Audit committee flags need for city policy on EFTs, cash handling and penny retirement

FAYETTEVILLE — Committee members agreed the city must formalize cash-handling procedures and adopt an electronic-fund-transfer policy after staff said current practice predates state guidance.

Speaker 1 said the Arkansas Municipal League and Arkansas law require a council-approved policy to use EFTs, and that Fayetteville has been using electronic transfers without a formal written policy. "But according to Arkansas law, you can only use electronic fund transfers if you have a city council approved policy, and we don't currently," Speaker 1 said.

Committee discussion covered practical implementation questions. Speakers debated whether the city should round small cash payments (for example amounts ending in pennies) and whether that guidance should be integrated into a broader cash-handling policy. Speaker 3 suggested setting the policy to be "the most lenient to citizens," and Speaker 2 agreed that citizen-friendly practices should guide rounding and penny-handling decisions.

Members also discussed whether the city could move to cashless operations. Speakers noted equity concerns for residents who do not use banks and said certain operations (parks, concessions) would be difficult to make fully cashless. Speaker 2 noted the city already charges a convenience fee for credit-card and e-check transactions.

Committee consensus was to draft a cash-handling policy that addresses EFTs, ACHs, convenience fees, petty-cash counts and the procedural question of retiring the penny. Staff were directed to prepare a draft policy for committee review and council consideration.