HomeMy WebLinkAboutRes 2023-01-1346 Purchasing Card Policy AmendmentCITY OF ANNA, TEXAS
RESOLUTION NO. �24�?-3 - 01 — 134fo
A RESOLUTION REVIEWING AND AMENDING THE PURCHASING CARD POLICY OF
THE CITY OF ANNA.
WHEREAS, the City of Anna, Texas ("the City") is committed to principles and
practices of open and fair government that honors the public trust; and
WHEREAS, the City of Anna, Texas City Council ("City Council") has determined that
it is in the interests of the citizens of Anna to adopt a Purchasing Card Policy that
establishes policies and procedures to govern the management and care of public
funds through the use of Purchasing Cards; and
WHEREAS, the most recent review of the City's Purchasing Card Policy has prompted
an amendment to the existing policy attached hereto as Exhibit 1;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ANNA, TEXAS, THAT:
Section 1. Recitals Incorporated.
The above -referenced recitals are incorporated herein as if set forth in full for all
purposes.
Section 2. Purchasing Card Policy Reviewed
The City Council has reviewed the City's Purchasing Card Policy and approves the
amended Purchasing Card Policy attached hereto as Exhibit 1.
PASSED by the City Council of the City of Anna, Texas, on this the 10th day of January,
2023.
PURCHASING CARD POLICY
BACKGROUND AND PURPOSE:
The purpose of the Procurement Card Program (also referred to as the Purchasing Card or "P-
Card") is for efficient and controllable methods to make cost-effective purchasing and for small
dollar purchases or for travel related purchases. A purchase should not be made with a card
unless it is the most productive purchasing method. This program is designed as an alternative
to the traditional purchasing process and can result in a significant reduction in volume of
purchase orders, invoices, and checks processed.
All employees issued a P-Card are expected to understand City policies related to using City
funds. At no time does the use of the P-card override the City's Procurement Policy, which is
guided by state procurement law. The City bears no legal liability from inappropriate use.
The City will issue cards from a company that has received the State of Texas purchasing card
contract or under a Co-operative purchasing agreement with another municipality within the
State of Texas. The card will be primarily used in place of petty cash, small regular purchase
orders, blanket purchase orders (where sales are made over-the-counter), emergency purchase
orders, and all other credit cards. This card policy is not intended to replace, but rather
supplement existing purchasing, travel and other City policies. Participating in the Purchasing
Card Program will be the option of the employer. Employees that are not issued a card may
obtain travel advances or reimbursements. Employees who have been issued a P-Card must
utilize them for travel related purchases.
This policy addresses the following areas:
• Purchasing Limits
• Allowance/Prohibited Purchases
• Security
• Merchandise Returns
• Reconciliations
• Payment Processing
SCOPE:
The policy supports the use of purchasing cards for appropriate business transactions, while
assuring that the appropriate internal controls are in place to minimize the City's risk of financial
loss. All P-Cards shall be governed and used in a manner that complies with the said policy.
11Page
CARD CONTROLS AND LIMITS:
The Finance Department is responsible for administration of the Purchasing Card Program,
policies, and procedures. Each individual purchasing card will have transaction and/or spending
cycle limits. Billing cycles run through the 5h' of each month or the next business day if the 51h is
on Saturday or Sunday. All cardholders shall have all purchase orders for the cycle and
The Finance Director has the ability to limit types of purchases, place of purchase and hours of
day purchases can be made on individual cards. The total purchase price as printed on the
individual credit card receipt is known as the "transaction amount". The purchasing card may be
limited by the merchant type, transaction amount, and monthly transaction limit. The Department
Director, Finance Director, and City Manager determine limits and may also authorize a
temporary increase to a card. Below are the current limits:
Cardholder Class
*Per Transaction
*Per Month
Management:
City Manager, Assistant City
$5,000
$10,000
Manager, Department Directors, Assistant
Directors
Supervisory: Division Heads, Supervisors
$2,500
$5,000
IT Director
$10,000
$15,000
Recreation Staff
$2,500
$5,000
Intermediate Level Users
$1,500
$3,000
*The City Manager may set different limits for specific individuals as needed.
CARDHOLDER RESPONSIBILITIES:
The P-Card must ONLY be used for City expenses in accordance with the City of Anna Purchasing
Card Policy. Any other use is prohibited. All transactions on the P-Card are the responsibility of
the person to whom the card is issued. Any transactions that a Cardholder makes that violate this
P-Card Policy, or any other related policy, may result in a warning, suspension or revocation of
the card, termination of employment or other disciplinary action in accordance with the City of
Anna disciplinary policies. The cardholder must:
• Ensure the P-Card is used for legitimate business purposes only
• Maintain the P-Card in a secure location at all times
• Adhere to purchasing limits and restrictions
• Obtain and reconcile all sales slips, register receipts, online order confirmations, and/or P-
Card slips and provide to the Finance Department in a timely manner
• Submit original receipts (not copies) or online order confirmations for each item appearing
2 1 P a g e
on the P-Card
• Obtain detailed receipts, not just charge slips, showing specific items purchased
• Attempt to resolve disputes or billing issues directly with the vendor and notify the card
issuer if the dispute or billing error is not satisfactorily resolved
• Ensure that appropriate credit for the reported dispute item or billing error appears on a
subsequent statement
• Not accept cash in lieu of credit to the P-Card account
• Return the P-Card to the Finance Department upon terminating employment with the City
When the card is received by the Cardholder the Cardholder Agreement Form (Exhibit #1) must
be signed to acknowledge the responsibilities associated with the card.
USING THE CARD
Spending Limits: Each cardholder is responsible for understanding their departmental budget,
account numbers and the limits set for their individual cards.
Receiving Goods: All merchandise purchased with the P-Card should be sent directly to the
employee's City address. Itemized receiving documentation that accompanies the order should be
kept as documentation with the original transaction receipt.
Receipts: Original receipts (not copies) must be submitted along with the Purchase Order for each
item appearing on the P-card monthly statements. The PO and receipt should be turned into the
Finance Department as transactions are completed in order to ensure payment is made to the P-
Card vendor in a timely manner. Meal receipts shall include the event, date, and names of
participating employees. Purchases for each P-Card shall be placed on separate Purchase Orders.
Lost Receipt: Occasionally, a cardholder may lose a receipt. The cardholder should document the
details about the purchase by completing the Purchasing Card Lost Receipt Form (Exhibit #2).
The form must be approved by the Department Director. The Lost Receipt Form should
accompany the Purchase Order. Excessive lost receipts shall result in the purchasing card
privileges being revoked.
Internet Purchases: Purchases using the P-Card should be made on secure websites only.
International purchases are not allowed. An order confirmation of the purchase should be printed
to submit with the Purchase Order.
Contract Vendors: The Cardholder should ensure the City does not have existing contracts or
price agreements with designated vendors for specific goods or services. The City has a
contractual obligation to make all purchases from these vendors whenever price agreements or
contracts exist.
Vendor Accounts — The Cardholder should not utilize the P-Card at locations where the City has
an established credit account. These would include vendors such as the following: Office Depot,
3 1 P a g e
Auto Zone, Tractor Supply, Warrior Tire, Gebo's and O'Reilly's. A complete list can be provided
by contacting the Finance Department.
Sales Tax: All purchases using the P-Card should only be for official City purposes; therefore,
purchases are not subject to state or local tax. The City is not exempt from paying hotel/motel
taxes. A tax-exempt certificate can be obtained from the Finance Department. Cardholders should
remind vendors at the time of purchase that the City is exempt from sales tax.
Travel Expenses: The City's Travel Policy should be followed for all travel related purchases
made using the P-Card. Approved travel authorizations should be obtained prior to using the P-
Card and a signed Travel Authorization form along with original receipts must be submitted to the
Finance Department upon return as well as any Purchase Order for any reimbursement.
Meal Expenses: Meal receipts must show details of items ordered and should include the business
purpose of the expense, who attended, and show details of the items ordered. The credit card
receipt showing only the total charged amount is not acceptable documentation. Alcohol
purchases are prohibited for use with the P-Card.
Examples of Acceptable Purchases
• Car Rentals
• Dues/Subscriptions
• Memberships
• Training Courses and Seminars
• Travel Related Purchases (airfare/hotel reservations)/family excluded
Examples of Unacceptable Purchases
• Alcoholic Beverages
• Capital Items (Items over $5,000)
• Personnel Services
• Payments to Individuals
• Services or Commodities which have a contracted price unless an emergency exception is
approved by the Finance Department
• Payment to vendors where the City has an established credit account
• Charitable Contributions or Donations
P-CARD FRAUD AND MISSUSE
The following summarizes typical actions that will be considered fraudulent, misuse or
administratively deficient for purposes of this policy.
Fraud/Misuse
• Receiving cash refunds or advances
• Purchase of items for personal use
• Purchase of tobacco, liquor, or any alcoholic beverages or any substance, material, or
service which violates policy, law, regulation pertaining to the City of Anna or any other
4 1 P a g e
restricted commodity
• Splitting of purchase or service cost over multiple card transactions in order to circumvent
the authorized transaction limit
• Splitting of purchase or service cost over multiple card transactions in order to avoid
Purchasing Policy limits which would require quotes to be obtained
• Any purchases of goods/services at a merchant type not considered prudent or of good
judgment
• Any other purchase specifically excluded in the City purchasing policy
Any employee who is found to have inappropriately used or violated the policy and procedures of
the P-Card Program will be required to reimburse the City for all costs.
Administrative Deficiencies
• Failure to obtain supporting documentation for all card transactions on more than two
occurrences in a six-month period
• Lack of timely and proper reconciliation of posted transactions
All fraud, misuse or administrative deficiencies will be documented and reported to the Director
of Human Resources.
MONTHLY RECONCILIATION:
The Finance Department will reconcile the purchase orders against each individual cardholder's
statement and validate the total monthly amount due before processing for payment.
Management will be responsible for auditing and verifying that all P-Card charges are for City
related business, City policies are followed, correct budgeted expense accounts are used, original
receipts are obtained, and purchase orders are approved in a timely manner and submitted to
Finance for processing by the requested date.
CARD CANCELLATION/REPLACEMENT
Card cancellation may occur if purchasing misuse is detected, an employee fails to repeatedly not
turn in original receipts or is repeatedly delaying the reconciliation and payment of the purchasing
cards for the City.
The Finance Department should be notified immediately to deactivate the P-card when an
employee is terminated, the card is lost, or the employee is no longer eligible to use the card.
If the purchasing card is lost or stolen, the cardholder must immediately notify the Customer
Service number. The current City purchasing card program is through JP Morgan Chase Bank.
Please contact Customer Service at 1-800-316-6056.
5 1 P a g e
PURCHASING CARDHOLDER AGREEMENT
EXHIBIT # 1
I, hereby agree to comply with the
purchasing card procedures and the following terms and conditions regarding my use of the card.
As a cardholder, I have read and understand the City of Anna Purchasing Card Policy and
Procedures.
1. I understand I am being entrusted with a valuable tool, the purchasing card. I will be making
financial commitments on behalf of the City of Anna. I will obtain the best value for the City
of Anna by using the card wisely and with discretion.
2. I agree to use this card for official approved purchases only. I fully understand that misuse or
abuse of the card will result in revocation of the card and appropriate disciplinary action
which may include termination of my employment.
3. Policy violations include, but are not limited to:
• Expenditures for personal use
• Cash advances or refunds
• Payment to an individual
• Expenditures associated with capital items
• Expenditures for tobacco or alcoholic beverages
• Purchases under a contract, unless an emergency is granted
• Separate, sequential, and component purchases or transactions made with intent to
circumvent accounting and procurement policies and regulations
• Failure to submit proper documentation with each transaction
4. I agree to return the card immediately upon request or termination of employment (including
retirement and resignation). Should I be transferred, qualify for extended leave or undergo
an organizational change which causes my duties to no longer necessitate the use of the card,
I agree to return it immediately.
5. If the card is lost or stolen, I agree to immediately notify the bank at 1-800-316-6056.
6. I understand it is my responsibility to safeguard the purchasing card and the account number
when using procurement.
7. I understand the importance of transaction review. I will submit the original receipt and
other proper documentation along with a signed Purchase Order as transactions are made.
Employee Signature: Date:
Department Head: Date:
Finance Director: Date:
Transaction Limit: Monthly Limit:
6 1 P a g e
PURCHASING CARD LOST RECEIPT FORM
EXHIBIT #2
The original receipt(s) for the following described transaction(s) have been misplaced. This
memo is intended to replace these documents for audit purposes.
Transaction
Date
Merchant Name
DETAIL Items Purchased
Amount
Designated Cardholder Signature:
Date:
Department Head Signature:
Date:
Finance Director:
Date:
7 1 P a g e