HomeMy WebLinkAbout2026-07-01 ORDINANCE NO. 2026-07-01
AN ORDINANCE AUTHORIZING THE USE OF ELECTRONIC FUNDS TRANSFERS AND
ONLINE BANKING; AND FOR OTHER PURPOSES.
WHEREAS, Ark. Code Ann. § 14-59-105 permits Arkansas municipalities to disburse '
funds via Electronic Funds Transfer(EFT) and Automated Clearing House (ACH), provided the
City Council authorizes the system and adopts written internal accounting control policies; and
WHEREAS, the Legislative Joint Auditing Committee requires municipalities operating
electronic banking systems to implement written security and internal control procedures;
NOW, THEREFORE, BE,IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
BATESVILLE, ARKANSAS:
SECTION 1. Authorization: The City of Batesville hereby authorizes the use of Electronic
Funds Transfers (EFT), ACH, wire transfers, and online banking for municipal disbursements,
payroll, and collection activities.
SECTION 2. Policy Adoption: The City of Batesville Electronic Banking Security Policy
attached hereto as Exhibit A is hereby adopted as the official internal accounting control policy
of the City.
SECTION 3. Designated Disbursing Officers: The City Treasurer, Mayor, Payroll Clerk/
Finance Director and City Engineer/Manager(or designated authorized signers) are authorized
to execute bank agreements necessary to implement online banking, subject to the dual-control
provisions in Exhibit A.
SECTION 4. Mandatory Incident Reporting: Pursuant to Ark. Code Ann. § 10-4-429, the
City shall disclose any security or electronic banking incident to Arkansas Legislative Audit in
writing within five (5) business days of discovery.
SECTION 5. Severability & Effective Date: If any portion of this ordinance is held
invalid, the remainder shall continue in effect. This ordinance shall take effect immediately upon
passage.
EMERGENCY CLAUSE: It is further found that, the City has had difficulty getting
checks delivered to its general contractor as construction is ongoing for the new water
plant. And that the failure to timely transfer funds could slow down said project and add
to the costs of construction. Therefore, an emergency is declared to exist and this
ordinance, being necessary for the preservation'of the public peace, health and safety
shall take effect from and after its passage and approval.
PASSED AND APPROVED this 28th day of Jam; 2026
ATTEST:
Rick Elumbaugh, Mayor
ssica Davis, er
EXHIBIT A
City of Batesville Electronic Banking Security Policy
1. Purpose & Legal Authority
This policy establishes internal controls for electronic banking for the City of Batesville
under A.C.A§ 14-59-105 and Arkansas Legislative Audit(ALA) Information Systems Best
Practices.
2. Dual Control (Mandatory Segregation of Duties)
a. Two-Person Rule: No single employee may-initiate, approve, and release an
electronic payment.
b. Role Separation:
Z. Initiator Accounts Payable Clerk,Payroll Clerk/Finance Officer,Mayor,
Engineer/Manager, Clerk/Treasurer, or their designee: Prepares the transaction or
payroll.batch in the bank portal.
ii. Approver-Treasurer/Clerk,Payroll Clerk/Finance Officer,Mayor, City
Engineer/Manager, or their designee: Independently verifies supporting
documentation and authorizes the release.
C. Portal Configuration:The bank portal permissions must enforce dual custody
at the administrative level.
g. Payment Verification & Fraud Controls
a. Out-of-Band Call-Back:Any request to change vendor banking/routing details
must be verbally verified over the phone using a known,verified contact number—never the
number provided in the change request email.
b. Supporting Documentation: Every EFT must be backed by an approved
purchase order,invoice,or payroll register prior to release.
4. Technical Safeguards
a. Multi-Factor Authentication (MFA): Mandatory for all users accessing
online banking systems. Credential sharing is strictly prohibited.
b. Dedicated Hardware: Banking tasks must be conducted on secured municipal
devices with auto-updates enabled. Banking on public/unsecured Wi-Fi is prohibited.
5. Audit Trail & Reconciliations
a. Transaction Logs: The City must retain bank confirmation logs,ACH trace
numbers, and written approval records for every transaction.
b. Monthly Review: Bank reconciliations must be completed monthly and
reviewed by an independent supervisor or official who does not initiate disbursements.
6. Mandatory Breach Reporting (Ark. Code Ann. § 10-4-429)
In the event of a suspected or confirmed electronic banking breach or unauthorized transfer:
a. Immediate Action: Notify management and contact the bank to freeze affected
accounts.
b. 5-Day Audit Notice: Submit a ATitten initial report of the incident to
Arkansas Legislative Audit within five (5)business days of discovery.