CITY OF PENSACOLA PURCHASING CARD POLICY July 2008
I. Purpose The purpose of the City of Pensacola Purchasing Card Program is to make purchases easier and more efficient for employees who obtain goods and services from vendors that accept the Visa credit card. The program also allows employees to make reservations and pay for expenses and services related to travel and training. The Financial Services Department will monitor the Purchasing Card program. Questions or concerns should be directed to: Purchasing Card Administrator(s): George Maiberger Sharon Gafford Accounts Payable: Deanna Lucia
435-1835 435-1835 435-1819
This policy directive is intended to accomplish the following: -
Provide an efficient method of purchasing and paying for goods and services needed by the City to operate effectively, primarily those expenses related to travel and training expenses.
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Ensure purchasing card purchases are in accordance with City ordinances, policies and procedures.
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Eliminate or reduce the need for employees to use personal credit cards when traveling and reduce the need for requesting cash in advance of travel.
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Provide for disciplinary action if the purchasing cards are misused.
II. Scope This policy directive will be applicable to those departments which have selected employees to make purchases with Purchasing Cards. Any exceptions to this policy must have express approval from the Director of Finance. This policy directive applies to all city departments. III. Electronic Card Management (“WORKS”)
The Purchasing Card program is supported by a web based management program called “WORKS.” The works program allows cardholders and other employees involved in the approval process to view and approve card transactions online. The program is a proprietary management system offered by the cards’ issuer, Bank of America. The WORKS program is accessed through the internet by a secured and password protected portal. The WORKS web site contains training
modules on the Purchasing Card program and report functions that users can utilize to become familiar with the WORKS features. The WORKS program allows cardholders to review and sign off on each credit card transaction. It also allows the purchases to be reviewed at the department level, as well as by Accounts Payable. The WORKS program also allows for the export of transactions in electronic form which will be imported and processed by the city financial system, Inforum Gold, for payment to Bank of America. To protect the City and employees against fraud, there are several limitations on card use, including limiting purchase amounts and types of purchases made. The standard limitations for the City include the following: $1,500 Single purchase limit as set by the Director of Finance $5000 Monthly spending limit as set by the Director of Finance Merchant code restrictions [as requested by the Department Director]
IV. Responsibilities A. Responsibilities: The following are the responsibilities of the individuals and departments utilizing the Purchasing Cards. 1) Cardholder
Hold and secure Purchasing Card Pay for legitimate City expenses Collect and save sales receipts and invoices Weekly sign off of all transactions in WORKS Review and sign off on monthly Statement of Account
2) Department Purchasing Card Reviewer
Assign appropriate cost center and vendor codes to transactions in WORKS Balance source documents to cardholder statement of account Sign-off on monthly Statements of Account that charges are correct Forward Statements of Accounts to Accounts Payable with appropriate source documents after signed off by Department Director Perform regular inspection of card possession by cardholders 3) Department Director Request Purchasing Cards for employees Appoint a Department Purchasing Card Reviewer Establish internal controls to review purchases
Collect cards from employees who end employment Notify the Purchasing Card Administrator (the City’s Purchasing Manager) of cards that need to be terminated due to departure of cardholder from city employment Sign off on monthly Statements of Account indicating approval to pay before sending to Accounts Payable 4) Purchasing Card Administrator
Coordinate issuance and cancellations of cards Participate in ongoing program reviews Assist with resolving billing disputes Provide WORKS training Maintain Purchasing Card policy
5) Accounts Payable Match cardholder Statement of Account to consolidated City Statement of Account Confirm that all charges are authorized by Department Director Reconcile WORKS reports to monthly Statement of Account and Consolidated Statement of Accounts Pay monthly charges from consolidated Statement of Account Process accounting data into the Inforum Gold Accounting Software File and store cardholder statement of account, consolidated City statement of Account and supporting documentation 6) Purchasing Card Administrator/Purchasing Office Review and recommend approval/disapproval of new purchasing card requests to the Director of Finance Coordinate issuance and cancellation of cards Resolution of vendor disputes Pursue vendor discount opportunities Evaluate Purchasing Card feedback from vendors Coordinate and maintain internal controls Provide WORKS training Maintain Purchasing Card Policy Policy 7) Finance Director Approve/disapprove new Purchasing Card Requests Establish card use and spending limitations 8) Business Process Review Manager Conduct periodic operational and compliance audits Perform physical audits of card possession by cardholders
V. Issuance of New Purchasing Card 1. Issuance of Purchasing Cards a. Requests for Purchasing Cards shall be submitted by the Department Director to the Purchasing Card Administrator on a Purchasing Card Request Form. The form shall be reviewed for approval by the Finance Director. b. The Purchasing Card Administrator is responsible for ordering new and replacement cards. c. The Purchasing Card will display the employee's name, “City of Pensacola”, and the card expiration date embossed on its face. The City’s Florida sales tax exemption number is printed on the Purchasing Card as well. The purchasing card issuer (Bank of America) will not have any individual cardholder information other than the cardholder's work address. d. Once received by the employee, the card must be immediately signed. The cardholder will be provided a copy of this policy. Each card must be activated by the cardholder according to instructions printed on the Card prior to use [using the last four digits of the employee’s employer ID number] and entering the Purchasing Office phone number, 435-1837. e. Cardholders will sign a user form certifying that they will use their card in accordance with the City’s Purchasing Card Policy. A copy of the signed formed will be retained in the employee’s personnel file. VI. Termination of employment or Transfer of Cardholder 1. When an employee ends his or her employment or is transferred to another Department, the Department Director shall collect the purchasing card, destroy it (cut it in half), and submit the pieces of the card to the Purchasing Manager, along with a memo explaining who the card belonged to and the reason for the termination. 2. If the Department Director is unable to collect the purchasing card when an employee terminates, he/she shall immediately notify the Purchasing Manager by telephone followed by an email or memo. The Purchasing Manager will ensure that the card is immediately canceled. VII. Use of Purchasing Card 1. Cardholder Use Only The Purchasing Card may be used only by the employee whose name is embossed on the
card. No other employee is authorized to use the card. The cardholder is accountable for all transactions that occur on his/her card. The cardholder will be held personally liable for inappropriate charges. 2. City Purchases Only The purchasing card is to be used for City purchases only. The purchasing card cannot be used for any personal use and any such use can be cause for disciplinary action up to and including termination of employment. 3. Spending Limits a. The Director of Finance or his designee will set two limits for each cardholder: single purchase limit and 30-day limit. The standard limits shall be $1,500 for a single purchase and $5,000 during the 30-day billing cycle. b. Requests for spending limit changes shall be submitted by the Department Director to the Purchasing Card Administrator and forwarded to the Director of Finance for final approval. c. Purchases may be made of multiple items, but the invoice cannot exceed $1,500. Splitting charges will be considered abuse of the purchasing card program. Dividing similar purchases over different days and times to keep the total amounts below the $1,500 limits for single purchases is prohibited. Split charges are purchases of a like or similar item(s) deliberately purchased separately to avoid the single purchase dollar limit. 4. Prohibited Uses of Purchasing Cards a. Cash advances (Prohibited by software) b. Personal telephone charges c. Goods or services not related to City business or approved travel and training. VIII.
Procedures for Making and Paying for Purchases 1. Receipts a. When a purchase is made, the cardholder shall obtain the “customer copy” of the charge slip receipt and the detailed receipt. The charge slip and detailed receipt are the source documents that will be used to reconcile the transactions submitted for payment
2. Sales and Use Taxes
The City is exempt from paying Florida sales or use tax. If the vendor charges sales tax, it is the cardholder’s responsibility to contact the vendor and correct the transaction. A credit receipt and a corrected receipt must be obtained from the vendor. This issue should be resolved before the cardholder signs off of the purchase in the WORKS program. The City’s tax exemption number is printed on the face of the Purchasing Card. If there is a problem with any vendor about sales tax, please contact the Purchasing Card Administrator at 435-1835. 3. Missing Documentation In the event a cardholder does not have proper documentation (charge slip and detailed receipt of items purchased), the cardholder shall provide a description of the purchase, including: date, location of the purchase and amount. Continued incidents of missing documentation may result in the cancellation of the employee's purchasing card and possible disciplinary action. 4. Payment and Invoice Procedures a. An individual Statement of Account will be mailed to the cardholder’s office and one consolidated statement for the City mailed to the Finance Services Department. The Statement of Account will list all transactions processed during the previous 30 day billing cycle. If no purchases were made on a purchasing card during the billing cycle, no Statement of Account will be generated unless adjustments for previously billed transactions have been processed during that cycle. b. The cardholder shall review the Statement of Account for any errors or potential disputes. The cardholder will sign the Statement of Account certifying the charges are correct and reconcile to the source documents. The Statement of Account for all the cardholders in the department will be reviewed by the Department Reviewer who will then reconcile the Statements of Account to a report printed from WORKS detailing all transactions for the department during the billing cycle. The Report, statements, and receipts will be forwarded to the Department Director for examination and sign off. By signing the statement and report, the Department Director certifies that all charges are appropriate and that all charges are documented with attached receipts, invoices, and source documents. Once all the Statements of Accounts for the Department have been reviewed, reconciled and the Department Director has signed off, the statements and source documents should be forwarded to Accounts Payable. IX. Reconciliation of Charges The Accounts Payable activity will reconcile the City’s consolidated Statement of Account to the individual cardholder statements and remit payment to Bank of America.
X. Disputes 1. If items obtained with the purchasing card are defective, the cardholder shall return the item(s) to the vendor for replacement or credit. If the vendor refuses to replace or correct the faulty item, the purchase will be considered in dispute. If the quantity of items received is less than the invoice and charge billing, then the transaction shall be disputed. 2. If a vendor charges the City sales tax the cardholder should not sign the sales slip or continue with the purchase. 3. A disputed item shall be explained with a note on the cardholder's Statement of Account before the statement is forwarded to Accounts Payable for payment. A transaction in dispute will require both a notation in the WORKS program, as well as a notation on the cardholder’s statement. 4. It is essential that the time frames and documentation requirements established by the purchasing card issuer (Bank of America) be followed to protect the cardholder's rights in dispute. 5. Transactions that are charged in one billing cycle and reversed in the following billing cycle, by the vendor, will be processed as a normal transaction and credit taken in the following month. Bank of America statements will not be “short paid.” These types of transactions are not disputed, but simply reversed/corrected. The City will not pay transactions that have been disputed. It is the responsibility of the cardholder to get vendors to correct any errors to minimize disputed transactions. XI. Disciplinary Procedure Intentional misuse of the Purchase Card will result in disciplinary action against the cardholding employee ranging from loss of card privileges to termination of employment. The full range of consequences, from counseling to employment termination, may result on the first offense. The City Manager, the Director of Finance Director and the respective Department Director shall determine the appropriate disciplinary action. XII. Lost or Stolen Purchasing Cards a. If a purchasing card is lost, stolen, or misplaced, the cardholder shall immediately notify the Bank of America (1-888-449-2273) and the Purchasing Card Administrator at 4351835 of the loss. b. The cardholder will be responsible for reporting all information necessary about a lost or stolen card. c. The Purchasing Card Administrator will be responsible for the coordinating card replacement.
City of Pensacola Purchasing Card User Form
I do hereby certify that I will utilize the City Purchasing Card issued to me in accordance with the purchasing card policy governing the use of the cards, in compliance with the law and the budget, and that all charges to the Purchasing Card are just, reasonable and necessary for the operation of my department. Further, I understand that use of the card for unauthorized, inappropriate, or personal use may result in confiscation of the card, possible disciplinary action, up to and including termination of employment on first offense.
Employee Signature: ___________________ Employee Name: ______________________ Department: __________________________ Date: ________________
Purchasing Card Request Form
Name of Employee: ______________________________ Department:_____________________________________ Last 4 digits of City Employee ID Number:_________
The card requested for the employee listed above is necessary for the efficient and effective operation of the department. All purchases will be closely monitored for compliance with the Purchasing Card Policy and the City’s Purchasing Manual.
Department Director:__________________ Signature
Date:_________________
