CITY OF NORFOLK PROCUREMENT CHARGE CARD POLICIES AND PROCEDURES PURPOSE: The City of Norfolk’s Procurement Card Program is established to increase the efficiency of procuring certain goods and services for appropriate City purposes. The Policy and Procedures provided herein must be adhered to by all City procurement card holders. POLICY/PROCEDURE A. OVERVIEW OF TRANSACTIONS / DOCUMENTATION EXPECTED: The procurement card is a tool used to purchase certain low dollar goods and services for the City of Norfolk’s operations, maintenance and repairs with a $1,000 limit per transaction. To the extent travel-related purchases have been authorized for specific users, travel-related purchases have a $2,000 transaction limit. Items carried in the City Storehouse or items covered by City Price Agreements cannot be purchased through the Procurement Card Program. Proper documentation must be kept confirming that adequate research was performed to obtain the best price. The use of the procurement card does not exempt a user from complying with the City of Norfolk’s Procurement Code. All competition requirements contained in those guidelines apply. Often, this means proof that three quotes have been obtained. The method of payment does not eliminate this requirement.
B. PROGRAM ADMINISTRATION: The City of Norfolk's Program Administrator is in the Department of Finance and Business Services. This individual is registered with the procurement card vendor as the only person authorized to make changes (e.g., add or cancel cards, change limits) for the Procurement Card program at the agency or corporate account level. This individual will also be responsible for any necessary communication with the credit card company, to include, but not limited to, the names of those who will receive cards, monthly billings, additional statements and management reports, resolution of payment discrepancies, formatting of payment transmittal data, and ensuring the timely reconciliation and payment of credit card company invoices. C. PURCHASE LIMITS AND INDUSTRY / TRANSACTION RESTRICTIONS: A monthly purchase transaction limit for each user is determined by a Department Head, Manager or Supervisor when the procurement card is originally requested. This amount should be determined based on the volume of transactions and the cost of Revised February 2009
each on a monthly basis. Requested limits above $10,000 will require written justification to the Program Administrator. A cardholder may not, under any circumstances, authorize any charge in excess of the transaction limit set by the Program Administrator. In compliance with the City’s procurement code, no single purchase transaction limit shall exceed $1,000. Additionally, industry restriction flexibility is available to limit transactions. When applying for procurement cards for new users, the Program Administrator can set restrictions within merchant category codes (MCC’s) to provide departments with additional controls to ensure compliance with the City’s Procurement Guidelines and to customize each user’s purchasing ability to their expected requirements for accommodations, car rentals (generally excluded with limited exceptions), oil/gas (excluded), restaurant food and travel. Subsequent changes to cardholder’s restrictions can also be requested. Travel-related purchases require specific authorization for each user (as noted below). The purchase of gift certificates with the procurement card is prohibited. Tracking the ultimate purchases made with gift certificate after they are disseminated would be difficult if not impossible, in violation of the City’s Procurement Code.
D. UTILIZATION FOR TRAVEL AND MEALS: Completion and submission of the “Procurement Card Travel Authorization Form” with cardholder and department head signatures is required to enable the Purchasing Card to be used for travel-related purposes. Once enabled for a cardholder, the procurement card is authorized and may be convenient for the purchase of conference registrations, airline tickets, rail passes, hotel accommodations, and the procurement of books and supplies for the attending conference subject to the approval procedures described in the City’s Travel Policy. The use of the City’s procurement card for car rental is restricted, with very limited exceptions, and gas purchases using the procurement card are prohibited. Note: Airline and rail ticket purchases, like all other purchases made with the card, may not exceed the card limits. With electronic tickets, new airline and rail travel regulations may require that passengers who purchase electronic tickets with a charge card produce the card at check-in. It is recommended that verification be performed with the airline of choice or Amtrak to determine its practices. Departments making hotel reservation must contact an individual at the hotel location to verify: 1) The hotel location is willing to accept a corporate procurment card as the form of payment for only the hotel room and applicable taxes. 2) The hotel does not require a card imprint on file for the card being used for the hotel room and applicable taxes. 3) The hotel does not require a faxed or mailed copy of the card. 4) The hotel can accommodate another form of payment for all incidentals for the traveler (i.e.,. room service, phone calls, Internet, movies, etc). Pg.2
5) If all of these guidelines can be met according to the staff at the hotel location, then the charge can be placed on the card. The name of the individual with whom the cardholder spoke must be documented to include the date and time on the Charge Log (described below). Prepared and non-prepared meals must be purchased for City purposes only, consistent with the City’s current Travel Policy, and a detail explanation logged on the Charge Log detailing the purpose of the meal purchase and for whom it was for. The original itemized receipts must be attached to the corresponding Charge Log before payment is made. E. PROCEDURES: 1) Card Issuance, Cancellation and Changes: Procurement cards will be issued in the names of the designated individuals. An Acknowledgement for Receipt of the Corporate Purchasing Card will be provided to the cardholder upon obtaining their procurement card. Upon request by the City or upon termination of employment, cardholders must return the procurement card to the Program Administrator. Additionally, when any changes to existing procurement cards need to be effected, cardholders and/or supervisors must contact the Program Administrator. If a card is lost or stolen, replacement procurement cards will be provided to cardholders within 7-10 business days following deactivation of old card. The card will be mailed to the Program Administrator and the cardholder will be contacted when the card has arrived and is available for pick-up. Name change requests by a cardholder must be validated against a legal document before the name change can be processed. Departments must provide proper documentation that the cardholder’s name has officially been changed (i.e. Social Security Card) to the Program Administrator. Each Department must maintain verification in case there are questions at a later date. 2) Security: Authorized use of the procurement card is limited to the person in whose name the card was issued. The procurement card must not be loaned to another person. 3) General Requirements for Card Usage: Cardholders must record all purchases made with the procurement card on an individual Charge Log. All related charge receipts for each transaction must be retained with the Charge Log. At the end of each billing cycle, cardholders must forward the charge log with the attached original receipts to the department’s Charge Card Representative or the cardholder’s supervisor for approval. A new Charge Log will be established at the beginning of each new billing cycle. To use the card, the cardholder must: a) Identify a supplier that sells the required goods and services. A list of vendors participating in the credit card company’s procurement card Pg.3
program is attached. The Program Administration will provide periodic updates of this information by maintaining a current list on the City’s intranet. b) Call or go to the supplier's place of business and place their order. Provide any specific point of sale information their department desires to capture for reconciliation purposes (an object code for each transaction must be provided if charge is to be made to an object code other than your default object code). c) Give the supplier the account number and expiration date of their procurement card. The supplier will verify the account number with the charge card vendor. The purchase amount will be verified electronically for compliance with applicable limits. d) Retain all documentation pertaining to the purchase. When the supplier delivers the order, documentation of the purchase (such as a sales receipt or packing slip) should accompany the order. This documentation must be maintained with the log and forwarded to the Departmental Coordinator for reconciliation to the monthly charge card statement.
4) Returns, Credits, and Disputed Items: Cardholders must attempt to resolve disputes directly with the supplier of the goods or services. The cardholder should use the following guidelines when returning an item:
a) If an item needs to be returned for any reason, the cardholder should return the item to the supplier or notify the supplier to pick up the item. b) Documentation of the return (such as a credit receipt) must be issued by the supplier. All documentation pertaining to returns must be retained with the Charge Log and forwarded to the Departmental Coordinator for reconciliation to the monthly charge card statement c) Problems with deliveries or returns must be resolved between the supplier and the cardholder. d) If the cardholder and the supplier cannot resolve an issue, the cardholder should then contact the Program Administrator. 5) Payment Of The Credit Card Company Invoice: Accounts Payable must process the credit card company's summary statement within 7 days of the purchasing card company’s due date in order to avoid finance/late charges. Limited time is available to reconcile these charges prior to payment; therefore, the following processing procedures must be followed:
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a) The credit card company monthly billing cut off date will be the 15th of each month. b) The credit card company will mail each cardholder’s paper statement to the address provided on the cardholder’s application. Contact the Program Administrator if the invoice is not received by the 25th of each month. c) The departmental charge card representatives will be responsible for collecting all Charge Logs for the departments. A reconciliation of approved Charge Log(s) against the detailed invoice(s) will be completed at the department or bureau level. Identify any changes to the default account distribution furnished by the charge card company for each charge, and summarize charges by account distribution. A General Accounting Expenditure (GAX) document will be created for the full amount of the detailed statement made payable to the purchasing card company. Further processing instructions will be given by the Program Administrator and must be adhered to. The scheduled pay date for the voucher will default to the 28th of each month. Please check to make sure this date does in fact populate before completing all levels of approval. Each line of the GAX will reference a specific procurement card account in the description field and will be charged to the appropriate expense account. 6) Reconciliation of the Charge Card Statement: Each department, division and/or bureau must be responsible for retaining documentation of purchases and returns on the Charge Log and for reconciling them to the monthly charge card statement. The credit card company invoice must be reconciled against the monthly charge card statement as follows: a) For purchases listed on Charge Log sheet but not on invoice: i.
Highlight item on Charge Log sheet an annotate "missing from invoice."
ii.
Add a note of explanation to next Charge Log sheet when item appears on invoice.
b) For purchases on the credit card company invoice, but missing on Purchase Log: i.
Pay total credit card company statement charges in full.
ii.
Reconcile differences with vendor.
c) For returns, the credit card company will issue credits on a subsequent bill.
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7) Audit Procedures: The Program Administrator will conduct unannounced departmental audits. Retained purchase documentation must be reviewed and compared with Charge Logs and vendor invoices. Returns and exchanges must be reviewed to verify proper credits to the accounts.
8) Card Suspension: Program Administrators have the ability to suspend cards for a stated period of time. This option can be used for many reasons to include: a) History of abuse and suspension of card for a period of time b) Cardholder is on extended period of leave such as Disability, Medical, etc. c) Late payments entered into the AFMS System 9) Failure to Follow These Procedures: Procurement cardholder failure to follow these procedures may result in one or more of the following: a) b) c) d) e)
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Reporting of the violation to the department head. Revocation or suspension of the procurement card. Appropriate disciplinary action as warranted. Appropriate criminal credit card fraud charges as warranted. Cardholder reimbursement to the City for unauthorized charges.
