First 5 Association of California Financial Management Guide Fifth Edition, 2015 TABLE OF CONTENTS 1 INTRODUCTION ............................................................................................................................ 4 2 CONTRACTING ............................................................................................................................. 5 2.1 Provider Selection Principles .......................................................................................................... 5 2.2 POLICY STATEMENT .................................................................................................................... 5 2.2.1 Contracting and Procurement Policies ..................................................................................... 6 2.3 PROCEDURES .............................................................................................................................. 6 2.3.1 Provider Selection .................................................................................................................... 6 2.3.2 Request for Proposals (RFP) ................................................................................................... 7 2.3.3 Request for Qualifications (RFQ) ........................................................................................... 10 2.3.4 Sole Source Procurement ...................................................................................................... 10 2.3.5 Intent to Negotiate ................................................................................................................. 10 2.3.6 Request for Information (RFI) ................................................................................................ 11 2.3.7 Contract Renewal .................................................................................................................. 11 2.3.8 Evaluation of Proposals ......................................................................................................... 11 2.3.9 Notification and Appeals ........................................................................................................ 12 2.3.10 Contracts ............................................................................................................................... 13 2.3.11 Performance Monitoring and Reporting ................................................................................. 15 2.3.12 Contractor Payments ............................................................................................................. 16 2.3.13 Advance Payments ................................................................................................................ 17 2.3.14 Progress Payments ............................................................................................................... 17 3 INVESTMENT MANAGEMENT ................................................................................................... 19 3.1 POLICY STATEMENT .................................................................................................................. 19 3.2 THE INVESTMENT POLICY ........................................................................................................ 19 3.2.1 Content of the Investment Policy ........................................................................................... 19 3.2.2 Responsibility for Investment Management ........................................................................... 20 3.2.3 Permissible Types of Investments ......................................................................................... 21 3.2.4 Types of Investment Risks to be Considered ........................................................................ 21 3.2.5 Submitting the Investment Policy to the Commission ............................................................ 22 3.3 PROCEDURES ............................................................................................................................ 22 3.3.1 Deposit of Public Funds ......................................................................................................... 22 3.3.2 Maturities of Investments ....................................................................................................... 22 3.3.3 Internal Controls for Investment Management ....................................................................... 23 3.3.4 Safekeeping ........................................................................................................................... 23 3.3.5 Investment Performance Benchmarks ................................................................................... 24 3.3.6 Investment Reporting to the Commission .............................................................................. 24 3.3.7 Selection of Investment Advisors ........................................................................................... 25 3.3.8 Financial Reporting of Investments ........................................................................................ 26 4 PLANNING AND BUDGETING.................................................................................................... 27 4.1 STRATEGIC PLAN ....................................................................................................................... 27 4.1.1 Policy Statement .................................................................................................................... 27 4.1.2 Procedures ............................................................................................................................ 27 4.1.3 Community Input Session(s) .................................................................................................. 28 4.1.4 Commission Planning Session .............................................................................................. 28 4.2 LONG-TERM FINANCIAL PLAN .................................................................................................. 28 Policy Statement ................................................................................................................................ 28 4.2.1 Procedures ............................................................................................................................ 29 4.3 BUDGET ...................................................................................................................................... 29 4.3.1 Policy Statement .................................................................................................................... 29 4.3.2 Procedures ............................................................................................................................ 30 4.3.3 Budget Document .................................................................................................................. 31 4.3.4 Commission Review of Proposed Budget .............................................................................. 31 4.3.5 Budget Adoption .................................................................................................................... 31 4.3.6 Communicate Budget to the Public through a Popular Budget .............................................. 31 4.3.7 Budget Administration ............................................................................................................ 31 4.3.8 Budget Amendments ............................................................................................................. 31 5 ACCOUNTING ............................................................................................................................. 32 5.1 POLICY STATEMENT .................................................................................................................. 32 5.2 GENERAL ACCOUNTING PROCEDURES ................................................................................. 32 5.2.1 Fund Accounting .................................................................................................................... 33 Page 2 of 82 5.2.2 Modified Accrual Basis of Accounting .................................................................................... 34 5.3 Account Classification .................................................................................................................. 34 5.3.1 Chart of Accounts .................................................................................................................. 34 5.3.2 Object of Expenditures .......................................................................................................... 35 5.3.3 Program Accounting .............................................................................................................. 36 5.4 Cost (Expense) Allocation ............................................................................................................ 36 5.5 Budgetary Control......................................................................................................................... 37 5.6 Internal Controls ........................................................................................................................... 38 5.7 SPECIFIC ACCOUNTING PROCEDURES .................................................................................. 38 5.7.1 Cash ...................................................................................................................................... 38 5.7.2 Petty Cash 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