court, and the court shall order the deposited funds to be held by the clerk. If there is an entry of final judgment in favor of the plaintiff in the civil action, and if the deposit and the bond are subject to forfeiture, the criminal court shall order payment of all or any part of the deposit to the plaintiff in the action, as is necessary to satisfy the judgment. The court shall then order the remainder of the deposit, if any, and the bond forfeited.”
Surety Bonds
In the case of a surety bond, which was declared forfeited by the judge, and the bondsman does not remit within one hundred twenty days of the mailing of the notice required in IC 27-10-2-12, a late surrender fee shall be assessed and calculated in the following manner:
Number of Days Percentage of
After the Mailing the Face Value
of the Notice of the Bond
121 – 180 days 20%
181 – 210 days 30%
211 – 240 days 50%
241 – 365 days 80%If over 365 days, the court shall declare forfeited an amount equal to 20% of the face value of the bond and immediately enter judgment on the forfeiture and assess to the bondsman all actual costs resulting from the defendant’s failure to appear (including jury fees, witness fees, and any other documented costs incurred by the court).
In the case of an insurer, if the fees, costs, or judgment are not paid, then the clerk shall mail notice to the commissioner (Insurance Commissioner). Under IC 27-10-2-12 (f) there are provisions to pay for late surrender fees, costs, and any judgment of forfeitures ordered by the court from funds the insurer has on deposit with the Department of Insurance.
The distribution of the Late Surrender Fees collected under IC 27-10-2-12 would be allocated as fifty percent (50%) deposited to the Police Pension Trust Fund, IC 36-8-10-12, and the other fifty percent (50%) of the Late Surrender Fee should be deposited to the County Extradition and Sheriff’s Assistance Fund established under IC 35-33-14.
Any remaining bond forfeitures would be remitted to the State Common School Fund.
If the County General Fund is paying the pension trust employer costs we would recommend a Police Pension Fund be established to account for the late surrender fees and the county may take these fees into consideration when paying the County employer share of the police pension costs.
As you can see from this discussion, accounting for cash and bail bond funds can be very difficult. Because of this difficulty in determining when and if a fee would be charged it is very important for the judges and the clerk to work very closely together in administering and determining the appropriate disposition of these funds.
The State Board of Accounts is frequently asked if a county can establish a new fund for a particular purpose or function.
IC 36-1-3 is entitled “Home Rule”. IC 36-1-3-2 states: “The policy of the state is to grant units all the powers that they need for the effective operation of government as to local affairs.” Other sections of the statute restate this premise in various terms.
IC 36-1-3-6 states in part: “(a) If there is a constitutional or statutory provision requiring a specific manner for exercising a power, a unit wanting to exercise the power must do so in this manner.
(b) If there is no constitutional or statutory provision requiring a specific manner for exercising a power, a unit wanting to exercise the power must either:
(1) if the unit is a county or municipality, adopt an ordinance prescribing a specific manner for exercising the power;
(2) if the unit is a township, adopt a resolution prescribing a specific manner for exercising the power; or
(3) comply with a statutory provision permitting a specific manner for exercising the power.
(c) An ordinance under subsection (b)(1) must be adopted as follows:
(1) In a municipality, by the legislative body of the municipality.
(2) In a county subject to IC 36-2-3.5 or IC 36-3-1, by the legislative body of the county.
(3) In any other county, by the executive of the county.”
Our position is the powers granted by various statutes authorize the Board of County Commissioners to create, by ordinance, as many funds as necessary to operate their particular county. However, an ordinance may not be used in an attempt to circumvent statutory provisions, including the provisions of IC 36-2-5-2 requiring appropriation by the county fiscal body prior to disbursement of monies.
The enabling ordinance should provide various types of information.
1. The ordinance should clearly indicate the type or types of revenue that is to go into the new fund.
2. The ordinance should list the purpose or purposes for which expenditures can be made from the new fund.
3. The ordinance should establish the life of the new fund and indicate if the fund balance is nonreverting at year end or perpetual until terminated either by the terms of the current ordinance or if another subsequent ordinance must be enacted.
4. The ordinance should provide guidance as to disposition of the fund balance on termination of the fund.
5. The ordinance should include any other terms or conditions the attorney representing the county deems necessary.
An ordinance is not necessary when a fund is created by statute, unless the statute states an ordinance is required. The State Board of Accounts prescribes the use of fund accounting to provide accountability for government activities and financial status. This means that individual funds are used to segregate financial activity based on sources and uses. Permanent transfer of money from one fund to another clouds the transparency provided by fund accounting and should be infrequent, such as when specifically authorized by statue. Instead of transferring money from one fund to another, the appropriation should be transferred to the fund that has available money. This way, use of the money in a fund remains transparent.
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Guaranteed Energy Savings Contracts
The auditor independence provisions of the U. S. Government Accountability Office (GAO) are contained in its generally accepted government auditing standards (GAGAS).
The GAO issued such standards to better serve the public interest by maintaining a high degree of integrity, objectivity and independence for CPA’s, and other practitioners who audit government entities and organizations receiving government funds.
Compliance with the standard hinges on the auditor’s observance of two overarching principles and compliance with the consequential framework when evaluating threats to independence. The two overarching principles are critical to understanding the nonaudit service rules:
(1) Audit organizations should not provide nonaudit services that involve performing management functions or making management decisions.
(2) Firms should neither audit their own work nor provide nonaudit services in situations where the nonaudit services are significant or material to the subject matter of audits.
If the nonaudit service would violate either of the two overarching principles, then the firm would be required to make a choice between providing the service or performing the audit.
Personal, external, and organizational factors can impair auditor independence, as well as personal impairments relating to nonaudit service.
The statute regarding ghost employment is IC 35-44.1-1-3.
The State Board of Accounts recommends that all governmental entities carefully maintain accurate prescribed or approved employment, service and other records for all persons employed so that documentation is available to substantiate all duties assigned and all amounts paid.
GUARANTEED ENERGY SAVINGS CONTRACTS
Requirements for guaranteed energy savings contracts may be found under IC 36-1-12.5. Please make sure that adequate documentation exists to show that you are in compliance. For example, make sure that the contract that includes stipulated savings specifies the methodology used to calculate the savings using industry engineering standards as per IC 36-1-12.5-11; that improvements that are not casually connected to a conservation method included in a guaranteed savings contract meet the requirements under IC 36-1-12.5-12; that the information required under IC 36-1-12.5-10 and IC 36-1-12.5-12 is reported to the LT. Governor’s office. Information regarding this program may be found through the Lt. Governor’s Office of Energy Development.
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Highways
Reimbursement for Salary of County Highway Engineer
House Bill 1002 that was passed in the 2017 legislation amended Indiana Code 8-23-30 on the local road and bridge grant that INDOT calls the Community Crossings grants. The local match is no longer restricted by statute to the Special LOIT fund, Rainy Day fund or increase in the Excise Surtax or Wheel tax. The statute now allows the county to use any fund that is authorized to be used on road, highway or bridge projects as the local match for the grant. As a result, it is no longer a requirement that the county use the Rainy Day – Restricted funds that were established last year for this grant. If the county has a balance in any of the Rainy Day Restricted funds, that money should be transferred back to the originating fund (MVH, LRS, Major Moves, Cum Bridge or Wheel Tax). If the county chooses to use the balance in the Rainy Day Restricted funds as the local match for the 2017 grants, the funds could be transferred to the 2017 Community Crossings Grant fund. Once the balances are transferred out, the funds should no longer be used. An additional change in this statute is for counties with a population under 50,000. For those counties, whose population is below 50,000, the percentage of local match needed is reduced from 50% to 25%.
We are still receiving many questions on the Community Crossings Grant. You do not need an appropriation to transfer the local match to the grant fund. You do need an appropriation to disburse from the grant fund. If you have not received the grant money from the state, you can do a temporary loan from one of your other highway funds to the grant fund and then repay that loan when the grant money is received. All of the transactions for the grant, both from the local match and from the grant funds should be posted to the Community Crossing grant fund for the grant year.
IC 8-18-8-5 states in part: "…all expenses incurred in the maintenance of county highways shall first be paid out of such funds from the gasoline tax, special fuel tax, and the motor vehicle registration fees that are paid to the counties by the state, …in addition a county may use funds derived from the:
(1) County motor vehicle excise surtax
(2) County wheel tax
(3) County adjusted gross income tax
(4) County option income tax
(5) Riverboat admission tax (IC 4-33-12)
(6) Riverboat wagering tax (IC 4-33-13)
(7) Property taxes and miscellaneous revenue deposited in the county general fund
COUNTY HIGHWAY OPERATIONAL REPORT
This report is to be filed with the State Board of Accounts by June 1. We will have it available on our website at www.in.gov/sboa for you to retrieve, sometime in January.
Starting in 2019 (for reporting calendar year 2018), the annual operational report will be electronically filed with the Indiana State Board of Accounts through an online data management system developed and maintained by LTAP. Look for further instructions in the first part of 2019 from both SBOA and LTAP regarding training for the data management system. The report is also to be filed with the governing body of the municipality and should be available to the public and media.
IC 8-19-7-1 outlines the only procedure for placing county equipment and services at the disposal of the “resident taxpayer.” Whenever such taxpayer desires the use of county highway equipment or serviced from its employees for the purpose of ditching, grading or hauling gravel or store or other services on his premises, the resident taxpayer may petition the board of commissioners to use county highway equipment and employees to do any of the work requested.
The board may order the highway supervisor to do any of the work requested if the county equipment is being used in the vicinity of the taxpayer premises and if the equipment is not being needed for county business. The county equipment may not be used for contractual work in any municipality or subdivision of the municipality.
REIMBURSEMENT FOR SALARY OF COUNTY HIGHWAY ENGINEER
Per IC 8-17-5-8 this distribution is for a full-time county highway engineer. A county in which the county engineer devotes part-time to the county highway department and part-time to the drainage funds or some other department would not qualify for the grant-in-aid subsidy for full-time county highway engineers.
IC 8-17-5-9 requires the county auditor to certify annually to the state auditor if the county employs a full-time county highway engineer. Such certification must show the name and address of the county highway engineer and the serial number of his certificate of registration issued by the State Board of Registration for Professional Engineers. Upon receipt of the annual certification, the state auditor shall distribute from the county highway engineer fund to the counties a grant-in-aid subsidy in the amount of $40,000 which is to be applied toward the engineer's annual salary. If the county highway engineer is employed by the two (2) counties, acting jointly, the amount to be distributed to each such county unit shall be $40,000 (IC 8-17-5-10).
Also, if the amount fixed by council, as compensation for services as highway engineer is greater than the amount set for serving as county surveyor, then the amount the person receives as compensation as engineer is in lieu of the amount set for the surveyor (IC 36-2-12-15).
All counties have home rule powers as set out in IC 36-1-3. The following should be considered when exercising such powers.
It is desirable to look at the limitations, both expressed and implied, that have been placed on the scope of Home Rule powers. As noted in prior bulletins, Home Rule was never intended to give local governments a completely free hand to do whatever they want, and there are definite rules and limits that must be observed.
Expressed Limits of Home RuleThe Home Rule law contains a number of expressed provisions that preclude, limit, or condition the exercise of powers under Home Rule.
First, there are two general limits. A unit may not do anything that is:
(1) expressly denied by the state constitution or state law (for example, a unit could not prescribe a penalty for an action that violates state law or impose jail time as a penalty for violation of a local ordinance); or
(2) expressly granted to another entity (counties, for instance could not take over functions or usurp powers vested by law in municipalities, township, etc.
In addition, there are other powers of a more specific character that units still may not exercise in the absence of authorization by state law. Please see IC 36-1-3-8 for these additional exceptions.
Implicit Limitations of Home RulesIn addition to those limitations that are expressed in the Home Rule law, there are also a number of important considerations that will further limit the scope and applicability of Home Rule powers. These limits are not made explicit in the Home Rule law, but may be applied from examining other statutes and principles
of law. These implied limitations include:(1) a governmental unit may not exercise powers outside its normal territorial jurisdiction, except as specifically authorized by law or through interlocal agreement; and
(2) restrictions inherent in the federal laws, regulations, and constitution must be observed.
Procedures for Utilizing Home RuleThe ability to use Home Rule properly is not only important in terms of allowing government flexibility as needed, but is even more important now that many of the state laws which previously provided permissive powers to local units have been repealed. This is especially true of those laws which constituted “class” legislation in the past. Therefore, aside from providing additional powers, local units will need to invoke Home Rule authority in passing local ordinances to continue powers or procedures formerly granted by specific state
statutes.
Who Can Utilize Home Rule Powers?The home rule laws confer these powers to counties, cities, towns, schools, and townships. Libraries have never been accorded home rule powers, nor have special entities such as special service corporations or regional commissions.
When Should Home Rule Powers Be Used?
A unit may exercise its Home Rule powers whenever it is “necessary or desirable” to exercise any power, perform any function, provide any service -- and create the structural elements or procedures to do so and;
(1) the laws and constitutions of the state and federal governments do not expressly or implicitly prohibit or preempt it from doing so; and
(2) state law does not already provide for exercising the power, providing the service, or performing the function, or state law does provide for the foregoing but does not mandate any procedures to follow in implementing it.
How Are The Home Rule Powers Exercised?A question that one often hears when talking about Home Rule is, “Well that all sounds very nice - but how do we adopt Home Rule?” The answer to this question is very simple - you don’t adopt Home Rule. Home Rule represents both a policy of the state and a particular method more efficiently conveying powers to local governments. Home Rule is not like a “local option tax” that requires further action to become effective within
a particular local jurisdiction.Home Rule has already been conferred upon local units by the General Assembly as a matter of state law. No further action is necessary on the unit’s part in this respect.
Local action is required only when a unit wants to do some particular things under Home Rule authority. A unit doesn’t “adopt Home Rule” but it does adopt specific powers that it wants to exercise. The formal ordinance procedure is required to accomplish this end.
An error to which Home Rule has been subject in the past is the impression that it confers powers on local officials and bodies individually. Occasionally individual officials wanting to preform some function and seeing no state law prohibiting them from doing so have acted with the idea that ”if anybody gripes, I’ll say its Home Rule”. Home Rule does not work that way. Home rule is essentially a legislative power -- a form of limited legislative discretion delegated by the state legislature to the appropriate local legislative bodies.
In essence, local ordinances substitute for state laws in the exercise of Home Rule powers. The bodies that must pass the appropriate authorizing ordinances are:
(1) in a municipality, by the legislative body of the municipality;
(2) in a county subject to IC 36-2-3.5 or IC 36-3-1, by the legislative body of the county.
(3) in any other county, by the executive of the county.
The ordinance authorizing the exercise of a new power, the performance of a new function, or the provisions of a new service under the authority of the Home Rule law should be adopted according to the same rules and procedures generally applicable to the adoption of ordinances by the local legislative body. Although it is not a specific requirement, it would probably be advisable to state in the preamble or digest of the ordinance (not in the body of the ordinance itself) that Home Rule powers vested in the unit’s government by IC 36-1-3 are being exercised so that the source of authority will be clear in the event that the action is questioned.
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Increment Tax - Withdrawal of Forestry Lands
Inspector of Weights and Measures - Compensation
Insurance
Health Insurance
Group Health Insurance Premiums
Interest
Allocation to General and Highway Funds
Tax Overpayments/Underpayments
Investment Cash Management System
Property Reassessment Fund Investments
INCREMENT TAX – WITHDRAWAL OF FORESTRY LANDS
In order that there will be a complete record of the increment tax imposed by IC 6-1.1-6-24, upon the withdrawal of land from classification for forestry purposes, and in view of the provisions of IC 6-1.1-6-24 which makes such tax a lien upon the land, with the land subject to tax sale if the tax is not paid, it is suggested that such tax be entered and handled as follows:
1. Enter the increment tax in the tax duplicate against such lands, but in a separate section thereof so that the collections may be properly apportioned in the manner provided in IC 6-1.1-6-24. In this respect the tax should be handled in the same manner as any other special assessment, such as a line fence assessment, with proper cross-references between the regular taxes on such lands and the increment tax.
2. When collected by the treasurer, receipt such tax into the ledgers of the auditor and treasurer by a separate Application to Pay and Quietus, and credit the same to the County General Fund.
In regard to the ineligible deductions fund IC 6-1.1-36-17(d) was amended effective July 1, 2013 to state in part: “Each county auditor shall establish a nonreverting fund. Upon collection of the adjustment in tax due (and any interest and penalties on that amount) after the termination of a deduction or credit as specified in subsection (b), the county treasurer shall deposit that amount: … (2) if the county does not contain a consolidated city: (A) in the nonreverting fund, to the extent that the amount collected, after deducting the direct cost of any contract, including contract related expenses, under which the contractor is required to identify homestead deduction eligibility, does not cause the total amount deposited in the nonreverting fund under this subsection for the year during which the amount is collected to exceed one hundred thousand dollars ($100,000); or (B) in the county general fund, to the extent that the amount collected exceeds the amount that may be deposited in the nonreverting fund under clause (A).”
It is our position that this does not restrict the balance amount that may be carried forward. The restriction is placed on the amount of receipts that may be deposited in the auditor’s ineligible deductions fund for a calendar year.
In a memo regarding Changes affecting the 1% Tax Cap and Homestead Deduction Non-Reverting Fund, dated June 20, 2013 the Department of Local Government Finance stated in part: “…there is a limitation on receipts to be deposited in the fund each year for counties that do not contain a consolidated city. In order to properly deposit and comply with this limit, if applicable, the county should review the receipt amount for the calendar year each time a deposit to the non-reverting fund is to be made. The annual receipt amount net of contract costs to identify homestead deduction eligibility must not exceed $100,000. Any additional collections in a calendar year must be deposited into the county general fund. As the effective date for this statutory change is July 1, 2013, at the point in time after June 30, 2013 that this net receipt amount equals $100,000 for the year, any additional collections that calendar year must be deposited into the county general fund”
Because costs that are to be netted against the annual receipts may occur throughout the year we will not take audit exception if before year end a final calculation to determine the receipts net of appropriate costs occurs. This may result in a transfer from the auditors ineligible deduction fund to the county general fund if the net receipts for the year exceed $100,000.
IC 34-28-5-5 provides that judgment for violations of statutes defining infractions be deposited in the state general fund.
The Auditor should establish an Infraction Judgment Fund to quietus such judgments into when remitted by the courts. The balance in this fund will be paid and reported to the state twice a year with the Settlement Sheet.
Please do not commingle Infraction Judgment Fees with State Fines and Forfeitures.
We have been questioned before about what recourses the County has for collecting the innkeeper’s tax when the taxpayer does not pay. The following statutes address the collection of the innkeeper’s tax.
IC 6-9-18-3 (d) states: “The county fiscal body may adopt an ordinance to require that the tax be reported on forms approved by the county treasurer and that the tax shall be paid monthly to the county treasurer….the tax shall be paid to the county treasurer not more than 20 days after the end of the month.”
If the tax is not paid when due, per IC 6-9-29-2 penalties and interest may be assessed and the taxpayer could be charged with a felony.
Per IC 6-9-29-2:
An individual who:
(1) is an individual taxpayer or an employee, an officer, or a member of a corporate or partnership taxpayer; and
(2) has a duty to remit innkeeper's taxes to the department of state revenue or a political subdivision; holds those innkeeper's taxes in trust for the state or political subdivision and is personally liable for the payment of the innkeeper's taxes, plus any penalties and interest attributable to the innkeeper's taxes, to the state or political subdivision. An individual who knowingly fails to collect or remit the innkeeper's taxes to the state or political subdivision commits a Level 6 felony.
According to IC 6-9-29-3, if an ordinance has been adopted requiring the payment of the innkeeper's tax to the county treasurer instead of the department of state revenue, the county treasurer has the same rights and powers with respect to collecting the county innkeeper's tax as the department of state revenue.
We would suggest contacting the County Attorney to assist in issuing a tax warrant or issuing charges against the taxpayer.
Additionally, the County should withhold permits under IC 7.1-3-21-15(b) for nonpayment.
IC 7.1-3-21-15(b) states “The commission shall not renew or transfer a wholesaler, retailer, dealer, or other permit of any type if the applicant:
(1) is seeking a renewal and the applicant has not paid all the property taxes under IC 6-1.1 and the innkeeper's tax under IC 6-9 that are due currently;
(2) is seeking a transfer and the applicant has not paid all the property taxes under IC 6-1.1 and innkeeper's tax under IC 6-9 for the assessment periods during which the transferor held the permit;
(3) is seeking a renewal or transfer and is at least thirty (30) days delinquent in remitting state gross retail taxes under IC 6-2.5 or withholding taxes required to be remitted under IC 6-3-4;
(4) is on the most recent tax warrant list supplied to the commission by the department of state revenue; or
(5) does not provide the commission with property tax clearance Form 1 with an embossed seal from the county treasurer.”
INSPECTOR OF WEIGHTS AND MEASURERS – COMPENSATION – TRAVELING EXPENSE
IC 24-6-3-3 requires that the board of commissioners of every county of 30,000 population or more shall, and the board of county commissioners of any county of less than 30,000 population may appoint a county inspector of weights and measures. No person shall be appointed unless approved by the Indiana Division of Weights and Measures. There is a provision in this law which reads, "Provided, however, that it shall not be obligatory upon the board of county commissioners of such counties containing a city or cities which are already provided with an inspector of weights and measures or city sealers, to make such appointments." The compensation of the inspector of weights and measures is fixed by ordinance of the Board of the county commissioners. It is required that the board provides the necessary apparatus and supplies for the inspector and that the county council appropriate necessary sums of money for the salary and maintenance of the office. There should be a clearly defined procedure adopted by the governing body of the unit concerning placement, maintenance, and commissions of vending machines on their property.
PAYMENT BY PUBLIC EMPLOYERS OF GROUP HEALTH INSURANCE PREMIUMS
Official Opinion 2002-5 issued October 11, 2002 by the Attorney General of the State of Indiana states in the Conclusion, “The language of IND. CODE 5-10-8-2.6 unambiguously states that public employers may pay a part of the cost of group health insurance premiums for their employees. Rules of statutory construction hold that an unambiguous statute must be held to mean what it plainly expresses. N. Miami Educ. Ass’n, 746 N.E.2d at 382. Therefore, because the statute provides that employers may only pay a part of the cost, this language cannot be expanded or construed to allow employers to pay the full amount. The existence of a collective bargaining agreement allowing employers to pay the full amount would not alter this conclusion, as courts will not enforce contract terms that run contrary to statute or public policy. Ahuja, 675 N.E. 2d at 707.”
ALLOCATION OF INTEREST TO GENERAL AND HIGHWAY FUNDS
The county treasurer may invest tax collections pending distribution to political subdivision. The interest received is receipted to the county general fund or any other fund from which expenses incurred in the maintenance of county highways may be paid. Specifically IC 5-13-9-6(c) and (d) state:
“(c) Each county treasurer, if authorized by the board of county commissioners, may invest tax collections under this chapter pending distribution of the collections to political subdivisions. These investments may not:
(1) exceed the amount available after giving consideration to taxes which may need to be advanced to any political subdivision; or
(2) be made in deposit accounts or repurchase agreements, the maturity dates of which are later than the time when the tax collections are required by law to be distributed to political subdivisions
(d) The interest received on the investments made under subsection (c) shall be receipted to the county general fund or any other fund from which expenses incurred in the maintenance of county highways may be paid.”
The statute merely states that the county council shall determine the allocation of this interest among the general fund and the various highway funds into which the interest may be deposited. It does not include any specific procedures for the allocation.
The definition of tax collections would include property taxes, financial institution taxes, and any license excise taxes. Since most county treasurers invest such collections with other county funds on hand in total monies on deposit type investments, it is almost impossible to be able to arrive at an exact amount of interest earned on tax collections. Only a good estimate can be made. We recommend the following procedures be followed if the county council determines to allocate interest on tax collections to highway funds:
1. Determine total interest earnings for the county general fund in the prior year.
2. Analyze all county general fund interest by month for the prior year. Determine how much interest was attributable to tax collections investments versus other collections. Most of the tax collections are invested in the periods of April, May, June, and October, November, and December.
3. Take into consideration all advance tax draws made to political subdivisions prior to settlement.
4. Upon completion of this analysis, arrive at a dollar amount which was attributable to the investment of tax collections and a percentage of tax collections invested to total monies invested.
5. Report this amount to the County Council with the following information:
a. This amount was for a prior year.
b. Since interest rates fluctuate, this amount could be lower this year.
c. Advance draws could increase this year resulting in lower interest earnings.
d. Interest is earned throughout the year and will not be available for distribution all at once.
6. Instruct the county council to arrive at a dollar amount of interest which it wants placed in the highway fund or funds.
We recommend the interest be deposited directly to the highway fund or funds when interest is received from the financial institutions based upon the percentage arrived at in Step No. 4 until the amount set by the county council has been reached.
INTEREST ON ISETS BANK ACCOUNTSWe were recently informed by one of the counties that their ISETS bank account is earning interest and they requested guidance on what to do with the interest. We contacted the Department of Child Services (DCS) for their opinion on this issue. DCS indicated that any interest earned on an ISETS bank account from undistributed child support collections would be considered program income and should be distributed to the custodial parents during the distribution process. Because this would be a complicated process to determine which custodial parents money was in the bank account at any given time and how to allocate such a minimal amount, DCS encourages the clerks not to place the money into an interest bearing bank account. If the interest is not distributed then it should remain in the bank account and reported as program income, but there is no clear direction on what to do with the interest if it is not distributed. DCS will be updating their guidelines regarding this issue.
INTEREST ON PAYMENTS FOR ROAD WORK
IC 36-1-12-17 requires that each contract for roadwork must provide for final payment within one hundred twenty (120) days after final acceptance and completion of the contract. Final payment may not be made on any amount that is in dispute, but final payment may be made on that part of a contract or those amounts that are not in dispute.
For each day after one hundred twenty (120) days, the county shall pay to the contractor interest for late payment of money due to the contractor. However, interest may not be paid for those days that the delay in payments is not directly attributable to the county. The annual percentage rate of interest on the unpaid balance is twelve percent (12%).
INTEREST ON PUBLIC CONTRACTS WHEN NOT PAID TIMELY
IC 5-17-5 states in part: “…political subdivision shall pay interest at the rate of one percent (1%) per month on amounts due on written contracts for public works, personal services, good and services, equipment, and travel, whenever the …political subdivision fails to make timely payment.”
Timely payment is defined, with some exceptions, to occur if “…a date for payment is not specified in an applicable contract; a claim for payment for goods and services and that must be approved by a local legislative body or board is submitted to the body or board; and the political subdivision pays the claim within thirty-five (35) days following the first regularly scheduled meeting of the body or board that is held at least ten (10) days after the body or board receives the claim.”
There are situations where the interest requirement does not apply and these are listed in IC 5-17-5-2.
IC 6-1.1-26-5, IC 6-1.1-37-9, and IC 6-1.1-37-11 require interest at the rate established by the commissioner of the department of state revenue under IC 6-8.1-10-1be used when calculating the amount of interest owed under these statutes. A historical chart of these rates is maintained on the Department of Revenues web site at: https://www.in.gov/dor/4037.htm
INTEREST RATES ON TAX OVERPAYMENTS AND UNDERPAYMENTS
From the Department of Revenue, Departmental Notice #3 issued in November 2019 effective January 1, 2020. “Pursuant to IC 6-8.1-10-1, the rate of interest for an underpayment of tax and an excess tax payment is the percentage rounded to the nearest whole number that equals two percentage points above the average investment yield on state general fund money for the state’s fiscal year ending June 30, 2019, excluding pension fund investments, as provided by the State Treasurer’s office. The rate of interest for an underpayment of tax and an excess tax payment for calendar year 2020 will be 4%”
In addition we have included a historical list of calculated percentages for the last 10 years. This information can be found on the Department of Revenue website (www.in.gov/dor)
Historical Interest Rate ListYear Overpayments Delinquent Payments 2010 4% 4% 2011 9% 9% 2012 4% 4% 2013 3% 3% 2014 3% 3% 2015 3% 3% 2016 2% 2% 2017 3% 3% 2018 3% 3% 2019 3% 3% 2020 4% 4% IC 36-1-7 allows the county to enter into interlocal agreements. Before the interlocal agreement takes effect, the agreement must be recorded with the county recorder. Not later than sixty (60) days after the agreement takes effect, the agreement must be filed with the state board of accounts for audit purposes
Internal controls are the policies and procedures used by management to ensure that their programs and functions operate efficiently and effectively in conformance with applicable laws and regulations. One purpose of internal control is to ensure that financial reporting of the financial statements and the schedule of expenditures of federal awards are completed accurately. It is also used to reduce the risk associated with fraud related to the operations of the governmental unit. Internal control is essentially a check and balance system over the operations. The foundation for a good internal control system starts with making sure that there are appropriate procedures in place to ensure that errors and fraud are either prevented or detected and corrected in a timely manner.
In order to have an effective internal control system, it is important to have proper segregation of duties. Segregation of duties is a common term referred to in relation to internal control. This means to have a separation of functions over certain activities that would provide internal control. The fundamental premise of segregation of duties is that an individual or small group of individuals should not be in a position to initiate, approve, undertake, and review the same action. An example of appropriate segregation of duties would be having one individual prepare claims, having another individual review and approve the claims, and having a third individual sign the checks for payment of the claims. Without proper segregation of duties, it is difficult to have an effective system of internal control. Sufficient compensating controls would then need to be implemented. This might entail random verification and approval by the official at different points in the process or switching duties. There are two main advantages to implementing segregation of duties. The first is that fraud is more difficult to perpetrate when proper segregation of duties is in place because it would require collusion of two or more individuals. Secondly, with several individuals involved in the process, innocent errors are more likely to be detected and corrected. Officials have the fiduciary responsibility to ensure the proper accountability of financial activity. This is accomplished by making sure there is proper oversight, reviews and approvals.
The Accounting and Uniform Guidelines Manual for each unit provides that internal controls be established and put into operations. Therefore, a sound internal control system should be put into place to ensure accurate reporting of the financial statements and the schedule of expenditures of federal awards. Additionally, a sound internal control system should be put into place to ensure that all requirements related to federal awards received are complied with. The requirements of a federal program can be obtained from various sources which include but are not limited to the grant agreement with the Federal agency/pass-through entity, the appropriate section of the Code of Federal Regulations and United States Code, and applicable handbooks and other guidance provided by the Federal agency and/or pass-through entity.
In addition to the guidance noted above, the A-102 Common Rule and OMB Circular A-110 (2 CFR part 215) require that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. OMB Circular A-133 requires auditors to obtain an understanding of the non-Federal entity’s internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk for major programs, plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program, and, unless internal control is likely to be ineffective, perform testing of internal control as planned.
As the auditor of your local governmental entity, the State Board of Accounts will be assessing the controls you have in place over the preparation of the financial statements and schedule of expenditures of federal programs and over the compliance with the requirements of federal programs. If we determine that controls for any of these areas are either not in place or are not operating effectively, we are required by the standards we follow to report those issues. This reporting is required to be made in the form of written Federal findings included in the audit report. In order for us to be able to determine operating effectiveness of the controls, we must have documentation of the controls to audit. Therefore, any review completed over the preparation of the financial statement or schedule of expenditure of federal awards should be documented in some way. Additionally, the oversight given to ensure compliance with requirements of the federal programs should be documented.
Indiana Code 5-11-1-27 requires the state board of accounts define the acceptable minimum level of internal control standards for political subdivision. As a result, we have completed a manual entitled “Uniform Internal Control Standards for Indiana Political Subdivisions”. The manual and the approved training materials were presented and approved by the Audit Committee. We have posted the manual on the SBOA website www.in.gov/sboa on a newly created page under Political Subdivisions called “Internal Control Standards”. This page has a link to the manual itself and lists the approved training and the certification requirements. It also references other sources of information on internal controls. We have also added the same information to each page for the county’s and county offices on the SBOA website. You can also find a link to the manual on the SBOA homepage under our mission statement.
Part One of the manual lists the minimum standards which include the five components of internal control and the seventeen principles. Part Two of the manual is called Approved Personnel Training Materials and also contains examples and case studies, which are not part of the minimum level of standards but do provide additional information and examples that can be used in the implementation of internal controls by the subdivision. There is a certification form for internal control training in the appendix to the manual.
We have also posted a webinar to the SBOA website which will provide additional training information that can be used by the county. We have given presentation on internal controls at various conferences in the past few years and we will continue to include internal controls in future presentations given at called meetings. The webinar makes the information provided in the past year available to all employees of the subdivision. We will be posting additional webinars in the future.
By statute, after June 30, 2016 the legislative body must ensure that internal control standards and procedures are adopted and that the appropriate personnel receive training on internal controls and procedures. The County Auditors will file a certification along with the annual report in Gateway.
IC 5-11-1-27 requires all Indiana political subdivisions to adopt the minimum level of internal control standards developed by the state board of accounts as published in the Uniform Internal Control Standards for Indiana Political Subdivisions. Each political subdivision must adopt these standards, train appropriate personnel, and implement policies and procedures consistent with the standards. The following is a guide to fulfilling these requirements and deadlines for action.
Statutory Requirements - Uniform Internal Control Standards for Indiana Political Subdivisions (Statutory Deadline: After June 30, 2016)
Legislative Body – Uniform Internal Control Standards
1. Adopt Standards. The legislative body shall ensure that the Uniform Internal Control Standards for Indiana Political Subdivisions are adopted. We recommend adoption by ordinance or resolution.
The Uniform Internal Control Standards for Indiana Political Subdivisions are available on our website at www.in.gov/sboa.
2. Train Personnel. The legislative body shall ensure that personnel, as defined in statute, receive training concerning the Uniform Internal Control Standards for Indiana Political Subdivisions.
Approved training materials are located in Part Two of the Uniform Internal Control Standards for Indiana Political Subdivisions; the Video Presentation materials in Section One accompany the Internal Control Webinar located on our website at www.in.gov/sboa.
Training by each employee should be documented on the Internal Control Training Certification Form located in the Appendix to the Uniform Internal Control Standards for Indiana Political Subdivisions. Retain this documentation for audit. Please note that training is an ongoing process as new employees are hired.
Fiscal Officer – Uniform Internal Control Standards
1. Certify Adoption of Standards. The fiscal officer shall certify in writing that the Uniform Internal Control Standards for Indiana Political Subdivisions have been adopted.
2. Certify Training of Personnel. The fiscal officer shall certify in writing that the personnel, as defined in statute, have received the required training.
3. Submit Certification with Annual Financial Report in 2017. Both the Adoption of Standards Certification and the Training of Personnel Certification shall be filed electronically with the state board of accounts at the same time as the annual financial report is filed.
Ongoing Requirements - Implementation of Internal Control Policies and Procedures
Management - Responsibility to Implement Internal Control Policies and Procedures
The term “management” is defined for each unit of government in the Introduction section of the Uniform Internal Control Standards for Indiana Political Subdivisions.
After June 30, 2016, management should document in writing the specific internal control policies and procedures required for use in each department of the unit. Examples of such policies and procedures are contained in Part Two Section 2 of the Uniform Internal Control Standards for Indiana Political Subdivisions.
The implementation of internal control policies and procedures is an ongoing process. We recommend that management start by documenting procedures already in place and evaluating those policies and procedures in light of the five components of internal control. If any of the five components is missing, true internal control is not achieved. An effective implementation of Internal Control is a process and requires regular evaluation and adaptation for changes affecting your office. Over time controls may be added, deleted, or adjusted as necessary.
We have received a number of questions on allowable investments and working with investment companies or brokerage companies. The following is our audit position on this issue.
Investing in Securities:
IC 5-13-9-2 authorizes an investment officer to invest in certain securities that are listed in the statute:
“(a) Each officer designated in section 1 of this chapter may invest or reinvest any funds that are held by the officer and available for investment in any of the following:
(1) Securities backed by the full faith and credit of the United States Treasury or fully guaranteed by the United States and issued by any of the following:
(A) The United States Treasury.
(B) A federal agency.
(C) A federal instrumentality.
(D) A federal government sponsored enterprise.
(2) Securities fully guaranteed and issued by any of the following:
(A) A federal agency.
(B) A federal instrumentality.
(C) A federal government sponsored enterprise.
(3) Municipal securities issued by an Indiana local governmental entity, a quasi-governmental entity related to the state, or a unit of government, municipal corporation, or special taxing district in Indiana, if the issuer has not defaulted on any of the issuer's obligations within the twenty (20) years preceding the date of the purchase. A security purchased by the treasurer of state under this subdivision must have a stated final maturity of not more than ten (10) years after the date of purchase.”
The statue goes onto say in subsection (d) to state that
“(d) The investing officers of the political subdivisions are the legal custodians of securities under this chapter. They shall accept safekeeping receipts or other reporting for securities from:
(1) a duly designated depository as prescribed in this article; or
(2) a financial institution located either in or out of Indiana having custody of securities with a combined capital and surplus of at least ten million dollars ($10,000,000) according to the last statement of condition filed by the financial institution with its governmental supervisory body.
To determine a duly designated depository, you may review the list of depositories on the Treasurer of State’s website: www.in.gov/tos/deposit/2377.htm
The definition of a financial institution may be found in IC 5-13-4-10.
IC 5-13-4-10 "Financial institution"
Sec. 10. "Financial institution" means any of the following:
(1) A bank, trust company, or mutual savings bank that:
(A) was incorporated under the law of Indiana or any other state; and
(B) has its principal office or a branch in Indiana.
(2) A national banking association with its principal office or a branch in Indiana.
(3) A savings association operating as a deposit association incorporated under Indiana law.
(4) A federally chartered savings association with its principal office or a branch in Indiana.
(5) A federally chartered savings bank with its principal office or a branch in Indiana.
(6) A state chartered credit union in Indiana that is federally insured or privately insured and that has assets of three million dollars ($3,000,000) or more.
In order for the county to be compliant with statute on purchasing securities, the county funds must be deposited with a designated depository or financial institute as defined in the statute. If that procedure is followed, the designated depository or financial institution has custody of the funds. The investment companies may work with a county on the purchase of these securities but they may not directly sell the securities to the county or have custody of any county funds. As an example, a county could purchase a T-Bill from an investment company, however, the cash for the purchase should be sent to the financial institution and the financial institution would then deliver the cash to the investment company after the investment company delivers the T-Bill to the financial institution on behalf of the county. The financial institution would have custody of the T-Bill.
Investing in Money Market Funds:
IC 5-13-9-2.5 authorizes a political subdivision to invest money in money market mutual funds with certain restrictions:
(a) An officer designated in section 1 of this chapter may invest or reinvest funds that are held by the officer and available for investment in investments commonly known as money market mutual funds that are in the form of securities of or interests in an open-end, no-load, management-type investment company or investment trust registered under the provisions of the federal Investment Company Act of 1940, as amended (15 U.S.C. 80a et seq.).
(b) The investments described in subsection (a) shall be made through depositories designated by the state board of finance as depositories for state deposits under IC 5-13-9.5.
(c) The portfolio of an investment company or investment trust described in subsection (a) must be limited to the following:
(1) Direct obligations of the United States.
(2) Obligations issued by any of the following:
(A) A federal agency.
(B) A federal instrumentality.
(C) A federal government sponsored enterprise.
(3) Repurchase agreements fully collateralized by obligations described in subdivision (1) or (2).
Subsection (b) of this statute also requires that the investments in allowable money market funds be made through designated depositories. So to be in compliance with statute, the money market fund must be made through a designated depository and not directly with the investment company.
The investment officer for the county is the Treasurer. The Treasurer will make the final decision on which investments, if any to make with county funds. However, there are restrictions on the types of investments that a Treasurer may make. First, the investment made by the Treasurer must follow statute (Indiana Code 5-13) for allowable investments and maturity dates. The investment must also comply with policies established by the Board of Finance and an investment policy for the county established under Indiana Code 5-13-9-5.7.
The Treasurer has the authority to contract with a federally regulated investment advisor or other institutional money manager. Any contracts should be reviewed by your county attorney to ensure that the county funds are adequately safeguarded within the contract. Even when utilizing the services of an investment advisor, it is ultimately the responsibility of the Treasurer to make the final decision on the investments, having done due diligence to ensure that the investments comply with statute and with the county’s investment policy. You should keep the documentation of your decision process.
INVESTMENT CASH MANAGEMENT SYSTEM
IC 5-13-11 allows the county board of finance and county treasurers to contract with a depository for the operation of an investment cash management system. IC 5-13-11-2 states: “(a) The contract must: (1) be in writing; (2) provide for the investment of funds by the depository with the approval of the investing officer; (3) provide that the depository keep those records concerning the investment cash management system that the political subdivision would maintain for audits by the state board of accounts; (4) provide that investments will be made in accordance with this article; (5) not have a term of more than two (2) years; and (6) be awarded under the bidding provisions of IC 5-22. (b) If no designated depository whose principal office or branch is located within the political subdivision will provide an investment cash management service permitted in this chapter, then the contract for an investment cash management service must be awarded as provided in IC 5-13-8-9(c). If the investment cash management service contract is awarded to a financial institution whose principal office or branch is located outside the political subdivision, then the recipient of the contract does not constitute a designated depository of the political subdivision for purposes of investment under IC 5-13-9-3 unless it meets the limitations of IC 5-13-9-4 or IC 5-13-9-5, but does constitute a depository under this article for all other purposes.”
IC 5-13-11-2.5 provides for the contract renewal and states: “(a) A contract may be renewed under this chapter if the county board of finance for a county subject to IC 5-13-7-1 or the fiscal body of a political subdivision and the investing officer of the political subdivision agree with the depository to renew the contract under the same terms or better terms as the original contract.(b) The term of a renewed contract may not be longer than the term of the original contract. (c) A contract may be renewed any number of times.”
IC 5-13-11-3 provides for service charges and states: “The contract may provide for the depository to assess a service charge for its management of the investment cash management system. The service charge may be paid by direct charge to the deposit or other account or in any other manner mutually agreed upon by the investing officer and the depository.”
IC 5-13-11-4 requires a monthly report of transactions and states: “The depository shall furnish the political subdivision with at least one (1) report each month of transactions concerning the investment cash management system.”
IC 5-13-11-5 on interest states: “The depository shall credit any interest or other accretion from an investment to the investment account of the political subdivision. The interest or accretion becomes a part of the principal in that account.”
PROPERTY REASSESSMENT FUND INVESTMENTSThe county treasurer shall as provided by IC 6-1.1-4-28.5(c) invest any money accumulated in the property reassessment fund until the money is needed to pay reassessment expenses. Any interest received from the investment of this money shall be receipted into the property reassessment fund.
INVESTMENTS – REPURCHASE AGREEMENTS
IC 5-13-9-3 allows units of government to invest in repurchase or resale agreements. These involve the purchase and guaranteed resale of any interest-bearing obligations issued, or fully insured or guaranteed by the United States or any U.S. government agency. The amounts of these types of agreements must be fully collateralized by interest-bearing obligations as determined by the current market value computed on the day the agreement is effective.
To insure that ownership of securities acquired is vested in the governmental unit, it has been suggested by F.D.I.C. that the agreements be so written as to:
- Vest title of the securities in the name of the governmental unit;
- Describe the specific securities acquired; and
- Represent a safekeeping receipt for the securities so acquired
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Judges
IC 33-38-11-9 authorizes judges of circuit, superior, or county courts to appoint temporary judges and sets their compensation at twenty-five dollars ($25) per day. This statute states that the compensation of temporary judges is to be paid by the county.
We continue to receive questions on jail booking fees. A jail booking fee is a onetime fee established by local ordnance and collected by the sheriff. The intent of the fee is to offset the cost of processing a person into the jail. We have heard that some counties are charging every person processed into jail even if there has been no court decision to convict them. In 2008, the legislature enacted 36-2-13-17.4 which states that “A sheriff or an employee of a jail may not charge an individual a fee for the individual to be incarcerated or held in a jail unless the individual has been convicted of a crime for which the individual was incarcerated or held in jail. “ It is our audit position that the only time a booking fee may be charged is after the person has been convicted. A fee assessed to every person processed into jail is not allowed. The jail booking fee would need to be established by an ordinance under Home Rule and should be collected by the Sheriff’s department.
In some counties, there have been attempts to add the jail booking fee to the fees collected under the pretrial diversion program and our audit position is that no additional court fees should be charged that are not specifically authorized by statute.
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Licenses
Bail Agent and Recovery Agents Licenses - Registration
Hunting, Trapping, and Fishing
Landfill Closure/Post-Closure Trust Fund
Law Enforcement Continuing Education Fees
Filing Verified Statements of Cause Numbers
Leave of Absence
Officers and Employees Who Are Members of the Indiana National Guard
Responsibility to Establish Leave Policies
Loans
Local Road and Street Account
Approved Uses of Distributions by Cities, Towns, and Counties
REGISTRATION OF BAIL AGENT’S AND RECOVERY AGENT’S LICENSES
IC 27-10-3-17 states: “(a) A bail agent may not become a surety on an undertaking unless the bail agent has registered the bail agent’s license in the office of the sheriff and with the clerk of the circuit court in the county in which the bail agent resides. The bail agent may then become a surety in any other county upon filing a copy of the bail agent’s license in the office of the sheriff and with the clerk of the circuit court in the other county. A surety bail agent must also file an original qualifying power of attorney signed by the bail agent and attached to a specimen bail bond with the clerk of the circuit court and file a copy of the qualifying power of attorney with the office of the sheriff. The clerk of the circuit court and the sheriff may not permit the registration of a bail agent unless the bail agent is currently licensed by the commissioner under this article.
(b) a recovery agent may not perform the recovery agent’s duties unless the recovery agent has registered the recovery agent’s license within fifteen (15) days of issuance or any renewal in the office of the sheriff and with the clerk of the circuit court in the county where the recovery agent resides. The clerk of the circuit court and the sheriff may not permit a registration unless the recovery agent is properly licensed by the commissioner under this article.”
A fee for these registrations may be charged if a County enacts a home rule ordinance setting the fee in accordance with IC 36-1-3-1 et seq.
HUNTING, TRAPPING, AND FISHING LICENSES
Per IC 14-22-11-3 the clerk of the circuit court may issue hunting, trapping, and fishing licenses. IC 14-22-12-8 and IC 14-22-12-9 states: "Each license agent who is authorized to sell licenses under this article shall retain a seventy-five cent ($0.75) service fee for each license sold.
The clerk of the circuit court in each county shall retain as the property of the county the service fees provided by section 8 of this chapter from the sale of licenses sold by the clerk. The clerk shall pay the fees promptly into the county general fund as other fees are paid."
The State Board of Accounts is a post-audit agency and as such does not have the authority to render legal opinion. However, when necessary this department has found it necessary to develop a departmental position in regard to the audit of governmental entity. These audit positions have been developed by using references such as, the Indiana Code, Court Cases, and the Opinions of the Attorney General.
IC 7.1-3-21-15 state in part:
“The commission shall not issue, renew, or transfer a wholesaler, retailer, dealer, or other permit of any type if the applicant:
(1) is seeking a renewal and the applicant has not paid all the property taxes under IC 6- 1.1 and the innkeeper’s tax under IC 6-9 that are due currently.
(2) is seeking a transfer and the applicant has not paid all the property taxes under IC 6- 1.1 and the innkeeper’s tax under IC 6-9 for the assessment periods during which the transferror held the permit;”
Except for mobile homes, which are due in the year assessed and certain other exceptions as listed, IC 6-1.1-22-9 requires that “the property taxes assessed for a year under this article are due in two equal installments on May 10 and November 10 of the following year.”
IC 6-1.1-1-2 defines assessment date as March 1 for all tangible property, except mobile homes which is January 15 for the current year. This would appear to mean that the assessment period for all tangible property (except mobile homes) would be March 1, 2012 through February 28, 2013 and would be payable in two equal installments on May 10 and November 10, 2013.
In the case of a transfer of an Alcoholic Beverage Commission permit requested in July 2013, it would appear that the applicant would need to have paid all property taxes due through November 10, 2014. We base this on the requirement that the applicant is to pay all property taxes under IC 6-1.1 for the assessment periods which the transferor held the permit. The applicant technically held the permit in July 2013, which falls in the assessment period of March 1, 2013 through February 28, 2014, with taxes due in two equal installments on May 10 and November 10, 2014. Technically it would appear that in order for the County Treasurer to certify on transfer, both the May and November 2014 would need to be paid.
In the case of a renewal of an Alcoholic Beverage Commission permit requested in July 2013, it would appear that the applicant would need to have paid all property taxes due through May 2013. We base this on the requirement that the applicant is to pay all the property taxes under IC 6-1.1 that are due currently. The property taxes assessed for a year under this article are due in two equal installments on May 10 and November 10 of the following year. It would appear that in order for the County Treasurer to certify to the renewal that only the May 10, 2013 property taxes would need to be paid.
This would appear reasonable, since IC 6-1.1-2-4 states that “The owner of any tangible property on the assessment date of a year is liable for the taxes imposed for that year on the property.” This would appear reasonable since a permit for renewal would be the same owner, who would continue to be liable for the taxes imposed on March 1, 2013 payable on 2014. On the other hand, the transfer of a permit would indicate that the owner is changing and, since the taxes would be assessed to the owner of record, the owner would be liable for the taxes imposed on March 1, 2013 and payable in 2014. It would then appear that before transferring the permit to a new owner all taxes imposed on the previous owner should be paid.
This is not to be construed as a legal opinion, but merely represents the position this department would take in its audit of counties. The audit position of the State Board of Accounts does not preclude other individuals or entities from taking exception to the actions of a unit of government.
LANDFILL CLOSURE/POST-CLOSURE TRUST FUND
IC 13-22-9 specifies the requirements for applying for permits to operate a landfill or transfer station. There are specific requirements to establish financial responsibility for costs of closure and postclosure monitoring and maintenance of those facilities.
IC 13-22-9-3 states: “Financial responsibility may be established under section 1 of this chapter by filing one (1) or a combination of the following with the commissioner:
(1) Trust fund agreement.
(2) Surety bond with a standby trust fund agreement.
(3) Letter of credit with a standby trust fund agreement.
(4) Insurance policy with a standby trust fund agreement.
(5) If the person applying for a permit derives less than fifty percent (50%) of the person's gross revenue from waste management, proof that the person meets a financial test established by the board.”
If your county chose the Trust Fund option, a separate (expendable trust) fund should have been established entitled Landfill Closure/Post Closure Trust Fund to account for the initial payment to the trustee and any future payments made or interest earned on the trust fund.
The reason a separate trust fund should be established is that each county will eventually either be refunded the monies which they paid into the trust fund or they will direct the Department of Environmental Management to make payment to the contractors when the landfill is closed.
HANDLING LAW ENFORCEMENT CONTINUING EDUCATION PROGRAM FEES
1. Each court is to assess a $4 law enforcement continuing education program fee on each action in which a defendant is found to have: (1) committed a crime; (2) violated a statute defining an infraction; or (3) violated an ordinance of a municipal corporation. (IC 33-37-5-8(c))
2. Monthly, a county, city or town court clerk is to transmit the law enforcement continuing education fees collected to the county, city or town fiscal officer. (IC 33-37-4-1, IC 33-37-4-2, IC 33-37-4-3)
3. The fiscal officer shall deposit the fees into either the County User Fee Fund or the City or Town User Fee Fund. (IC 33-37-4-1, IC 33-37-4-2, IC 33-37-4-3)
4. A law enforcement agency may receive funds from a County User Fee Fund or a City or Town User Fee Fund by filing a claim with the county, city or town fiscal officer. The claim shall include a "verified statement" of cause numbers for fees collected that are attributable to the law enforcement efforts of that agency. Payment of the claimed amount from a County User Fee Fund or a City or Town User Fee Fund may be made without appropriation. (IC 5-2-8-1)
5. Claims may be filled as often as monthly but must be filled in the same local fiscal year in which the fees are collected. (IC 5-2-8-1(g))
6. On receipt of the amount claimed by the law enforcement agency, the fiscal officer shall place the amount received into the County Law Enforcement Continuing Education Fund. (IC 5-2-8-1(c))
7. Funds received by a law enforcement agency shall be used for the continuing education and training of law enforcement officers employed by the agency and for equipment and supplies for law enforcement purpose. (IC 5-2-8-1)
8. Amounts claimed for expenditures from the County Law Enforcement Continuing Education Fund must have been appropriated prior to expenditure either through the normal budget process or by additional appropriation. (IC 33-37-8-6)
9. Money in excess of $100 that is unencumbered and remains in the county law enforcement continuing education fund for a least one entire calendar year from the date of deposit, at the end of a county's fiscal year, be deposited by the county auditor in the law enforcement training fund established under IC 5-2-1-13(b).
LAW ENFORCEMENT CONTINUING EDUCATION PROGRAM FEES - FILING VERIFIED STATEMENTS OF CAUSE NUMBERSSince the statutes (IC 5-2-8, IC 33-37-8) are silent regarding by whom or in what manner the "verified statement of cause numbers" will be prepared, the State Board of Accounts has adopted the following suggested procedures to handle such filings:
1. The applicable law enforcement agency should prepare the claim. At a minimum, the claim should indicate each fee collected by date of payment, cause number, defendant name, and receipt number if available.
2. The claim should be filed by the law enforcement agency with the fiscal officer of the governmental unit.
3. The fiscal officer shall transmit the claim to the court clerk in order for the claim to be verified.
4. Once the court clerk verifies the fees claimed on the claim, the claim shall be transferred back to the fiscal officer for processing in the same manner as all other claims, i.e. submitted for the board's approval and subsequent payment.
An alternative to steps number 3 and 4 had been approved for some units. In this instance when the clerk transmits the monthly collection of law enforcement continuing education fees to the fiscal officer, the court clerk includes a listing of the fees transmitted by date of payment, cause number, defendant name, and the law enforcement agency to which the fees are attributable. By doing this, the fiscal officer is able to verify the fees claimed by the various law enforcement agencies and is not required to go back to the court clerk.
It would also be permissible for the law enforcement agency to attach a copy of such listing that is provided by a court to a claim once the law enforcement agency verified the accuracy of the data contained in the listing.
The State Board of Accounts is of the audit position that in purchasing computers, equipment or any other good from public funds, the Board of County Commissioners as the purchasing authority of a county has the right to enter into a rental with option to purchase agreement if the rental charge is fair and reasonable.
However, before such an agreement is entered into, there must be a sufficient appropriation balance available for payment of the current year’s rental charge. The agreement should not obligate the county for payment of rental beyond the current year’s appropriation. Provision may be made in the agreement for renewal for succeeding years by rental payments subject to appropriations being available.
If the original gross cost of the equipment (without consideration of any trade-in) exceeds one hundred fifty thousand dollars ($150,000), the purchasing agency must comply with the “Public Purchases Law”, IC 5-22 (certain exceptions exist), by advertising for the bids and by awarding with reasonable promptness by written notice a contract to the lowest responsible and responsive bidder. Only by awarding a contract pursuant to IC 5-22 would the county have authority to purchase the equipment at a later date. A lease-purchase agreement will often contain an option to purchase at the end of the lease term for nominal consideration or no additional consideration.
The specifications for the equipment must be recognized standard specifications to allow competitive bidding and should provide for the bidder to quote the total purchase cost, the rental charge to be made, and the percentage of the amount of the rental charge that will be credited toward the purchase cost should the county exercise the option to purchase. Any interest or carrying charges must be made a part of the original bid price without specific reference made thereto.
Compliance with the above requirements will allow the purchasing agency to exercise the option to purchase at any time a sufficient appropriation for the equipment is available.
Remember, as mentioned above, whether or not the equipment should be bid is based on the original cost of the equipment and is not based on cost less trade-in or on the annual lease rental payment amount.
LEAVE OF ABSENCE – OFFICERS AND EMPLOYEES WHO ARE MEMBERS OF THE INDIANA NATIONAL GUARD OR RESERVES
Reserve Duty
Each officer and employee of the State of Indiana or of any county, township, municipality or school corporation in Indiana who is:
(1) A member of the Indiana National Guard,
(2) A member of a reserve component, or
(3) A member of the retired personnel of the naval, air, or ground force of the United States,
is entitled to receive from the member's employer a leave of absence from the member's respective duties in addition to regular vacation period without loss of time or pay for the time that the member is:
(1) on training duties of the state under the order of the governor as commander in chief: or
(2) a member of any reserve component under the order of the reserve component authority; for any consecutive or nonconsecutive period that does not exceed a total of fifteen (15) days in any calendar year. The entitlement to a leave of absence without loss of time or pay is not at the discretion of the member's employer. (IC 10-16-7-5(b))
Active DutyA member is entitled to receive from the member's employer a leave of absence from the member's respective duties, in addition to the members regular vacation period, for the total number of days that the member is on state active duty under IC 10-16-7-7. This leave of absence may be with or without loss of time or pay at the discretion of the member's employer. (IC 10-16-7-5 (c)).
ELECTED OFFICIALS – LEAVE POLICYWe have received questions concerning the authority (or need) for elected officials to be included in the counties’ vacation leave, sick leave, death leave, or other leave policy.
We have not taken audit exception to an elected official’s compensation as long as the office to which the official was elected performs the duties and responsibilities of the office. Whether the elected official personally does the work, whether the elected official personally maintains office hours or whether the elected official shows up at the office are matters to be determined locally. Keep in mind our audit position relates only to elected officials. We recommend the county attorney provide specific written guidance that conflicts do not exist with IC 35-44.1-1-3, the Ghost Employment Statute.
In those few instances where elected officials choose to be included in such employee benefit policy (and were included in the authorizing resolution), the officials must maintain proper attendance records (the same as all other county employees) which shall clearly disclose days worked, days missed, type of leave taken, etc. We are of the audit position that the requirement for keeping proper attendance records would require the decision not be made just prior to the close of the officials’ term.
A county is authorized to “grant vacation with pay, sick leave, paid holidays, and other similar benefits by ordinance” (resolution) to “employees of the political subdivision” pursuant to IC 5-10-6-1. The term “employees” is not defined.
RESPONSIBILITY FOR ESTABLISHING VACATION, SICK LEAVE, PAID HOLIDAYS, AND OTHER SIMILAR BENEFITS
IC 5-10-6-1(b) states: “Employees of the political subdivisions of the state may be granted a vacation with pay, sick leave, paid holidays, and other similar benefits by ordinance of the legislative body of a county, city, town, township, or controlling board of a municipally owned utility, board of directors or regents of a cemetery, or board of trustees of any library district.”
It is imperative that the county adopt a policy regarding leave rules and other benefits. The State Board of Accounts will be auditing to see that the employees of the county are following the adopted policy.
The statute governing the publication of legal notices and annual reports may be found in IC 5-3-1. IC 5-3-1-1 details the method of calculating the compensation of the publisher which may be claimed after the notice or report has been published. This statute also describes the specifications which the publisher is to follow in setting the type for the notice or report which is currently a minimum of 7 point type.
IC 5-3-1-1.5 provides the requirements for newspaper website posting when a notice is published in accordance with this chapter and provides that a newspaper may not charge a fee for posting a notice on its website in accordance with this section.
IC 5-3-1-2 provides the requirements for notice publication of different types of events when the notice is required to be published in accordance with this chapter.
IC 5-3-1-2.3 provides guidance for the validity of notices that contain errors or omissions, both for those published in accordance with this chapter or published in accordance with other statutes.
IC 6-1.1-18.5-17 defines levy excess to mean the part of the ad valorem property tax levy actually collected by a civil taxing unit, for taxes first due and payable during a particular calendar year that exceeds the civil taxing unit’s ad valorem property tax levy, as approved by the department of local government finance. It requires that the levy excess be deposited into a fund to be known as the levy excess fund except as provided under IC 6-1.1-18.5-17 (h).
To expend the levy excess IC 6-1.1-18.5-17 (d)-(g) provides that Department of Local Government Finance will work with the taxing unit to include the levy excess amount in a subsequent budget. It also provides for a transfer of funds from levy excess fund to other funds to offset the loss from property tax refund.
The authority for such loans is found in IC 36-1-8-4 which states, “….The fiscal body of a political subdivision may, by ordinance or resolution, permit the transfer of a prescribed amount, for a prescribed period, to a fund in need of money for cash flow purposes from another fund of the political subdivision if all these conditions are met:
(1) It must be necessary to borrow money to enhance the fund that is in need of money for cash flow purposes.
(2) There must be sufficient money on deposit to the credit of the other fund that can be temporarily transferred.
(3) Except as provided in IC 36-1-8-49(b), the prescribed period must end during the budget year of the year in which the transfer occurs.
(4) The amount transferred must be returned to the other fund at the end of the prescribed period.
(5) Only revenues derived from the levying and collection of property taxes or special taxes or from operation of the political subdivision may be included in the amount transferred.”
If the fiscal body of the political subdivision determines that an emergency exists that requires an extension of the prescribed period of a transfer under this section, the prescribed period may be extended for not more than six (6) months beyond the budget year of the year in which the transfer occurs if the fiscal body does the following:
(1) Passes an ordinance or a resolution that contains the following:
(A) A statement that the fiscal body has determined that an emergency exists.
(B) A brief description of the grounds for the emergency.
(C) The date the loan will be repaid that is not more than six (6) months beyond the budget year in which the transfer occurs.
(2) Immediately forwards the ordinance or resolution to the State Board of Accounts and the Department of Local Government Finance.”
Since the county auditor keeps the funds ledger we feel it would be appropriate for the county auditor to initiate such loans.
Upon adoption of the ordinance or resolution by the county council the auditor is authorized to make such a loan.
LOCAL ROAD AND STREET ACCOUNT-APPROVED USES OF DISTRIBUTIONS BY CITIES, TOWNS, AND COUNTIESIC 8-14-2-5 states: ”Money from the local road and street account shall be used exclusively by cities, towns, and counties for:
1. engineering, land acquisition, construction, resurfacing, maintenance, restoration, or rehabilitation of both local and arterial road and street systems;
2. the payment of principal and interest on bonds sold primarily to finance road, street, or thoroughfare projects;
3. any local costs required to undertake a recreational or reservoir road project under IC 8-23-5; or
4. the purchase, rental or repair of highway equipment.”
It is State Board of Accounts’ position that local road and street account distributions are to be used only for direct expenses incurred in the construction, reconstruction, or maintenance or arterial and local roads and streets. This would prohibit the use of such funds for building buildings or for such indirect costs as administrative salaries or supplies, goods, or materials not used directly for one of the aforementioned purposes.
Local road and street account distributions must be budgeted and appropriated prior to expenditure in the same manner as properly tax revenues.
LOCAL INCOME TAX-CERTIFIED SHARES
There are numerous changes that became effective in 2016 regarding Local Option Income Tax (LOIT). One of those changes is a name change and the tax is now referred to as Local Income Tax (LIT). Several memorandums have been sent out by the Department of Local Government Finance as well as presentations made by the department on the new statutes for local income tax. You can find the information on the DLGF website www.in.gov/dlgf.
One of the changes we would like to reiterate is the change in the accounting for the new local income tax revenues. In 2012, a memorandum had been issued requiring counties to account for CAGIT Certified Shares and COIT Distributive Shares in a separate fund and not comingle the revenue with property tax revenues. That requirement has changed as of 2017, Local Income Tax certified shares will be receipted into the General fund as Local Income Tax revenue. Some counties may have a balance in their CAGIT Certified Shares or COIT Distributive Shares funds. We will not take audit exception if the county decides to budget and disburse the remaining balance from the existing fund in 2017 or transfer the remaining balance to the General fund. Please note that for economic development and public safety the Local Income Tax revenue will continue to be accounted for in separate funds that were established under LOIT. Special Purpose Local Income tax revenue will also continue to be accounted for in a separate fund. The new Local Income Tax for property tax relief will continue to be accounted for in the settlement funds.
The joint memo from the State Board of Accounts and Department of Local Government Finance regarding the accounting for the new local income tax revenue is attached at the end of bulletin for further reference.
SUPPLEMENTAL DISTRIBUTIONS OF LOCAL INCOME TAXPer IC 6-3.6-9-15, if the State Budget Agency determines that the balance in a county trust account exceeds fifteen percent (15%) of the certified distributions to be made to the county in the determination year, the State Budget Agency shall make a supplemental distribution to the county from the county's trust account.
The county should deposit the supplemental distribution into the LIT Distribution Fund (7333) until distribution to the local units.
The Department of Local Government Finance (DLGF) shall determine for the county and each taxing unit within the county he amount and allocation of the supplemental distribution. The DLGF shall provide these determinations to the county auditor before May 16 of the determination year. Before June 1, the county auditor shall distribute to each taxing unit the amount of the supplemental distribution that is allocated to the taxing unit.
The distribution may include certified shares, economic development, and public safety portions which will be shown on the distribution sheet provided by DLGF. The statute does not address what fund in which to deposit the supplemental distribution. However, IC 36-1-8-5.1(b)(2) indicates that this distribution may be a source of funding for the Rainy Day Fund. Unless otherwise directed, we would recommend the supplemental distribution be deposited to the county’s and local unit’s General Fund or Rainy Day Fund. If the distribution includes economic development and/or public safety portions, those amounts could be deposited into the LIT Economic Development (EDIT) and LIT Public Safety funds. The supplemental distribution should be reported in the records using a separate revenue code.
There are numerous changes that take effect this year regarding Local Option Income Tax (LOIT). One of those changes is a name change and the tax is now referred to as Local Income Tax (LIT). Several memorandums have been sent out by the Department of Local Government Finance as well as presentations made by the department on the new statutes for local income tax. You can find the information on the DLGF website www.in.gov/dlgf.
One of the changes we would like to reiterate is the change in the accounting for the new local income tax revenues. In 2012, a memorandum had been issued requiring counties to account for CAGIT Certified Shares and COIT Distributive Shares in a separate fund and not comingle the revenue with property tax revenues. That requirement has changed as of 2017, Local Income Tax certified shares will be receipted into the General fund as Local Income Tax revenue. Some counties may have a balance in their CAGIT Certified Shares or COIT Distributive Shares funds. We will not take audit exception if the county decides to budget and disburse the remaining balance from the existing fund in 2017 or transfer the remaining balance to the General fund. Please note that for economic development and public safety the Local Income Tax revenue will continue to be accounted for in separate funds that were established under LOIT. Special Purpose Local Income tax revenue will also continue to be accounted for in a separate fund. The new Local Income Tax for property tax relief will continue to be accounted for in the settlement funds.
In 2017, the transition from Local Option Income Tax (LOIT) to Local Income Tax (LIT) continued. Under LIT legislation, there are three possible rates for local income tax. The expenditure rate, the property tax relief rate and the special purpose rate.
Expenditure Rate
Within the expenditure rate, the adopting body will determine the allocation of the expenditure rate to public safety, economic development and certified shares. We had provided instructions in 2016 to counties that for certified shares, the revenues should be deposited to the General fund starting in 2017. The funds that had been established for CAGIT County Certified Shares and COIT County Distributive Shares should be closed. Any balance remaining in these funds should be transferred to the county’s General fund by the end of the year. The funds used for CAGIT and COIT (1110 and 1121) should no longer be used after 2017. The Economic Development fund remained the same fund number (1112) and was renamed LIT Economic Development. The Public Safety fund also remained the same fund number (1170) and was renamed LIT Public Safety. There would be no need to transfer money for either the Economic Development (CEDIT) or Public Safety funds.
Special Purpose Rate
The special purpose rate is established under IC 6-3.6-7-1 and must be used in compliance with the statute. Under LOIT, a special purpose rate was allowed under CAGIT, COIT and CEDIT legislation. This rate is now one rate under LIT. We established a new fund on the chart of accounts for LIT-Special Purpose (fund 1114). If a county had a fund under CAGIT, COIT or CEDIT (funds 1109, 1113, or 1120), the balance of the fund at the end of 2016 should have been moved to the new fund (1114). The appropriations from the 2017 budget for the Special Purpose fund should have been recorded to the new fund. The purpose of the fund remained the same as under the LOIT legislation.
Property Tax Rates
There were several funds established within the settlement funds to account for LOIT Property tax relief. The counties were instructed to deposit all the 2017 LIT Property Tax Relief revenues into a new fund for Local Income Tax – Property Tax Relief (fund 6203). The existing funds were not to be used in 2017 and the Auditor of State would provide instructions for including the balances from the previous property tax relief funds into settlement and distribution in 2018. The counties need to review any LOIT Property Tax Relief funds to determine that the balances in the fund, do represent only undistributed amounts of property tax relief. If the counties have any other funds in these accounts, please contact us for assistance in clearing out any funds that are not property tax relief funds. If the county has placed property tax relief funds in any fund other than the 6000 series, please make sure that the Auditor of State’s office has that information as well.
If you have any questions on the information provided, please don’t hesitate to contact our office.
Supplemental LIT Payments
The Department of Revenue collects the Local Income Tax (LIT) and places those collections in a separate trust fund for each county. The county receives monthly distributions from this trust account which is then distributed to each local unit eligible to receive LIT, including a distribution to the county itself. The Expenditure Rate of LIT is allocated by the approving bodies in each county to certified shares, public safety and economic development. Each year the Department of Local Government Finance certifies the amount of the LIT distribution for each unit and by each type of LIT. The county would also receive a distribution for property tax relief if that rate was established by the approving body of the county and for a special purpose if the county has a rate established for a special purpose.
When the trust fund balance exceeds a 15% threshold based on the trust account balance year prescribed in statute, a supplemental distribution of LIT is given to each county for the amount in excess of the threshold. In the past, the threshold amount had been 50% and supplemental distributions were not frequent. However, with the reduction in the threshold balance to 15%, this should result in more frequent supplemental distributions. These distributions are sent out annually in May and the county auditor is required to distribute to the local units before June 1. In the past, the statute required these supplemental distributions to be placed in the Rainy Day fund of the unit receiving the distribution. That requirement is no longer in statute and the supplemental distribution should be posted in the same manner as the certified monthly distributions. DLGF does provide a breakdown of the supplemental distribution for EDIT, Public Safety and Economic Development. Any property tax relief would be placed in the LIT property tax relief fund and special purpose LIT would be placed in the LIT Special Purpose fund. In 2016 only two counties received a supplemental distribution of LIT but in 2017 the number of counties receiving this distribution increased.
In addition, during an audit of the trust fund balances, it was determined that not all monthly distributions had been made as some LIT collections received by DOR had not been placed in the appropriate county trust account. There was a distribution of these additional collections to the counties in June 2018. This is separate from the supplemental distribution and separate from the monthly distribution. It should be treated in the same manner as the monthly certified distributions are treated. Again, the counties received a breakdown by unit and type of LIT (EDIT, Public Safety and Certified Shares) so they will have direction on how to process these payments. For counties, any Property Tax Relief LIT would be placed in the LIT PTRC settlement fund to be distributed as part of settlement. Any special purpose LIT would be deposited to the LIT Special Purpose fund.
LOCAL INCOME TAX – ECONOMIC DEVELOPMENT
Counties may adopt a local income tax expenditure rate. This tax is then allocated by the adopting body between economic development, public safety and certified shares. See Indiana Code 6-3.6-6. Economic Development funds from the local income tax expenditure rate are often called EDIT funds. The Commissioners must adopt a Capital Improvement plan specifying the amount allocated for economic development purposes. The requirements for a capital improvement plan are found in Indiana Code 6-3.6-6-9.5. However, the EDIT fund must also be appropriated before it can be spent. So, to spend economic development funds, the county must complete the following two items:
- Commissioners must adopt a capital improvement plan.
- Council must appropriate the fund consistent with the capital improvement plan.
Our audit position that the EDIT fund must be appropriated is based on the following. IC 36-2-5-2(b) states: “The county fiscal body shall appropriate money to be paid out of the treasury, and money may be paid out of the treasury only under an appropriation made by the fiscal body, except as otherwise provided by law.” We do not see anything in IC 6-3.6 that specifically allows the EDIT funds to be paid without appropriation. Therefore, the EDIT fund must be appropriated by county council but only for those items included in the capital improvement plan.
Under Indiana Law some government officials may not legally serve in more than one public service position at one time. The holding of two lucrative offices may result in a dual office violation. The dual office prohibition does not prohibit a person from maintaining an office while also serving as an employee of a governmental entity. However determining what a lucrative position is can be tricky.
Official Opinion No. 13 (June 4, 1970) of the Attorney General points out that dual office holding involves at least six major questions and three particular sections of the Indiana Constitution. The questions are:
1. Is each position a lucrative office within the meaning of the Indiana Constitution? (Article 2, Section 9 of the Indiana Constitution)
2. Is such office-holding in violation of the doctrine of the separation of powers? (Article 3, Section 1 of the Indiana Constitution)
3. Does such office-holding involve a judicial office, and other office of trust and profit under the State? (Article 7, Section 16 of the Indiana Constitution)
4. Are such offices incompatible with each other?
5. Is there a conflict of interest?
6. Would such office-holding be against public policy?
The state Attorney General’s Office website provides a guide on dual office holdings. The guide contains a listing of lucrative and non-lucrative office examples. We recommend that you consult your county attorney when question arise regarding dual office holding.
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Mileage
Rate for County Officials and Employees
Monthly Reports of County Treasurer
Monthly and Annual Engagement Uploads
Motor Vehicle Excise Tax Accounting
Motor Vehicle Penalties - Allocation
Motor Vehicle Highway (MVH) - Negative Balances
Trial Rule 60.5 states:
(A) Scope of mandate. Courts shall limit their requests for funds to those which are reasonably necessary for the operation of the court or court-related functions. Mandate will not lie for extravagant, arbitrary or unwarranted expenditures nor for personal expenditures (e.g., personal telephone bills, bar association memberships, disciplinary fees).
Prior to issuing the order, the court shall meet with the mandated party to demonstrate the need for said funds. At any time in the process, the dispute may be submitted to mediation by agreement of the parties or by order of the Supreme Court or the special judge.
(B) Procedure. Whenever a court, except the Supreme Court or the Court of Appeals, desires to order either a municipality, a political subdivision of the state, or an officer of either to appropriate or to pay unappropriated funds for the operation of the court or court-related functions, such court shall issue and cause to be served upon such municipality, political subdivision or officer an order to show cause why such appropriation or payment should not be made. Such order to show cause shall be captioned “Order for Mandate of Funds”. The matter shall be set for trial on the merits of such order to show cause unless the legislative body, the chief executive officer or the affected officer files a waiver in writing of such a trial and agrees to make such appropriation or payment.
The trial shall be without a jury, before a special judge of the court that made the order. There shall be no change of venue from the county or from the special judge appointed by the Supreme Court. The court shall promptly notify the Supreme Court of the entry of such order to show cause and the Supreme Court shall then appoint as special judge an attorney who is not a current or former regular judge and who does not reside nor regularly practice law in the county issuing the Order of Mandate of Funds or in any county contiguous thereto. If the appointed judge fails to qualify within seven [7] days after he has received notice of his appointment, the Supreme Court shall follow the same procedure until an appointed judge does properly qualify.
Unless expressly waived by the respondent in writing within thirty (30) days after the entering of the trial judge’s decree, a decree or order mandating the payment of funds for the operation of the court or court-related functions shall be automatically reviewed by the Supreme Court. Promptly on expiration of such thirty (30) day period, the trial judge shall certify such decree together with either a stipulation of facts or an electronic transcription of the evidence to the Supreme Court. No motion to correct error nor notice of appeal shall be filed. No mandate order for appropriation or payment of funds made by any court other than the Supreme Court or Court of Appeals shall direct that attorney fees be paid at a rate greater than the reasonable and customary hourly rate for an attorney in the county.
No mandate order shall be effective unless it is entered after trial as herein provided and until the order has been reviewed by the Supreme Court or such review is expressly waived as herein provided.
GENERAL FORM 101 - MILEAGE CLAIM
General Form No.101, Mileage Claim, is a general form for use of all governmental units and is to be used by every local public official claiming mileage.
It is to be noted that this is a mileage claim form only. This form is not to be used by officials claiming reimbursement for authorized traveling expenses, such as hotels, meals, etc., which should be properly itemized on Accounts Payable Voucher, Form No. 17, with receipts attached. Mileage in connection with such traveling expenses may also be claimed on Form No. 17.
MILEAGE RATE FOR COUNTY OFFICIALS AND EMPLOYEES
“County officers, except for officers subject to IC 36-2-7-4 and IC 36-2-7-5 of this chapter, are entitled to a sum for mileage in the performance of their official duties in a amount determined by the county fiscal body.” (IC 36-2-7-3)
Fines imposed pursuant to the Indiana Military Code IC 10-16 were payable to the county treasurer for transmittal to the Treasurer of State prior to July 2011. IC 10-16-9-3 now provides that fines be collected by payment to the local armory board assigned to the convicted soldier’s unit. Please refer any inquiries of military fines to either the local or state armory board.
Indiana Code 5-11-1-27(l) requires a public officer who has actual knowledge or reasonable cause to believe that there has been a misappropriation of public funds or assets to immediately send a written notice to the state board of accounts and the prosecuting attorney.
Indiana Code 5-11-1-27(l) states:
(l) A public officer who has actual knowledge of or reasonable cause to believe that there has been a misappropriation of public funds or assets of the public office, including:
(1) information obtained as a result of a police report;
(2) an internal audit finding; or
(3) another source indicating that a misappropriation has occurred; shall immediately send written notice of the misappropriation to the state board of accounts and the prosecuting attorney serving in the area governed by the political subdivision.
The State Examiner Directive 2015-6 also addresses this statute.
The policy must also consider Ind. Code § 5-11-1-27(l), which requires public officials who have actual knowledge of or reasonable cause to believe that there has been a misappropriation of public funds to immediately send written notice of the misappropriation to the State Board of Accounts and the prosecuting attorney. There is no materiality threshold applicable to Ind. Code § 5-11-1-27(l). Thus, whenever a political subdivision has actual knowledge or is reasonably certain that a misappropriation of public funds has occurred (regardless of the dollar amount), the political subdivision must send written notice of the misappropriation to the State Board of Accounts and the local prosecuting attorney. Misappropriation occurs when an employee or in-house contractor of the political subdivision wrongly takes or embezzles public funds. When there is a known misappropriation or embezzlement of public funds by an internal actor, materiality is irrelevant. Indiana law requires the political subdivision to report the activity to the State Board of Accounts and the local prosecutor. Ind. Code § 5-11-1-27(l).
We are finding that the requirements of this statute are not being followed consistently. If a public official fails to report the misappropriation of funds or assets in a timely manner, this will result in a finding in the audit report. This may also result in additional audit costs. Also, be aware that reporting the misappropriation to a law enforcement agency does not fulfill the requirements of the statute. Even when you have notified law enforcement officials, you must still notify the board of accounts and the prosecutor. If there are any concerns on the response the board of accounts will take after a report is received or how they will liaison with the law enforcement investigation, you can contact our Director of Special Investigations, Mark Mahon at (317) 232-2513 or mmahon@soba.in.gov
MONTHLY REPORTS OF COUNTY TREASURERPursuant to the provisions of IC 36-2-10-16, the county treasurer is required to file a financial report with the county auditor not later than the sixteenth (16) day of each month. The report is to be prepared in quadruplicate, one copy is retained by the office as public record and the other three forwarded to the county auditor in which one copy is to be immediately sent to the State Board of Accounts.
In connection with these reports, we wish to impress upon you that it is the duty of the county auditor to see that the reports are also presented monthly to the board of county commissioners.
MONTHLY AND ANNUAL ENGAGEMENT UPLOADS
In keeping with State Examiner Directive 2018-1, the following details the monthly and annual uploads required by each department:
Monthly, we will be requiring the following to be uploaded:
County Auditor
- Approved Board Minutes
- Funds Ledger, reporting total receipts, disbursements, and balances by fund for the month
County Treasurer
- Monthly Bank Reconcilement (Monthly Report)
- Cash Balance Report (Cash Book)
County Clerk
- Monthly Bank Reconcilement (Monthly Report)
- Cash Balance Report
County Sheriff
- Monthly Bank Reconcilement
- Cash Balance Report
County Recorder
- Monthly Bank Reconcilement
- Cash Balance Report
Counties will be required to upload their January 2019 files in March 2019. The due date for these files will be March 15th, 2019. Each official will have the responsibly of uploading their own monthly required documents in gateway. County Auditors will already have the access needed to upload files. We are currently working with our programmers to get the other officials access to the application. Further communication will be coming in regards to this access. You do not need to contact us to get this access. We will contact you with the information.
Annually, we will be requiring the following to be uploaded:
County Auditor
- Detail of Receipt Activity
- Detail of Disbursement Activity
- Current Year Salary Ordinances
- Annual Vendor History Report
County Treasurer
- Year End Bank Statement
- Year End Outstanding Check List
- Year End Investments Statements
County Clerk
- Year End Bank Statement
Annually, we will be requiring the following to be uploaded:
County Sheriff
- Year End Bank Statement
County Recorder
- Year End Bank Statement
Counties will be required to upload their 2018 annual files in March 2019.Once we are further along in the development of the application for schools and counties, we will update our user guide. Currently our user guide focuses on the units of government that have already implemented the upload process, but should also address many of the questions that you will have. We encourage you to review the user guide, which is located at:
https://gateway.ifionline.org/userguides/engagementguide
Many answers to questions you have will be found here. You might even start at the end of the guide under frequently asked questions which should help you with your most pressing questions.
The Bureau of Motor Vehicles (BMV) deposits daily to the county’s BMV bank account the excise tax and if applicable the surtax and wheel tax collected 14 days earlier. At least monthly the county treasurer must enter the BMV collections into the Treasurer’s Cashbook. Total collections should be entered in the bank deposits section of the cashbook. Excise tax collections should be entered in the Other Sources section of the cashbook and if applicable the surtax and wheel tax is to be quietused to the county auditor’s Wheel Tax / Surtax Fund and is entered into the Treasurer’s Cashbook in the Funds Ledger section.
The Indiana Department of Revenue (DOR) distributes to counties the aircraft excise, quarterly in January, April, July and October. Auto rental excise tax is distributed by DOR semi-annually in May and November and wheel tax comes from them monthly. The county treasurer should receipt aircraft and auto rental excise tax collections to excise accounts in the Other Sources section of the cashbook. Wheel tax is quietused to the county auditor’s Wheel Tax / Surtax Fund and is entered in the Funds Ledger section of the cashbook just as stated above for wheel tax remittances from the BMV.
The Auditor of State’s office distributes monthly to counties watercraft excise tax, education plate fees, and excise tax cut replacement. They distribute annually the final excise tax cut replacement. The county treasurer should be posting watercraft excise tax, monthly excise tax cut replacement distributions and final excise tax cut replacements to the excise accounts in the Other Sources section of the cashbook. Education plate fees are quietused to the county auditor’s Education Plate Fee Fund and it is entered to be entered in the Funds Ledger section of the Treasurer’s Cashbook.
The county auditor should have an excise tax ledger to record motor vehicle excise tax, watercraft excise, aircraft excise, auto rental excise tax, lottery credit and excise tax cut replacement distributions. The ledger should be separated by taxing district but have a control ledger for all excise tax activity. Within each separate or subsidiary ledger for a taxing district there should be separate columns to account for each of the taxes and distributions listed above that are to be included in the ledger. The ledger must be footed by month and have a running balance. Receipts for watercraft, aircraft, auto rental excise and final excise tax cut replacement distributions should be posted in the month received. Monthly excise tax cut replacement distributions should be posted in the month received or to the previous month. Posting these monthly distributions to the previous month matches distributions to the lottery credit being replaced by the distribution. County auditors should also be posting to the excise tax ledgers at least monthly.
The following should be included in settlement: motor vehicle excise tax, monthly excise tax cut replacement distributions, final excise tax cut replacement distribution for the year, watercraft excise, aircraft excise tax and auto rental excise. The amount of excise to include in the settlement is the excise tax posted to the county auditor’s excise tax ledger as of the excise tax cutoff date. The cutoff date should be as of the end of a month. For most counties the cutoff dates have been April 30 for June settlement and October 31 for December settlement. With the recent BMV change to a 14 day lag time between the transaction date and the deposit and report date, counties may want to consider backing those dates up to March 31 and September 30.
The Auditor of State’s Office provides a Reconciliation Worksheet that should be used to determine the difference between the excise tax the county auditor is including in the settlement and the excise tax the county treasurer certified on the 49TC. Because the county auditor should be including in the settlement the excise tax posted to the excise tax ledger as of the cutoff date and the county treasurer should be certifying on the 49TC the excise tax posted to the cashbook as of the date the 49TC is completed, there should be a variance to reconcile using the Reconciliation Worksheet. Once the auditor and treasurer have reconciled the excise tax records of their offices, excise tax allocations can be calculated according to the State Auditor’s instructions. More details on complete excise tax accounting and settlement is provided by the State Auditor’s office. This article merely summarizes the instructions provided by Dan Bastin, Settlement Director at the Auditor of State’s Office. His presentation from the Fall 2011 County Auditor’s Conference can be found under meeting materials for that conference on our website at www.in.gov/sboa.
ALLOCATION OF PENALTIES COLLECTED FOR FALURE TO TIMELY REGISTER MOTOR VEHICLES
IC 9-18.1-2-6 states: A nonresident that becomes an Indiana resident may operate a vehicle on a highway for not more than sixty (60) days after becoming an Indiana resident without registering the vehicle under this article if the vehicle is registered in accordance with the laws of the jurisdiction in which the nonresident was a resident..”
IC 9-18.1-2-11 states: “A person that fails to register a vehicle that is required to be registered under this chapter commits a Class C infraction.” IC 34-28-5-17(b) states: “In addition to…any judgment assessed under IC 34-28-5…, a person that violates IC 9-18.1-2-3 shall be assessed a judgment equal to the amount of excise tax due on the vehicle under IC 6-6-5 or IC 6-6-5.5…”
IC 34-28-5-17 goes on to require the clerk to collect the additional judgment and transfer the additional judgments collected to the county auditor on a calendar year basis. The auditor shall distribute the funds to the law enforcement agencies, including the state police, responsible for issuing citations to enforce section 1 of this chapter. The percentage of the funds distributed to an agency equals the percentage of the total number of citations issued by the agency for the purpose of enforcing section 1 of this chapter during the applicable period.
Funds distributed under this section shall be used for any law enforcement purpose including contributions to the pension fund of the law enforcement agency.
To facilitate the handling and allocation of these fees under IC 34-28-5-17, the clerk should use General Form No. 367 (1984) entitled “Clerk’s Report to Auditor of Additional Judgments for Excise Tax.” In using this form the following procedures should be observed:
1. The clerk of the court which collects these penalties must include a memorandum with the remittance which shows the number of citations filed in the court by each law enforcement agency for failure to timely register a motor vehicle. Such memorandum could be as follows:Law Enforcement Agency Number of Citations _____County Sheriff 6 Urban City Police 2 Best Town Marshall 2 Total 10 2. The amount received from the clerk would be receipted to a fund called “Judgments Due Law Enforcement” fund #7305.
3. The amount receipted to the Judgments Due Law Enforcement Fund would then be multiplied by the percentage of the total citations which were filed by each law enforcement agency during the applicable period to determine the amount due each law enforcement agency.
Using the number of citations shown in Item 1 above an example of a worksheet to determine the allocation of funds is as follows:Law Enforcement Agency Number of Citations Percentage of Total Amount Due Agency _____County Sheriff 6 60% $270 Urban City Police 2 20% 90 Best Town Marshall 2 20% 90 Total 10 100% $450
4. After the amount due each law enforcement agency is determined a warrant should be issued to the disbursing officer of the particular governmental unit for the amount due. The warrant should be accompanied by a brief explanation showing the purpose of the distribution.
5. The amount due the county on account of citations filed by the sheriff’s department should be receipted by quietus to a fund called “Motor Vehicle Registration Penalties” Fund #1214. This fund can be expended for any law enforcement purpose. However, disbursement should be by county warrant and only after a duly itemized claim has been approved by the board of county commissioners.
6. Any amount due on account of citations issued by the state police would be sent to the Auditor of State.MOTOR VEHICLE HIGHWAY (MVH) - NEGATIVE BALANCES
The MVH Restricted sub-fund (1173) was introduced in 2018. While this sub-fund is part of the MVH fund as a whole it should not have a negative balance at the end of the year. The County is required to deposit at least 50% of the MVH distributions into the MVH Restricted sub-fund and can only be used to pay for construction, reconstruction, and preservation (definitions and examples can be found here: MVH - Restricted Uses).
However, the MVH fund (1176) can also be used to pay for construction, reconstruction and preservation costs. If there are costs that exceed the revenue in the MVH Restricted sub-fund (1173), the costs should then be posted to the 1176 fund. This should be monitored throughout the year so that neither 1176 nor 1173 are in the negative.
If expenses posted to MVH Restricted (1173) cause it to have a negative balance those expenses can be moved to MVH (1176). No transfers of funds from 1176 to 1173 should be occurring without an ordinance or resolution allocating money in excess of the 50% requirement.
We have, in the past, become aware of some creative funding ideas for a few County Sheriff and Police Departments. It is our understanding if a cash donation is made to a law enforcement agency, then there will not be any formal court proceedings. These cash donations are being held by the agencies and not accounted for within the financial records of the unit.
We would draw your attention to IC 33-37-4 which sets the court costs which are required to be collected by the Clerk of the Circuit Court. These court costs are split between the State, County, and City and Town. At the county level twenty-seven percent (27%) of all court costs are deposited within the general fund of the local unit to be used within the operating budget of each unit. It would appear by accepting these donations in lieu of charging the court cost required, the local law enforcement agency would be decreasing the amount of revenue available to the unit as a whole.
We know of only two exceptions where the entire costs or a portion of the court costs may be waived, the Pretrial Diversion Fee and the Deferral Program Fee
Pretrial Diversion Fee
IC 33-37-4-1(c) states "Instead of the criminal costs fee prescribed by this section… except for the automated record keeping fee (IC 33-37-5-21), the clerk shall collect a pretrial diversion program fee if an agreement between the prosecuting attorney and the accused person entered into under IC 33-39-1-8 requires payment of those fees by the accused person." This statute goes on to define the amount and instructs the clerk to forward these fees to the auditor for deposit in a User Fee Fund for Pretrial Diversion. IC 33-39-1-8 requires the terms of this agreement to be recorded in an instrument signed by the person and the prosecuting attorney and to be filed in the court in which the charge is pending.
Deferral Program Fee
IC 33-37-4-2(e) states "Instead of the infraction or ordinance violation costs fee…the clerk shall collect a deferral program fee if an agreement between a prosecuting attorney…and the person charged with a violation entered into under IC 34-28-5-1 requires payment of those fees by the person charged with the violation." Actions may be deferred under IC 34-28-5-1 (h) if five (5) conditions are met. Number 4…"the defendant in the action agrees to pay court costs of twenty-five dollars ($25) to the clerk of court if the action involves a moving violation" and Number 5," the agreement is filed in the court in which the action is brought. When a defendant complies with the terms of an agreement filed under this subsection, the prosecuting attorney…shall request the court to dismiss the action. Upon receipt of a request to dismiss an action under this subsection the court shall dismiss the action…"
If your agency or department is settling charges in lieu of the statutory fees, we would draw your attention to the following code citings: IC 9-30-3-11(c) states "The court shall keep a full record of every case in which a person is charged with a traffic offense other than a nonmoving traffic offense…"
IC 9-30-3-11(e) states "Upon failure of a court officer to comply with subsection (c) the officer is liable on the officer's official bond for a civil penalty of one hundred dollars ($100) accruing to the state, which may be recovered, together with the costs of the suit, in a civil action brought by the attorney general in the name of the state on relation of the attorney general. Each failure by an officer constitutes a separate cause of action."
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Non-Sufficient Funds (NSF) Checks
NEPOTISM: GUIDANCE ON PL 135-2012, HEA 1005
Chapter 20.2. Nepotism
Sec. 1. This chapter applies to all units.
SBOA Audit Position: This chapter becomes effective July 1, 2012. Therefore, it should be in place and all "units" should be following this section on July 1, 2012.
A "unit," for the purpose of this chapter, is any county, city, town, or township in Indiana. All elected or appointed officials and all other employees within a "unit" of government are subject to this chapter. Superior Court Judges, Circuit Court Judges, County Prosecutors, county court employees, and county prosecutor office employees are not included in this definition of a "unit" as Superior Court Judges, Circuit Court Judges, and County Prosecutors are elected to a judicial district and not elected to a specific county. Therefore, they are not subject to the direction of the "elected office" of the county.
Sec. 2. An individual who is employed by a unit on July 1, 2012, is not subject to this chapter unless the individual has a break in employment with the unit. The following are not considered a break in employment with the unit:(1) The individual is absent from the workplace while on paid or unpaid leave, including vacation, sick, or family medical leave, or worker's compensation.
(2) The individual's employment with the unit is terminated followed by immediate reemployment by the unit, without loss of payroll time.
SBOA Audit Position: Any individual that is employed by a "unit" on July 1, 2012, is not subject to this chapter and any individual hired on or after July 2, 2012, is subject to this chapter.
At a minimum, "units" must define that an individual absent from the workplace while on paid or unpaid leave, including vacation, sick, or family medical leave, or worker's compensation is not considered a "break in service." If an individual's employment with the unit is terminated, followed by immediate reemployment by the "unit," without loss of payroll time, this is not considered a "break in Service." "Units" may adopt within their specific nepotism policy additional specific situations that could qualify as not being a "break in service."
Sec. 3. For purposes of this chapter, the performance of the duties of:
(1) a precinct election officer (as defined in IC 3-5-2-40.1) that are imposed by IC 3; or
(2) a volunteer firefighter;
is not considered employment by a unit.
SBOA Audit Position: If you are a precinct election officer or volunteer firefighter, for this chapter you are not considered to be an employee of the "unit" and, therefore, are not employed by the "unit" on July 1, 2012.
Sec. 4. As used in this chapter, "direct line of supervision" means an elected officer or employee who is in a position to affect the terms and conditions of another individual's employment, including making decisions about work assignments, compensation, grievances, advancement, or performance evaluation. The term does not include the responsibilities of the executive, legislative body, or fiscal body of a unit, as provided by law, to make decisions regarding salary ordinances, budgets, or personnel policies of the unit.SBOA Audit Position: The nepotism policy is designed to help prevent occurrences whereby relatives who are employees of the "unit" are in direct supervisory line with respect to each other. In order to guard against these practices the policy should prohibit "unit" full-time, part-time, or temporary employees who are relatives from being placed within the same direct line of supervision where one relative is responsible for directly supervising the job performance or work activity of another relative. In discussions with the author of the bill, it was determined that it was not the authors intent, to the extent possible, to prohibit two or more such relatives from working for the same "unit" or within the same department or office of a "unit." More specifically, "direct line of supervision" for the purpose of this section means the direct next person directly above the employee.
Sec. 5. As used in this chapter, "employed" means an individual who is employed by a unit on a full-time, part-time, temporary, intermittent, or hourly basis. The term does not include an individual who holds only an elected office. The term includes an individual who is a party to an employment contract with the unit.SBOA Audit Position: The term "employed" means an individual who is employed by a "unit" on a full-time, part-time, temporary, intermittent, or hourly basis. The term does not include an individual who holds only an elected office. The term includes an individual who is a party to an employment contract with the unit. Elected office for this chapter is any office that is elected within the "unit" of government and is not limited to the definition established in IC 3-5-9.
Sec. 6. As used in this chapter, "member of the fire department" means the fire chief or a firefighter appointed to the department.SBOA Audit Position: A member of the fire department means the fire chief or a firefighter appointed to the department.
Sec. 7. As used in this chapter, "member of the police department" means the police chief or a police officer appointed to the department.
SBOA Audit Position: A member of the police department means the police chief or a police officer appointed to the department.
Sec. 8. (a) As used in this chapter, "relative" means any of the following:
(1) A spouse.
(2) A parent or stepparent.
(3) A child or stepchild.
(4) A brother, sister, stepbrother, or stepsister.
(5) A niece or nephew.
(6) An aunt or uncle.
(7) A daughter-in-law or son-in-law.
(b) For purposes of this section, an adopted child of an individual is treated as a natural child of the individual.
(c) For purposes of this section, the terms "brother" and "sister" include a brother or sister by the half blood.
SBOA Audit Position: A relative of an employee is a spouse, parent, stepparent, child, stepchild, brother, sister, stepbrother, stepsister, niece, nephew, aunt, uncle, daughter-in-law, son-in-law, adopted child, half-brother, or half-sister.
Sec. 9. (a) This chapter establishes minimum requirements regarding employment of relatives. The legislative body of the unit shall adopt a policy that includes, at a minimum, the requirements set forth in this chapter. However, the policy may:(1) include requirements that are more stringent or detailed than any provision in this chapter; and
(2) apply to individuals who are exempted or excluded from the application of this chapter.
The unit may prohibit the employment of a relative that is not otherwise prohibited by this chapter.
(b) The annual report filed by a unit with the state board of accounts under IC 5-11-13-1 must include a statement by the executive of the unit stating whether the unit has implemented a policy under this chapter.
SBOA Audit Position: HEA 1005 establishes minimum requirements that must be adopted by the "unit." The "legislative body" of the "unit" has the ability to adopt additional requirements that are more stringent or detailed and that apply to individuals who are exempted or excluded from the application of the new law. A “unit” could fulfill the requirement of adopting a policy by merely adopting the minimum requirements set forth in HEA1005 (2012).”
A report under this chapter that is submitted after December 31, 2012, must include a statement by the executive (as defined in IC 36-1-2-5) of the “unit” regarding whether the “unit” has implemented a policy under IC 36-1-20.2 and IC 36-1-21. If a "unit" does not implement a policy under IC 36-1-20.2 and IC 36-1-21, the department of local government finance may not approve the "units" budget or any additional appropriations for the "unit" for the ensuing calendar year.
Sec. 10. Individuals who are relatives may not be employed by a unit in a position that results in one (1) relative being in the direct line of supervision of the other relative.
SBOA Audit Position: Any individual "employed" by a "unit" may not directly supervise a spouse, parent, stepparent, child, stepchild, brother, sister, stepbrother, stepsister, niece, nephew, aunt, uncle, daughter-in-law, son-in-law, adopted child, half brother or half sister.The term "employed" means an individual who is employed by a unit on a full-time, part-time, temporary, intermittent, or hourly basis. The term does not include an individual who holds only an “elected” office within the "unit." The term includes an individual who is a party to an employment contract with the "unit."
Sec. 11. (a) This section applies to an individual who:(1) is employed by a unit on the date the individual's relative begins serving a term of an elected office of the unit; and
(2) is not exempt from the application of this chapter under section 2 of this chapter.
(b) Unless a policy adopted under section 9 of this chapter provides otherwise, an individual may remain employed by a unit and maintain the individual's position or rank even if the individual's employment would violate section 10 of this chapter.
(c) Unless a policy adopted under section 9 of this chapter provides otherwise, an individual described in subsection (b) may not:
(1) be promoted to a position; or
(2) be promoted to a position that is not within the merit ranks, in the case of an individual who is a member of a merit police department or merit fire department;
if the new position would violate section 10 of this chapter.
SBOA Audit Position: Section 11 of this chapter applies to an individual who is employed by a "unit" on the date the individual's relative begins serving a term of an elected office of the "unit," and is not exempt from the application of this chapter under section 2 of this chapter. So, if an individual is employed by a "unit" on July 1, 2012, they are not subject to this section unless they have had a break in service between July 1, 2012, and the date of the application of this section.
Unless a policy adopted under section 9 of this chapter provides otherwise, section 11 allows an individual to remain employed by a "unit" and maintain the individual's position or rank even if the individual's employment allows a direct supervisor to be a relative as specified in section 8.
Unless a policy adopted under section 9 of this chapter provides otherwise, an individual whose direct supervisor is a relative may not be promoted to a position if the new position would place a relative as the direct supervisor to the individual being promoted. If the individual being promoted is a member of a merit police department or merit fire department, the individual may not be promoted if the new position would place a relative as the direct supervisor to the individual being promoted.
Sec. 12. This chapter does not abrogate or affect an employment contract with a unit that:
(1) an individual is a party to; and
(2) is in effect on the date the individual's relative begins serving a term of an elected office of the unit.
SBOA Audit Position: This chapter does not abolish, annul, repeal or affect an employment contract with a "unit" that an individual is a party to, and is in effect on the date the individual's relative begins serving a term of an “elected office” of the "unit."
Sec. 13. Unless the policy adopted under section 9 of this chapter provides otherwise, a sheriff's spouse may be employed as prison matron for the county under IC 36-8-10-5 and the spouse may be in the sheriff's direct line of supervision.SBOA Audit Position: Unless the "unit" adopts a policy under section 9 of this chapter that states otherwise, the sheriff's spouse may be employed as prison matron for the county under IC 36-8-10-5 and the spouse may be in the sheriff's direct line of supervision.
Sec. 14. Unless the policy adopted under section 9 of this chapter provides otherwise, an individual:(1) who served as coroner;
(2) who is currently ineligible to serve as coroner under Article 6, Section 2(b) of the Constitution of the State of Indiana;
(3) who, as coroner, received certification under IC 36-2-14-22.3; and
(4) whose successor in the office of coroner is a relative of the individual;
may be hired in the position of deputy coroner and be in the coroner's direct line of supervision.
SBOA Audit Position: Unless the "unit" adopts a policy under section 9 of this chapter that provides otherwise, an individual who served as coroner, who is currently ineligible to serve as coroner under Article 6, Section 2(b) of the Constitution of the State of Indiana, who, as coroner, received certification under IC 36-2-14-22.3; and whose successor in the office of coroner is a relative of the individual, may be hired in the position of deputy coroner and be in the coroner's direct line of supervision.
Sec. 15. If the township trustee's office is located in the township trustee's personal residence, unless the policy adopted under section 9 of this chapter provides otherwise the township trustee may hire only one (1) employee who is a relative. The employee:(1) may be hired to work only in the township trustee's office;
(2) may be in the township trustee's direct line of supervision; and
(3) may not receive total salary, benefits, and compensation that exceed five thousand dollars ($5,000) per year.
SBOA Audit Position: Unless the "unit" adopts a policy under section 9 of this chapter that disallows the following: In a township where the trustee's office is located in the township trustee's personal residence, the township trustee may hire only one (1) employee who is a relative. The employee may be hired to work only in the township trustee's office, may be in the township trustee's direct line of supervision and may not receive total salary, benefits, and compensation that exceed five thousand dollars ($5,000) per year. A policy adopted under section 9 may be more restrictive but may not increase total salary, benefits, and compensation allowed under this section.
Sec. 16. Each elected officer of the unit shall annually certify in writing, subject to the penalties for perjury, that the officer has not violated this chapter. An officer shall submit the certification to the executive of the unit not later than December 31 of each year.SBOA Audit Position: Each locally elected officer is required to certify under penalties of perjury to the "executive" of the "unit" before December 31 of each year that they have not violated the adopted nepotism policy. Depending on the "unit," the "executive" of the unit may be one of the following: president of the county commissioners, mayor, president of the town council, trustee, or chief executive officer.
Sec. 17. If the state board of accounts finds that a unit has not implemented a policy under this chapter, the state board of accounts shall forward the information to the department of local government finance.
SBOA Audit Position: Any report filed in accordance with IC 5-11-13-1 after December 31, 2012, must include a statement by the president of the board of county commissioners, for a county not having a consolidated city, mayor of a consolidated city for a county having a consolidated city, mayor, for a city, president of the town council for a town, trustee for a township of the "unit" regarding whether the "unit" has implemented a policy under IC 36-1-20.2 and IC 36-1-21. The SBOA will use these reports as the initial verification that a policy has been implemented for a "unit" of government. On February 1, the SBOA will notify the Department of Local Government Finance of any unit" not submitting this verification by the end of January of each year. The SBOA will also follow up with each "unit" that has not submitted their verification to determine the status. If a unit subsequently files the required report, the SBOA will notify the Department of Local Government Finance that they have received verification from the unit that a policy has been adopted and has been implemented. During the course of the annual or biennial audit, the SBOA will review the policies that have been implemented as the SBOA Field staff determines necessary. If it is found that the policy has not been implemented the report will contain an audit result and comment and forwarded to the Department of Local Government Finance.
Sec. 18. If a unit has not implemented a policy under this chapter, the department of local government finance may not approve:(1) the unit's budget; or
(2) any additional appropriations for the unit;
for the ensuing calendar year until the state board of accounts certifies to the department of local government finance that the unit is in compliance with this chapter.
SBOA Audit Position: The Department of Local Government Finance, not the SBOA, will make all determinations as to whether a budget or any additional appropriations shall be denied based on the requirements of this chapter. The SBOA will send to the Department of Local Government Finance a list of those "units" that have not certified in accordance with IC 5-11-13-1.1 based upon information obtained from the filing of the "units" yearend personnel report (currently known as the 100R) due to be submitted to the SBOA in January of each year. The SBOA will follow up with those that do not comply with this chapter and will notify the Department of Local Government Finance when the "unit" has complied.
SOURCE: IC 36-1-21; (12)HE1005.1.8. --> SECTION 8. IC 36-1-21 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]:
Chapter 21. Contracting With a Unit
Sec. 1. This chapter applies only to a unit.
SBOA Audit Position: This chapter becomes effective July 1, 2012. Therefore, it should be in place and all "units" should be following this section on July 1, 2012.
A "unit," for the purpose of this chapter, is any county, city, town, or township in Indiana. All elected or appointed officials and all other employees within a "unit" of government are subject to this chapter. Superior Court Judges, Circuit Court Judges, County Prosecutors, county court employees, and county prosecutor office employees are not included in this definition of a "unit" as Superior Court Judges, Circuit Court Judges, and County Prosecutors are elected to a judicial district and not elected to a specific county. Therefore, they are not subject to the direction of the "elected office" of the county.
Sec. 2. As used in this chapter, "elected official" means:(1) the executive or a member of the executive body of the unit;
(2) a member of the legislative body of the unit; or
(3) a member of the fiscal body of the unit.
SBOA Audit Position: The term "elected official" for the purpose of this chapter, depending on the "unit" of government refers to the executive, executive body, legislative body, or the fiscal body of the "unit" of government. Depending on the "unit," this would include county commissioners, county council members, mayors, city or town council members, township board members, and trustees of each "unit."
Sec. 3. (a) As used in this chapter, "relative" means any of the following:(1) A spouse.
(2) A parent or stepparent.
(3) A child or stepchild.
(4) A brother, sister, stepbrother, or stepsister.
(5) A niece or nephew.
(6) An aunt or uncle.
(7) A daughter-in-law or son-in-law.
(b) For purposes of this section, an adopted child of an individual is treated as a natural child of the individual.
(c) For purposes of this section, the terms "brother" and "sister" include a brother or sister by the half blood.
SBOA Audit Position: A “relative” of an employee is a spouse, parent, stepparent, child, stepchild, brother, sister, stepbrother, stepsister, niece, nephew, aunt, uncle, daughter-in-law, son-in-law, adopted child, half-brother, or half-sister.
Sec. 4. (a) This chapter establishes minimum requirements regarding contracting with a unit. The legislative body of the unit shall adopt a policy that includes, at a minimum, the requirements set forth in this chapter. However, the policy may:(1) include requirements that are more stringent or detailed than any provision in this chapter; and
(2) apply to individuals who are exempted or excluded from the application of this chapter.
The unit may prohibit or restrict an individual from entering into a contract with the unit that is not otherwise prohibited or restricted by this chapter.
(b) The annual report filed by a unit with the state board of accounts under IC 5-11-13-1 must include a statement by the executive of the unit stating whether the unit has implemented a policy under this chapter.
SBOA Audit Position: HEA 1005 establishes minimum requirements that must be adopted by the "unit." The "legislative body" of the "unit" has the ability to adopt additional requirements that are more stringent or detailed and that apply to individuals who are exempted or excluded from the application of the new law. A “unit” could fulfill the requirement of adopting a policy by merely adopting the minimum requirements set forth in HEA1005 (2012).”
A report under this chapter that is submitted after December 31, 2012, must include a statement by the executive (as defined in IC 36-1-2-5) of the unit regarding whether the “unit” has implemented a policy under IC 36-1-20.2 and IC 36-1-21. If a "unit" does not implement a policy under IC 36-1-20.2 and IC 36-1-21, the department of local government finance may not approve the "units" budget or any additional appropriations for the "unit" for the ensuing calendar year.
Sec. 5. (a) A unit may enter into a contract or renew a contract for the procurement of goods and services or a contract for public works with:(1) an individual who is a relative of an elected official; or
(2) a business entity that is wholly or partially owned by a relative of an elected official; only if the requirements of this section are satisfied and the elected official does not violate IC 35-44-1-3.
(b) A unit may enter into a contract or renew a contract with an individual or business entity described in subsection (a) if:
(1) the elected official files with the unit a full disclosure, which must:
(A) be in writing;
(B) describe the contract or purchase to be made by the unit;
(C) describe the relationship that the elected official has to the individual or business entity that contracts or purchases;
(D) be affirmed under penalty of perjury;
(E) be submitted to the legislative body of the unit and be accepted by the legislative body in a public meeting of the unit prior to final action on the contract or purchase; and
(F) be filed, not later than fifteen (15) days after final action on the contract or purchase, with:
(i) the state board of accounts; and
(ii) the clerk of the circuit court in the county where the unit takes final action on the contract or purchase;
(2) the appropriate agency of the unit:
(A) makes a certified statement that the contract amount or purchase price was the lowest amount or price bid or offered; or
(B) makes a certified statement of the reasons why the vendor or contractor was selected; and
(3) the unit satisfies any other requirements under IC 5-22 or IC 36-1-12.
(c) An elected official shall also comply with the disclosure provisions of IC 35-44-1-3, if applicable.
(d) This section does not affect the initial term of a contract in existence at the time the term of office of the elected official of the unit begins.
SBOA Audit Position: A “unit” may enter into a contract or renew a contract for the procurement of goods and services or a contract for public works with an individual who is a “relative” of an “elected official”. A “unit” may also enter into a contract or renew a contract for the procurement of goods and services or a contract for public works with a business entity that is wholly or partially owned by a “relative” of an “elected official” only if the requirements of this section are satisfied and the “elected official” does not violate IC 35-44-1-3.
A “unit” may enter into a contract or renew a contract with an individual or business entity described in the preceding paragraph if the “elected official” files with the unit a full disclosure, which must be in writing; describe the contract or purchase to be made by the “unit”; describe the relationship that the “elected official” has to the individual or business entity that contracts or purchases; be affirmed under penalty of perjury; be submitted to the legislative body of the “unit” and be accepted by the legislative body in a public meeting of the unit prior to final action on the contract or purchase; and be filed, not later than fifteen (15) days after final action on the contract or purchase, with the SBOA and the clerk of the circuit court in the county where the unit takes final action on the contract or purchase.
The appropriate agency of the “unit” must also make a certified statement in writing that the contract amount or purchase price was the lowest amount bid or offered or they must make a certified statement in writing of the reasons why the vendor or contractor was selected. The “unit” must also satisfy any other requirements under IC 5-22 or IC 36-1-12.
An “elected official” shall also comply with the disclosure provisions of IC 35-44-1-3, if applicable. This section does not affect the initial term of a contract in existence at the time the term of office of the “elected official” of the “unit” begins.
Sec. 6. Each elected officer of the unit shall annually certify in writing, subject to the penalties for perjury, that the officer is in compliance with this chapter. An officer shall submit the certification to the executive of the unit not later than December 31 of each year.SBOA Audit Position: Each locally elected officer is required to certify under penalties of perjury to the "executive" of the "unit" before December 31 of each year that they have not violated the requirements of this chapter. Depending on the "unit," the "executive" of the unit may be one of the following: president of the county commissioners, mayor, president of the town council, trustee, or chief executive officer.
Sec. 7. If the state board of accounts finds that a unit has not implemented a policy under this chapter, the state board of accounts shall forward the information to the department of local government finance.
SBOA Audit Position: Any report filed in accordance with IC 5-11-13-1 after December 31, 2012, must include a statement by the president of the board of county commissioners, for a county not having a consolidated city, mayor of a consolidated city for a county having a consolidated city, mayor, for a city, president of the town council for a town, trustee for a township of the "unit" regarding whether the "unit" has implemented a policy under IC 36-1-20.2 and IC 36-1-21. The SBOA will use these reports as the initial verification that a policy has been implemented for a "unit" of government. On February 1, the SBOA will notify the Department of Local Government Finance of any "unit" not submitting this verification by the end of January of each year. The SBOA will also follow up with each "unit" that has not submitted their verification to determine the status. If a unit subsequently files the required report, the SBOA will notify the Department of Local Government Finance that they have received verification from the unit that a policy has been adopted and has been implemented. During the course of the annual or biennial audit, the SBOA will review the policies that have been implemented as the SBOA Field staff determines necessary. If it is found that the policy has not been implemented the report will contain an audit result and comment and forwarded to the Department of Local Government Finance.
Sec. 8. If a unit has not implemented a policy under this chapter, the department of local government finance may not approve:(1) the unit's budget; or
(2) any additional appropriations for the unit; for the ensuing calendar year until the state board of accounts certifies to the department of local government finance that the unit has adopted a policy under this chapter.
SBOA Audit Position: The Department of Local Government Finance, not the SBOA, will make all determinations as to whether a budget or any additional appropriations shall be denied based on the requirements of this chapter. The SBOA will send to the Department of Local Government Finance a list of those "units" that have not certified in accordance with IC 5-11-13-1.1 based upon information obtained from the filing of the "units" year-end personnel report (currently known as the 100R) due to be submitted to the SBOA in January of each year. The SBOA will follow up with those that do not comply with this chapter and will notify the Department of Local Government Finance when the "unit" has complied.
The Department of Workforce Development should be contacted for all questions concerning the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996” and requirements that all employers must file a “new hire report” for each “newly hired” employee. Please consult the “Indiana New Hire Reporting Center” at (866) 879-0198 or www.in-newhire.com.
PROCESSING NON-SUFFICIENT FUNDS CHECKSAn extended effort shall be made by the treasurer to recover funds from checks returned by the depositories as uncollectible. During the process of collecting, the return checks shall be carried as a cash item and the tax duplicate so noted. DO NOT REMOVE OR DELETE THE PAYMENT ON THE TAX DUPLICATE.
The treasurer should immediately notify the maker or drawer of the returned check. We recommend you develop a form letter detailing the procedures and consequences of not making the returned check good. Contact by telephone is usually more expedient; however you should probably follow up your verbal conservation with the form letter. If the drawer comes in to pay make sure you only accept cash, certified check or money order. The amount necessary to redeem the returned check is:
1. The amount of the returned check
2. The actual charge by the financial institution
3. An Amount not to exceed twenty dollarsIn order to collect $3 above, the board of county commissioners will need to enact a Home Rule Ordinance establishing this returned check fee.
When it is determined that the return item is uncollectible, the treasurer shall attach all related documents to a regular claim to be presented to the board of county commissioners, with an explanation. Upon the commissioner’s approval of payment from the general fund, without appropriation, the county warrant is placed in the cash drawer to replace the uncollectable item and deposited as other checks. The amount tax shall be recharged on the proper duplicate by the auditor.
The amount reimbursed to the treasurer shall be deducted from the amount for apportionment in the appropriate taxing district in the next December settlement and returned to the county general fund. This amount should be shown on line 39 of the apportionment and settlement sheets as “reimbursements to county treasurer for bad checks.”
IC 26-2-7-5 allows counties to purse collection of these returned checks through the courts.
If the county chooses to purse collection by the procedures listed in IC 26-2-7, any amounts collected over the face amount of the check would be receipted to the General Fund.
Bank service charged may be paid to the treasurer along with the bad check at the time or reimbursement by the general fund or since money is already out of the bank account, the county auditor may post a disbursement in the general fund for the service fee. No check is written.
Software ProcessesIn 2015, we reviewed the procedures for processing non-sufficient funds checks (NSF) checks from several of the counties. We received the procedures from five counties that have four different software vendors: Low Associates, Thompson-Reuters, Guts, and Hamilton County’s Proper Tax system. The uniform guidelines prescribe a manual system for the processing of NSF checks. See above discussion. Counties now have software to handle their tax billing and collections and the purpose of the review was to determine if the alternative procedures could be approved in place of the prescribed manual procedures.
The uniform guidelines establish procedures that comply with the segregation of duties between the county auditor and the county treasurer. Placing the charge on the tax duplicates is the responsibility of the County Auditor. The County Treasurer bills and collects the tax payments. The uniform guidelines for NSF checks maintains this segregation by having only the auditor recharge tax duplicates for taxes, and charge for the fees and bank charges when the county is notified that a check that was deposited is return ed due to non-sufficient funds. The Treasurer receives the information from the bank and carries the amount as a reconciling item on the cash book.
In reviewing the automated system, it was found that the software allows the Treasurer to electronically reverse the payment which restores the tax due to the tax duplicate as if the payment had not been made. The history for the parcel number will show the reversal due to the NSF check. Each of the systems has different ways of tracking and documenting this reversal. Each office has established different procedures for tracking and processing the NSF payments. Even for the two counties reviewed that had the same software, the procedures were different between the counties. The complexity of the procedures and varying approaches to the process make it extremely difficult to approve a system based on automated features. The policies and procedures would need to be audited on site as they actually working within the county.
State Board of Accounts prescribes the forms to be used and the manner that those forms are to be used. We allow alternative forms to be approved as long as the information provided is sufficient to audit. See the April 2014 County Bulletin for approval of forms. We do not approve systems. It is the same for processing NSF checks. The uniform compliance guidelines (found in the manuals and the bulletins) outline the prescribed forms and the procedures for processing NSF checks. We will review the internal controls over the processing of the collection of taxes including the processing of NSF checks and if we find deficiencies in the internal controls over those processes we will notify you of any deficiencies.
It is very important that controls are in place to ensure that the payment is adequately documented and the record of that payment is retained. There must be an adequate audit trail for all transactions. It is also important to document the NSF payment and reversal of the payment properly. If the taxpayer can present a valid receipt for payment and the records do not show the NSF payment and reversal of the receipt, an employee could incorrectly conclude that the original receipt was not posted correctly. Under the manual process, the tax is recharged to show that the tax amount is still not paid and the date of the recharge is after the date of the receipt issued ensuring that the transaction history is well documented. There are other issues to consider such as, is it possible for one person is to be able to receive post, deposit and reconcile as well as post reversals of receipts and is there sufficient oversight of the process within the treasurer’s office and between the treasurer and auditor.
You will need to review the controls established in your county over the processing of NSF checks and ensure that adequate controls are in place to address any risks to the collection and proper posting of tax collections.
If a condition violating an ordinance of a municipal corporation exists on real property, employees or contractors of a municipal corporation may enter onto that property and take appropriate action to bring the property into compliance with the ordinance. However, before action to bring compliance may be taken, all persons holding a substantial interest in the property must be given a reasonable opportunity of a least ten (10) days but not more than sixty (60) days to bring the property into compliance. Continuous enforcement orders (as defined in IC 36-7-9-2) can be enforced and liens may be assessed without the need for additional notice. If the municipal corporation takes action to bring compliance, the expenses incurred by the municipal corporation to bring compliance constitute a lien against the property. The lien attaches when notice of the lien is recorded in the office of the county recorder in which the property is located. The lien is superior to all other liens except liens for taxes, in an amount that does not exceed:
1. ten thousand dollars ($10,000) for real property that:
A. contains one (1) or more occupied or unoccupied single or double family dwellings or the appurtenances or additions to those dwellings; or
B. is unimproved; or
2. twenty thousand dollars ($20,000) for all other real property.
The municipal corporation may issue a bill to the owner of the real property for the costs incurred by the municipal corporation in bringing the property into compliance with the ordinance, including administrative costs and removal costs. A bill is delinquent if the owner of the real property fails to pay the bill within thirty (30) days after the date of the issuance of the bill.
Whenever a municipal corporation determines it necessary, the officer charged with the collection of fees and penalties for the municipal corporation shall prepare:
1. a list of delinquent fees and penalties that are enforceable, including:
A. the name or names of the owner or owners of each lot or parcel of real property on which fees are delinquent;
B. a description of the premises, as shown on the records of the county auditor; and
C. the amount of the delinquent fees and the penalty; or
2. an instrument for each lot or parcel of real property on which the fees are delinquent.
The officer shall record a copy of each list or each instrument with the county recorder, who shall charge a fee for recording the list or instrument under the fee schedule established in IC 36-2-7-10.
The amount of a lien shall be placed on the tax duplicate by the auditor. The total amount, including any accrued interest, shall be collected in the same manner as delinquent taxes are collected and shall be disbursed to the general fund of the municipal corporation.
A fee is not enforceable as a lien against a subsequent owner of property unless the lien for the fee was recorded with the county recorder before conveyance to the subsequent owner. If the property is conveyed before the lien is recorded, the municipal corporation shall notify the person who owned the property at the time the fee became payable. The notice must inform the person that payment, including penalty fees for delinquencies, is due not later than fifteen (15) days after the date of the notice. If payment is not received within one hundred eighty (180) days after the date of the notice, the amount due may be considered a bad debt loss.
The municipal corporation shall release:
(1) liens filed with the county recorder after the recorded date of conveyance of the property; and
(2) delinquent fees incurred by the seller; upon receipt of a written demand from the purchaser or a representative of the title insurance company or the title insurance company's agent that issued a title insurance policy to the purchaser. The demand must state that the delinquent fees were not incurred by the purchaser as a user, lessee, or previous owner and that the purchaser has not been paid by the seller for the delinquent fees.
The county auditor shall remove the fees, penalties, and service charges that were not recorded before a recorded conveyance to a subsequent owner upon receipt of a copy of the written demand. (IC 36-1-6-2)
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Offices of the County Auditor and County Treasurer
OFFICIES OF COUNTY AUDITOR AND COUNTY TREASURER
Unlike many of the other political subdivisions, in counties there are two offices with combined procedures that provide fiscal administration of the county funds. Receipting, disbursing, and reconciling of county funds require both offices to work together to complete each process. There is a built-in segregation of duties between the two offices that must be maintained. We have noted in some counties, that there have been times when one office or the other may assume some of the responsibilities of the other office for any number of reasons, often if one official believes that the other official is not completing procedures, the first official will assume those procedures. However, that erosion of the segregation of duties would be a control deficiency that increases the risk to the accuracy of the financial records and safety of the cash and investments of the county. It could also be a material weakness in the controls over financial reporting for your county that could result in an audit finding.
The County Auditor is the fiscal officer for the county and maintains the official funds ledger. The financial information from the fund’s ledger is uploaded onto Gateway by the County Auditor’s office and becomes the financial statements that are audited. The Treasurer is the custodian of the county treasury and the investment officer for the county. The Treasurer maintains the daily Cash Book for all county funds as well as property taxes, excise taxes and other collections held by the Treasurer until settlement twice a year. The Treasurer will reconcile the cash and investments of the county with the bank and investment statements each month. The Treasurer also maintains a separate account of the county funds ledger that is reconciled to the County Auditor’s fund ledger monthly as a check and balance over the transactions to the funds ledger to ensure that the records are accurate and complete.
ReceiptingThere are many collection points within a county and these offices and collections must bring in their collections to the Auditor and Treasurer to be deposited into the county treasury and posted to the county funds. The Auditor’s office is also a collection point for the fees collected by the Auditor such as copy fees, sales disclosure fees, and endorsement fees. However, other than the fees to be collected by the Auditor’s office, the employees of the Auditor’s office should not be taking custody of any collections from other offices or departments. Each department will prepare a Report of Collections to remit their collections to the county treasury and posting to the county funds ledger. This process is accomplished in a series of steps.
Step 1: The department employee will turn in the Report of Collections to the Auditor’s office. This step starts the quietus process. The Report of Collections would be used to fill out the pending quietus which will show the amount of collections, and the funds and revenue lines to be posted.
Step 2: A copy of the pending quietus is given to the department employee to take with the actual collections to the Treasurer’ office.
Step 3: The Treasurer will count, receipt and accept the collection for deposit to the county treasury. Only when the Treasurer has accepted the collections for deposit and supplied the department with a receipt has the custody of the collections transferred from the department to the county treasury.
Step 4: The treasurer’s receipt is returned to the Auditor to confirm the amount receipted for deposit and the Auditor will then complete the quietus process. The final quietus will be given to the department. The Auditor will post the funds ledger from the quietus. The Treasurer will also post the receipt to the treasurer’s fund ledger. The department will have a copy of the quietus and the treasurer’s receipt to keep for their records.
It is possible to complete this process using electronic transmission of forms, instead of physically carrying the forms from office to office, however the process remains the same. The Auditor will provide the quietus and post the funds ledger. The Treasurer will provide a receipt and take the collections for deposit. If the Report of Collections and actual collected checks and cash are left with the Auditor’s office, responsibility for the collections stays with the department until the Treasurer has receipted the amount for deposit. If any money is missing from the collection, the department would be held accountable. If the Report of Collections and actual collections are sent to the Treasurer first, the proper funds and revenue lines needed may not be completed correctly and the funds ledger may not be posted properly. The receipting process requires the active participation of both offices performing their separate roles to properly record the receipts and safeguard the county assets.
This process is not used for the collections of property tax payments, which are made directly to the treasurer who will post them to the daily cash book as well as the tax duplicate in the billing software. Property tax collections are kept by the treasurer until settlement when they will be receipted in by quietus to the county funds for disbursement. However, if another payment is due to the county that is not made at a department, the payment would follow the same procedure as outlined for departments above. Procedures and internal controls must be in place over electronic payments such as ACH payments to ensure that those payments are properly posted. ACH payments are directly deposited into the county treasury, so the posting must be completed timely to allow the two offices to reconcile the funds ledger and the Treasurer to reconcile the cash book to the bank.
Disbursing
All claims for payment from the County Treasury should be made by submitting accounts payable vouchers to the Auditor’s office. The Auditor will audit the claims to determine that the claim is sufficiently itemized, and proper for payment. The claims are submitted to the governing board, usually the County Commissioners, for approval. It is possible that some claims are approved by other boards, such as the Redevelopment Commission or Tourism Commission. Once the claims are approved, checks are prepared to pay those claims. The checks should contain both the signature of the Auditor and Treasurer. Often the signatures are placed electronically on the checks by the software, however there should be a control in place that prevents any checks from being signed that have not been approved for payment by the Treasurer. The Treasurer does not audit the claims; however, the Treasurer does review the totals to be paid and verifies that the amount in the bank is sufficient to cover those checks. The same controls should be in place for electronic payments. The Auditor’s office should not be able to authorize an electronic payment from the bank. The Treasurer should be the only official who can authorize any type of withdrawal from the county bank accounts. On the other hand, the Treasurer should not be able to initiate a warrant and affix the Auditor’s signature to a check. Nor should there be any electronic payments that don’t have a supporting claim audited by the Auditor’s office. These duties should be segregated and there should be controls in place to prevent either office from initiating, signing and issuing a payment from one office only.
Reconciling
Because both offices are integrated in the receipting and disbursing process, it is necessary that the two offices reconcile their records on a regular basis. Each month, the Auditor and Treasurer should compare the funds ledger maintained by each office and reconcile any differences between the two ledgers. Each fund’s receipts, disbursements and ending balance should agree between the two offices. Any variances between the two reports should be researched and any posting errors corrected.
There are actions taken by either side that could affect the funds ledger recorded by that office which may not have been reported to the other office, such as voided checks, transfers, and ACH deposits.
By completing the reconcilement, any errors or omissions can be detected and corrected to ensure that the funds ledger is accurate and reconciled with the bank. The funds ledger amount in total is carried on the cash book along with the property tax and other tax collections and the cash book is reconciled by the Treasurer to the bank each month as well.
Segregation of Duties
It takes both offices working together to account for and safeguard the cash and investments of the county. Each office has specific duties, and those duties need to continue to be segregated between the offices. When the segregation of duties is not maintained, it increases the risk that errors may occur and not be detected or corrected or that fraudulent activity may not be prevented as well. In order to function properly, the two offices need to communicate and work together well. The segregation of duties serves an important role in the accounting processes of the county.
OFFICIAL BONDS
I. Minimum Bond Amounts
A. $30,000 per $1,000,000 of Receipts.
The bond amount must be at least $30,000, but not greater than $300,000 unless approved by the fiscal body. IC 5-4-1-18(d)(1), (2).
1. The following individuals identified in IC 5-4-1-18(d):
- City controllers
- City clerk-treasurers
- Town clerk treasurers
- Barret Law fund custodians
- County treasurers
- County sheriffs
- Circuit court clerks
- Township trustees
- Conservancy district financial clerks
2. Solid waste management district controller. IC 5-4-1-18(f).
B. $30,000.
County auditors must file bonds in amounts of not less than $30,000 as fixed by the fiscal body of the county. IC 5-4-1-18(d).C. $15,000.
1. The following individuals identified in IC 5-4-1-18(e)(1):
- City judges
- City clerks
- Town judges
- County recorder
- County surveyor
- County coroner
- County assessor
2. Any employee directed to file an individual bond by the fiscal body of a city, town, or county. IC 5-4-1-18(a)(5).
D. $5,000.
Employees or contractors of a city, town, county, or township “whose official duties include receiving, processing, depositing, disbursing, or otherwise having access to funds that belong to the federal government, the state, a political subdivision, or another governmental entity.” IC 5-4-1-18(a)(7), (e)(2).E. The SBOA may increase minimum bond coverage amounts if an examination report finds malfeasance, misfeasance, or nonfeasance that resulted in the misappropriation of, diversion of, or inability to account for public funds. IC 5-4-1-18(j), (k), (l).
II. Bond Terms
A. One Year. After January 1, 2016, all bonds must have a one year term. IC 5-4-1-18(m)(1). A continuation certificate is not sufficient. Consecutive yearly bonds must provide separate coverage for each year. IC 5-4-1-18(m)(2).
We will not take audit exception to a new calendar year bond term greater than one year if the current bond expires before December 31, 2015. For example, if the current bond expires on September 30, 2015, we will not take exception to a new bond term from October 1, 2015 to December 31, 2016, even though it is greater than one year. Similarly, we will not take audit exception to a new calendar year bond term less than one year if the current bond expires after December 31, 2015, but before December 31, 2016. For example, if the current bond expires on March 31, 2016, we will not take exception to a new bond term from April 1, 2016 to December 31, 2016, even though it is less than one year.
B. Term of Office. Term bonds issued after January 1, 2016, are not allowable pursuant to IC 5-4-1-18(m)(1). We recommend that all current term bonds be converted to one year bonds starting January 1, 2016, to comply with the spirit of the amended statute and to reduce the risk of financial exposure to the local unit.
III. Other Types of Bonds
A. Blanket Bonds. Blanket bonds are allowable if they are authorized by ordinance, endorsed to cover faithful performance, and include aggregate coverage sufficient to cover all officers, employees, and contractors required to be bonded. IC 5-4-1-18(b).
B. Crime Insurance Policies. Crime insurance policies providing additional coverage for criminal acts or omissions committed by officers, employees, or contractors are permitted if they are authorized by ordinance or resolution. IC 5-4-1-18(c). Crime insurance policies do not take the place of bonds.
IV. Aggregate Liability
The aggregate liability for a surety or insurer for a policy year is the sum of the amounts specified in the bonds issued by the surety or insurer for that policy year. IC 5-4-1-18(m)(2). For example, if a clerk-treasurer has four consecutive yearly bonds for $30,000, the liability of the insurer is $30,000 for each of the four years.
V. Commencement Date
After January 1, 2016, all bonds must commence on one of the following:
1. The first day of the calendar year;
2. The first day of the fiscal year of the political subdivision or governmental unit; or
3. The first day of the individual’s service in the office or employment position for which a bond is required. IC 5-4-1-18(m)(1).VI. Payee
All official bonds shall be made payable to the State of Indiana. IC 5-4-1-10. The State is considered an additional named insured on all crime insurance policies. IC 5-4-1-18(c).
VII. Recording
A. All bonds must be filed with the county recorder (officials and employees of the county recorder must file with the clerk of the circuit court). Beginning July 1, 2015, copies of the bonds must also be filed with the fiscal officer of the political subdivision. IC 5-4-1-5.1(b).
B. The fiscal officer of the political subdivision must submit copies of all bonds to the State Board of Accounts electronically via Gateway with their Annual Financial Report. IC 5-4-1-5.1(e).
C. Bonds must be filed with the county recorder and the fiscal officer of the political subdivision within ten days of their issuance. IC 5-4-1-5.1(c).
D. Current bonds already filed with the county recorder are not required to be re-filed with the fiscal officer of the political subdivision. For example, a bond obtained in January 2015, and properly filed with the county recorder does not need to be filed with the fiscal officer of the political subdivision. However, when the January 2015 bond expires and a new bond is obtained in January 2016, it must be filed with both the county recorder and fiscal officer of the political subdivision.
Bonds for Employees and Contractors
Indiana Code 5-4-1-18(a)(7) states that bonds are required for individuals “(A) who are employees or contractors of a city, town, county, or township; and (B) whose official duties include receiving, processing, depositing, disbursing, or otherwise having access to funds that belong to the federal government, the state, a political subdivision, or another governmental entity.”
The political subdivision must determine who must be bonded under the statute. The term “official duties” is not defined. It is our position that “official duties” may include duties set forth in a job description, duties that are customary or routinely performed, or duties that are assigned but not frequently performed. For example, if an office has eight employees who routinely accept payments at the clerk’s counter, then all eight employees must be bonded. If an employee is assigned to accept certain registration fees but only receives funds once every other year, then that employee must be bonded.
There is no dollar threshold or de minimis exception in the statute. Thus, it is our position that all employees and contractors whose official duties include receiving, processing, depositing, disbursing, or otherwise having access to public funds—regardless of the dollar amount—are required to be bonded. For example, if an office employee who, as part of her official duties, receives $5.00 per year for microfilm copies, then she is required to be bonded.
IX. Bonds for Other Public Officials
Bonds for public officials are required in statutes other than IC 5-4-1-18. For example, redevelopment commissioners, library treasurers, police commissioners, and deputy marshals must all be bonded. For these officials, we take the following position:
A. The minimum amount of the bond must be the amount stated in the statute at issue. If no amount is stated, we recommend a minimum of $5,000, unless the position mirrors one of the offices listed in IC 5-4-1-18(a)(1)-(6). For example, we recommend a minimum bond of $15,000 for a library treasurer.
B. If the statute is silent as to the term of bond required, we recommend an annual bond. We will not take audit exception to a term bond or a continuation bond as long as the minimum amount of coverage is provided each year.
C. The bond type may be individual or blanket, as long as the blanket bond is (1) authorized by ordinance, (2) endorsed to include faithful performance, and (3) includes aggregate coverage sufficient to provide coverage amounts specified for all individuals required to be bonded. See IC 5-4-1-18(b).
X. Bonds for School Treasurers
A. School Treasurers. School treasurers, deputy treasurers, and “any individual whose official duties include receiving, processing, depositing, disbursing, or otherwise having access to funds that belong to a school corporation or the governing body of a school corporation” must be bonded. IC 20-26-4-5(a).
1. The bond amount is determined by the school corporation’s governing body. IC 20-26-4-5(a).
2. The term of the bond is one year commencing on July 1. The bond may be an individual bond, or a blanket bond if (1) the blanket bond is endorsed “to cover the faithful performance of all employees and individuals acting on behalf of the governing body or the governing body’s school corporation,” and (2) “includes aggregate coverage sufficient to provide coverage amounts specified for each individual required” to be bonded. IC 20-26-4-5(b).
3. The governing body must determine who must be bonded under the statute. The term “official duties” is not defined. It is our position that “official duties” may include duties set forth in a job description, duties that are customary or routinely performed, or duties that are assigned but not frequently performed. For example, cafeteria cashiers, teachers who routinely collect lunch money from students, and employees who collect textbook rental fees must be bonded. The statute does not require the individual to be an employee of the school corporation. So, for example, parents volunteering in the school lunchroom or at an extracurricular sporting event must be bonded if their official volunteer duties include receiving public funds such as lunch money or admission fees.
4. There is no dollar threshold or de minimis exception in the statute. Thus, it is our position that all individuals whose official duties include receiving, processing, depositing, disbursing, or otherwise having access to public funds—regardless of the dollar amount—are required to be bonded. For example, a teacher who collects $1.20 per day for milk from each student in her kindergarten class is required to be bonded.5. There is no filing requirement in the statute. We recommend that all bonds be filed with and kept by the governing body.
B. Extracurricular Treasurers. Extracurricular account treasurers must be bonded if they handle funds in excess of $300 during the school year. IC 20-41-1-6(a).
1. The bond amount is determined by the superintendent and principal of the school approximating the total “anticipated funds that will come into the possession of the treasurer at any one time during the regular school year.” IC 20-41-1-6(a). If school lunch or textbook rental fees are handled by an extracurricular treasurer, then the governing body must set the amount of the bond “sufficient to protect the account for all funds coming into the hands of the treasurer of the account.” IC 20-41-2-6(b).
2. The term of the bond is not specified, but an extracurricular treasurer must be designated “immediately upon the opening of the school term ….” Thus, we recommend an annual bond commencing on July 1.
3. The bond may be an individual bond or a blanket position bond for all extracurricular account treasurers. IC 20-41-1-6(b).
4. The bond must be filed with the trustee or board of school trustees. IC 20-41-1-6(a).
Statute on the opioid litigation and settlements can be found in IC 4-6-15. These funds are settlement funds paid to the state from pharmaceutical companies and should not be confused with federal or state grants. These funds will not be reported on the SEFA and should be maintained in funds that have been created:
1237 – Opioid Restricted
1238 – Opioid Unrestricted
The restricted portion is controlled by the settlement agreement from the courts while the unrestricted portion may be spent in the same manner as money in the general fund. At this time the reporting requirements have yet to be known but as information becomes available, we will be sure to disseminate.
Please refer to the Attorney General’s website ( https://www.in.gov/attorneygeneral/about-the- office/complex-litigation/opioid-settlement/ ) for information on distribution totals, settlement agreements, and approved opioid abatement (remediation) uses.
The Indiana State Board of Accounts is of the audit position both sides of a check are part of the original record. Therefore, both sides of an "optical imaged check" should be available for public inspection and audit. The optical imaged checks should be produced or at least be retrievable. Encoding, printing and bank certification should exist to ascertain that the back side of a check is part of a particular check, i.e. endorsements should belong to the front side of a check presented.
Indiana Code 5-15-5.1-10(a) states in part: “Each . . . local government shall: (1) Make and preserve records containing adequate and proper documentation of . . . essential transactions of the . . . local government to protect the legal and financial rights of the government. . . “
An optical image copy of a check would be treated as an original as long as the foregoing was followed.
Furthermore, Indiana Code 26-2-8-111 states in part:
"(a) If a law requires that certain records be retained, that requirement is met by retaining an electronic record of the information in the record that:
(1) accurately reflects the information set forth in the record after it was first generated in its final form as an electronic record or otherwise; and
(2) remains accessible for later reference. . .
(e) If a law requires retention of a check, that requirement is satisfied by retention of an electronic record of the information on the front and back of the check in accordance with subsection (a)." [Emphasis added]
I.C. 36-10-3-20 concerns establishment and use of a special nonreverting capital fund.
I.C. 36-10-3-22 relates to charging fees for park services and authorized establishing either/or a special nonreverting operating fund or a special nonreverting capital fund.The unit’s fiscal body shall designate the fund or funds into which the unit’s fiscal officer (or county treasurer) shall deposit fees from golf courses, swimming pools, skating rinks, or other major facilities requiring major expenditures for management and maintenance. Money received from fees other than from major facilities or received from the sale of surplus property shall be deposited by the unit’s fiscal officer (or county treasurer) either in the special nonreverting operating fund or in the nonreverting capital fund, as directed by the board. However, if neither fund has been established, money received from fees or from the sale of surplus property shall be deposited in the unit’s general fund. Money from either special fund may be disbursed only on approved claims allowed and signed by the president and secretary of the board.”
Official Attorney General Opinion No. 54 of 1965 states there is no expressed authorization by the legislature to the park board to expend the activity fees in the special nonreverting fund without prior appropriation, and such money cannot be disbursed without a prior appropriation ordinance having been adopted according to law by the city council, county council or town council.
Legislative intent was for the park special nonreverting operating fund to pay for park and recreation activities that were to be conducted on a self-supporting basis. (For instance, such activities as horse shoe tournaments, swimming meets, little league, arts and crafts, and other similar activities.) The special nonreverting capital fund was to be funded from an item within the park and recreation board’s annual budget with an appropriation made for “these specific purposes”. It was never suggested such activities should be undertaken in an effort to relieve local tax levies.
Notwithstanding apparent legislative intent, with the passage of the aforementioned statutes along with the authority provided in I.C. 36-1-3, Home Rule, we feel the county council has the authority to create by ordinance as many funds as they feel necessary to operate their unit. When nonreverting funds, capital or operating, are established properly pursuant to the statutes mentioned, no audit exceptions will be taken by the State Board of Accounts.
There are three situations that should be considered when creating the nonreverting funds.
(1) On diverting revenues from the Park Operating Fund to the new nonreverting funds, this will reduce the revenue available for funding operating fund expenditures.
(2) All expenditures from the nonreverting operating and/or nonreverting capital funds must have been authorized by the enabling ordinance(s) and prior appropriation(s) must be available. The appropriations need not go before the Department of Local Government Finance (DLGF) but do need approval by “the board or the unit’s fiscal body” for the nonreverting operating fund and the “unit’s fiscal body” for the nonreverting capital fund.
(3) If the county appeals to DLGF for an excessive levy, the DLGF may insist that any balance or balances of such nonreverting funds be transferred to the park operating fund to any consideration of relief to the operating fund.
OLD OUTSTANDING WARRANTS (IC 5-11-10.5)
All warrants outstanding and unpaid for a period of two or more years, as of the last day of December of each year are void. This law further provides that the treasurer, not later than March 1, shall prepare a list in triplicate of all such warrants, showing the date of issue of each warrant, the fund upon which it was drawn, the name of the payee, the amount of the warrant, and the total amount of the warrants for each fund. The original copy of such list shall be filed with the county board of finance, the duplicate with the county auditor and the triplicate copy retained by the treasurer. Upon receipt of such list, the county auditor shall issue an application to pay, receipt and quietus for such warrants, in the same manner as for any other receipt, and the warrants shall be removed by the treasurer from the outstanding list.
If a warrant or check is presented for payment that has been cancelled, the holder shall file a claim with the county auditor. If the auditor finds the claim in order he may issue another warrant. However, warrants outstanding for more than seven (7) years are void and no recovery is possible.
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Parks and Recreation - Nonreverting Capital Fund and Nonreverting Operating Fund
Payments
Employees - Due to Compensable Injury
Public Notice Publications - Penalty
To Bank for Employee Compensation
Per Diem for Area Plan Commission Members and Boards of Zoning Appeals
Petition - Application of the Public Question
Petition and Remonstrance Process VS Petition for a Public Question Process
Plats and Subdivisions - Recording
Political and Personal Expenditures Prohibited
Precious Metal Dealer Registration
Spreadsheet Software Utilization
Probation
Prosecutor
Expenses for Attending Attorney General Conferences
Number of Employees and Salaries
Public Works
Advertising for Receiving Bids
Detailed Specifications Not Required in Notice to Bidders
Financing Public Work Projects less than $2,000,000
Public Works Contracts less than $150,000
Retainage of Public Works Contracts in Excess of $200,000 and Performance Bond
Penalties
Child Restraint System Penalties
Property
PARKS AND RECREATION – NONREVERTING CAPITAL FUND AND NONREVERTING OPERATING FUND
I.C. 36-10-3-20 concerns establishment and use of a special nonreverting capital fund and states:
“(a) Upon the request of the board, the fiscal body of the unit may establish, by ordinance, a special nonreverting capital fund for the purposes of acquiring land or making specific capital improvements. The fiscal body may include in the board’s annual budget an item and an appropriation for these specific purposes.
(b) Money placed in the nonreverting capital fund may not be withdrawn except for the purposes for which the fund was created, unless the fiscal body repeals the ordinance. The fiscal body may not repeal the ordinance under suspension of the rules.”
I.C. 36-10-3-22 relates to charging fees for park services and authorized establishing either/or a special nonreverting operating fund or a special nonreverting capital fund and states:
“(a) Park and recreation facilities and programs shall be made available to the public free of charge as far as possible. However, if it is necessary in order to provide a particular activity, the board may charge a reasonable fee.
(b) The unit’s fiscal body may establish by ordinance, upon request of the board:
(1) a special nonreverting operating fund for park purposes from which expenditures may be made as provided by ordinance, either by appropriation by the board or by the unit’s fiscal body; or
(2) a special nonreverting capital fund for the purpose of acquiring land or making specific capital improvements from which expenditures may be made by appropriation by the unit’s fiscal body.
The unit’s fiscal body shall designate the fund or funds into which the unit’s fiscal officer (or county treasurer) shall deposit fees from golf courses, swimming pools, skating rinks, or other major facilities requiring major expenditures for management and maintenance. Money received from fees other than from major facilities or received from the sale of surplus property shall be deposited by the unit’s fiscal officer (or county treasurer) either in the special nonreverting operating fund or in the nonreverting capital fund, as directed by the board. However, if neither fund has been established, money received from fees or from the sale of surplus property shall be deposited in the unit’s general fund. Money from either special fund may be disbursed only on approved claims allowed and signed by the president and secretary of the board.”
Official Attorney General Opinion No. 54 of 1965 states there is no expressed authorization by the legislature to the park board to expend the activity fees in the special nonreverting fund without prior appropriation, and such money cannot be disbursed without a prior appropriation ordinance having been adopted according to law by the city council, county council or town council.
Legislative intent was for the park special nonreverting operating fund to pay for park and recreation activities that were to be conducted on a self-supporting basis. (For instance, such activities as horse shoe tournaments, swimming meets, little league, arts and crafts, and other similar activities.) The special nonreverting capital fund was to be funded from an item within the park and recreation board’s annual budget with an appropriation made for “these specific purposes”. It was never suggested such activities should be undertaken in an effort to relieve local tax levies.
Notwithstanding apparent legislative intent, with the passage of the aforementioned statutes along with the authority provided in I.C. 36-1-3, Home Rule, we feel the county council has the authority to create by ordinance as many funds as they feel necessary to operate their unit. When nonreverting funds, capital or operating, are established properly pursuant to the statutes mentioned, no audit exceptions will be taken by the State Board of Accounts.
PAYMENT OF EMPLOYEES DURING ABSENCE FROM WORK ON ACCOUNT OF COMPENSABLE INJURY
Official Opinion of the Indiana Attorney General, No. 134 of 1945, established guidelines to be observed in paying school teachers in instances where an absence from work was because of circumstances under which the teacher received compensation benefits through the provisions of the Workmen’s Compensation Act. In that opinion, it was clarified that a teacher who receives benefits under the Workmen’s Compensation Act while absent from work would be entitled to receive from the school corporation only the difference between the amount received under the Workmen’s Compensation Act and the full benefits provided by law allowing teachers to be absent without loss of pay for a stated number of days; that the laws considered in the opinion do not authorize double payment for the same injury.
Official Opinion No. 17 of 1975 supports the prior opinion in that it concludes that while a teacher is entitled to each earned sick leave day for actual sickness or injury, in the event a teacher also receives workmen’s compensation payments during the same time frame as receiving sick leave, an adjustment must be made so that the combined earned sick leave days and workmen’s compensation payments do not exceed that teacher’s normal salary for the same time frame.
Applying the same rule to county employees we must conclude that, when absent, an employee would be entitled to receive only the difference between the amount received under the Workmen’s Compensation Act and the full benefits otherwise provided by any local board regulation authorizing sick leave. Double payment for the same time frame or overlapping payment of compensation on account of the same injury is not authorized for a public employee under Indiana law.
PAYMENT FOR PUBLICATION OF PUBLIC NOTICES - PENALTY FOR VIOLATION
Whenever publication of notice, report, or statement of any kind is required and a county is liable for the cost of that publication, the executive may not make or pay for publication in more than one newspaper, unless publication in two newspapers is required. A person who violates this section commits a Class C infraction. (IC 36-2-2-25)
PAYMENT TO BANK OF COMPENSATION DUE EMPLOYEESIC 5-10-9-2 provides that an employee of a municipal corporation may make a written request that any compensation due the employee from the municipal corporation be deposited to the employee’s account in a bank or trust company. Upon receipt of request, the officer responsible for making the disbursements (County Auditor) may, instead of drawing a check to the requesting employee: (1) Draw a check in favor of the bank or trust company named in the request for the credit of the employee; or (2) in the event more than one employee of the same municipal corporation designates the same bank or trust company, draw a single check in favor of the bank or trust company for the total amount due the employees and transmit the check to the bank or trust company identifying each employee and the amount to be deposited in each employee’s account.
IC 5-10-9-3, provides that payment by a municipal corporation of a check properly endorsed and drawn in accordance with IC 5-10-9 constitutes full payment for the amount due the employee.
The amount to be sent to the bank is the “net” pay for the employee. A copy of each report sent to a bank or trust company must be retained on file with the corresponding payroll claim in the auditor’s office for reference and audit purpose. When a “direct deposit” system is used in the payroll process, the balance of the payroll process would not change except that each employee not receiving a payroll check must be provided a non-negotiable statement of earnings and deductions (Deposit Advice) for each payroll period. Recap sheets for each depository, if applicable, should be maintained indicating direct deposit. Individual wage assignments should be kept on file to support direct deposits.
PER DIEM PAYMENTS TO MEMBERS OF AREA PLAN COMMISSION AND BOARDS OF ZONING APPEALS
Notwithstanding IC 36-2-7-2, a member of a county executive, a member of a county fiscal body, a county surveyor, or an appointee of a county surveyor who is also a member of a plan commission is entitled to receive the following:
(1) A sum for mileage for each mile necessarily traveled while performing the duties of a plan commission member in an amount that is equal to the amount paid to state employees for mileage.
(2) A sum for compensation for services as a member of the plan commission in an amount that the county fiscal body may determine for attendance at meetings of the plan commission.
Since the laws governing Boards of Zoning Appeals fails to address the subject of compensation of board members, we would not be opposed to a county adopting a Home Rule ordinance in accordance with IC 36-1-3 to allow such compensation. As long as those members who are elected officials are excluded, we would not take exception to paying per diem to other members of this board.
PETITION FOR THE APPLICATION OF THE PUBLIC QUESTION
The public referendum process is established under IC 6-1.1-20-3.5 and 3.6. We would like to clarify what the statute says about the costs of a special election that may be requested under IC 6-1.1-20-3.6 to put the local public question on the ballot for specific controlled projects.
If the petitioners under IC 6-1.1-20-3.5 are successful and the governing body wants to move forward with the controlled project the county auditor will be provided the necessary documentation. The county auditor then has the duty to certify the local public question to the county election board. IC 6-1.1-20-3.6 states that after certification, the public question shall be placed on the ballot at the next primary election, general election, or municipal election in which all voters of the political subdivision are entitled to vote.
However, if a primary election, general election or municipal election will not be held in the 6 month period after the county auditor certifies the public question, the public question shall be placed on the ballot at a special election to be held:
(1) On the first Tuesday after the first Monday in May
(2) November
after the public question is certified.
The fiscal body of the political subdivision that requests the special election shall pay the costs of holding the special elections.
PETITION AND REMONSTRANCE PROCESS VS PETITION FOR A PUBLIC QUESTION PROCESS
Both the petition and remonstrance process and the petition for a public question process are applicable for a controlled project. The deciding factor of which is to be used is based upon the cost of the project. The cost guidelines can be found under IC 6-1.1-20-3.1 for the petition and remonstrance and IC 6-1.1-20-3.5 for the public question. The State Board of Accounts prescribes the forms for both processes as follows:
Petition and Remonstrance phase I under IC 6-1.1-20-3.1 forms 201K-201N
Petition and Remonstrance phase II under IC 6-1.1-20-3.2 forms 201-201J, 201O
Public Question under IC 6-1.1-20-3.5 forms 202K-202N
These forms are to be used solely for these processes and not for other types of petitions. Per IC 6-1.1-20-3.1(b)(5) and IC 6-1.1-20-3.5(b)(5) the county voter registration office is to issue these forms to the petitioners upon their request. Please contact our office for copies of these forms and any questions on their implementation.
IC 36-1-8-3 states:
“(a) The fiscal body of a political subdivision may establish a petty cash fund for any of its offices in a like manner to that prescribed by section 2 of this chapter.
(b) The custodian of a petty cash fund shall use it to pay small or emergency items of operating expense. A receipt shall be taken for each expenditure and made from the fund.
(c) The custodian of a petty cash fund shall periodically file a voucher, with all original receipts totaling the cash claimed expended being attached to it, so that the fund can be reimbursed for expenditures from it. Reimbursements must be approved and made in the same manner as is required for other expenditures of the political subdivision.”
A claim for expenditures must be prepared and filed for reimbursement to the petty cash fund. Such reimbursement shall be approved, allowed and paid in the same manner as other claims. If desired, for safeguarding funds and providing proper records, the petty cash fund may be maintained and accounted for through a separate bank account under jurisdiction of the responsible officer or employee with bank issued check forms used for all payments from the account. If this method is desired, it should have prior approval by ordinance of the fiscal body of the political subdivision.
Except as provided in section 9 of this chapter, the auditor, or, if authorized by county ordinance, the surveyor of each county shall maintain a plat of each civil township of the county the auditor or surveyor serves. The plats shall be divided in such a manner that they clearly exhibit the ownership and assessed value of each parcel of real property. The plats must be in the form and contain the information prescribed by the department of local government finance. The plats shall be kept current. (IC 6-1.1-5-1)
Indiana Code Section 6-1.1-35-13 authorizes the department of local government finance to prepare
a plat if an official fails to deliver a plat to the appropriate officer or board. They may appoint a special representative to prepare the plat. The board shall certify the expenses incurred to the township or county which is served by the official who failed to perform his duty. The township or county shall pay the amount of the expenses to the treasurer of state within thirty (30) days after the department's certification and the township or county may collect amounts which it pays under the section from the official who failed to perform his duty.PLATS AND SUBDIVISIONS - RECORDING
IC 36-7-3-2 requires the recording of plats of subdivisions of lots or lands situated outside corporate limits of any city or town with the county recorder prior to the sale of any lots. Acknowledgement of the maker and certificate of acknowledgement by the officer taking same is required to be recorded with the plat. The correctness of the plat, as shown by the certificate of a licensed land surveyor must be attached to the plat.
In counties having created a plan commission the plat must be approved by such commission before filing as required by IC 36-7-4; in other counties the plat must be submitted for approval to the county executive (IC 36-7-3-2(d)).
Unless the certificate of approval is attached thereto, the county recorder is prohibited from recording the plat. (IC 36-7-3-2(d)).
POLITICAL AND PERSONAL EXPENDITURES PROHIBITED
Governmental funds and assets should not be used in a manner unrelated to the functions and purposes of the governmental unit. This prohibition includes expenditures for political purposes, contributions to political campaigns, directly or indirectly which are not authorized by law. Public funds used for political or personal reasons shall be the personal obligation of the responsible official or employee.
PRECIOUS METAL DEALER REGISTRATION
In regard to the registration requirement by precious metal dealers to local law enforcement agencies IC 24-4-19-13 (c) states:
“A precious metal dealer must submit a registration to a law enforcement agency one (1) time every twelve (12) months for each permanent place of business owned or leased by the precious metal
dealer in Indiana as follows:(1) If the permanent place of business is located in a municipality that maintains a law enforcement agency, the registration shall be submitted to the law enforcement agency of the municipality.
(2) If the permanent place of business is not located in a municipality that maintains a law enforcement agency, the registration shall be submitted to the sheriff of the county in which the permanent place of business is located.
A registration submitted to a law enforcement agency under this subsection must include the name of the precious metal dealer, the address of the permanent place of business, any other information required by the law enforcement agency, and a registration fee of fifty dollars ($50). However, if a precious metals dealer registers more than one (1) permanent place of business with the same law enforcement agency, the precious metal dealer must pay a registration fee of fifty dollars ($50) to register all the permanent
places of business with the law enforcement agency.”It is our position that all local law enforcement should be depositing this fee into their unit’s general fund.
PRESCRIBED FORMS
State Board of Accounts prescribes forms to be used within the political subdivisions. This process is outlined in more detail within Chapter 1 of the Accounting and Uniform Compliance Guidelines. Although we prescribe the forms, copies must be purchased from a public print vendor or other source. The prescribed forms are not available on our website, but a sample copy can be obtained from the County Directors. Many software programs can create exact replicas of the prescribed forms and may be used as the prescribed form. Any form that is not an exact replica must be approved.
For any form that is to be approved, the county can start using the form as soon as they have it ready. A log of these forms must be kept indicating the form it replaced and the effective date of the new form. At the beginning of an engagement, this log must be presented to the field examiners. The field examiners will review the form, how it is used and determine if it contains the same information as the prescribed form and works in the manner prescribed.
To be approved, new forms must be in place during at least one engagement and must not be an element of a finding or result and comment that is responsible or partially responsible for an exception found during an engagement. Once a form is approved during an audit it is the counties responsibility to place on the new form the year of installation in the upper right corner. This reference should be similar to “Installed in [Name of Unit], (20xx).
PRESCRIBED FORMS - SPREADSHEET SOFTWARE UTILIZATION TO GENERATE EXACT REPLICAS OF PRESCRIBED FORMS
The Indiana State Board of Accounts prescribes the forms to be utilized in accounting systems, but does not specify the source from which the prescribed forms must be obtained. With the current capabilities of spreadsheet software, the use of spreadsheet software may, in some instances, be an acceptable method of generating exact replicas of prescribed forms.
Spreadsheet may not be utilized to replace functionality that should be an integral function of a computerized accounting system or replace a controlled document for the entry of accounting information. Examples of this type of form include forms that are required to be either prenumbered by an outside printing supplier or numbered by the accounting system with sufficient controls to prevent unauthorized generation of the form or duplication of control numbers on the forms. These forms include receipts, checks, purchase orders and material receiving documents. In addition, spreadsheets should not be utilized to generate control documents such as ledgers, receipt registers, check registers, outstanding check list and similar reports. Under no circumstances is it acceptable to implement an electronic interface from spreadsheet software directly to the information files of an accounting system without being processed through the same edit and control features as are utilized to ensure the accuracy of information entered manually into the accounting system.
Exact replicas of prescribed forms generated by spreadsheet software may be utilized for forms incidental to the computerized accounting system. Examples of these forms include travel vouchers, attendance records, and fixed asset records.
If you have any questions on the utilization of spreadsheet software to replicate a specific prescribed form, please contact Counties@sboa.in.gov.
IC 33-39-1-8 provides that pretrial diversion fees must be paid by the program participant directly to the clerk. It is, therefore, improper for the prosecutor to collect the fees even if the fees are then forwarded by the prosecutor to the clerk. IC 33-39-1-8 is silent as to whether monies under a pretrial diversion program need to be appropriated. The Department of Local Government Finance has consistently been of the opinion, with which we concur, that appropriations should exist for all items unless expressly exempted by statute. Therefore, our audit position would be that expenditures from the pretrial diversion fund would be permissible only after an appropriation has been provided in the manner prescribed by law. Furthermore, we are of the audit opinion that claims should be filed, advertised and allowed in the same manner as other county claims pursuant to IC 36-2-6 for expenditures from the pretrial diversion fund.
IC 33-37-8-5(b) makes pretrial diversion fees a part of the County User Fee Fund. IC 33-37-8-6 requires claims to be submitted to the county council by the prosecuting attorney in order for pretrial diversion fees to be appropriated to that program or fund.
If the prosecuting attorney requests such appropriations in a separate pretrial diversion fund, then IC 33-37-8-7(b) states “Funds appropriated as described in subsection (a) may be used by the office of the prosecuting attorney for any purpose specified in the appropriation ordinance adopted by the fiscal body”.
3% ADMINISTRATIVE FEE ON PROBATION USER’S FEE COLLECTIONS
IC 35-38-2-1 states, “If a clerk of a court collects a probation user’s fee, the clerk: (1) may keep not more than 3% of the fee to defray the administrative costs of collecting the fee and shall deposit any fee kept in the clerk’s record perpetuation fund.”
In our opinion, if probation user fees are withheld from bonds that the clerk is entitles to the 3% just as well as if they had come directly to your office to pay.
ADULT PROBATION ADMINISTRATIVE FUND
In 2003 Senate Bill 506 under non code section 16, and later in 2011 under the new section IC 36-2-16.5-6, both required a more restricted use for the $100 administrative fee collected under IC 35-38-2-1(f) and IC 35-38-2-1(g). IC 35-38-2-1 allows the supplemental adult probation services fund to be used for supplementing probation services and supplementing the salaries of probation officers. IC 36-2-16.5-6 requires that the administrative fee be first used to pay for the salary increases required under IC 36-2-16.5 and IC 11-13-1-8. The amount of these fees collected that exceed the amount required to pay for these salary increases may then be used for supplementing probation services.
In a memorandum dated August 4, 2003, the State Board of Accounts instructed that these fees be accounted for in a separate fund due to the more restrictive expenditure requirement. Under the new chart of accounts this fund is entitled Adult probation Administrative.
JUVENILE PROBATION ADMINISTRATIVE FUNDIn 2003 Senate Bill 506 under non code section 16, and later in 2011 under the new section IC 36-2-16.5-6, both required a more restricted use for the $100 administrative fee collected under IC 31-40-2-1(a)(3). IC 31-40-2-2 requires the receipts in the supplemental juvenile probation services fund to be used for supplementing probation services to juveniles and supplementing the salaries of juvenile probation officers. IC 36-2-16.5-6 requires that the administrative fee first be used to pay for the salary increases required under IC 36-2-16.5 and IC 11-13-1-8. The amount of these fees collected that exceed the amount required to pay for these salary increases may then be used for supplementing probation services.
In a memorandum dated August 4, 2003, the State Board of Accounts instructed that these fees be accounted for in a separate fund due to the more restrictive expenditure requirement. Under the new chart of accounts this fund is entitled Juvenile Probation Administrative.
Prosecuting Attorneys desiring to maintain a Bad Check Account would need to establish a policy and proper internal controls over the accounting and physical security of those funds and submit a written request to the State Board of Accounts. The request should indicate whether all, or a portion of, the service charge on a bad check is to be retained by the prosecuting attorney. If a service fee is retained by the prosecuting attorney it should be pursuant to enactment of a "Home Rule" ordinance that has been enacted in accordance with IC 36-1-3 concerning the imposition of costs and service charges, and a copy of the Ordinance should accompany the written request for approval from this office. The State Board of Accounts will review the ordinance and the proposed program with corresponding comments concerning what the audit position will be in a letter of response to the inquiring prosecutor. The policy and internal controls would be reviewed during the next regular audit and any deficiencies identified would be communicated to the responsible official and need to be corrected.
If the prosecuting attorney assesses and retains a service charge for processing bad checks, that fee or service charge becomes the property of the county and must be submitted to and receipted by, the County Auditor for deposit into the county general fund. Funds so received by the county may be expended by the prosecuting attorney only by following the budget appropriation and claim procedure. Funds collected through imposition of a bad check service charge may not be disbursed from the bad check account for the direct payment of prosecuting attorney office expenses. Such funds may only become available for this purpose upon appropriation by the county council from the county general fund into a line item in the prosecuting attorney's budget.
CLAIMS AND ALLOWANCES – PROSECUTING ATTORNEYAll expenses of the prosecuting attorney's office shall be paid upon properly itemized claims filed with the county auditor and allowed by the board of county commissioners, in the same manner as claims of other county offices and departments.
All salaries and wages shall be paid upon filing of a Payroll Schedule and Voucher, General Form No. 99. Mileage payable to the prosecuting attorney, deputies and assistants in the performance of their duties shall be itemized on Mileage Claim, General Form No. 101.
Claims of vendors for furnishing supplies and equipment should be filed on County Form No. 17 and each such claim should be fully itemized or have attached thereto itemized invoices to support the amount claimed. The practice of purchasing items for the office and being reimbursed therefore is discouraged.
PROSECUTING ATTORNEY - EXPENSE FOR ATTENDING ATTORNEY GENERAL CONFERENCES
Reimbursement for expenses for the prosecuting attorney for attending conferences called by the attorney general is governed by IC 33-39-6-1(e) which states in part: “The expenses necessarily incurred by a prosecuting attorney in attending any such conference, including the actual expense of transportation to and from the place where such conference is held, together with his meals and lodging, shall be paid from the general fund of the county upon the presentation of an itemized and verified claim, filed as required by law, and by warrant issued by the county auditor.”
Mileage reimbursement would be at the then current rate. If two (2) or more prosecuting attorneys ride together, mileage should only be paid to the person furnishing the automobile. Reimbursement for hotel or motel room would be actual single occupancy room rate. If a spouse or some other person who is not a prosecuting attorney accompanies the prosecuting attorney a statement showing the single occupancy room rate should accompany the bill for lodging. If two (2) or more prosecuting attorneys share the same room each person would only be entitled to reimbursement for his (her) proportionate share of the room charges. Charges for telephone, (other than actual business) pay movies, alcoholic beverages, etc., are the personal expense of the prosecuting attorney and should not be included in the reimbursement by the county.
Reimbursement for meals would be actual expenses unless a flat rate allowance for meals has previously been established as a part of the county personnel policy.
IC 33-39-6-1 makes no mention of this expense being paid without an appropriation. Therefore, it would appear that an appropriation should be obtained prior to payment being made.
DISCLOSURE STATEMENT – PROSECUTING ATTORNEY
If the prosecuting attorney received payment from the county for use of a building owned by the prosecuting attorney, or for the use of equipment owned by the prosecuting attorney, a disclosure statement may need to be filed with the Clerk of the Circuit Court and the State Board of Accounts in accordance with IC 35-44.1-1-4. A review of the disclosure statute is suggested to determine whether other activities of the prosecuting attorney require the filing of a disclosure statement.
DISPOSAL OF PROPERTY – PROSECUTING ATTORNEY
When property of the prosecuting attorney's office is disposed of by trade, sale or abandonment, the board of county commissioners should be consulted for their prior approval. It is suggested that the minutes of the meeting of the board of county commissioners reflect the decision and approval given the prosecuting attorney for the disposal of specific property.
NUMBER OF EMPLOYEES AND SALARIES – PROSECUTING ATTORNEYPursuant to IC 36-2-5-4, each prosecuting attorney on or before July 2 of each year, for salaries and wages to be paid in the ensuing budget year, shall file with the county auditor County Form No. 144, titled "Statement of Salaries and Wages Proposed to be Paid Officers and Employees," setting out the number of employees and the rate of salary or wage to be paid each such employee from county funds. The salaries to be paid the prosecuting attorney and chief deputy prosecuting attorney by the State of Indiana shall not be included; however, if additional salary is to be paid by the county, such salary must be included.
The county council shall, at its annual budget meeting consider and act on the statements filed by all county commissioners, and shall adopt a separate ordinance fixing the salaries of officers, deputies, assistants and employees for each office.
OFFICE SPACE – PROSECUTING ATTORNEY
IC 33-39-6-8(d) contains the following provision concerning office space:
"…If a board of county commissioners does not furnish the prosecuting attorney with office space the county council shall appropriate a reasonable amount per year to the prosecuting attorney for office space." (Our Emphasis)
This law was originally enacted in 1959, and since the enactment of that law, it has been generally construed that the underscored wording permits the county council to appropriate a reasonable amount of money per year to the prosecuting attorney for office space, where an office is not furnished by the board of county commissioners. If the prosecuting attorney's office is located in a law office rented or owned by the prosecuting attorney or the law firm in which the prosecuting attorney is a member or partner, this will not preclude payment of the allowance to the prosecuting attorney or to the owner of the building; however, the amount of the allowance shall not exceed that fixed by the county council when the county budget is considered. The amount should be clearly set out in the budget estimate under an item titled "Rental of Office Space."
The term "office space" may include within that definition the cost of the space occupied by the prosecuting attorney's office, including utilities and equipment owned by the law office, but shall not include salaries expenses which should be paid directly by the county. For telephone expenses to be paid by the county, the telephone should be listed in the name of "Prosecuting Attorney" in the same manner as other county offices and departments.
PAYMENT OF SALARIES AND WAGES – PROSECUTING ATTORNEYAll officers and employees of the prosecuting attorney's office for which salaries and wages have been fixed by the county council shall be paid on payrolls submitted by the prosecuting attorney in the same manner as other county officers and employees. In those counties where a person is employed on a part-time basis in the prosecuting attorney's office and part-time in a law firm or in the private practice of the prosecuting attorney, the portion of the salary payable by the county shall be paid directly to the employee by the county. The law firm or the prosecuting attorney should not be reimbursed for personal services of any employee whose salaries and wages are payable from county funds.
LEGAL ADVERTISING FOR RECEIVING BIDS
Whenever bids are to be received, a legal notice shall be published two (2) times, at least one (1) week apart, with the second publication made at least seven (7) days before the date the bids will be received. (IC 5-3-1-2)
This requirement includes bids received for all supplies, goods, machinery and equipment to be purchased or leased, and public works.
DETAILED SPECIFICATIONS NOT REQUIRED IN NOTICE TO BIDDERS
When advertising for bids, it is not necessary to list in detail the specifications of the job, material, or project under consideration. It is sufficient for the ad to state specifications may be inspected in the county office.
The advertising must be in accordance with IC 5-3-1-2 (e) and the specifications must be clear, and subject to bidder's inspection. The advertisement should list the items which are to be purchased or contracted for, but need not include the entire listing of component items.
Counties are prohibited from requiring any bidder to submit his bid earlier than the time of the meeting at which the bids are to be opened. (IC 5-22 and IC 36-1-12-4)
The meeting for receiving bids must be open to the public. All bids received must be made available to the public.
CANCELLATION OR REJECTION OF BIDS
IC 5-22-18-2 states that when the purchasing agency determines it is in the best interests of the governmental body:
1. A solicitation may be canceled; or
2. Offers may be rejected; in whole or in part as specified in the solicitation. IC 5-22-7-2 requires this statement to be included in an invitation for bids.
The reason for a cancellation of a solicitation or rejection of offers must be made part of the contract file.
COMMON CONSTRUCTION WAGE ACT – PUBLIC WORKS CONTRACTS
The Indiana Department of Labor is in charge of administering the Common Construction Wage Act which establishes criteria for establishing the wage rates to be paid to construction workers on Indiana’s public works. The Department of Labor has provided a synopsis of this Act which may be found at www.in.gov/dol/files/Guide_to_CCW_5-30-08.pdf
FINANCING PUBLIC WORKS PROJECTS OF NOT MORE THAN TWO MILLION DOLLARS ($2,000,000)
IC 36-9-41 allows counties to borrow the money necessary to finance a public work project under two million dollars ($2,000,000) from a financial institution in Indiana by executing a negotiable note under IC 36-9-41-4. A county shall provide notice of its determination to issue the note under IC 5-3-1. Money borrowed is chargeable against the county's constitutional debt limitation.
A county borrowing money under IC 36-9-41-3 shall execute and deliver to the financial institution the negotiable note of the county for the sum borrowed. The note must bear interest, with both principal and interest payable in equal or approximately equal installments on January 1 and July 1 each year over a period not exceeding six (10) years.
The first installment of principal and interest on a note is due on the next January 1 or July 1 following the first tax collection for which it is possible for the county town to levy a tax.
The county shall appropriate an amount for and levy a tax each year sufficient to pay the obligation under the note according to its terms.
An obligation of a county or town under the note is a valid and binding obligation of the county notwithstanding any tax limitation, debt limitation, bonding limitation, borrowing limitation, or other statute to the contrary.
IC 36-9-41-6 through IC 36-9-41-8 set out the provisions for taxpayers to file a petition against the issuance of such note.PUBLIC WORKS PROJECTS COSTING LESS THAN $150,000
We will not take audit exception to expenditures for projects under $150,000 that maintain the existing condition of the asset or restore the asset to normal operating efficiency and which might qualify as routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property under IC 36-1 12-4.9. Included in our audit position could be expenditures for the replacement and repair of elevators, flooring, ceiling, tile, bathroom fixtures, windows, sidewalks, parking lots, and roofs which would not be part of another public works project. Additionally, the costs associated with reconfiguring the interior of offices (additions/deletions of wiring for electrical outlets, lighting, data lines, and telephones, cubicle walls, etc) and reconfiguring offices with movable walls which would not be part of another public works project, could be considered. Not included would be additions to the structure, reconfiguring offices with permanent walls, change of purpose of an area that involves substantial addition or removal of plumbing or gas lines (adding a kitchen area or bathroom), addition of elevator shafts, parking lots and other like changes to the interior or exterior that involve changes to the structural integrity of the building or improvements to real property, etc. or expenditures for which a determination has been made of the applicability of other provisions of the Public Works Law, IC 36-1-12-1 et seq. Our audit position is with the assumption a determination has been made by the governmental unit in a public meeting of the applicability of IC 36-1-12-4.9 to the proposed public works project
RETAINAGE ON PUBLIC CONTRACTS IN EXCESS OF $200,000 AND PERFORMANCE BOND
Pursuant to IC 36-1-12-14, it is required that when public works contracts are awarded by a county for certain public works or improvements and such contracts exceed $200,000, such contracts shall include provisions for the retainage of portions of payments by the board (defined to mean the board or officer of a political subdivision or agency having the power to award contracts for public work) to contractors, by contractors to subcontractors, and for the payment of subcontractors. This statute applies to the construction, alteration, or repair of all buildings or other improvements the cost of which is paid from public funds or from special assessments imposed and levied on real estate, land and lots benefited thereby but shall not include highways, roads, streets, alleys, bridges and appurtenant structures situated on streets, alleys and dedicated highway right-of way.
At the discretion of the contractor, the retainage shall be held by the board or shall be placed in an escrow account with a bank, savings and loan institution, or the state as escrow agent. The escrow agent shall select by mutual agreement between the board and contractor or contractor and subcontractor under a written agreement among the bank or savings and loan institution and (1) the board and the contractor; or (2) the subcontractor and the contractor.
Where an escrow agent is selected, it is required that at the time any retainage is withheld the amount of the retainage shall be placed in an escrow account with the escrow agent, to be promptly invested by the escrow agent in its discretion. The escrowed principal and the income from the investments shall be held by the escrow agent until receipt of a notice releasing the funds in accordance with the terms of the law and the agreement.
When a bank or savings and loan institution is selected as escrow agent, the amount of the retainage withheld shall be paid by warrant to the escrow agent and, when paid, shall be treated in the same manner as any other payment on the contract, with the escrow agent being required to deposit, invest and otherwise account for the escrowed principal and interest, in accordance with the law and the terms of the agreement. The escrow account will not be carried on the records of the county.
Statute provides that the escrow agent shall be compensated for its service as the parties may agree in an amount comparable with fees being charged for the handling of escrow accounts of similar size and duration. The fee shall be paid from the escrowed income of the escrowed account.
The escrow agreement must contain the provisions that the escrow agent shall invest all principal in obligations selected by the escrow agent, that the escrow agent shall hold the principle and income until receipt of notice and follow the notices provision of release, and the statutory escrow agent fee provisions.
To determine the amount of retainage to be withheld the board shall:
1. Withhold no more than ten percent (10%) nor less than six percent (6%) of the dollar value of all work satisfactorily completed until the public work is fifty percent (50%) completed and nothing further after that; or
2. Withhold no more than five percent (5%) nor less than three percent (3%) of the dollar value of all work satisfactorily completed until the public work is substantially completed.
If upon substantial completion of the public work minor items remain uncompleted within sixty-one (61) days after the date of substantial completion, an amount equal to two hundred percent (200%) of the value of each item as determined by the architect-engineer shall be withheld until the item is completed.
If the contractor chooses to have the retainage held by the board, then the board is not required to pay interest on the amounts of retainage it holds. However, such amounts held by the board will be carried on the records of the county as an agency fund.
Required warranties begin not later than the date of substantial completion.
Subject to IC 36-1-12-11 and IC 36-1-12-12 and subject to the value of minor items being withheld as stated above, the board or escrow agent shall pay the contractor within 61 days after the date of substantial completion.The contractor shall furnish the board with a performance bond equal to the contract price. If acceptable to the board, the performance bond may provide for incremental bonding in the form of multiple or chronological bonds that, when taken as a whole, equal the contract price.
The performance bond must specify that:
(1) a modification, omission, or addition to the terms and conditions of the public work contract, plans, specifications, drawings, or profile;
(2) a defect in the public work contract; or
(3) a defect in the proceedings preliminary to the letting and awarding of the public work contract; does not discharge the surety.
The surety on the performance bond may not be released until one (1) year after the date of the board's final settlement with the contractor.
However, if the public work contract is less than $250,000, the board may way the performance bond requirement and accept from the contractor an irrevocable letter of credit. The letter of credit must be for an equivalent amount from an Indiana financial institution approved by the Department of Financial Institutions. Subsections (e) through (g) of IC 36-1-12-14 apply.
CHILD RESTRAINT SYSTEM PENALTIES
All Class D infraction collections for violations of the child restraint laws under IC 9-19-11 are to be accounted for separately as child restraint system fees. Such fees are to be remitted by the clerk to the county auditor on a monthly basis.
MONEY RECEIVED FOR DAMAGES TO PROPERTY
IC 6-1.1-18-7 states:” Notwithstanding the other provisions of this chapter, the fiscal officer of a political subdivision may appropriate funds receives from a person (as defined in IC 6-1.1-1-10) if:
(1) the funds are received as a result of damage to property of the political subdivision; and
(2) the funds are appropriated for the purpose of repairing or replacing the damaged property. However, this section applies only if the funds are in fact expended to repair or replace the property within the twelve (12) month period after they are received.”
The State Board of Accounts is of the audit position these funds are considered appropriated at the time the governing body allows the claims for payment of the expense of repair or replacement.
The board of county commissioners, is the purchasing agent for the county and all general laws related to purchases should be observed.
The board of county commissioners is also responsible for maintenance of the court house in which the prosecuting attorney's office is located and, if any repairs or remodeling of the office are needed, the matter should be submitted to the board of county commissioners.
In some of the larger counties it is the practice to award annual contracts for certain equipment and care should be taken to see that equipment for the office is purchased in the same manner as is applicable to other county offices and departments. Also, it is suggested that when equipment is purchased, whether or not a contract is required to be awarded, that the purchase be approved by the board of county commissioners to avoid any question which might arise when the claim is submitted for allowance and payment.
ADVANCE PURCHASE ORDERS
Processing accounts payable requires certain procedures. IC 5-11-10-1.6 lists the requirements for paying a claim by a political subdivision. Based on that statute, the State Board of Accounts Uniform Guidance had provided that payments could not be made in advance of the receipt of goods. The reason for that guidance was that a signature of the person receiving goods must be part of the claim’s process. There was a provision for payment in advance of the governing body’s approval in certain circumstance but not in advance of the receipt of the goods or services. 2023 legislation change IC 5-11-10-1.6 to allow for payment of claims in advance of the receipt of goods or services with specific requirements for that purchase.
IC 5-11-10-1.6(d)(3) provides the first exception for counties to the requirement that the receipt of goods and services be certified before payment. When there is a public works project and the county chooses to do so, they can make advance payments to the contractors for the specific purpose of allowing the contractor to purchase supplies and materials needed to complete the county’s project. To do this, the solicitation for bids for the public works project must include certain items. Those items include the statement:
- that the county will make advance payments to contractors to enable contractors to purchase materials,
- any limitations on the amount of advance payment that will be made,
- requirements for documentation relating to making advance payments to contractors for materials, and
- any other information about advance payment for materials the political subdivision considers useful to contractors that make offers.
IC 5-11-10-1.6(d)(4) provides the second exception for counties, which allows for prepayment related to advance payments on the receipts of goods and services (public purchases). The fiscal body must authorize making advance payments and must do all the following:
- track prepayments by defining the prepayment on a purchase order,
- create a prepayment invoice that is associated with the purchase order, and
- require insurance or a surety bond in the amount of the prepayment if the amount of the prepayment is more than one hundred fifty thousand dollars ($150,000).
For prepayments associated with public works or public purchases, IC 5-11-10-1.6(e) provides that no more than 50% of the entire cost of the contract can be prepaid with up to a limit of $2,000,000.
The reason SBOA guidance states that payments should not be made prior to the receipt of goods or services, except as authorized by statute, is to protect the county from paying for goods and services that they never receive. In allowing for prepayment for materials, the county needs to include requirements that substantiate that the materials were purchased for the counties project only and were used on that project. Prepayment of materials increases the counties risk for loss of funds, which can be mitigated with proper procedures and internal controls.
The county also needs to make sure the goods and services it pays for are being received. If your council approves making a prepayment, internal controls need to be established with procedures and policies that govern how the county will track from the prepayment to the receipt of goods and any final payment due. This will require the use of purchase orders and invoices for the prepayment. The purchase needs to be tracked before the final payment is made, there should be a certification that goods and services were received.
As an example of this process, assume a county is considering the purchase a dump truck, but the manufacturer won’t even start building the dump truck without half of the cost being paid up front. The highway department asks the council for approval to do a prepayment on this purchase. An invoice for the total cost with the required prepayment is attached to a purchase order that is approved by the governing board during the claims process. The warrant for the prepayment is issued and a check sent to the vendor for the approved prepayment amount. When the truck is received a claim is completed for the final payment, and a copy of the purchase order and final invoice is attached to the claim to show the prepaid amount. The final payment is then made.
To aid in the tracking of prepayments we have created a new prescribed form, 98P called a Purchase Order Prepayment. The new prescribed form does not replace the form 98 Purchase Order, but the new form is to be used when a prepayment is made to track from prepayment to receipt of goods and any final payment due. The top half of the form 98P is the same as the form 98, which lists: the quantity, number of units, description, unit price and total amount of the order. The bottom half of the form is what is new for prepayments, it lists; prepaid amount, prepaid check number, prepaid check date, invoice number, and total amount remaining of the order. It also has a space to document that a surety bond has been issued or is not required. The prepayments section also lists the Indiana Code for further requirements, if needed. The form 98P can be obtained through your local print vendor, please contact us with any questions regarding the form.
- Q
- R
Record Requests
Record Retention
Public Nature of Records and Meetings
Recorder
Redacting of Social Security Numbers
Redevelopment Commission Funds
There have been several questions from county officials on transferring funds to the Rainy Day Fund. Specifically, there have been questions received on which funds may transfer monies to the Rainy Day fund. The term ‘dedicated fund’ has been used throughout the state and the local officials have asked for a meaning of the term as it relates to transfers to Rainy Day. Our audit position is as follows:
Dedicated fund is a generic term not defined in statute, but is generally construed to mean a fund set aside for a specific purpose. For purposes of transferring to the Rainy Day fund, we are limiting our position to those dedicated funds that result from statutory authority but do not include home rule funds or clearing accounts. Debt service fund are already specifically prohibited from transfer in the Rainy Day statute as so are not considered here either.
In order to determine whether or not monies in a fund may be transferred to the Rainy Day fund, an analysis would need to be made of the authority creating the fund in light of IC 36-1-8.5-1. It would be up to the county to show State Board of Accounts how money transferred to the Rainy Day fund met the criteria for transfer. However, we can provide general guidance based on our position.
Tax levy and LOIT funds have different criteria than other statutorily created funds in regard to the transfer to the Rainy Day fund. The key words to tax levy and LOIT funds are: whenever the purposes of the tax levy have been fulfilled and unencumbered balance remains in the fund and unless a statute provides that it be transferred otherwise. In general it will be up to the county to define when the purposes have been fulfilled. There are certain funds that are raised by levy that have very specific language that the balance may not be transferred, such as the assessment fund. For those funds, we would take exception if there were a transfer to Rainy Day fund. Also, for some cumulative funds such as those found in IC 6-1.1-41-1, balances in these funds may only be transferred to the General fund per IC 6-1.1-41-15 and again we would take exception if they were transferred to the Rainy Day fund.
For other funds, the statute allows for transfer to Rainy Day fund if the funding source is specified in the Rainy Day ordinance and the transfer is not otherwise prohibited by law. It is our general position that if the statute provides definitive restrictive language on the use of the funds or that the balance is not to be transferred, whether Rainy Day fund is specifically included or not, that the monies are not to be transferred to Rainy Day fund. For example, for MVH funds IC 8-14-1-4 provides that for counties, any surplus existing in the funds at the end of the year shall thereafter continue as a part of the highway funds of the county and shall be budgeted and used as already provided in this chapter. For Local Road and Street funds, IC 8-14-2-5 defines the exclusive use of the funds. Transfers from MVH and LRS (or any other fund with similar statutory restrictions) to Rainy Day fund would be prohibited and we would take exception if monies were so transferred. When there is not such restrictive language or prohibition of transfer, we will consider the county attorney’s written opinion as to why the other fund would not fall under the category of prohibited and be transferred.
IC 5-11-9-4 provides that records be maintained showing which hours were worked each day by officers and employees of the county.
This requirement can be met by preparing an endorsement on the payroll claim form showing the general work schedule and listing the specific employees who worked hours different from that general work schedule. Each elected officer or head of each department would be responsible for preparing such endorsement on the payroll claim for their office or department.
If an employee is employed by more than one (1) public agency or in more than one (1) position within that public agency, it is also essential that an accurate record or hours worked by maintained. In these instances we recommend that each department records reflect hours worked in both positions.
An employee who works for more than (1) governmental unit should not be paid by more than one governmental unit for the same period of time worked. Such employee should use his/her accumulated leave time from one governmental unit while serving the other governmental unit when there is an overlap in a work schedule. For example, a county employee, who is also a member of a school board, attends a school board meeting during his/her work shift. The employee would be expected to use his/her time accumulated at the county while attending such meeting. IC 5-11-9-4 requires such officers and employees to maintain records showing which hours were worked each day.
An employee of a county who fills two separate positions (deputy auditor and part-time janitor, for example) would be required by IC 5-11-9-4 to maintain a record of hours worked. This requirement can be met by indicating the number of hours worked on each Employee’s Service Record General Form No. 99 A and/or General Form No. 99B.
A local governmental entity recently became a victim to ransomware. Ransomware is a type of malicious software designed to block access to a computer system until a sum of money is paid. The principle of ransomware is that the malware encrypts files on a system’s hard drive using an unbreakable key, and this is decrypted by the attacker once a ransom is paid. Beware of unexpected or suspicious emails, especially those containing a link or requesting a reply. Most ransomware is delivered via email and the typical overall themes are shipping notices from delivery companies. Also, many attacks are delivered by mass random emails because the intention is to infect as many as possible to maximize the chances of getting a result.
Consider your unit’s policies related to the protection of computer information. The most common advice to recover from an attack by ransomware relies largely on whether a good backup policy is employed. Backup expectations are discussed Chapter 2 of the Accounting and Uniform Compliance Guidelines Manual for Counties of Indiana which is available on our website (www.in.gov/sboa). Governmental entities also should keep their anti-virus software up-to-date and apply security patches in a timely manner. If you become a victim of ransomware, inform the local authorities and State Board of Accounts.
It has come to our attention that the County Auditor at some counties may be collecting receipts from other county departments and possibly other fees that are not related to the auditor’s office. The County Auditor should only be collecting money for fees their office is authorized to collect. The laws provide for fees to be charged by the auditor for the following services:
1. The fiscal body shall establish a fee schedule for the certification or copying of documents. The fee for certification of documents may not exceed five dollars ($5) per document. The fee for copying documents may not exceed the greater of: (1) ten cents ($0.10) per page for copies that are not color copies or twenty-five cents ($0.25) per page for color copies; or (2) the actual cost to the agency of copying the document. The fee established must be uniform throughout the public agency and uniform to all purchasers. (IC 5-14-3-8(d))
2. If authorized by an ordinance enacted by the Board of County Commissioners, $10.00 for each endorsement made on a deed to be recorded to be receipted to the Plat Book Fund. (IC 36-2-11-14 and IC 36-2-9-18).
3. A county auditor who executes a tax deed under this chapter shall provide a copy of the tax deed to the grantee. The county auditor shall collect from the grantee the appropriate recording fee set forth in IC 36-2-7-10 on behalf of the county recorder and submit the tax deed directly to the county recorder for recording. (IC 6-1.1-25-20)
4. A person filing a sales disclosure form, unless exempted, shall pay a fee of $10 to the county auditor. 50% of the fee collected shall be deposited into the sales county’s disclosure fund and 50% shall be transferred to the state.
All money payable to the county treasury must be received and deposited by the county treasurer. The only money the county auditor should be collecting are the fees for county auditor services which are deposited monthly with county treasurer. Those fees would be posted to the auditor’s fee book and remitted through the receipting process with a report of collections.
The process was designed to support the county’s compliance with Indiana Code 36-2-9-12 and Indiana Code 36-2-10-10 for the separation of duties between the auditor and treasurer. The prescribed form is Form 20-21, however, you do not have to use the prescribed form if you have an approved form in its place. The form of Quietus, Application to Pay, Treasurer's Receipt and Auditor's Copy is required to be prenumbered by the printer. Under no circumstances shall unnumbered receipts be purchased or used, nor shall any other form of receipt be used by the auditor.
The process begins with the auditor’s office preparing a document that shows the date, fund or funds to be credited, amount, person paying and source of payment. The person paying then needs to take the payment to the treasurer to be counted and deposited. The information provided by the auditor on the payment, needs to be transferred to the treasurer either by the person paying, taking a copy of the document prepared by the auditor or an electronic transfer of the information between the two offices. The treasurer gives a receipt to the person paying. A copy of that receipt is returned to the auditor, (or an electronic transfer of the receipt information is sent) where a quietus is issued by the auditor to the payer. At the end of this process, the auditor has the information needed to post the funds ledger and proof that the money is in the custody of the treasurer. The treasurer has the information needed to post their copy of the funds ledger based on the amount on the quietus. The payer has the information on the amount posted to the funds as well as a receipt to show transfer of custody of the funds to the treasurer.
We have often heard that in many counties, the departments remitting their departmental collections do not want to wait until the process is completed. Sometimes the report of collections and the collection itself are dropped into a basket or on a desk in the auditor’s office. It is then left to the auditor to take the collection to the treasurer and the quietus is provided to the department at a later time. This is not proper procedure. The custody of the amount collected by the department does not transfer to the county until it is receipted in by the treasurer. If the collection dropped off by the department does not match the report of collections, the department would be held accountable for the variance. For example, if the report of collections shows total collections of $500 but the actual collections remitted to the treasurer is only $450, the missing $50 is the responsibility of the department. For a department, at the end of the process, you should have a receipt from the treasurer to document the amount you turned in to the county treasury and a quietus to show what funds and revenue lines your collection is being posted.
When you receive a payment electronically (ACH, EFT, etc.) the payment is being deposited to the county’s bank account instead of being turned in for deposit. You should still have notification of the date, source and amount of the payment. If you don’t, you need to contact the entity paying and ensure that in the future you receive the notices. The process still requires the auditor to propose how the payment is to be posted in the funds ledger, and the treasurer to post the cash book and the treasurer’s fund ledger. The transfer of information between the two offices is still needed and there should be policy established to ensure that the posting is timely.
APPLICATION TO PAY – PROCESS BASED ON MANUAL FORM
Payment of any money to the county, other than taxes, comes into the county treasury in the following manner: Mr. A. comes to the Auditor's office and states his intention to pay a certain amount for a certain purpose. The Auditor writes the "Quietus" and "Application to Pay" and gives the "Application to Pay" to Mr. A., who takes the same and his check or money to the Treasurer's office. [Some Auditor's have found it advantageous to walk Mr. A. to the Treasurer's office to be sure the transaction is completed within the same day and all parties have their correct copy.] The Treasurer writes his "Receipt" to Mr. A. and keeps the application to pay and Mr. A. returns to the Auditor's office and surrenders the Treasurer's Receipt for the Auditor's "Quietus."
The Auditor and Treasurer must be in agreement with respect to "Application to Pay" and Receipts." The application to pay must be written on the same day, immediately upon receipt of the money and turned over to the Treasurer at once. If the Auditor dates his "Application to Pay" on a given day and it is not presented to the Treasurer on the same date it is impossible for the Treasurer to balance with the Auditor that day.
The statute must be followed in this matter. Bear in mind that no transaction is complete until all the required steps are taken and properly recorded. At the close of each month the balance sheets of the Auditor and Treasurer should be compared in detail in order to avoid any irregularities arising from an improper or omitted posting.
Most records of public offices are public property and may be examined by any citizen of the county, unless the law specifically provides they be confidential. Any person may inspect and copy the public records of any public agency.
No request may be denied because the person making the request refuses to state the purpose of the request, unless such condition is required by Statute.
A public agency may not deny or interfere with a person’s right to inspect or copy public records. The public agency shall either provide the requested copies to the person requesting such copies or allow the person to make copies on the agency’s equipment or on his own equipment. (IC 5-14-3-3) The public agency may charge a fee for such copies. If the public record is a duplicate of a computer tape or disc, microfilm, or other similar record, the fee to be charged should be set in accordance with IC 5-14-3-8.
IC 5-14-3-4 contains a listing of those records which are (or could) be held to be confidential. All county officials are urged to review this section of the law to ensure that the county’s policy on such records is in compliance with the Statute.
Questions regarding access to public records should be directed to the States’ Public Access Counselor at (317) 232-3380.
PUBLIC NATURE OF RECORDS AND MEETINGS
We are often asked about public access to meetings and records. Statutory requirements regarding access to meetings and records may be found at IC 5-14-1.5 (Open Door Law) and IC 5-14-3 respectively. The Public Access Counselor provides assistance concerning Indiana’s public access statutes and may be reached at 1-800-228-6013 or 1-317-234-0906. The Public Access Counselor’s website also provides resource materials such as a handbook on public access, fact sheets, and advisory opinions. The website is www.in.gov/pac.
Most records of public offices are public property and may be examined by any citizen of the county, unless the law specifically provides they be confidential. Any person may inspect and copy the public records of any public agency.
No request may be denied because the person making the request refuses to state the purpose of the request, unless such condition is required by Statute.
A public agency may not deny or interfere with a person’s right to inspect or copy public records. The public agency shall either provide the requested copies to the person requesting such copies or allow the person to make copies on the agency’s equipment or on his own equipment. (IC 5-14-3-3) The public agency may charge a fee for such copies. If the public record is a duplicate of a computer tape or disc, microfilm, or other similar record, the fee to be charged should be set in accordance with IC 5-14-3-8.
IC 5-14-3-4 contains a listing of those records which are (or could) be held to be confidential. All county officials are urged to review this section of the law to ensure that the county’s policy on such records is in compliance with the Statute.
Questions regarding access to public records should be directed to the States’ Public Access Counselor at (800) 228-6013.
RECORDER – REDACTING OF SOCIAL SECURITY NUMBERS
IC 36-2-11-15((c-d) requires a preparer’s statement and affirmation statement in the following form be included on the instrument:
"This instrument was prepared by (name)."
"I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law (name)"
The law does not stipulate where the affirmation statement is to be located, however, we have recommended that the affirmation statement be located near (either before or after) the preparer's statement. We would not take exception if the preparer included the statement on a separate page and paid the recording fees for the additional page or combined the affirmation with the preparer's statement.
IC 36-2-11-15(a) states that the affirmation statement is applicable to any instrument except:
(1) an instrument executed before July 1, 1959, or recorded before July 26, 1967;
(2) a judgment, order or writ of a court;
(3) a will or death certificate;
(4) an instrument executed or acknowledge outside Indiana; or
(5) a federal lien on real property or a federal tax lien on personal property, as described
in IC 36-2-11-25Please note that instruments executed or acknowledged (notarized) outside of Indiana are not required to contain the affirmation statement.
Maps, plats, and surveys would typically be required to contain the affirmation statement. We have determined that UCC filings would not need to contain the statement because it is not possible to determine whether the document was executed or acknowledged in Indiana. We have also been asked whether the affirmation statement would be applicable to military discharged paperwork (DD214). The DD214 is required to contain the person's social security number, therefore, would not be required to be redacted. The Recorder may receive for record or filing an instrument only if all social security numbers in the document are redacted, unless the social security number is required by law (IC 36-2-11-15(b)). Again, all documents unless specifically exempted (above) are required to contain the affirmation statement.
IC 36-2-11-2.5 requires that county recorders receive training. The training courses are to be developed by the Association of Indiana Counties and approved by State Board of Accounts. The State Board of Accounts will not take audit exception to the recorders perpetuation fund being used for training that is related to preservation of records and the improvement of record keeping systems. However, training that is not related to record keeping should be paid using appropriated county general funds.
For example, training on budgeting, human resources, office management, etc. should not be paid using perpetuation funds. In situations where there are a variety of topics offered, some related to recordkeeping and some not, allocating costs between county general fund and the record perpetuation fund would be appropriate. The allocation method used should be reasonable and documented. We will not take exception to payment from perpetuation fund where recordkeeping is the training focus but there is de minimus nonrecordkeeping training provided.
Payments for mileage and lodging for the Recorders Annual State Called Meeting by the State Board of Accounts are still to be paid from county general fund and do not have to be appropriated.IC 36-2-7-10 states in part: “The county recorder shall tax and collect the fees prescribed by this section for recording, filing, copying, and other services the recorder renders,… The county recorder may not tax or collect any fee for:
1. Recording an official bond of a public officer, a deputy, an appointee, or an employee; or
2. Performing any service under any of the following:
- IC 6-1.1-22-2(C)
- IC 8-23-7
- IC 8-23-23
- IC 10-17-2-3
- IC 10-17-3-2
- IC 12-14-13
- IC 12-14-16.
The state and it’s agencies and instrumentalities are required to pay the recording fees and charges that this section prescribes…”
Therefore, it is our audit position that the proper recording fees are to be charged for services provided to the county and other political subdivision unless it is the recording of an official bond under item 1 above or any of the services listed in item 2.
MORTGAGE FEE IC 24-9-9-1 MORTGAGE RECORDING FEEThe county recorder shall assess a fee of three dollars ($3) under IC 36-2-7-10(b) for each mortgage recorded. Public 73-2004 created a new fee to be charged by the county recorder. The fee is $3 for each mortgage recorded. $.50 goes to the recorder's perpetuation fund and $2.50 to the state.
The recorder will remit the state's share to the auditor monthly. The auditor then will remit this semiannually to the state. The auditor will need to create a new fund to hold this fee until remittance to the state. For uniformity purposes, all auditors and recorders should call this fee the same. Therefore, on the report of collections, title the fee Mortgage Fee. Auditors will create the new fund and title it Mortgage Fee Fund.
REDEVELOPMENT COMMISSION FUNDS
Tax Increment Financing (TIF) is a method of financing redevelopment projects by allocating the property tax revenue from an increased assessed value within a designated TIF District to the use of that district. The Redevelopment Commissions are established by the county executive and Indiana Code 36-7-14 governs redevelopment commissions. The redevelopment commissions are subject to oversight by the legislative body of the commissions’ annual budget. The commission is also subject to audit by the State Board of Accounts, public meeting laws and public records laws. (IC-36-7-14-3). In July 2014, the statute changed making the fiscal officer of the unit establishing the redevelopment commission as the treasurer for the redevelopment commission.
Indiana Code changed. IC 36-7-14-8(b) now states: “The fiscal officer of the unit establishing a redevelopment commission is the treasurer of the redevelopment commission. Notwithstanding any other provision of this chapter, the treasurer has charge over and is responsible for the administration, investment and disbursement of all funds and accounts of the redevelopment commission in accordance with the requirements of state laws that apply to other funds and accounts administered by the fiscal officer.” Based on this change, it is our audit position that the fiscal officer for the unit should include the redevelopment commission funds on the unit’s funds ledger. For Counties, the county auditor should maintain the records for the redevelopment commission funds and the county treasurer should deposit and invest the funds. Internal controls over the redevelopment funds should be maintained in the same manner as with all other funds.
IC 36-7-14-29 states that “All payments from any of the funds established by this chapter shall be made by warrants drawn by the proper officers of the unit upon vouchers of the redevelopment commission signed by the president or vice president and the secretary or executive secretary.” Claims would be approved by the Redevelopment Commission, but in all other ways the claims process must be followed by the unit. As of January 1, 2016, IC 36-7-14-8(c) states that “the treasurer of the redevelopment commission may disburse funds of the redevelopment commission only after the redevelopment commission allows and approves the disbursement. However, the redevelopment commission may, by rule or resolution, authorize the treasurer to make certain types of disbursements before the redevelopment commission’s allowance and approval at the next regular meeting. “
If a county has established a redevelopment commission, the commission funds should be included on the funds ledger and the custody of the accounts turned over to the county treasurer. IC 36-7-14-13 provides that by April 15 of each year, the redevelopment commission or its designee must file a report with the executive and fiscal body of the county that sets out the activities for the prior year. A copy of this report must be filed with the Department of Local Government Finance.
We have had several questions about retention and confidentiality of checks when a unit uses remote deposit. We conferred with the Indiana Commission on Public Records about the retention of these checks and their suggestion will be that retention of the checks remain 3 years, however; based on OCPR policy 06-01 (see http://www.in.gov/icpr/files/policyelectronic10years.pdf); the paper can be destroyed after the documents have been scanned and are in the digital repository, so long as the total retention is less than 10 years. We conferred with the Public Access Counselor in regard to confidentiality and he provided that the confidential financial provision, I.C. 5-14-3-4(a)(5), would allow an agency to redact the person’s account and routing number from the check. The social security number would be considered confidential pursuant to IC 5-14-3-4(a)(12).
- S
Salary
Court Reporters - Employee vs Independent Contractor
Sales Tax - Reimbursement for Lodging
Service Charges
Sewer Liens - Recording and Certifying
Sheriffs - County
County Extradition and Sheriff Asisstance Fund
Federal Reimbursement for Housing Federal Prisoners
Inmate Trust and Commissary Funds
Commissary Fund - Supporting Documentation
Social Security Incentive Payments
Social Security VerificationsSoil and Water Conservation Districts
Solid Waste Collection and Disposal
State Department of Corrections - Housing Reimbursements
State Employees - Garnishment of Wages
State Gaming Fund - Revenue Sharing
Statement of Wages and Compensation
Surveyor (County)
SALARIES NOT PAYABLE IN ADVANCE
"A county officer or a deputy or employee of a county officer is entitled to payment for services only after he has rendered those services." (IC 36-2-8-4)
"Public officers may not draw or receive their salaries in advance." (IC 5-7-3-1(a)) "However, payment of vacation benefits so granted by the board of county commissioners, may be made in advance of any vacation taken by such an employee." (IC 5-10-6-1(c))
COURT REPORTERS - EMPLOYEE (FORM W-2) VS. INDEPENDENT CONTRACTOR (FORM 1099)
We have received quite a few questions on paying wages to an employee versus payments to an independent contractor. This classification is ultimately determined by the Internal Revenue Service. We can’t provide an audit position on this question and would have to refer any questions that a county may have on making this determination to the IRS. However, there appears to be a common question on whether a person can be both an employee and an independent contractor for the county. The following is copied from the IRS website www.irs.gov.
“A worker’s role determines which information return an entity would provide. Entities provide a Form 1099-Misc to independent contractors and Form W-2 to employees. … However, there may be instances where a worker may be serving as an independent contractor and an employee for the same entity.”Court Reporters is one example of where an employee of the county may also be an independent contractor for the county. The Indiana Supreme Court adopted Ind. Administrative Rule 15 on Court Reporters to address the provision of the preparation of transcripts. You can find this rule on the Court’s website www.courts.in.gov.
A court reporter is responsible for preparing a transcript when an appeal is made. The courts of the county must adopt a Court Reporter Model in compliance with Rule 15 that includes a uniform method by which a court reporter charges for transcription preparation. The court’s local rule and any changes to the local rule must be approved by the Supreme Court. Depending on the model chosen by the court, an employee of the court may also be an independent contractor. The preparation of transcripts could be a fee for service that is paid by private parties to obtain the transcript. If the person has been determined to be indigent by the court, the county pays the fee for the transcription service on behalf of the indigent person. You would have to look at the model adopted by the court and the local rule for transcription services, but it is possible for the court reporter to receive a 1099 from the county for the provision of transcription services for indigent appellants as well as a W-2 for the court reporter’s annual salary.
SALARY AND WAGE PERIODS – MANNER OF PAYMENT
"The county auditor and county treasurer may pay salaries and wages to county officers and employees monthly, twice each month, every two (2) weeks, or weekly.
The manner of payment of salaries and wages must be authorized by the legislative body of a county having a consolidated city or by the executive of any other county." (IC 36-2-8-2)
For both elected officials and employees, payroll should be processed in accordance with the salary and wage ordinance and the county’s written policy of compensation and benefits. The county council should, at its annual budget meeting, adopt a salary ordinance fixing the salaries of county officers, deputies, assistances and employees. This ordinance is separate from the budget ordinance. The Form 144 completed as part of the budget process is not the salary ordinance. The salary ordinance is a separate and distinct ordinance and should in no way be combined with the ordinance for appropriations.
During an audit of payroll, we are looking to see that the payment amount that an official or employee received is in accordance with what has been authorized on the salary ordinance. Each salary or wage payment should be clearly tied to the period of service for which the payment is being made. If questions arise concerning the payment for service, there should be sufficient documentation to ascertain the periods of service performed and the corresponding payment for that period of time. Any paid time off should be granted in compliance with the county’s policy and adequately documented.
Elected officials do not have to track their hours worked. IC 36-2-5-13(b) states that “An elected county officer is not required to report hours worked and may not be compensated based on the number of hours worked.” However, this applies only to elected officers. First Deputies and other salaried employees, who are not elected officers, would have to report hours/days worked.
IC 36-2-8-5 states that,” Compensation of deputies and employees of county officers shall be paid by warrants that are payable to the respective deputies and employees after (1) filing of itemized and verified claims as prescribed by IC 36-2-6 and (2) allowance of the claims by the county executive.” Payroll claims must be submitted for all employees, even if it is a salaried position.
Statute also states that payment may not be made in advance of the services provided. As an example, if a newly elected officer or a newly hired employee begins work on January 1, they should not receive a payment for a full bi-weekly pay period during the first week of January after working only a few days. If such a payment is issued and the employee leaves employment before the full service is performed, we would expect to see a reimbursement to the county by that employee.
It is a county decision as to how often compensation is paid. IC 36-2-8-2 states that “the county auditor and county treasurer may pay salaries and wages to county officers and employees monthly, twice each month, every two (2) weeks, or weekly.” IC 36-2-8-4 states: “A county officer or a deputy or employee of a county office is entitled to payment for services only after the officer, deputy or employee has rendered those services”. There is no statute that requires an elected officer’s annual pay be completely paid by year end or that the W-2 and salary ordinance of an elected official must match exactly.
We would not take audit exception to payments made in arrears or encumbrances of those payments in arrears. Based on that position, we also would not take audit exception if an elected officials’ annual salary is not completely paid within a calendar year. We recommend that salary ordinances for salaries be set at bi-weekly or weekly amount, if an annual salary amount is set, and the amount is divided into 26 biweekly or 52 weekly pays. The county should have a policy in place on how to process uneven payment amounts to match the total annual salary that was approved and how to process payroll in years with 27 biweekly pays.
SALARY ORDINANCES - SEPARATE ORDINANCE
A separate ordinance must be adopted by the county council at fixing the number of employees and the rates of salaries or wages to be paid officers and employees of the county per IC 36-2-5-11. The approval of the budget setting appropriations for each fund does not constitute the salary ordinance, a separate ordinance is required.
In regard to change of compensation of officials and employees, please IC 36-2-5-13. The compensation of an elected county officer may not be changed in the year for which it is fixed. The compensation of other county officers, deputies, and employees or the number of each may be changed at any time if the requirements in IC 36-2-5-13 are followed.
To change the salaries of other officers, deputies, assistants and employees or the number of each, an amended Form 144, Statement of Salaries and Wages Proposed to be Paid Officers and Employees, should be filed by the officer or department head, submitted to the board of the county commissioners for review and recommendations and then submitted to the county council for consideration.
SALES DISCLOSURE FEE AND FUND (IC 6-1.1-5.5)A Buyer and Seller must file a Sales Disclosure Form with any conveyance document (Conveyance document is defined at IC 6-1.1-5.5-2). The Sales Disclosure Form is to be prescribed by the Department of Local Government Finance.
IC 6-1.1-5.5-4 requires a person filing a sales disclosure form shall pay a fee of ten dollars ($10) to the County Auditor. A buyer and seller may agree to file jointly, and if so there will be only one sales disclosure form. If they don’t agree, then a form must be filed by each party separately. Based on this it would appear that ten dollars ($10) should be charged for each form filed, not each person filing. No charge is to be made if the transaction is Exempt from filing the Disclosure of Sales Information Form.
The finalized version of the prescribed form was not designed to incorporate a receipt, therefore you will need to account for these fees in the following manner:
1. The County Auditor must issue a receipt for each form filed. We would recommend the use of General Receipt Form No. 352 instead of issuing a quietus for each form filed. At the end of each business day one quietus would be written for the entire day’s collection and posted in total to the Auditor’s Fee Book County Form No. 1. (This will result in the funds ledger being posted daily and also fulfill the statutory requirements to deposit within the next business day. It also should cut down on the traffic between the treasurer and auditor’s office since you will not be issuing a quietus for each form filed, which would require the person to go to the County Treasurer’s office to complete the quietus transaction.)
2. Of the ten dollar ($10) fee the county will retain fifty percent (50%), for deposit within the Sales Disclosure --County Share Fund # 1131 and the remaining fifty percent (50%), will be receipted to the Sales Disclosure – State Share Fund # 7105. The County Auditor will semi-annually forward to the Auditor of State the State Share.
The fiscal body of each county shall establish a Sales Disclosure Fund. Money in the Sales Disclosure Fund may be expanded only for: administration of this chapter, verification of the information contained on a sales disclosure form, training of assessing officials, or purchasing computer software or hardware for a property record system. The county fiscal body shall appropriate the money in the sales disclosure fund based on requests by assessing officials in the county.
SALES TAX REIMBURSEMENT FOR LODGING
Lodging for individuals in hotels and motels is not exempt from state sales tax. Therefore, reimbursements for lodging in travel stats will include state sales tax. We will not take an audit exception to employees being reimbursed for sales tax on lodging.
The cost of providing loading and unloading conveniences for school buses on county highways and roads shall be paid by the county as provided by IC 20-27-10-1.
IC 20-27-10-1 states: “To promote safety in school bus operations, school corporations shall cooperate with the civil divisions of local and state government to provide necessary loading and unloading conveniences as an accessory to public streets and highways. The cost of providing these conveniences shall be paid by the civil divisions of government.”
IC 9-19-10-2 states “Each occupant of a motor vehicle equipped with a safety belt that: (1) meets the standards stated in the Federal Motor Vehicle Safety Standard Number 208 (49 CFR 571.208) (2) is standard equipment installed by the manufacturer; shall have a safety belt properly fastened about the occupant’s body at all times when the vehicle is in forward motion.”
IC 9-19-10-8 states “A person who: (1) is at least sixteen (16) years of age; and (2) violates section 2 (see above) of this chapter commits a Class D infraction.”
IC 34-28-5-4(d) states “A judgment of up to twenty-five dollars ($25) may be entered for a violation constituting a Class D infraction.” IC 34-28-5-5(b) states “If a judgment is entered: (1) for a violation constituting: (A)… (2) in favor of the defendant in any case… the defendant is not liable for costs.”
Therefore, this agency’s audit position would be that the payment by the defendant for a safety belt infraction would be a judgment (fine) of up to $25 as set by the court.For each seatbelt violation under IC 9-19-10-2, IC 9-19-11-2 and IC 9-19-11-3.6, a person commits a Class D infraction. IC 34-28-5-4 allows a court to enter a judgment of up to twenty-five dollars ($25) for each Class D infraction. All seatbelt violation cases would be considered moving traffic violations under IC 9-30-3-14 and would be required to be heard in a circuit, superior, county, city or town court or traffic violations bureau designated by these courts. Furthermore, IC 34-28-5-5 (c) states that all funds collected as judgments for violations of statutes defining infractions shall be deposited in the state general fund.
Additionally, in the Home Rule Law IC 36-1-3-8 states that a unit of government does not have the power to prescribe a penalty by local ordinance for conduct constituting an infraction.
CIVIL AND SMALL CLAIM SERVICE CHARGES
There has been a number of questions regarding these service changes. The biggest question has been regarding garnishee/defendants. The new fee laws say when a “defendant” is added, you change the $10 fee. The State Board of Accounts cannot give a legal opinion on the definition of defendant.
We would recommend you talk to your judges and ask them whether a garnishee/defendant is a defendant under the fee law. Get the judge to put in writing their interpretation and keep this for audit purposes. That way we will know why you are or are not collecting the fee on garnishee/defendants. In the meantime, we will pursue an Attorney General opinion on this issue.
SEWER LIENS UNDER IC 36-9-23 – RECORDING AND CERTIFYING
The officer charged with collection of unpaid sewage fees and penalties shall enforce their payment. The officer may defer enforcing the collection of the unpaid fees and penalties assessed until the unpaid fees and penalties have been due and unpaid for at least ninety (90) days.
As often as the officer determines is necessary in a calendar year, the officer shall prepare either of the following:
(1) A list of the delinquent fees and penalties that are enforceable, which must include the following:
(A) The name or names of the owner or owners of each lot or parcel of real property on which fees are delinquent.
(B) A description of the premises, as shown by the records of the county auditor.
(C) The amount of the delinquent fees, together with the penalty.
(2) An individual instrument for each lot or parcel of real property on which the fees are delinquent.
The officer shall record a copy of each list or each individual instrument with the county recorder who shall charge a fee for recording the list or each individual instrument in accordance with the fee schedule established in IC 36-2-7-10. The officer shall then mail to each property owner on the list or on an individual instrument a notice stating that a lien against the owner’s property has been recorded. Except for a county having a consolidated city, a service charge of five dollars ($5), which is in addition to the recording fee charged, shall be added to each delinquent fee that is recorded. The amount of the recording fee should also include the amount required to record as well as release the lien.
Using the lists and instruments prepared and recorded, the officer shall, not later than ten (10) days after the list or each individual instrument is recorded, certify to the county auditor a list of the liens that remain unpaid for collection in the next May. The county and its officers and employees are not liable for any material error in the information on this list.
The officer shall release any recorded lien when the delinquent fees, penalties, service charges, and recording fees have been fully paid. The county recorder shall charge a fee for releasing the lien in accordance with IC 36-2-7-10.
Except in a county containing a consolidated city, on receipt of the list, the county auditor of each county shall add a fifteen dollar ($15) certification fee for each lot or parcel of real property on which fees are delinquent, which fee is in addition to all other fees and charges. The county auditor shall immediately enter on the tax duplicate for the municipality the delinquent fees, penalties, service charges, recording fees, and certification fee, which are due not later than the due date of the next May installment of property taxes. The county treasurer shall then include any unpaid charges for the delinquent fee, penalties, service charge, recording fee, and certification fee to the owner or owners of each lot or parcel of property, at the time the next cycle’s property tax installment is billed.
Except in a county containing a consolidated city, after certification of liens, the officer may not collect or accept delinquent fees, penalties, service charges, recording fees, or certification fees from property owners whose property has been certified to the county auditor.
If a delinquent fee, penalty, service charge, recording fee, and certification fee are not paid, they shall be collected by the county treasurer in the same way that delinquent property taxes are collected.
At the time of each semiannual tax settlement, the county treasurer shall certify to the county auditor all fees, charges, and penalties that have been collected. The county auditor shall deduct the service charges and certification fees collected by the county treasurer and pay over to the officer the remaining fees and penalties due the municipality. The county treasurer shall retain the service charges and certification fees that have been collected, and shall deposit them in the county general fund.
Fees, penalties, and service charges that were not recorded before a recorded conveyance shall be removed from the tax roll for a purchaser who, in the manner prescribed by IC 36-9-23-32(d), files a verified demand with the county auditor. (IC 36-9-23-33)
IC 9-29-11-1 allows County Sherriff’s to charge a fee which shall be fixed by ordinance of the fiscal body in an amount not less than five dollars ($5.00) for each report. The fee shall be deposited in a separate account to be known as the Accident Report Fund and may be expended at the discretion of the County Sheriff for any purpose reasonably related to the keeping of accident reports and records or the prevention of street and highway accidents.
We recommend the following procedures be used in accounting for such transactions:
(1) Issue a Receipt, Sheriff’s Receipt No. 133 for each fee collected and post the receipt to the Sheriff’s Cash Book.
(2) Remit the receipts to the County Auditor at the end of each month on the Monthly Report of Collection (County Form No. 362).
(3) The County Auditor shall receipt the fees to a separate “Accident Report Fund.”
(4) The money in the fund may be expended for the purposes listed in IC 9-29-11-1 without appropriation.
The following procedures should be followed in obtaining and making expenditures for buy money or payments to informants:
(1) Under IC 36-1-3 an ordinance be passed allowing this type of program and associated expenditures;
(2) An appropriation for such purpose be provided in the manner authorized by state statutes;
(3) Petty cash fund procedures are followed as authorized by IC 36-1-8-3; and a minimum documentation procedure to be followed
Local law enforcement agencies may, on request for release or inspection of a limited criminal history, do the following:
(1) Require a form, provided by them, to be completed. The form shall be maintained for a period of two (2) years and shall be available to the record subject upon request.
(2) Collect a three dollar ($3) fee to defray the cost of processing a request for inspection.
(3) Collect a seven dollar ($7) fee to defray the cost of processing a request for release. However, law enforcement agencies may not charge a fee for requests received from the parent locator service of the child support bureau of the division of family and children.
Local law enforcement agencies shall edit information so that the only information released or inspected is information which has been requested and is limited criminal history information. (IC 10-13-3-30)
A local home rule ordinance would be required to enable a county law enforcement agency to collect such fees. All monies should be deposited in the county's general fund unless otherwise stated in the ordinance.
COUNTY EXTRADITION AND SHERIFF ASSISTANCE FUNDIC 35-33-14 establishes in each county a county extradition and sheriff assistance fund for the purposes of providing funding (1) to offset the cost or extraditing criminal defendants; (2) to train and equip law enforcement officers in the county; and (3) to offset other costs incurred by the county sheriff’s department in providing law enforcement services. Money in the fund may not be used for any other purpose. The fund consists of the portion of late surrender fees deposited in the fund under IC 27-10-2-12(i). The fund is to be administered by the county auditor and money left at the end of the calendar year does not revert to any other fund, but remains in the county extradition and sheriff’s assistance fund.
Any police officer incurring expenses in accordance with the Uniform Criminal Extradition Act, IC 35-33-10-3 should file a claim, County Form No. 17, for all expenses incurred in the extradition of prisoners. The claim should be against the county wherein the crime is alleged to have been committed. The expenses should be paid from the County General Fund if the County Extradition Fund established under IC 35-33-14 does not have a sufficient balance to pay the expenses. Assuming appropriations are not available for extradition purposes, additional appropriations should be secured in the proper legal manner.
The amount of reimbursement should be in accordance with IC 35-33-10-3(25) which provides, “The expenses shall be the fees paid to the officers of the state on whose governor the requisition was made, as now provided by law, for all necessary travel in returning such prisoner.”
A county may adopt a local home rule ordinance which provides for travel advances. Naturally, we would expect sufficient documentation such as receipts for all expenses incurred (airline ticket costs, bus travel costs, etc.) The original receipts plus the remaining cash advance must agree with the total of the travel advance. Any differences will be the responsibility of the police officer.
IC 35-47-2-3 states in part:
“…(b) The law enforcement agency which accepts an application for a handgun license shall collect the following application fees:
(1) From a person applying for a four (4) year handgun license, a ten dollar ($10) application fee, five dollars ($5) of which shall be refunded if the license is not issued.
(2) From a person applying for a lifetime handgun license who does not currently possess a valid Indiana handgun license, a fifty dollar ($50) application fee, thirty dollars ($30) of which shall be refunded if the license is not issued.
(3) From a person applying for a lifetime handgun license who currently possesses a valid Indiana handgun license, a forty dollar ($40) application fee, thirty dollars ($30) of which shall be refunded if the license is not issued….the fee shall be deposited into the law enforcement agency’s firearms training fund or other appropriate training activities fund and used by the agency to train law enforcement officers in the proper use of firearms or in other law enforcement duties, or to purchase firearms, firearm related equipment, or body armor (as defined in IC 35-47-5-13(a)) for the law enforcement officers employed by the law enforcement agency. The state board of accounts shall establish rules for the proper accounting and expenditure of funds collected under this subsection.”
In keeping with the provisions of this statute, the following procedure is recommended for accounting for such application fees:
(1) Issue a Receipt, Sheriff’s Receipt No. 133 for each fee collected.
(2) Remit receipts to the County Auditor on the Monthly Report of Collections (County Form No. 362.)
(3) The county auditor shall receipt the fees to a separate fund in the ledger of receipts and disbursements titled “Firearms Training Fund” and the county treasurer shall deposit such receipts in a designated depository of the county. A separate depository account is not required.
(4) If the application is turned down, a refund shall be made from the Firearms Training Fund without appropriation upon the basis of a claim filed, allowed and paid in the proper legal manner. No refunds are to be made from any other fund of the unit.
Such fees are to be deposited into the law enforcement agency's firearms training fund or other appropriate training activities fund and used by the agency to train law enforcement officers in the proper use of firearms or in other law enforcement duties, or to purchase firearms, firearm related equipment, or body armor for the law enforcement officers employed by the law enforcement agency.
RETAIL HANDGUN DEALER'S LICENSE - DISPOSITION OF FEE
IC 35-47-2-15 states in part: “(a) A person desiring a retail handgun dealer’s license shall apply to the sheriff of the county in which he resides, or if he is a resident of another state and has a regular place of business in Indiana, then to the sheriff of the county in which he has a regular place of business. The applicant shall state his name, full address, occupation, sex, race, age, place of birth, nationality, height, weight, build, color of eyes, color of hair, complexion, scars and marks, and any criminal record (minor traffic offenses excepted). The officer to whom the application is made shall verify the application and search his records concerning the applicant’s character and reputation.
(b) The officer to whom the application is made shall send to the superintendent:
(1) the verified application;
(2) the results of the officer’s investigation; and
(3) the officer’s recommendation for approval or disapproval of the application; in as many copies as the superintendent shall designate, and one (1) set of legible and classifiable fingerprints of the applicant. The superintendent may make whatever further investigation he deems necessary. Whenever disapproval is recommended by the officer to whom the application was made, he shall provide the superintendent and the applicant with his complete reasons for the disapproval in writing. If the officer to whom the application is made recommends approval, he shall instruct the applicant in the proper method of taking legible and classifiable fingerprints. If it appears to the superintendent that the applicant is of good character and reputation and a proper person to be licensed, he shall issue to the applicant a retail handgun dealer’s license which shall be valid for a period of two (2) years from the date of issue. The fee for the license shall be twenty dollars ($20), which shall be deposited with the officer to whom the application is made, who shall in turn forward it to the superintendent for deposit with the treasurer of state when the application is approved by the superintendent. In the event that the application is disapproved by the superintendent, the fee shall be returned to the applicant along with the complete reasons, in writing, for the disapproval.”
Such fee shall be handled as trust funds are handled when received.
FEDERAL REIMBURSEMENT FOR HOUSING FEDERAL PRISONERS
All reimbursements to the county sheriff from the federal government for housing federal prisoners shall be turned over to the county auditor for deposit into the County General Fund.
IC 36-8-10-22 states:
“(a) This section applies to any county that operates a county jail.
(b) The sheriff shall hold in trust separately for each inmate any money received from that inmate or from another person on behalf of that inmate.
(c) If the inmate or his legal guardian requests a disbursement from the inmate’s trust fund, the sheriff may make a disbursement for the personal benefit of the inmate, including but not limited to a disbursement to the county jail commissary.
Upon discharge or release of an inmate from the county jail, the sheriff shall pay to that inmate or his legal guardian any balance remaining in his trust fund.
(e) If an inmate is found guilty of intentionally destroying or losing county property after a hearing under IC 11-11-5-5, the sheriff may disburse from the inmate’s trust funds or commissary account sums of money as reimbursement to the county for the inmate’s international destruction or loss of county property, including but not limited to clothing, bedding and other nondisposable items issued by the county to the inmate. Before disbursing money under this subsection, the sheriff shall adopt rules to administer this procedure.
(f) The sheriff shall maintain a record of each trust fund’s receipts and disbursements. The State Board of Accounts shall prescribe the form for this record.”
In order to comply with these provisions, the sheriff may post the receipts and disbursements through the Sheriff’s Cash Book, through the trust column. County Form No. 133 for receipts and County Form No. 141 for disbursements would be used and General Form No. 358 for each individual inmate trust fund. An alternate method would be to use General Form No. 358, Ledger of Receipts, Disbursements and Balances as a control and also for each individual inmate trust fund. The balances from the total individual ledger must be equivalent to the control ledger on any given date.
INMATE TRUST AND JAIL COMMISSARY FUNDSIC 5-13-6-1 states that all public funds paid into the treasuries of the respective political subdivisions shall be deposited not later than the business day following the receipt of funds in one or more depositories in the name of the political subdivision by the officer having control of the funds.
The sheriff is the officer of the county who has control of the inmate trust and commissary funds. Therefore, it is the audit position of this department that inmate trust and jail commissary funds should be deposited in the depository no later than the next business day after they are received.
Also, IC 36-8-10-21 states that the sheriff, or his designee, shall deposit all money from commissary sales into the fund, which he shall keep in a depository designated under IC 5-13-8.
SHERIFF’S INMATE TRUST AND RELEASING FUNDS - PETTY CASHIndiana Code 36-8-10-22 requires that the sheriff hold in trust separately for each inmate any money received from that inmate or on the behalf of the inmate. Upon discharge or release the sheriff is to pay to the inmate or legal guardian any balance remaining in the inmate’s trust fund. Often the balance is very small, ranging from a few cents to a few dollars. The warrants given to the inmates for the balances often go uncashed. We have been asked if a policy may be set whereby under a certain dollar limit the inmate does not receive this remaining balance. There is no statutory authority to do so.
We have also been asked if the payment may be in the form of cash instead of warrant for the distribution of the balance under a certain dollar limit. This may be done through the petty cash fund process. This would require authorization of the petty cash fund from the county council, a policy addressing the maximum dollar amount the balance may be to be paid using petty cash, and a voucher that provides at a minimum the date, dollar amount, identification of the inmate, and inmate’s signature.
It should be remembered that the vouchers are a reconciling item and that the cash and any vouchers should always equal the total petty cash fund. To properly account for the petty cash fund when part of the inmate trust fund, a separate card identified as the petty cash fund should be maintained as is maintained for each of the inmates’ trust funds. This way the total individual ledgers will be equivalent to the control ledger.
IC 11-12-5-5(b) is the statute for providing medical care for inmates.
However, a person confined to a county jail is not required to make the copayment if: (1) the person does not have funds in the trust account at the time of service, (2) the person does not have funds in the trust account within 60 days after the service, (3) the service is an emergency, (4) the service is a result of an injury received in the county jail, and (5) the service is provided at the request of the sheriff or jail administrator.
IC 11-12-5-5(e) states " Rules for the implementation of this section must be approved by the county legislative body." This would appear to mean that in most instances the County Commissioners will need to adopt a Home Rule Ordinance setting the amount of the fee to be charged. IC 11-12-5-5(d) states "Money collected must be deposited into the County Medical Care for Inmates Fund." However, since this is a reimbursement of costs, this should go to the fund that paid the costs of the service.
The State Board of Accounts audit position in regard to this statute is as follows: 1. Monies received by the county auditor from the county sheriff for this copayment may be receipted into the fund in which payment for services provided were or will be paid from, or; 2. Into the newly created County Medical Care for Inmates Fund.
IC 36-8-10-21 states:
“(a) This section applies to any county that has a jail commissary that sells merchandise to inmates.
(b) A jail commissary fund is established, referred to in this section as “the fund”. The fund is separate from the general fund, and money in the fund does not revert to the general fund.
(c) The sheriff, or his designee, shall deposit all money from commissary sales into the fund, which the sheriff or the sheriff’s designee shall keep in a depository designated under IC 5-13-8.
(d) The sheriff, or the sheriff’s designee at the sheriff’s or the sheriff’s designee’s discretion and without appropriation by the county fiscal body, may disburse money from the fund for:
(1) merchandise for resale to inmates through the commissary;
(2) expenses for operating the commissary, including, but not limited to, facilities and personnel;
(3) special training in law enforcement for employees of the sheriff’s department;
(4) equipment installed in the county jail;
(5) equipment, including vehicles and computers, computer software, communication devices, office machinery and furnishings, cameras and photographic equipment, animals, animals training, holding and feeding equipment and supplies, or attire used by an employee of the sheriff’s department in the course of the employee’s official duties;
(6) an activity provided to maintain order and discipline among the inmates of the county jail;
(7) an activity or program of the sheriff’s department intended to reduce or prevent occurrences of criminal activity, including the following;
(A) Substance Abuse.
(B) Child Abuse.
(C) Domestic Violence.
(D) Drinking and Driving.
(E) Juvenile Delinquency;
(8) expenses related to the establishment, operation, or maintenance of the sex and violent offender registry web site under IC 36-2-13-5.5; or
(9) any other purpose that benefits the sheriff’s department that is mutually agreed upon by the county fiscal body and the county sheriff.
(e) The sheriff shall maintain a record of the fund’s receipts and disbursements. The State Board of Accounts shall prescribe the form for this record. The sheriff shall semiannually provide a copy of this record of receipts and disbursements to the county fiscal body. The semiannual reports are due on July 1 and December 31 each year.”
In order to comply with these provisions use General Form No. 352, General Receipt; General Form 353, General Warrant; and Commissary Fund No. 205, Ledger of Receipts, Disbursements and Balances. The commissary fund is held in a separate bank account that must be reconciled monthly. Do not post these transactions to the Sheriff’s Cash Book.
The sheriff is to provide a copy of the commissary fund’s receipts and disbursements to the county council. The semiannual reports are due on July 1 and December 31 of each year. The SBOA has prescribed Form 205, Ledger of Receipts, Disbursements and Balances for the Commissary fund, for use as a semiannual report. The County always has the option to choose an alternative form and have that form (or report) approved as part of the audit process.COMMISSARY FUND – SUPPORTING DOCUMENTATION
During an audit of the commissary fund the State Board of Accounts would look for compliance with Indiana Code 36-8-10-21. The statute designates the Sheriff to oversee the commissary and provides nine allowable uses to supplement the Sheriff’s budget. This fund is maintained by the Sheriff outside of the county funds and is required to have the same level of documentation.
A ledger of Receipts, Disbursements, and Balances is required to track all transactions and balances. Supporting documentation for all transactions should also be maintained. Other necessary important documentation would include duplicate receipts supporting bank deposits and claims with detailed invoices and contracts. Supporting documentation for expenditures can vary depending on the expenditure, so additional information may need to be maintained.
It has come to our attention that documentation has been insufficient in a couple specific areas. If commissary funds are being used for special training in law enforcement for Sheriff employees, these expenditures must be accompanied by support that includes:
- the date, location, and time the training was conducted.
- the name and address of the person or entity that provided the training.
- a listing of each employee of the sheriff’s department who received training.
- a summary of the specific training that was provided.
- Itemized invoice documentation of the training cost and allocation to each employee, if applicable.
- list of all persons or entities that received payment from the sheriff’s department, any reimbursement for each employee, if applicable;
If commissary funds are being used to support an activity or program intended to reduce or prevent occurrences of criminal activity, these expenditures must be accompanied by support that includes:
- Description of the activities or programs of the sheriff’s department, with an explanation of its intention to reduce or prevent any and all applicable occurrences of criminal activity, including any of the enumerated topics listed in subsection (7) of the commissary statute;
- the date, location, and time the activity or program was provided;
- list of all employees of the sheriff’s department who provided the training;
- attendance list of any and all persons who attended the activity or program, including an accounting of how many days each person attended the training.
- Itemized invoice documentation of costs incurred by the sheriff’s department in providing the activity or program; including all persons or entities that received payment from the sheriff’s department;
- and all records to support the costs paid to each recipient of funds relating to the activity or program.
Commissary funds are considered public funds of the county and should only be used for the allowed statutory purposes. All expenditures should be accompanied by itemized invoices and have proper internal controls in place for the approval of the expenditures.
SALARY CONTRACTS FOR COUNTY SHERIFF’S (IC 36-2-13-2.5)The sheriff, the executive, and the fiscal body MAY enter into a salary contract for the sheriff. If the county elects to enter into a contract with the sheriff per IC 36-2-13-2.5(b) the contract must contain:
1. A fixed amount of compensation for the sheriff in place of fee compensation.
2. Payment of the full amount of the sheriff’s compensation from the county general fund in the manner that salaries of other county officials are paid.
3. Deposit by the sheriff of the sheriff’s tax warrant collection fees (as described in IC 6-8.1-8-3) in the county general fund for use for any general fund purpose.
4. A procedure for financing prisoners’ meals that uses one of the following methods:
(A) The county fiscal body (council) shall make an appropriation in the usual manner from the county general fund to the sheriff for feeding prisoners. The sheriff or the sheriff’s officer’s, deputies, or employees MAY NOT make a profit from the appropriation. The sheriff SHALL deposit all meal allowances received under IC 36-8-10-7 in the county general fund for any general fund purpose, or
(B) The sheriff shall pay for feeding prisoners from meal allowances received under IC 36-8-10-7. The sheriff or the sheriff’s officers, deputies, or employees MAY NOT make a profit from the meal allowances. After the expenses of feeding prisoners are paid, the sheriff shall deposit any unspent meal allowance money in the county general fund for use for any general fund purpose.
5. A requirement that the sheriff SHALL file an accounting of expenditures for feeding prisoners with the county auditor on the first Monday of January and the first Monday of July of each year.
6. An expiration date that is not later than the date than the term of the sheriff expires.
7. Other provisions concerning the sheriff’s compensation to which the sheriff, the county executive, and the fiscal body agrees.
The salary contract must be a written document containing the above provisions. It must be approved by resolution of both the executive and the fiscal body and signed by the sheriff.
SOCIAL SECURITY INCENTIVE PAYMENTS TO COUNTIESSeveral counties have been receiving incentive payments from the Social Security Administration (SSA) as a result of an agreement being executed between the local sheriff's department and SSA. The sheriff sends a listing of those individuals being confined to SSA. If SSA determines that any of those individuals are currently receiving Supplemental Security Income (SSI) benefits, these benefits will be suspended and an incentive payment will be deposited into the sheriff's bank account by EFT. Effective August 9, 2018, incentive payments will be $400 per individual for information received within thirty days of confinement or $200 per individual for information received after thirty days but within ninety days after confinement. These payments should be transferred by the sheriff to the County Treasurer and quietused into the County General Fund.
SOCIAL SECURITY VERIFICATION
The Social Security Administration provides an online verification of social security numbers of current and former employees at https://www.ssa.gov/employer/ssnv.htm. This service is useful to ensure that your current employees’ social security numbers match those on file with the Social Security Administration and can provide some assurance that retirees of single-employer pension plans are not deceased. These single-employer pension plans include the County Sheriff’s Retirement and Benefit Plans. Our Field Examiners may request that you provide documentation that you have verified retirees receiving benefits from the County Sheriff’s Retirement and Benefit Plans are not, in fact, deceased.We recommend that the counties consider enrolling for this service if you have not already done so and performing this verification prior to the start of the audit to avoid any delays in completion of the audit timely.
IC 36-8-10-21 allows the County Sheriff to establish a commissary fund for the sale of merchandise to inmates. If the county jail has pay telephones, which pays a long distance commission to the county, and those telephones are in an area of the jail used exclusively by inmates, then we would not take an audit exception to those commissions being deposited in the Commissary Fund.
However, if the telephones are in an area of the jail which is accessible to the public, then the commission for long distance calls shall be deposited in the County General Fund and would require an additional appropriation for expenditure of this revenue.
IC 9-29-4-2 states: “A person described in subdivision (3) who makes an inspection under IC 9-17-2-12 may charge a fee. A fee charged under this section is subject to the following:
(1) The fee must be established by ordinance adopted by the unit (as defined in IC 36-1-2-23).
(2) The fee may not exceed five dollars ($5).
(3) The Revenue from the inspection fee shall be deposited in the following manner:
(A) A special vehicle inspection fund if the person making the inspection is a member of the county sheriff’s department. The fiscal body of the unit must appropriate the money from the inspection fund only for law enforcement purposes.
(B) A local law enforcement continuing education fund established by IC 5-2-8-2 if the person making the inspection is a member of a city or town police department, a town marshal, or a town marshal deputy.”
In the enabling ordinance, it is further suggested a procedure for handling the fees be established similar to those prescribed by the State Board of Accounts for accident report copy fees and handgun license applications and/or transfers, as follows:
(1) Issue a receipt, Sheriff’s Receipt No.133, for each fee collected.
(2) Remit receipts to the County Auditor once each month, on the Monthly Report of Collections (County Form No. 362).
(3) The County Auditor shall receipt the collections into the Vehicle Inspection Fund.
SOIL AND WATER CONSERVATION DISTRICT EMPLOYEES
IC 14-32-4-18 provides that employees of soil and water conservation districts shall be considered county employees in all counties except those containing a first class city. The employees will be eligible for and included in all fringe benefit programs for employees of that county.
An employee of a district whose position is funded entirely from sources outside the county in which the employee works solely on the basis of the funding of the employee’s position is not considered an employee of the county.
Since employees of soil and water districts shall be considered county employees this will require these positions to be included in the salary ordinance and for the county council to appropriate sufficient general fund monies to pay these salaries and fringe benefits.
This will require the filing of form 99, Payroll Schedule and Voucher with the county auditor covering the soil and water conservation district employees certified by their supervisor. The county auditor will include these employees in their records and reports in the same manner as other employees of the county.
There seems to be some confusion over whether the county should pay the expenses of soil and water conservation districts. IC 14-32-4-18 provides that an employee of the district is considered a county employee and permits payment of salaries and fringe benefits of soil and water conservation district employees. However an employee of a district whose position is funded entirely from sources outside the county in which the employee works solely on the basis of the funding of the employee’s position is not considered an employee of the county. Except as stated in IC 14-32-5-8, all other operating expenses are to be paid by the district.
IC 14-32-5-8 states, “The fiscal body of each county that contains a district in whole or in part may (our emphasis) appropriate money for the use of the district serving the county from which the appropriation is to be made.”
County auditors are not to pay claims of any kind for soil and water conservation districts except payroll and fringe benefit claims (IC 14-32-4-18) and claims as per IC 14-32-5-8 provided in the appropriation by the county council.
SOLID WASTE COLLECTION AND DISPOSAL
IC 36-9-30-5 allows counties to contract for the collection or disposal of solid waste. The following types of contracts may be entered into:
(1) Contracts with individuals for the exclusive right to collect and dispose of solid waste as defined under IC 36-9-30-4;
(2) Contracts with any business or institution for the collection and disposal of industrial, commercial, or institutional solid waste. All fees collected by the county shall be deposited in the treasury of the county for the administration, operation, and maintenance of the solid waste collection and disposal project; and
(3) Contracts for the use of privately owned solid waste disposal facilities.
If a contract executed under (1) or (2) yields a gross revenue to a contractor (other than a governmental entity) of at least $25,000 during the time it is in effect, the county must comply with IC 36-1-12-4 in awarding the contract. The county shall require the bidder to submit a financial statement, a statement of experience, the bidder's proposed plans for performance of the contract, and the equipment the bidder has available for the performance of the contract.
A county may contract with private persons that operate facilities that combine significant elements of recycling or production of refuse derived fuel.
STATE SOLID WASTE MANAGEMENT FEESA State Solid Waste Management Fee is to be charged by all counties owning their own final disposal facility.
Per IC 13-20-22-1: “(b) A fee is imposed on the disposal or incineration of solid waste in a final disposal facility in Indiana, except as provided in section 14 of this chapter, the amount of the fee is as follows:
(1) For solid waste generated in Indiana and delivered to a final disposal facility in a
motor vehicle having a registered gross vehicle weight greater than nine thousand
(9,000) pounds, fifty cents ($.50) a ton.(2) For solid waste generated outside Indiana and delivered to a final disposal facility in a
motor vehicle having a registered gross vehicle weight greater than nine thousand
(9,000) pounds:(A) fifty cents ($.50) a ton; and
(B) if the solid waste management board has adopted rules under subsection (c), an
additional amount imposed under the rules.(3) For solid waste generated in Indiana or outside Indiana and delivered to a final disposal
facility in:(A) a motor vehicle having a registered gross vehicle weight of not more than nine
thousand (9,000) pounds; or(B) a passenger motor vehicle (as defined in IC 9-13-2-123); fifty cents ($.50) for each load delivered by the motor vehicle.
(c) The solid waste management board may adopt rules to establish and impose a fee on the disposal or incineration of solid waste that is:
(1) generated outside Indiana; and
(2) disposed of or incinerated in a final disposal facility in Indiana.
If rules are adopted under this subsection, the fee shall be set at an amount necessary to offset the costs incurred by the state or a county, municipality, or township that can be attributed to the importation of the solid waste into Indiana and the presence of the solid waste in Indiana.
(d) Revenue from fees collected under subsection (b)(1) and (b)(2)(A) shall be deposited in the state solid waste management fund established by section 2 of this chapter. Revenue from fees collected under subsection (b)(2) (B) shall be deposited in the hazardous substances response trust fund established by IC 13-25-4-1, except that any part of the revenue that the board finds is necessary to offset costs incurred by counties, municipalities, and townships shall be distributed to solid waste management districts pro rata on the basis of the district’s population.
Per IC 13-20-22-11:
“(a) The owner or operator of a final disposal facility is responsible for collecting the fees imposed under section 1 of this chapter from persons delivering solid waste to that facility.
(b) Each owner or operator may:
(1) deduct from the fees an amount equal to one percent (1%) of the fees collected; and
(2) retain this amount as compensation for collecting and remitting the fees; if the fees collected and the reports required under subsection (c) are timely remitted and filed.
(c) If:
(1) the fees collected are remitted; or
(2) the required report is filed; after the due date, the owner or operator shall remit all fees collected to the department of state revenue.
(d) The owner or operator shall remit the remainder of the fees that the owner or operator collects
during a month to the department of state revenue not later than ten (10) days after the last day of the
month in which the fees are collected.(e) The owner or operator of a final disposal facility shall file monthly reports with the department
concerning the fees collected under this section. The department shall adopt a form for these reports. An owner or operator shall use the form in reporting to the department.”STATE DEPARTMENT OF CORRECTIONS HOUSING REIMBURSEMENTS
Counties receive from the State Department of Corrections a reimbursement for housing state prisoners at county jails. IC 35-38-3-3 states that the per diem and medical expense be deposited into the General fund. An additional appro¬priation would be required for this revenue and the use of the revenue is restricted for the purpose of paying the costs of incarcerating in the county jail those convicted of felonies. The county auditor must semiannually provide a report to the fiscal body and to the sheriff which includes an itemized record of the per diem and medical expense reimbursements received.
STATE EMPLOYEES - GARNISHMENT OF WAGES TO PAY CHILD SUPPORT AND SMALL CLAIMS JUDGMENTSIf the wages of a state employee are being garnished for two or more causes in the same court, the Auditor of State will be sending only one warrant or electronic funds transfer to the Clerk of the Circuit Court in payment of these multiple orders.
The receipt issued by the Clerk of the Circuit Court shall list each cause individually. If the accounting system prohibits the Clerk of the Circuit Court from listing more than one cause on a single receipt multiple receipts shall be issued for the warrant received from the Auditor of State.
STATE GAMING FUND – REVENUE SHARINGThe State will distribute wagering taxes to the county treasurer of each county that does not have a riverboat. IC 4-33-13-6 requires such distributions to be placed in the county’s general fund or riverboat fund, or both. The distributions may be used to carry out any governmental purpose for which money is appropriated by the county’s fiscal body.
If a political subdivision receives state grant money requiring local matching money, the political subdivision shall create a special fund and deposit the grant money and matching money into the special fund. The money in the fund may be used only for the purposes of the grant.
If a political subdivision completes the project for which the state grant money was provided and money remains in the fund:
(1) the political subdivision shall transfer the state’s share of the remaining money to the Treasurer of State for deposit in the fund from which the grant was made; and
(2) the political subdivision’s pro rata share of the remaining money reverts to the political subdivision’s general fund. (IC 36-1-8-12)
The Indiana Finance Authority (IFA) receives Capitalization grants from the Environmental Protection Agency (EPA). This grant funding is receipted to the State’s SRF account. The SRF account also receives State matching payments and loan repayments from participants in the SRF program. The SRF account is used by the State to provide low interest loans to Indiana communities for projects that improve the wastewater and drinking water infrastructure.
Because a portion of the funding the State uses for these projects is federally funded, the federal portion of the SRF funding must be included on the Schedule of Expenditures of Federal Awards (SEFA) that is part of the annual financial report. The IFA will notify each unit that receives SRF funding the amount of the funding that is federal and needs to be included on the SEFA. As part of the contract with the IFA for the SRF project, the County will have to establish accounts with the Bank of New York as trust accounts for the construction account (proceeds from the SRF funding) and the debt service accounts for the repayment of the loan. Although the IFA retains control, the County must account for these trust accounts on the County records. In the Fall Auditor’s conference we had informed you that the funds did not need to be included on the annual financial report, however that information was incorrect. The construction accounts and debt service accounts do need to be included on the annual financial report. In addition, the County needs to be sure the debt is included on the debt schedule.
The County Auditor may keep a separate ledger to account for the construction funds and the debt service funds. The ledgers should be reconciled to the monthly trust statements from the Bank of New York. The ledgers can then be used at year end to complete the SEFA and to complete a Supplemental Annual Financial Report. The information on the Supplemental Annual Financial Report will be added to the Annual Financial Report completed on Gateway. An example of a sample ledger for the SRF construction account was provided at the Auditor’s Fall Conference and may be obtained from the State Board of Accounts website. www.in.gov/sboa.
STATEMENT OF RECEIPTS AND DISBURSEMENTS AND WAGES AND COMPENSATION
We remind County Auditors to publish a statement of wages and compensation. Please review IC 36-2-2-19 for requirements.
At its second regular meeting each year, the executive shall make an accurate statement of the county’s receipts and expenditures during the preceding calendar year. The statement must include the name of and compensation paid to each county officer, deputy, and employee. The executive shall post this statement at the courthouse door and two (2) other places in the county and shall publish it in the manner prescribed by IC 5-3-1.
Governmental units are eligible for an exemption from the state sales tax on purchases. To obtain the exemption a Sales Tax Exemption Certificate must be obtained from the Indiana Department of Revenue (IDOR). Application should be made to the Sales Tax Division of IDOR. This certificate must be presented at the time a purchase is made to avoid paying sales tax. If sales tax is paid erroneously, a refund application may be obtained from the Sales Tax Division.
Lodging for individuals in hotels and motels in not exempt from state sales tax. Therefore, reimbursements for lodging in approved travel status may include state sales tax. However, it should be kept in mind that claims for all such reimbursements must be supported by a fully itemized receipt showing date(s) of lodging, the name(s) of the person(s) occupying the room and the amount paid.
The county council is required under the provisions of IC 36-2-12-15 to fix the compensation of the county surveyor both as if he is registered under IC 25-31 and as if he is not registered under IC 25-31. If the county surveyor is registered under IC 25-31 the compensation shall be one and one-half times the compensation of a surveyor who is not registered. For example, if the surveyor is fixed at $4,000 then the compensation for a registered surveyor should be fixed at one and one-half times $4,000 or $6,000.
In addition to the compensation fixed in the above paragraph the county surveyor is entitled, with the approval of the board of county commissioners to:
If registered:
1. $4 per mile for each mile of active regulated drains in the county which are described and certified.
2. $4 for each corner reference required to be established and perpetuated by IC 36-2-12-11.
If not registered:
1. $2 per mile for each mile of active regulated drains in the county which are described and certified.
2. $2 for each corner reference required to be established and perpetuated by IC 36-2-12-11.
COUNTY SURVEYOR’S CORNER PERPETUATION FUNDIC 36-2-7-10(a)(7) requires $5 for each deed the recorder records, in addition to other fees for deeds, be charged for the county surveyor’s corner perpetuation fund. Per IC 36-2-19-6 the filing fee established under IC 36-2-19-4 and the penalty for the violation of an ordinance established under IC 36-2-12-13 and IC 21-47-3-4 shall also be deposited in this fund.
The money collected under these statutes must be appropriated in the regular manner, and must be used by the county surveyor for expenses incurred in the location and perpetuation of the original government survey corners as found under IC 36-2-12-11 and for geodetic activities under IC 21-47-3-3.
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Tax from School Property Acquired
Tax Payments
Policies and Procedures on Late Property Tax Payments
Tax Sale
Title IV-D
Private Collection Agency Funds
Travel Expenses
IC 6-1.1-22-9(g) states: “Notwithstanding any other law, a property tax liability of less than $5 is increased to $5. The difference between the actual liability and the $5 amount that appears on the statement is a statement processing charge. The statement processing charge is considered a part of the tax liability.”
It is our audit position that the $5 is $5 per year ($2.50) per installment) and not $5 per installment.
If a person has a veteran’s deduction that reduces their tax liability to zero, DO NOT CHARGE THE $5 MINIMUM TAX BILL. This also applies to churches, cemeteries, fraternal organizations and not for profit organizations that have exemptions that reduce their tax liability to zero.
The statement processing fee becomes a part of the collections and it is not necessary to keep a separate accounting of the amounts collected for statement processing fees.
Since the statement processing fee is a part of the total tax liability, the same penalties for delinquencies apply to this fee as apply to property taxes.
The $5 minimum tax bill does not apply to conservancy district taxes and other special assessments (i.e. Barrett Law, Line Fence, Delinquent Dog Tax, Weed Cutting Assessments, etc).
However, since the taxes on lands classified as forest reserve are real estate taxes, the $5 minimum tax bill does apply to taxes on lands classified as forest reserve.
TAX ON PROPERTY ACQUIRED BY A SCHOOL CORPORATION
Although a school corporation is exempt from having any of its property assessed for general property taxes it is not exempted from this payment of taxes already charged on the property it acquires. School corporations are not included in IC 6-1.1-36-7 as a governmental unit eligible for cancellation of tax on property it acquires. It follows that taxes charged on property acquired by a school corporation can be discharged only by payment of such taxes.
POLICIES AND PROCEDURES ON LATE PROPERTY TAX PAYMENTS
The State Examiner issued Directive 2023-1 on August 10, 2023, requiring each county to establish policies and procedures for the addition of the tax penalty. IC 6-1.1-37-10 provides guidance on how to determine if a tax payment is late and what penalty to apply. However, each county must establish their own policies and procedures documenting how they process a payment that is physically received after the statutory due date of May 10 and November 10.
The county needs to assign personnel to process these payments. In addition, the county should establish written procedures that should be followed each time a payment is received after the due date. Each step in the process should be outlined. For each payment, physically received after the due date, the procedure should state how the county documents the date received. The steps that are followed to apply the statute to the payment to determine if a penalty should be applied. This is especially true in cases where the envelope does not have a post mark. To illustrate, assume a taxpayer in your county had mailed their payment in and thought it was timely but received a late penalty. When they approach your office, can you show them when the payment was received, what steps you followed to determine that the payment was late and physical proof supporting your decision?
There should also be internal controls including review and approval processes to ensure that the policy is being applied consistently. Further, the policy should state what documentation is to be retained to support the decision that was made and for how long the documentation should be retained. During an audit, you should be able to provide the steps that were taken and the supporting documentation that the statute was applied properly.
REFUNDS FOR ERRONEOUS OR EXCESSIVE TAX PAYMENT
A person, or his heirs, personal representative, or successors, may file a claim for refund of all or a portion of a tax installment which he has paid. The claim must be filed with the auditor of the county in which the taxes were originally paid, within three (3) years after the taxes were first due, on County Form No. 17T, Claim for Refund of Taxes, prescribed by the State Board of Accounts. (Our Emphasis)
The claim must state that a payment was made in excess of the taxes due as established by (1) a determination by the county board, board of tax review, DLGF or a court for the tax year and parcel on which the taxes were paid, and after all rights of appeal have lapsed, (2) proof of an error in the computation of interest, penalties, or delinquent taxes carried forward; or (3) proof of an overpayment by the claimant. A taxpayer may not raise a claim under this section that must be raised under IC 6-1.1-15. A taxpayer is not entitled to a refund if the payment has been applied as a credit to later tax liabilities of the taxpayer for the property on which the tax was assessed. (IC 6-1.1-26-1.1)
The county auditor shall approve or deny the claim for refund. If the county auditor approves the claim for refund, the county auditor shall forward the claim to the county treasurer and county assessor for approval or denial. The county treasurer and county assessor shall each certify their approval or denial and return the claim to the county auditor within 75 days after the date of filing. If the county auditor, the county assessor or the county treasurer deny the refund, the county auditor will send notice to the taxpayer. The claimant may, within 45 days of the notice, file an original action claiming a refund in a court of competent jurisdiction in the county where the property is located. If a credit is not applied or a refund is not paid within 120 days from the date a claim was filed under section 1.1, a claimant may file an original action claiming a refund in a court of competent jurisdiction in the county where the property is located. (IC 6-1.1-26-2.1)
If the county auditor, the county assessor and county treasurer approve the refund, the county auditor shall issue a warrant to the claimant payable on the general fund for the amount due within 45 days of approval of the claim for refund. In addition, the taxpayer is entitled to interest on any overpayment of property taxes. Interest shall be computed for the date on which the taxes were paid or due, whichever is later, to the date on which the county auditor and county treasurer approve the refund at a rate in effect under IC 6-8.1-10-1 for each particular year covered by the refund. In the June or December settlement, immediately following a refund, the county auditor shall deduct the amount refunded from the gross tax collections of the taxing units (districts) for which the refunded taxes were originally paid and shall pay the amount so deducted into the general fund of the county. However, the county auditor shall make the deductions and payments required no later than the December settlement and apportion¬ment. The county auditor shall notify the county executive of the payment amount due. (IC 6-1.1-26-2.1)
If a determination is made in a review or appeal under IC 6-1.1-15 results in an overpayment by the taxpayer during the same tax year to which the assessment appeal relates, the taxpayer is entitled to a credit in the amount of the overpayment on the next successive tax installment, if any, due in that tax year. After the credit is given the county auditor shall determine if a further amount is due the taxpayer and if a further amount is due the taxpayer, without a claim or appropriation being required, pay the amount due the taxpayer. (IC 6-1.1-26-3.1)
For refunds in excess of $100,000, based on a real property tax assessment appeal, the county auditor may instead of a refund, elect to apply credits in equal installments to future property tax installments over a period of not more than five years following the conclusion of the assessment appeal If the claimant no longer owns the property on which the appeal was filed, the overpayment will not be applied as a credit but refunded in equal installments over not more than five years. (IC 6-1.1-26-4.1)
TAX SALE – DUTIES OF COUNTY AUDITOR
The law governing tax sales makes these requirements on the county auditor prior to the sale (these provisions do not apply to vacant or abandoned real property that is on the list prepared by the county auditor under section 1.5:
(a) Using the certified list prepared by the County Treasurer prepare and record a list of real property eligible for sale in the Tax Sale Record, Form No. 137.
(b) Prepare a notice with the list mentioned in (a), the location of each parcel, and a statement listing the date, time place and terms of the sale: (IC 6-1.1-24-2).
(c) Post the notice at a public place of posting in the county courthouse or another public county building at least twenty-one (21) days before the earliest date on which application for judgement; (IC 6-1.1-24-3).
(d) Give notice by publication once a week for three (3) consecutive weeks before the earliest date on which application for judgement may be made. The expenses of this publication shall be paid out of the county general fund without prior appropriation. (6-1.1-24-3)
(e) For properties not sold at their initial tax sale, the auditor may omit the descriptions of the tracts or items of real property, if the auditor includes in the notice a statement that descriptions of those tracts or items of property are available on the country government’s web site and the information may be obtained in printed form from the auditor. (IC 6-1.1-24-3)
(f) On or before the date of the sale, list on the record (Tax Sale Record) all properties that will be offered for sale: (IC 6-1.1-24-4)
(g) Send a notice of such sale to the owner or to at least one of the owners of such real property listed for sale for delinquent taxes or special assessments, to the last known address by certified mail, return receipt requested, and by first class mail at least 21 days before the earliest date on which the application for judgement and order for sale of real property eligible for sale may be made. If both notices are returned, the auditor shall take an additional step to notify the property owner, if the auditor determines that an additional reasonable step is practical. (Use form 137A for this purpose). (IC 6-1.1-24-4)
(h) Present proof of the mailing to the court along with the application for judgment and order of sale. (IC 6-1.1-24-4)
(i) At least twenty-one (21) days before application for judgments is made, send a notice by certified mail, return receipt requested, to any mortgagee, or purchaser under an installment land contract recorded in the office of the county recorder, who annually requests by certified mail a copy of the notice. (IC 6-1.1-24-3)
(j) On the day on which the application for judgment and order of sale is made, the county auditor assisted by the county treasurer shall compile and correct the list, removing delinquencies which have been paid, and subscribe to an affidavit in the form at IC 6-1.1-24-4.6(a).
(k) File the application for judgment and order for sale as one (1) cause of action to any court of jurisdiction jointly by the county treasurer and county auditor and shall include the affidavit and corrected list.
(l) Auditor shall serve as clerk of the sale. (IC 6-1.1-24-5).
(m) A business association that has not obtained a certificate of authority from, or registered with, the secretary of state or is not in good standing in Indiana or an agent of that business association is ineligible to purchase tracts or certificate of sales. If an ineligible person purchases a tract under this section, the sale of property is subject to forfeiture. (IC 6-1.1-24-5.1)
(n) A person who owes delinquent taxes, special assessments, penalties, interest or costs directly attributable from a tax sale on a tract or an item of real property listed, may not purchase a tract offered for sale. A person with an interest in an unsafe building or a vacant and abandoned building may not purchase a property offered for sale. If a person who is ineligible purchases a tract that sale of property is subject to forfeiture. (IC 6-1.1-24-5.3).
(o) A foreign business association that has not obtained a certificate of authority from, or registered with, the secretary of state or is not in good standing in Indiana and an agent of the business association is not eligible to purchase real property and may not purchase a tract offered for sale. If an ineligible foreign business association purchases a tract offered for sale, the sale of property is subject to forfeiture.
The notice required in (b) above must be published in two newspapers in the county.
It is recommended that the published and posted notice of tax sale indicate which parcels are being offered for the second time. Doing this will not only inform the owner of this fact, but will provide an orderly means of determining which parcels are subject to purchase by the county in not sold to an individual. See item (e) above for additional options for property being offered for the second time.
There are additional statutory requirements for the sale of vacant or abandoned property (IC 6-1.1-24-1.5; IC 6-1.1-24-2.3) and for properties not suitable for tax sale (IC 6-1.1-24-1.7).
If the purchaser fails to pay his bid, the property shall be offered again for sale and the purchaser shall pay a twenty five percent (25%) penalty of the amount bid. The County Prosecuting Attorney shall initiate an action in the name of the State Treasurer and amounts collected are to be deposited in the county general fund. (IC 6-1.1-24-8)
IC 6-1.1-24-1.2 (b) states, "A county treasurer may accept partial payments of delinquent property taxes, assessments, penalties, interest, or costs under subsection (a) after the list of real property is certified under section 1 of this chapter."
The acceptance of a partial payment after July 1st will not remove the property from the tax sale. IC 6-1.1-24-1.2(a) states: "A tract or an item of real property may not be removed from the list certified under section 1 of this chapter before the tax sale unless all delinquent taxes, special assessments, penalties due on the delinquency, interest, and costs directly attributable to the tax sale have been paid in full."
When real property is offered for sale under IC 6-1.1-24-6 for two (2) consecutive years and a bid is not received in an amount equal to or in excess of the minimum sale price the county acquires a lien in the amount of the minimum sale price. This lien attaches on the day after the last date on which the tract or item was offered for sale the second time. When the lien is acquired this fact should be noted in the Tax Sale Record, County Form No. 137, and an immediate record thereof made in the Register of Tax Sales to County, County Form No. 9S. It is also desirable to indicate on the tax duplicate "lien acquired by county on______ 2___," so that this information will be immediately available in the event any person appears to make a payment. No money is paid by the county on bid by the auditor but such real estate shall be held in trust by the county for the benefit of all the tax levying bodies as their interest therein appear.
The Register of Tax Sales to County, Form 9S, is designed to keep a complete record of all the proceedings on property on which liens are acquired by the county from the date the lien was acquired to the date of redemption or sale of the real estate.
When a county acquires a lien and a tax sale certificate is issued to the county, pursuant to IC 6-1.1-24-6, the redemption should be handled in the same manner as property sold to other purchasers, by issuing a quietus for the amount required for redemption and by crediting the amount to the tax sale redemption fund. A warrant from that fund should then be issued to the "Treasurer of_________County" for payment of the taxes, penalties, interest and costs for which a lien was acquired by the county, together with the statutory redemption penalty of 10% or 15% depending upon the date of redemption. The amount of the penalty added on redemption should then be entered in the "additional assessments" section of the duplicate in the column provided for "delinquent tax" and payment thereof entered by the county treasurer when the warrant is processed and a receipt (or receipts) issued for the taxes, penalties, interest and costs.
REFUND ON ACCOUNT OF ERRONEOUS TAX SALEIC 6-1.1-25-10 authorizes refunds to purchasers at tax sale when sales are found to be invalid. The purchaser at an erroneous tax sale is entitled to receive interest at the rate of 5% per annum on the amount paid at the sale and all types and special assessments on the property paid by the purchaser.
SETTLEMENT OF FALL TAXES COLLECTED BEFORE MAY 10
IC 5-13-6-3 requires all taxes collected by the County Treasurer to be deposited in one (1) fund in the several depositories selected for the deposit of county funds and remain in the depositories until distributed in the following semiannual distribution made by the County Auditor. The County Treasurer shall make settlement with the County Auditor semiannually for the amount of taxes and special assessments which the County Treasurer has collected (IC 6-1.1-27-2). Therefore, if both the spring and fall installments are collected before May 10, both installments must be part of June Settlement.
Any payments in excess of the taxes and special assessments actually due, as shown on the tax duplicate or special assessment records, shall constitute a special fund to be known as a “surplus tax fund.” Amounts placed in such fund shall first be applied to delinquent taxes in the manner set forth in IC 6-1.1-23-5(b). The taxpayer may then file a verified claim for money remaining in the surplus tax fund. The county treasurer or county auditor shall require reasonable proof of payment by the person making the claim. Any amounts remaining shall be disbursed to the party entitled thereto, on the warrant of the county auditor after approval of such claim by the county auditor and the treasurer.
Not less frequently than at the time of each semiannual settlement, the treasurer shall prepare a schedule on County Form 65SFT, Surplus Tax Fund Ledger, of all excess payments received showing the name on the tax duplicate, the amount of the excess paid, and the taxing district, and deliver the schedule to the county auditor. Within fifteen (15) days after receiving the schedule, the county auditor shall review the schedule, and if the county auditor concurs with the schedule, the county auditor shall notify the county treasurer that the notice may be sent. The county auditor shall preserve the schedule and, if a refund is made thereafter, shall further note thereon the date and amount of each item refunded. In addition, when money is transferred from the surplus tax fund to the county general fund, the county auditor shall note the date and amount of the transfer on the schedule.
If an excess payment is not claimed within the three (3) year period after November 10 of the year in which it was paid and the county treasurer has given the written notice, the county auditor shall transfer such sum into the general fund of the county and it shall not thereafter be refunded. (IC 6-1.1-26-6) This type of “excess” collection is not to be confused with tax sale surplus items.
This subsection applies only if the amount of an excess payment is more than five dollars ($5) and exceeds the amount applied to property taxes that are delinquent at the time that the excess payment is transferred to the surplus tax fund. Not later than forty-five (45) days after receiving the notification from the county auditor, the county treasurer shall give the taxpayer who made the excess payment written notice that the taxpayer may be entitled to a refund. The notice shall be mailed to the last known address of the taxpayer as listed on the tax duplicate of the most current record of the county treasurer. The notice must contain at least the following information:
(1) A statement that the taxpayer may be entitled to a refund because the taxpayer made an excess payment.
(2) The amount of the refund.
(3) Instructions on how to claim the refund.
(4) The date before which the refund must be claimed.
(5) An explanation that the amount of the refund will be reduced by any amount applied to property taxes that are delinquent.
Payments:
Surplus tax may only be refunded after being transferred by quietus from the Treasurer's Daily Balance of Cash and Depositories (Cashbook), line 53, to the Surplus Tax Fund. County treasurers are not authorized to make refunds from the "Other Sources" section of the Daily Balance of Cash and Depositories. Both the County Auditor and County Treasurer must approve all Surplus Tax Fund claims in accordance with IC 6-1.1-26-6.
We would not object to the transfer (by quietus) at more frequent intervals other than at settlement time. If your county chooses to make more frequent transfers, remember to complete the Surplus Tax Fund Ledger. Also, be sure to adjust the amounts reported on column 6 of the county Treasurer's Certificate of Tax Collections for surplus tax remitted prior to settlement.
Applying surplus to next installment:
It has come to our attention that there needs to be some clarification about the presentation in August 2013 at the Treasurers’ annual conference on refunds and surplus taxes under IC 6-1.1-26-6. During the presentation on refunds this statute was discussed to point out the differences between it and other types of refunds. A further point was made that per this statute a taxpayer is entitled to claim this surplus less delinquent taxes. The statute also provides that availability of these excess payments must occur at least two times a year, at the time of each semiannual settlement. Often this surplus has been applied to the next installment. We want to clarify that we have not taken audit exception to this, but want to emphasize that if the taxpayer wishes to claim an excess payment that this is the provision in the law that we would refer them to.
COMPENSATION FROM TITLE IV-D INCENTIVE FUNDS
IC 31-25-4-23 states that Title IV-D Incentive payments shall be distributed as follows:
(1) 22.2% to the Title IV-D Incentive Fund;
(2) 33.4% to the operating budget of the prosecuting attorney; and
(3) 22.2% to the operating budget of the county clerk.
In the case of Plummer v. Hegel App. 2 Dist. 1989, 535 N.E.2d 568, the court held that the prosecuting attorney was entitled to receive incentive payments to encourage enforcement and collections of child support, as additional salary without the county council’s approval.
IC 31-25-4-23 (c) states in part that:…”the amounts received as incentive payments may not, without the approval of the county fiscal body, be used to increase or supplement the salary of an elected official.”
IC 36-2-7-2 states that the compensation fixed for county officers and employees is in full for all governmental services and in lieu of all fees, per diems, penalties, costs, interest, forfeitures, percentages,
commissions, allowances, mileage, and other remuneration.Based on the two above cited code sections and the case of Plummer v. Hegel, it is the audit position of this department that deputies and employees in the offices of the prosecuting attorney and the clerk of the circuit court could be paid additional salary from Title IV-D Incentive Funds without prior approval of the county council.
TITLE IV-D PRIVATE COLLECTION AGENCY (PCA) FUNDS
We were recently made aware that the Child Support Bureau (CSB) released correspondence in March of 2016 changing their opinion and stating that the 10% prosecutor’s PCA funds should not be considered program income for the Child Support Enforcement Program (CFDA # 93.563). Below you will find the guidance issued in the correspondence released by CSB.
“This webmail addresses a change in guidance on the Program Income treatment of Private Collection Agency (PCA) funds sent to Prosecuting Attorneys. Since 2007, Prosecuting Attorney Offices have the option to contract with a PCA that has been approved by CSB to collect arrears on child support cases on eligible cases. (See Ind. Code 31-25-4-14.1) PCAs are used to attempt to collect on cases that only have state assigned child support arrears (TANF). Of the amount recovered, the PCA retains a 15% commission and the Prosecuting Attorney’s Office retains 10%.
Past guidance by DCS-CSB has stated the 10% amount retained by the Prosecuting Attorney Offices is to be considered Program Income. This causes a reduction in the reported expenses by the county and subsequently reduces the reimbursement sent to the county for IV-D services. This causes a negative impact on the local funds available to operate the IV-D program. Program Income is defined in the Code of Federal Regulations at 45 C.F.R. § 75.2. Further regulations governing program income are found at 45 C.F.R. § 75.307 and 45 C.F.R. § 304.50.
However, upon further review and consideration, CSB has determined that the 10% amount is not Program Income and therefore Prosecuting Attorney Offices are not required to report it as such. The 10% amount is retained from the recovered funds for work performed by the Prosecuting Attorney Offices. This work enables the recovering of these funds. This is a redistribution of the collected state assigned (TANF) child support arrearages to the Prosecuting Attorney Offices for their IV-D work effort as defined by the Cooperative Agreement entered with DCS-CSB.
Some county Prosecutor Offices have reported the 10% amount as Program Income and, therefore these previously reported amounts will be repaid to these counties. This will include all amounts reported as Program Income from 2007 to the present.
The CSB Financial Quality Assurance Department will work with each county Prosecutor’s Office to determine specific figures for the repayment.
This amount will be reimbursed to each county by directing the county Prosecutor’s Office to enter a negative amount on the Program Income line on their Monthly Expense Claim (MEC) form equivalent to the total amount that county Prosecutor’s Office has reported as PCA fund Program Income. This negative entry will increase the total amount reimbursed to the county relating to the monthly claim. Further, this method provides a proper and direct audit trail of the transaction.
CSB has also revised the IN IV-D Expense Reporting Guide to reflect this change. This Guide is found on the CSR within the IV-D Claims – Incentives link.”
If you have any questions about the reporting of PCA funds or the repayment noted above, contact DCS.
Any court may establish a traffic violations bureau and appoint a violations clerk who shall serve under the direction and control of the court. (IC 34-28-5-7)
The violations clerk or deputy violations clerk shall:
1. Accept:
A. Written appearances;
B. Waivers of trial;
C. Admissions of violations;
D. Declarations of nolo contendere for moving traffic violations;
E. Payments of judgments (including costs) in traffic violations cases;
F. Deferral agreements made under section 1 of this chapter (or IC 34-4-32-1(f) before its repeal) and deferral program fees prescribed under IC 33-37-4-2(e); and
G. Community restitution or service agreements made under section 1(g) of this chapter,
2. Issue receipts and account for any judgment (including costs) collected; and
3. Pay the judgments (including costs) collected to the appropriate unit of government as provided by law. (IC 34-28-5-8)
The court shall:
1. designate the traffic violations within the authority of the violations clerk, but these violations may not include misdemeanors or felonies;
2. establish schedules, within limits prescribed by law, of the judgments to be imposed for the first violations, designating each violation specifically;
3. order that the schedule of judgments be prominently posted in the place where the fines are paid;
4. establish a procedure under which any violations clerk or deputy violations clerk shall accept, receipt, and account for all money tendered for designated traffic violation; and
5. dismiss deferred actions if a dismissal request is made under section 1 of this chapter (IC 34-4-32-1 (f) before its repeal). (IC 34-28-5-9)
Any person charged with a traffic violation that is within the authority of the violations clerk may mail or deliver:
1. the amount of the judgment (including costs) indicated on the ticket; and
2. a signed:
A. admission of the violation; or
B. pleading of nolo contendere, if the action is for a moving traffic violation. (IC 34-28-5-11)
Before accepting a pleading, admitting to a violation, or entering a declaration of nolo contendere to a violation, the violations clerk or the officer writing the ticket shall inform the person that:
1. the person’s signature to:
A. an admission of the violation; or
B. a pleading of nolo contendere will have the same effect as a judgment of a court; and
2. the record of judgment will be sent to the commissioner of motor vehicles of Indiana or the state where the person received a license to drive. (IC 34-28-5-12)
All qualifying transient merchants shall file an application for a license for that purpose with the county auditor and shall pay to the county treasurer a license fee of one hundred dollars ($100) for each six (6) month period in which the applicant proposes to transact business, unless a lesser fee was established or waived by the county legislative body in accordance with IC 25-37-1-6.5. The applicant shall thereupon file the county treasurer's receipt for such payment with the county auditor of the county with whom the application is filed. (IC 25-37-1-4 and IC 25-37-1-6)
We recommend the Combination Quietus, Application to Pay, Treasurer's Receipt and Auditor's Copy (Form 20-21 Rev. 1987) or an alternate form that provides the same information be used in processing this type of transaction. We also recommend that the licenses issued to transient merchants be prenumbered by your printing supplier or generated by your software system in chronological order for accountability. If manual forms are used, they should stored in a safe place to prevent unauthorized use of such licenses. All license fees collected shall be quietused to the County General Fund. (IC 25-37-1-12)
At the time of filing the application with the county auditor, the applicant shall also file and deposit a bond with sureties to be approved by the county auditor for the penal sum of seven hundred fifty dollars ($750) or three (3) times the value of the goods, wares, and merchandise to be offered for sale or sold as shown by the inventory filed, whichever sum is greater, running to the State.
The bond shall be forfeited and used for the benefit of:
(1) any purchaser of goods, wares, or merchandise sold by the applicant, if the purchaser is awarded a judgment as a result of a cause of action against the applicant that was commenced within one (1) year of and that arose out of the sale;
(2) the operating budget of the county's prosecuting attorney, if the applicant is found by a court to have violated IC 25-37-1-9, although the amount forfeited under this subdivision may not exceed one-third (1/3) of the bond;
(3) the state, any of its departments or subdivisions, or any unit of local government, if the applicant fails to pay all taxes due from the applicant to that governmental entity; or
(4) a court in payment of partial payment of any fines that may be assessed by the court against the applicant, its agents, or employees for violation of this chapter.
However, the aggregate liability of the surety for all taxes, fines, disbursements, and causes of action may not exceed the amount of such bond. There shall be no limitation of liability against the transient merchant or the applicant for the license.
In such bond, the applicant and surety shall appoint the auditor of the county in which the bond is filed, the agent of the applicant, and the surety for the service of process. In the event of such service of process, the agent on whom such service is made shall, within five (5) days after the service, mail by ordinary mail a true copy of the process served upon him to each party for whom he has been served, addressed to the last known address of such party. Failure to mail the copy shall not, however, affect the court's jurisdiction.
The state or any department or subdivision, municipal or otherwise, thereof or any person having a cause of action arising from or out of any sale or sales of goods, wares, or merchandise or against the applicant may join the applicant and the surety on such bond in the same action or may sue either such applicant or the surety alone. (IC 25-37-1-5)
‘The following persons, organizations or corporations are not required to obtain a transient merchants license:
(1) any person, individual, copartner, limited liability company, or corporation which grows the goods, wares, or merchandise that is sold or is offered for sale;
(2) a person who makes crafts or items by hand and sells them or offers them for sale;
(3) an auctioneer who is licensed under IC 25-6.1;
(4) a resident of the county in which the sale takes place who conducts a sale of tangible personal property for no more than four (4) days per calendar year;
(5) an organization that is exempt from the Indiana gross retail tax under IC 6-2.5-5-26;
(6) a person who:
(A) sells merchandise;
(B) offers to sell merchandise; and
(C) provides proof that the sale is being conducted as part of an activity sponsored by an organization described in subdivision
(7) a person who:
(A) organizes;
(B) sells merchandise at;
(C) offers to sell merchandise at; or
(D) exhibits at; a trade show or convention;
(8) except as provided in section 15 of this chapter, a person who holds a registered retail merchant's certificate under IC 6-2.5-8. (IC 25-37-1-2)
A transient merchant who:
(1) transacts business without having first obtained license under this chapter; or
(2) knowingly advertises, offers for sale, or sells any goods, wares, or merchandise contrary to this chapter; commits a Class B infraction for each day a violation occurs. (IC 25-37-1-9)
Notwithstanding IC 25-37-1-5 (requirement to file bond), a county legislative body (as defined in IC 36-1-2-9) may annually:
(1) set the amount of the bond required under section 5 of this chapter in any amount that is not greater than the amount required in section 5 of this chapter; or
(2) waive the bond required under section 5 of this chapter.
A county legislative body that reduces or waives the bond must inform the auditor of the county of the following:
(1) Whether a bond is required to be filed with an application with the auditor for a transient merchant license.
(2)The amount of the bond if a bond is required.
If filing for a transient merchant license with a county auditor who has been informed of a reduced bond, an applicant filing for a transient merchant license must do the following:
The applicant must file:
(A) an application; and
(B) the bond; with the county auditor.
If filing for a transient merchant license with a county auditor who has been informed that a bond has been waived, the applicant must file only an application.
A bond required, although not in the amount required under IC 25-37-1-5, will for all other purposes be treated like a bond issued under IC 25-37-1-5. (IC 25-37-1-5.5)
Notwithstanding IC 25-37-1-6 (requirement to pay license fee), a county legislative body (as defined in IC 36-1-2-9) may annually:
(1) set the county license fee required under section 6 of this chapter in any amount that is not greater than the amount required in section 6 of this chapter; or
(2) waive the county license fee required under section 6 of this chapter.
A county legislative body that reduces or waives the county license fee must inform:
(1) the treasurer of the county; and
(2) the auditor of the county; whether a license fee is required to be filed with an application with the auditor for a transient merchant license and the amount of the license fee if a license fee is required.
A treasurer who is informed of a fee changed under subsection (b) shall:
(1) require each applicant to submit the lesser fee set by the county legislative body; and
(2) issue a receipt to the applicant.
An applicant filing for a transient merchant license must do the following:
(1) If filing for a transient merchant license with the county auditor who has been informed of a reduced license fee, the applicant must file:
an application; and
(B) a receipt from the county treasurer.
(2) If filing for a transient merchant license with a county auditor who has been informed that a license fee has been waived under subsection (b), the applicant must file only an application. (IC 25-37-1-6.5)
Governments use fund accounting to account for the financial transactions of their unit. A fund is self-balancing and used to account for money set aside for a specific purpose. The general fund of the unit has many sources of revenue and can be used for any legal purpose of the governmental unit. There can only be one general fund. Special revenue funds, debt service funds, and capital project funds are established to account for specific sources of revenue or specific purposes. Fund accounting provides transparency for the accounting of these specific purposes. Transferring cash between these funds' clouds that transparency.
Transfers should only be done when there is a statutory authority to do so. An example would be IC 36-1-8-5 and IC 36-1-8-5.1 which authorizes transfers to the Rainy Day fund. The statute specifies what transfers may be made into and out of the fund and the limits on those transfers. It is necessary to review the statute for the fund before making any transfers. The Uniform Chart of Accounts - “Fund and Account Descriptions” lists the statutory funds and the specific code that establishes how the fund may be used. The statute will also tell you if there is authority to transfer to another fund, and when that transfer is allowed. If the statute does not specifically authorize a transfer from the fund, then no transfers should be made from the fund.
TRAVEL EXPENSES – FIXED TRAVEL ALLOWANCE
In Official Opinion No. 74 of 1953 the Attorney General held that statutes do not authorize payment of a fixed travel allowance (Fixed amount regardless of the number of miles traveled) to city officers and employees. It is our audit position that this same reasoning would apply to county officers and employees.
The opinion states in part: "…I can find no statutory authority for the payment of a fixed monthly travel allowance to municipal employees and the employment relationship does not change the fact that such a "travel allowance" is in the nature of extra compensation to the employees involved."
This opinion is limited to the payment of a fixed monthly travel allowance and should not be considered as touching upon the authority of a city to reimburse its employees for travel upon a mileage basis, or by any other proper method based on the expense of the travel."
Based on the following opinion the State Board of Accounts has taken the audit position that county officers and employees may be reimbursed for actual miles traveled in their own motor vehicles on official business of the county at a rate per mile as fixed by an ordinance of the county council. The county council should also determine if parking and toll fees shall be a part of the mileage rate or if the county officials and employees are to be reimbursed for parking and tolls in addition to their mileage reimbursement.
Reimbursed mileage should not include travel to and from the officer's or employee's home and the governmental office in which he works. If two or more persons ride in the same motor vehicle, only one mileage reimbursement is allowable.
General Form 101 should be used for claiming mileage if more than one trip is involved.
When traveling on official business, county officers and employees may be reimbursed for meals, lodging and other necessary traveling expenses based upon the travel ordinance as established by the county.
EXPENSES FOR ATTENDANCE AT PURDUE ROAD SCHOOL
Expenses of county officials for attending the Purdue Road School are covered by the following statutes:
County Highway Supervisor
IC 8-17-3-10(a) states in part,“….The expenses of the county highway supervisor, including the actual expenses of transportation to and from the school, together with the expense of lodging and tuition, shall be paid from the county highway maintenance fund.”
Board of County Commissioners
IC 8-17-7-7 states, “Each member of the county executive shall attend any school or course conducted for local officials under IC 8-23-9-56. The fiscal body of each county may appropriate sufficient funds to pay each member of the county executive a per diem for expenses for each day or part of a day the member is in attendance at any school or course conducted for local officials under IC 8-23-9-56, and to pay the member a sum for mileage at a rate determined by the county fiscal body for each mile traveled to attend the school.
Other County Personnel
IC 36-9-8 permits the county surveyor or county engineer, and any other person authorized by the county commissioners to attend the annual road school and provides that their expenses including mileage, lodging and tuition to be paid from the county general fund. These expenses must be documented with proper receipts and approved by the board of commissioners before the county auditor can issue a warrant.
Mileage shall be at the rate per mile as approved by the county fiscal body for those authorized county officials and employees who used their personal conveyances in traveling to and from the road school.
All claims for reimbursement must be itemized and documented with paid receipts.
TRAVEL EXPENSES – REIMBURSEMENTS TO EMPLOYEES
The following sets forth the audit position of the State Board of Accounts with regard to reimbursements made by local governmental units to their officers and employees for travel and meal expenses.
A local unit may reimburse such persons for actual miles traveled in their own motor vehicles on the official business of the local unit at a reasonable rate per mile as fixed by an ordinance or resolution of the unit's legislative body. The mileage rate should be fixed by the board or commission having authority to approve claims for travel expenses. No particular mileage rate has been set by the State of Indiana for all local units of government and, consequently, the mileage rate lies within the discretion of the legislative body, board or commission, unless otherwise provided by statute. The body setting the mileage rate should also determine whether parking fees and toll charges are included in the rate or, on the other hand, whether such expenses are to be reimbursed separately based on the submission of receipts.
Reimbursed mileage should not include travel to and from the officer's or employee's home and regular place of employment. If more than one person rides in the same vehicle, only one mileage reimbursement is allowable. General Form 101 (or an approved substitute) should be used for claiming mileage. The odometer reading columns on this form are to be used only when the distance between points cannot be determined by fixed mileage or, official highway maps.
When traveling outside the local unit's boundaries on official business, officers and employees may also be reimbursed for meals, lodging, and incidental expenses as defined in the travel policy. The claim for reimbursement should be supported by itemized receipts from hotels, restaurants, and taxi cabs used by the officer or employee while traveling on official business.
It is permissible for the legislative body of the local unit or the board or commission having the authority to approve claims to adopt an ordinance or resolution establishing a reasonable per diem rate intended to cover travel expenses other than hotel and mileage costs and the officer or employee may be reimbursed on the basis of such a per diem rate in lieu of submitting receipts. If a fixed per diem rate is established by policy, the policy should clearly indicate which type of expenses, in addition to meals, are included in the rate and which expenses are to be reimbursed on the basis of actual receipts being submitted by the officer or employee. The policy should also define the local unit's boundaries for purpose of reimbursing travel; i.e. outside a 50-mile radius of the office, outside the county, etc. The policy should cover a proportionate reduction in the per diem rate when meals are provided by an outside party.
When state statutes govern the amounts of allowable travel reimbursements, those statutes supersede local policy. Also, when determining the reasonableness of a mileage rate or per diem rate, consideration should be given to rates established by the State of Indiana and the Federal government. The local unit should, however, consider the income tax implications of setting its rates higher than the current Federal rates.
In all cases, an officer or employee requesting reimbursement for overnight travel is required to submit a receipt from the hotel or other meeting place where such accommodations were provided.
- U
Uniform Electronic Transactions Act
Periodically, county officials may receive a telephone call or a letter from companies claiming to be able to help the county recover monies they have coming to them. Of course, the company charges a finder fee. There is nothing illegal about hiring these companies but be aware that the service you are receiving is not any more than you could do on your own, thus saving the county the finder fee. Most of the monies that are out there waiting for you to claim are unclaimed property. The reasons they exist can vary but the information is available to you from the same sources these companies use. Most of these unclaimed properties are being held by the State Attorney General. You may contact the Unclaimed Property section of the Attorney General’s office or they are also listed on the Internet. A little work from you could reap a reward for the county as you claim what legally belongs to the county.
UNEMPLOYMENT CLAIMS
Each unemployment claim received should be carefully reviewed to make sure that the claim is proper. Protests should be filed when considered necessary.According to the Indiana Department of Workforce Development Unemployment Insurance Employer Handbook (Revised 1/10/2020), page 47 and 48:
“Whenever an individual files an initial claim for benefits, their last employer and all of their base period employers are notified and asked to verify the reason for the claimant’s unemployment. This notifies the organization that its experience account may be charged. Employers that have elected to participate in the State Information Data Exchange System (SIDES) or SIDES E-Response can respond to these notices electronically. SIDES allows employers to exchange UI separation information with DWD electronically...If the organization is not signed up for electronic notice and response (SIDES), it may then use state form 640P to protest a claimant’s eligibility for benefits. The information the organization provides on this form could affect the claimant’s eligibility or any charges to the employer’s experience account for benefits paid. Form 640P is available online at www.in.gov/dwd/2465.htm... Employers have a duty to prevent unemployment benefits from being paid if the claimant is not entitled to receive benefits. To prevent benefits from being paid in error, the organization must respond electronically, or submit Form 640P, if a former employee seeking unemployment benefits is unemployed because that person:
- * Quit voluntarily or was absent for unknown reasons
- * Was discharged for just cause (see Section VII)
- * Was discharged for gross misconduct (see Section VII)
- * Is not entitled to ANY pay or benefits from the organization;
- * Is ineligible for any reason listed in this handbook.”
For purposes of the Unemployment Compensation System, IC 22-4-8-2(i)(1) and (2) defines employment to include service performed -
“(1)…by an individual in the employ of this state or any of its instrumentalities (or in the employ of this state and one (1) or more other states or their instrumentalities) for a hospital or eligible postsecondary educational institution located in Indiana.
(2)… by an individual in the employ of this state or a political subdivision of the state or any instrumentality of the state or a political subdivision, or any instrumentality which is wholly owned by the state and one (1) or more other states or political subdivisions…
However, service performed…as the following is excluded:
(A) An elected official.
(B) A member of a legislative body or of the judiciary of a state or political subdivision.
(C) A member of the state national guard or air national guard.
(D) An employee serving on a temporary basis in the case of fire, snow, storm, earthquake, flood, or similar emergency.
(E) An individual in a position which, under the laws of the state, is designated as: (i) a major nontenured policymaking or advisory position; or (ii) a policymaking or advisory position the performance of the duties of which ordinarily does not require more than eight (8) hours per week.”UNIFORM ELECTRONIC TRANSACTIONS ACT
The Uniform Electronic Act IC 26-2-8 allows governmental units to determine the extent that the entity will create and retain electronic records and convert written records to electronic records. In addition, the Act allows the governmental unit to send and accept electronic records and electronic signatures to and from other persons and otherwise create, generate, communicate, store, process, use and rely upon electronic records and signatures.
The State Board of Accounts Accounting and Uniform Compliance Guidelines Manuals document the requirements for computerized accounting systems and storage of accounting information on electronic media. These requirements are documented in the Accounting and Uniform Compliance Guidelines Manual for Indiana Political Subdivisions – Information Technology. This can be found with the other manuals available on our website.
NEW UNIFORM GUIDANCE (Federal Audits)
The Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance") was officially implemented in December 2014 by the Council on Financial Assistance Reform (COFAR). The Uniform Guidance – a "government-wide framework for grants management" – synthesizes and supersedes guidance from earlier OMB circulars and is effective for the first funding increment issued after December 26, 2014.For audit years beginning after December 26, 2014, states, local governments, and non-profit organizations expending Federal awards of $750,000 or more in a year are required to have a federal audit conducted for that year in accordance with the provisions new federal provisions.
Additional information about the new guidelines were discussed at the Auditor’s 2016 Fall conference. The training material, including a copy of the new Uniform Guidance (2 CFR 200), can be found on our website at www.in.gov/sboa under Political Subdivisions>Counties>County Auditor>Meeting Materials. Additional information about the new guidelines can be found on the Code of Federal Regulations website at www.ecfr.gov.
In order to make the audit process as effective and least cumbersome as possible, recipients of Federal awards should be aware of the new requirements placed upon them by OMB.
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Vending Machines
COMMISSIONS ON VENDING MACHINES
The following is our audit position concerning vending machine placement, use, maintenance, and commissions.
IC 36-2-7-2 states:
“Except as otherwise provided by section 6, 9, and 13 of this chapter, the compensation fixed for county officers and employees under this title is in full for all governmental services and in lieu of all:
(1) fees;
(2) per diems;
(3) penalties;
(4) costs;
(5) interest;
(6) forfeitures;
(7) percentages;
(8) commissions;
(9) allowances;
(10) mileage; and
(11) other remuneration;
which shall be paid into the county general fund.”
1. There should be a clearly defined procedure adopted by the governing body of the unit concerning placement, maintenance, and commissions of vending machines on their property.
2. All revenues generated and costs incurred in operating vending machines located on the unit’s premises should be accounted for through the unit’s records.
3. If vending machines are located in restricted areas (areas other than those available to the public) and if the unit’s governing body wishes for those revenues to be restricted for the use and benefit of those employees who use the machines and generate the revenues, the State Board of Accounts takes no exception to such action in an audit. This decision must be authorized by ordinance (or resolution) of the proper legislative body of the unit.
4. If vending machines are located in areas where the public makes use of the machines and generates the resulting revenues, we instruct officials to place the revenues in the unit’s general fund for the benefit of the general public, the machine users. Any alternative procedure(s) would be reviewed and evaluated on a case by case basis during our audits. As stated in No. 3 any alternative procedure should be authorized by ordinance (or resolution) of the proper body.
5. In the event personnel other than the unit’s personnel maintain, stock, and clean up around the vending machines, we would take no audit exception when such persons are paid for these services. In this situation, a written agreement should be entered into listing the services rendered, the amount to be paid for such services, timing of payments, and any other areas deemed necessary by the contracting parties or the governing body of the unit.
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ASSESSMENTS FOR WEED CUTTING UNDER IC 36-7-10.1
IC 36-7-10.1-3 provides that the legislative body of a municipality or county may by ordinance require the owners of real property located within the municipality or the unincorporated area of the county to cut and remove weeds and other rank vegetation growing on the property. The term “weeds and other rank vegetation” does not include agricultural crops, such as hay and pasture.
An ordinance adopted must specify the following:
1. The department of the municipality or county responsible for the administration of the ordinance.
2. The definitions of weeds and rank vegetation.
3. The height at which weeds or rank vegetation becomes a violation of the ordinance, specifying the appropriate heights for various types of weeds and rank vegetation.
4. The procedure for issuing notice to the owner of real property of a violation of the ordinance.
5. The procedure under which the municipality or county, or its contractors, may enter real property to abate a violation of the ordinance if the owner fails to abate the violation.
6. The procedure for issuing a bill to the owner of real property for the costs incurred by the municipality or county in abating the violation, including administrative costs and removal costs. The cost of sending notice is an administrative cost that may be billed to the owner.
7. The procedure for appealing a notice of violation or a bill issued under the ordinance.
An ordinance adopted must provide that a notice sent to the property owner must be sent by first class mail, or an equivalent service permitted under IC 1-1-7-1. The notice must be sent to:
1. the owner of record of real property with a single owner; or
2. at least one (1) of the owners of real property with multiple owners; at the last address of the owner for the property as indicated in the records of the county auditor on the date of the notice.
Per IC 36-7-10.1-4 if the owner of real property fails to pay a bill issued under IC 36-7-10.1-3 within the time specified in the ordinance, the department specified in the ordinance shall certify to the county auditor the amount of the bill, plus any additional administrative costs incurred in the certification. The auditor shall place the total amount certified on the tax duplicate for the property affected, and the total amount, including any accrued interest, shall be collected as delinquent taxes are collected and shall be disbursed to the general fund of the municipality or county.
If the owner of real property fails to pay a bill issued under IC 36-7-10-3 within the time specified in the ordinance, the municipality or county may bring an action in an appropriate court to collect the amount of the bill, plus any additional costs incurred in the collection, including court costs and reasonable attorney's fees. If the municipality or county obtains a judgment, the municipality or county may obtain a lien in the amount of the judgment on any real or personal property of the owner. (IC 36-7-10.1-4)
Notwithstanding IC 36-7-10.1-4, the municipality or county may provide that the amounts collected shall be disbursed to the general fund of the department specified to enforce the ordinance. (IC 36-7-10.1-5)
ACCOUNTING FOR WHEEL AND SURTAX
There has been some confusion about the proper way to record wheel tax and surtax when it is received from the BMV. Wheel Tax and Surtax are not treated the same as excise tax on the Treasurer’s Cashbook. Excise tax collections should be entered in the Other Sources section of the cashbook and the wheel tax and surtax are to be quietused to the county auditor’s Wheel Tax /Surtax Fund and entered into the Treasurer’s Cashbook in the Funds Ledger section. Wheel tax and surtax should not be included with excise tax and held until settlement. It is the county’s decision on whether to track the wheel tax and surtax in separate funds or use one fund for both.
The Auditor should quietus wheel tax and surtax into the Funds Ledger from the information provided on the deposit reports from the BMV. This could mean that daily quietuses are done if deposit reports from the BMV are received and downloaded daily. However, we are aware that the Auditor and Treasurer may not be downloading these reports daily and may be doing it at different times. If the Auditor has not quietused the wheel tax and surtax into the Funds Ledger at the time the Treasurer is posting the deposit report information to the cashbook, the Treasurer would need to create a separate line in the Other Sources section for the wheel tax and surtax to “hold it” until the Auditor quietuses it in. When it is quietused, the Treasurer would move it down to the Funds Ledger section, in the column ‘Transferred from Accounts Above by Quiteus’. The amount of wheel tax and surtax quietused by the Auditor should be reconciled to the amounts on the deposit reports and the amounts posted to the cashbook by the Treasurer.
The county auditor is to distribute monthly the wheel tax and surtax funds collected to the appropriate county fund and to the cities and towns within the county.
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YEAR END DUTIES – OUTGOING OFFICIALS
Outgoing county officials should completely post and balance their records before being turned over to their successors on January 1..
If there are any securities and undeposited cash in the office on December 31, they should be inventoried and/or counted and the new officer should sign a receipt in triplicate to be attested by the outgoing officer. One copy should be mailed to the State Board of Accounts with the outgoing officer and his successor each receiving a copy. Any cash change fund should be returned to the fund from which it was advanced on or before December 31. In the event one of the officers is not available, we suggest a disinterested third party be invited to witness the inventory or cash count and this individual should attest to the receipt.
We also suggest the outgoing officer prepare in triplicate an itemized inventory of equipment in the office at December 31 to be signed by the successor and attested to by the outgoing officer. Disposition of copies should be the same as outlined in the preceding paragraph.
As a matter of good business practice, the outgoing officer should prepare and give to the new officer a list of reports that must be filed in January and February of the new year. The outgoing official should offer his assistance in preparing such reports and in reconciling the depository accounts for the end of the year.
Among the reports that may be required to be filed by your unit are Withholding Tax, Social Security, Public Employees’ Retirement Fund Contributions, Annual Report, Annual Operational Report of Motor Vehicle Highway Fund, Report of Names, Addresses, Duties, and Compensation of Public Employees, Accounts Payable at December 31, Capital Assets at December 31.
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