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Revised (5/7/2012) Procurement Card City of Laramie Procedures ---PAGE BREAK--- 2 Procurement Card Procedures INDEX 1. PURPOSE 2. APPLICABILITY 3. ATTACHMENTS 4. DEFINITIONS 5. PROCEDURE 5.1 INTRODUCTION 5.2 RECEIVING A PROCUREMNT CARD 5.3 AUTHORIZED PROCUREMNT CARD USE 5.4 UNAUTHORIZED PROCUREMENT CARD USE 5.5 MAKING A PURCHASE 5.6 CARDHOLDER RECORD KEEPING 5.7 OUTLINE OF ACTIVITY 5.8 IMPACT OF NOT FOLLOWING INSTRUCTIONS 5.9 CARD SECURITY 5.10 CARDHOLDER TRANSFER/SEPARATION 5.11 CHANGES IN CARDHOLDER STATUS 5.12 PROCUREMENT TRAVEL CARD 5.13 REVENUE REBATE PROGRAM ---PAGE BREAK--- 3 Procurement Card Procedures 1 PURPOSE To establish a methodology and to define the limits and responsibility for use of a City issued procurement cards provided to certain personnel in order to make purchase of goods required by the City of Laramie. 2 APPLICABILITY This procedure specifically applies to City employees who have been authorized the issuance of a procurement card and the cardholders issued procurement cards. 3 ATTACHMENTS Request for Procurement Card - Account Action Request Form Changes to limits/Replacement Cards – Account Action Request Form Authorization for Procurement Card – Cardholder Agreement Statement of Questioned/Disputed Item(s) – Cardholder Dispute Form Purchasing Log – Individual/Combined Internet Reconciliation Statements Calendar of Statement Cutoff Dates 4 DEFINITIONS City The highest level of hierarchy that a card is issued Card Procurement card; credit card issued to a person in the City; the card has limits in dollars and on vendors. Card Holder/Owner City personnel has been issued a procurement card, carries the card at all times, who is authorized to make purchases in accordance with procedures. Cardholder Reference Card Holder and/or Card Owner Cut-off Date Date of Statement cut-off, see Calendar of Cutoff Dates Divisional Coordinator The person(s) designated to handle specified card tasks and reconcile statements forwarded to Accounting. Limit This is a dollar limit per month established for each cardholder. Single Purchase Limit A dollar amount limit of purchasing authority per cardholder, per purchase. Individual Statement The listing of transactions by the Cardholder, issued by the bank. Control Account Statement The listing of all transactions by all cardholders totaled by Cardholder and for group, issued by the bank. Transaction The act of making a purchase with the procurement card. Vendor A company from which the City is purchasing materials and/or equipment or services under the provisions of this procedure. Program Administrator A person(s) in the Finance Department controlling the UMB bank program. 5 PROCEDURES ---PAGE BREAK--- 4 5.1 INTRODUCTION This program is being established in order to provide a more expedient procedure of purchasing goods and to reduce paperwork and handling costs. By using procurement cards the traditional purchasing/payment cycle is greatly reduced. Those requisitioners who have been issued procurement cards may now initiate transactions in person or by telephone, within the limits of this procedure, and receive goods. Payments to vendors are made via the bankcard settlement system. The City Finance Office will make settlements with the bank. 5.2 RECEIVING A PROCUREMENT CARD Manager or Division Coordinators may propose personnel to be Cardholders by completing the request for procurement card (Action Request Form). The request is to be forwarded to Finance for final approval and processing. Upon receipt, review and approval of the request form, Division Coordinators will notify the bank. The proposed Cardholder shall be given in-residence training, issued a copy of this procedure and shall be required to acknowledge (sign) the City of Laramie Procurement Cardholder Agreement form (attached), indicating that the Cardholder understands the procedures, restrictions, and responsibilities associated with the card. 5.3 AUTHORIZED PROCUREMENT CARD USE The unique procurement card that the Cardholder receives has their name embossed on it and shall only be used by the Cardholder. NO OTHER PERSON IS AUTHORIZED to use the card. The Cardholder may make procurement transactions on behalf of others in their department in regards to goods and services. However, the Cardholder is responsible for business validity of use of their card and to obtain the appropriate receipts. Use of the procurement card shall be limited to the following conditions: The total value of a transaction shall not exceed a Cardholder’s Single Purchase Limit assigned by the Manager or Division Coordinator and as stipulated on the Cardholder’s Authorization for Procurement Card Use form. A single purchase will not be split into multiple transactions to stay within the Single Purchase Limit. The purchases for the month shall not exceed their Limit. Section 5.4 limits the items that may be purchased by using the card. The use of the procurement card provides an additional method of payment, not additional budget. 5.4 UNAUTHORIZED PROCUREMENT CARD USE ---PAGE BREAK--- 5 The procurement card may be used for all purchases less than $5,000, except as stipulated on the List of Merchants Blocked or more restrictions or exceptions which are enacted by the Department, Division, or Finance Department. Effective July 1, 2006 the procurement card is not to be used for travel expenditures. Employees may apply for a UMB Travel Credit Card to carry these expenses. See the new travel policy for more details. An exception does exist to allow for the advanced purchase of Airline tickets and Conference Registration on the Purchasing Card. The card is to be used by the person it is issued to and can ONLY be used to pay for approved City departmental expenses. The card is not to be used for any personal or unauthorized purchases. Any such use will require immediate reimbursement and may result in disciplinary action, which may include dismissal. 5.5 MAKING A PURCHASE Whenever making a purchase with the procurement card the Cardholder will check as many sources of supply as reasonable for the situation to assure best price, delivery, and compliance with policy and statute. How to make a Purchase Once a vendor is designated and that vendor confirms that an item is available, meets the specification and delivery requirements, etc. a) Confirm that the vendor agrees to charge the procurement card. The first time you use the card at a vendor, confirm that your card is approved to charge from that vendor by providing the card (or card number for phone orders) and have the vendor verify it with VISA. Generally, this can be done at the Customer Service counter. While at the Customer Service counter, ask the procedure for checking out with tax-exempt purchases. b) Advise the vendor that the City is tax exempt and will not pay sales tax. The City’s tax-exempt status and ID is shown on the face of the card. c) Provide the card, or card number on phone orders, to the vendor. d) For mail orders, it is extremely important that the purchase is sent to the Cardholder ordering the merchandise. The items should be received before you approve the payment. Division Coordinator/Manager Approval The procurement card is simply a tool to expedite the purchase of goods from a vendor, not circumvent communication between staff and management. In the event these privileges are abused, the card will be revoked. Two options are available to Divisional Coordinators to manage this system. A Coordinator may: 1. Allow a cardholder to retain the card and make any purchase that does not exceed the department’s budget or a predetermined dollar amount. If Coordinator/Manager have ---PAGE BREAK--- 6 an agreement to be able to spend a specific dollar amount over the course of the month, it will not be necessary to receive authorization for each purchase made under that amount. 2. Retain all cards and they or their Designee hand them out once a purchase or activity is approved. The card and receipt is returned immediately. Limitations are at the discretion of each Department or the Division Manager can be designated to the Divisional Coordinators. Where to Use the Card Procurement cards can be used anywhere VISA is accepted. 5.6 CARDHOLDER RECORD KEEPING The cardholder must keep the original sales documents (invoices, cash register tape, packing slip) and visa credit card slip for all items. If the department chooses, the Card Owner will provide all original sales documents to the Coordinator/Designee or designated area within the Division. In either case these documents MUST be neatly organized. The payments of these charges are reconciled through these steps: 1. Coordinators must reconcile the purchases on each card against the department’s or division billing statement forwarded by the Finance Department. 2. An excel spreadsheet of all purchases by employee are sent by Finance to each Coordinator. The Coordinator must validate each receipt and verify purchase to the UMB statements. 3. The Coordinator must enter a clear description of goods and enter an account number to charge the item. Note: It is important to have good descriptions to ensure proper coding of purchases (i.e. a poor description = supplies. A better description = shop rags). Once reconciled the billing statement and attached receipts are sent to Finance for payment processing and the reconciled excel spreadsheet is forwarded to Accounting by email. 5.7 OUTLINE OF ACTIVITY Activity Option 1 Option 2 Statement Cardholder receives a Statement. Designee receives individual and Control Statements. Designee receives control Statement. Required Action per calendar Cardholder provides all receipts to Coordinator Designee reconciles Individual or Control statement spreadsheet. Cardholder ensures sales tax N/A ---PAGE BREAK--- 7 exemption. Designee verifies support (see Designee paragraph). N/A The statements with attached receipts should be sent to the Division Coordinate two days before cutoff. The purchasing summary statement and attached receipts be sent to Accounts Payable within two days after calendar cutoff. Role of the Division Coordinator For both options, the Designee shall check the receipts given to the statement and confirm at a minimum: Receipts exist for each purchase. The proper account number has been charged. The goods were received or the services were performed. The Cardholder has complied with the applicable procedures. If receipts are not attached, ask employee to supply appropriate receipt See Section 5.8 for not following instructions The careful matching of support documents to the UMB excel statement is vital to the successful use of this program. Entering the Receipts on Credit Procurement Database The VISA bill cannot be paid unless each receipt is documented on the department purchasing reconciliation form. Each Division Coordinator will receive on-line version via email with the UMB Excel spreadsheet. Each purchase must be matched with one or more account numbers. If more than one City account number is matched/charged, a break out of the purchases and accounts must be designated on the UMB spreadsheet. The departmental receipts must balance to the UMB Excel spreadsheet. Stapled to the UMB Excel spreadsheet should be all attached receipts. The Department or Division Head must sign for approval of billing. The Affidavit signature stamp should be stamped on the reconciliation with the Department or Division Head signature. This bundle is then sent to Accounts Payable for processing as soon as possible after entering the charges. No copies need to be retained by Designee. All of this data is critical to provide audit substantiation. Departmental or Divisional Head Administrator Approval The Administrator shall check the statement and confirm that their Designee performed the above tasks. The Administrator shall approve the log and receipts. The Administrator’s approval of a statement indicates that the Cardholders were authorized to make those purchases and those purchases were made in accordance with the applicable procedures. Returns If an item is not satisfactory, received in error, damaged and/or defective, duplicate order, etc. the following steps should be followed. The Cardholder makes contact with the vendor to obtain authorization to return the ---PAGE BREAK--- 8 item(s). (Every vendor is different for return policies - make sure your return meets their criteria without incurring a restocking fee). The item(s) to be returned needs to be re-packed in original manufacturer’s carton. For local orders, take original receipt with product in original manufacturer’s carton back to the vendor. If you have already submitted your receipt, call your Coordinator or Accounts Payable for the original receipt to be returned to you. When an item has been returned and a credit voucher received, the Cardholder shall provide credit documentation to the Coordinator. Return the original receipt to your Coordinator (if applicable) and retain the credit receipt with these months’ transactions. If the vendor has not replaced or corrected the item by the cutoff date, then the purchase of that item will be considered in dispute. Attach “Statement of Questioned/Disputed Item” (see attached) to the statement. The item should be paid for in the receipts but listed as a dispute. The item is generally credited back the following month (see questionable dispute). Questionable/Disputed Charge If the Cardholder is disputing a charge, they shall complete the Statement of Questioned/Disputed Item” form (attached). If the statement lists a transaction where the goods have not been received or another discrepancy, the Coordinator or the Cardholder should resolve these items prior to their sending an approved statement to Finance. Most exceptions can be resolved between the Cardholder and the vendor. If the dispute cannot be settled at this level, the Coordinator shall advise Finance. Transactions Not Appearing on Statement If purchased items or credits are not listed on the statement, the Cardholder shall retain the appropriate transaction documentation until the next statement. If the purchase or credit does not appear on the statement within 60 days after the transaction date, the Cardholder or Coordinator shall notify Finance for assistance in resolving the issue. 5.8 IMPACT OF NOT FOLLOWING INSTRUCTIONS If a cardholder loses a receipt, the cardholder is responsible obtain replacement with a new receipt. For example, if a cardholder loses an invoice most vendors can send duplicate copies. This is the first action that is required. If on infrequent occasions a Cardholder does not have documentation of a transaction listed on the statement and has exhausted all means to obtain an appropriate receipt, the ---PAGE BREAK--- 9 Cardholder shall attach an explanation (on a generic voucher) that includes a description of the item(s) purchase, date of purchase, Vendor’s name and reason for the lack of supporting documentation. The Cardholder with the affidavit stamp must sign this. If a Cardholder consistently does not provide the receipts in a timely manner or abuses the privilege of the card, Finance can obtain the employee card and deactivate procurement privileges. 5.9 CARD SECURITY It is the cardholder’s responsibility to safeguard the credit card and account number to the same degree that a Cardholder safeguards their personal credit information. The cardholders’ designee is also responsible to safeguard employee card number security. The Cardholder must not allow anyone to use his or her account number. A violation of this trust will result in that Cardholder having their card withdrawn and disciplinary action. If the card is lost or stolen the Cardholder UMB Bank at the following number: 1-[PHONE REDACTED] Representatives are available 24 hours a day. Advise the representative that the call is regarding a VISA Procurement Card. The Cardholder shall also notify their Division Coordinator of the lost or stolen card within one working day after discovering the card missing. The Cardholder shall prepare and submit to their Coordinator the City of Laramie Action Request Form within two working days. ---PAGE BREAK--- 10 A new card shall be issued to the Cardholder after Finance receives the City of Laramie Action Request Form. A card that is subsequently found by the Cardholder after being reported lost shall be cut in half and given to the Coordinator. The Coordinator and Cardholder shall sign the Action Request Form and notify UMB Bank. 5.10 CARDHOLDER TRANSFER/SEPARATION Prior to a transfer to another Department or Division, or separation from the City, the Cardholder shall surrender the credit card to their Coordinator. This information is processed with the Coordinator’s other Cardholder statements. The Coordinator shall cut the credit card in half, complete the City of Laramie Action Request form and forward the form to finance, which will notify the Bank. If this is a transfer, when the Cardholder reports to their new location, they may request a new card in accordance with Section 5.2 of this procedure. 5.11 CHANGES IN CARDHOLDER STATUS If an employee requires a change in cardholder status such as increased limits, one time limit change, name change, etc., please see your Divisional Coordinator. Divisional Coordinator should use the Laramie Action Request form and have their Divisional or Department Administrator approve the change. All Action forms should be forwarded to Finance who will coordinate the change with UMB BANK. Any new hire within the division or department should have read the current procedure manual and the Division Coordinator should ensure the employee understands the Procurement policies. The Division manager or coordinator can have the employee review the policies with Finance if they chose. A Laramie Action Request Form should be completed to obtain a new employee card. An employee must sign an employee procurement contract and the contract forwarded to Finance for approval. Finance will send the form to Human Resources to be maintained within the employee’s file. At termination, all employee cards should note on termination form that the manager has destroyed the card or turned in the card to Finance for deactivation. 5.12 PROCUREMENT CARD NOT TO BE USED FOR TRAVEL Employees may NOT use procurement cards for travel. However, exception to this rule allows the Division Manager or Department Head to approve pre-authorization to purchase advanced airline tickets, advanced parking reservations and conference registration. 5.13 PROCUREMENT REVENUE SHARING REBATE PROGRAM UMB Bank is offering a rebate on qualified sales volume (sales, less refunds), payable on a quarterly, semi-annual, or annual (negotiable) basis without reserves or minimum volume guarantees from the State of Wyoming. The payment of a rebate may be effected by late payments. This rebate is effective immediately at the beginning of the pilot on ---PAGE BREAK--- 11 qualified sales /purchase volumes up to $500,000, at a rate of .0010 percent (one tenth of one percent, or 10 basis points). For sales volume over $500,000, the rates of rebate in the table below will apply: (The City is under the contract with the state so total purchase volume is based on everyone’s volume under that program). Level Annual Statewide Volume Percent Rebate A $500,000.01 up to $2 million .0011% (11 basis points) B Over $2 million to $4 million .00125% (12.5 basis points) C Over $4 million to $6 million .0016% (16 basis points) D Over $6 million to $10 million .0020% (20 basis points) E Over $10 million to $15 million .00245% (24.5 basis points) F Over $15 million to $20 million .0026% (26 basis points) G Over $20 million Negotiated