Greer council updates financial procedures, trims contingency from 5% to 1% in policy language

Greer — City staff presented and council approved revisions to the City of Greer Financial Policies and Procedures on July 14, changes staff said were intended to align policy language with audit standards and practical budgeting needs.

Mr. Klein led the presentation, describing several changes: an ethics and integrity section covering conflicts of interest and fraud reporting, adjusted internal control language to align definitions of material weakness and significant deficiency with the city’s audit, added guidance on installment purchase revenue bonds (IPRBs), and new procedures to require a banking services RFP every five years and an audit RFP every four years.

Klein explained the proposed contingency policy change and why staff suggested lowering the contingency set-aside in policy from 5% to 1% of the general fund. He gave an example: "When I looked over the last 5 years, we've only expensed an average of $30,000 out of that fund. So as it stands, 5% of a $60,000,000 budget would be set at $3,000,000. I just think that that amount is significantly higher than it needs to be. 1% of that would still be at $600,000." He emphasized the city retains a separate 35% general fund policy target and the change is intended to avoid double-counting reserves.

Council asked clarifying questions about whether the changes represent a wholesale shift in financial approach, how the changes would affect procurement timing and capital projects spanning fiscal years, and whether the capital projects fund created for multiyear projects would address prior procurement timing issues. Staff said the revisions are primarily clarifying and provide flexibility for multi-year capital accounting.

Council voted to receive the resolution and the policy changes. The amendments were approved as policy language updates; any budgetary or ordinance-based actions tied to these policies would come back to council for separate approval.