Attachment

EXHIBIT #1 Regular Council Meeting of 10/08/2007

EXHIBIT #2 Regular Council Meeting of 10/08/2007 CITY OF DOVER DEPARTMENT OF FINANCE PROCEDURE MANUAL TITLE: Grant Application Procedures PROCEDURE # 317 DATE: October 1, 2007 INTRODUCTION This procedure is intended to establish clear directions for accounting for and administering the funds and resources received by the City through Federal, State, and other Grants. It is the City’s policy to strictly prohibit any political activities related to Federal, State and other political subdivision assisted programs. The City’s employees will not engage in such activities nor spend City funds or grant funds in such activities. DEFINITIONS “Department”: Departments are the major organizational sub-divisions. They have a broad overall purpose. The City of Dover is organized into departments as follow: Customer Services, Parks, Recreation & Library, Public Services, Police, Public Utilities, Mayor, Central Services, City Clerk, City Manager, Information Technology, Finance, Human Resources, and Tax Assessor. “Grants”: Funds and resources procured by the City which are restricted as to usage by the government or institution providing the funds. Usually, there is an application process whereby the City provides evidence of its need for the funds, its ability to use the funds in a manner approved by the grantor, and detailing the expenditures expected to be incurred. The primary grant providers to the City are the Federal and State governments. “Closeout” The process of finalizing a grant project, including completion of the final financial reports, determination of cash balances, accomplishment of necessary accounting entries and placing all project files in a manageable holding system. APPLICATION AND AWARD PROCESS 1. The Department Heads are responsible for seeking out new grant resources, preparing the grant application packages, and submitting completed grant packages to the proper grantor institution. If the City is awarded the grant, a Committee Action Form (CAF) is to be prepared for the Legislative, Finance & Administrative Committee to approve the grant award. The CAF shall include any non-grant funded expenses in the current and future fiscal years. Several types of state funded grants are awarded to local law enforcement agencies state-wide based on annual allocations of funds approved by the State Legislature and quarterly applications for funds resulting from property and drug seizures. The Police Department must conform to the grantor requirements for spending these funds. The

Finance Department Grant Application Procedures F317 Police Chief approves the application for and disbursing of these particular funds. 2. A grant records file shall be prepared for each application and updated throughout the grant process, including the final accounting and closeout. The file shall consist of, at a minimum, the application, acceptance letter and a spreadsheet detailing cash receipts and disbursements. 3. The Department Head, or his/her designee, shall monitor the status of the grant application and the subsequent award. 4. All grants will be signed by the Mayor. 5. The original signed grant contract shall be added to the appropriate grant file and identified with contract number and performance period. 6. Copies of all documents are to be provided to the Finance Department to monitor compliance and completion of the annual audit. 7. Where applicable, Public Hearings and Advisory Board Meetings must be held in accordance with the grantor requirements throughout the term of the grant. ACCOUNTING PROCEDURES 1. The Department Head shall request account numbers for grant revenues and expected expenditures from the City Finance office. Where applicable a project number will be assigned to each grant to track receipts and expenses. 2. The Finance Department and Department Head are responsible for maintaining separate records for each grant project to avoid commingling of grant funds. 3. The Department Head is responsible for assuring all grant project funds are expended according to the terms of the grant. All grant project funds must be obligated by the termination date(s) specified in the grant. Any matching funds must be expended and reported timely. 4. The Department Head is responsible for submitting any required reimbursement requests to the grantor as authorized expenditures are incurred. At the end of each fiscal year, the Department Head shall submit to the Finance Department a list of all outstanding reimbursement requests and qualified expenditures incurred, but not submitted to the grantor for reimbursement. Accordingly, the Finance Department shall create a grant receivable entry, reconciling this to the grant activity recorded during the period. 5. Purchase, Invoice and Payment processing shall be in accordance with the City of Dover Purchasing Policy, incorporated into this procedure by this reference. Payroll processing shall be in accordance with City payroll procedures. 6. Retention of records shall be in accordance with the State of Delaware’s Local Government General Records Retention Schedule for Grants, which specifies grant financial files are to be retained for five years after submission of the grant closeout 2

Finance Department Grant Application Procedures F317 letter and successful audit. 7. Requests for drawdown of funds must be in accordance with award requirements specified by the grantor. 8. Receipts are received and entered into the General Ledger by the Finance Department. 9. The Department Head is responsible for maintaining records of all inventory purchased and are to provide an updated copy to the Finance Department June 30 each year for audit purposes. All records for equipment, non-expendable personal property and real property shall be retained for a period of at least three years from the date of the disposition, replacement, or transfer. 10. Records must be maintained for each non-expendable item that costs $5,000 or more and has a useful life of one year or more. The Department Head shall send the invoices and appropriate backup data to the Finance Department for recording in the Capital Asset system. 11. The Department Head is responsible for timely submission of reports to the grantor as required under the terms of the grant. 12, The Department Head is responsible for submitting quarterly and final Financial Status Reports (FSRs) for grants if required under the terms of the grant. A copy of any FSR must be submitted to the Finance Department before being sent to the grantor. Finance shall reconcile amounts reported on the FSR with the amounts recorded in the City's accounting system. Any discrepancy shall be resolved by the Department Head and communicated to the Finance Department. 13 The Department Head is responsible for performing and monitoring closeout activities. 14. Any unexpended funds shall be returned to the grantor and any interest earned on cash balances shall be disbursed in accordance with the grant requirements. 15. The Finance Department is responsible for preparing Form SF-SAC, “Data Collection Form for Reporting on Audits of States, Local Governments, and Non-Profit Organizations,” in accordance with Federal OMB Circular A-133. 16. A quarterly report will be presented to City Council by the Finance Department for all grants. DISTRIBUTION Mayor CDBG Director Police Department City Manager Department Heads 3