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HomeMy WebLinkAboutFIN-004-B Procument Card Policy (P-Card) CITY OF PALM DESERT ADMINISTRATIVE PROCEDURES Subject Procurement Card Issuance and Use Policy Policy No. FIN-004 (B) Date Issued: October 1, 2021 Amended: N/A Approved by PDMC 3.30.030 and .040 - City Manager Policy Authored by Finance Department I. PURPOSE The purpose of this policy is to establish a framework for appropriate use of Procurement Cards. A Procurement Card is a City-issued credit card from a financial institution to streamline the acquisition process and facilitate official City business that includes approved purchases such as utility payments, travel reservations, conference registrations, online subscriptions and small dollar purchases requiring a credit card payment or to place an order and invoicing is not an available option. This policy and the use of a Procurement Card (P-Card), is not intended to replace any policies of the City including those related to procurement, payments for services, use of City equipment or travel. This policy applies to all employees that are issued a P-Card or authorized to use one. II. AUTHORITY The City Manager is authorized under the PDMC Chapter 3.30 to establish and periodically update this policy. III. GENERAL POLICIES A. P-Cards may be issued in an authorized purchaser’s name and/or the City of Palm Desert (“City Cards”). B. P-Cards are to be used for official City business only. C. If a purchase will exceed the P-Card transaction limits, standard City purchasing policies and procedures must be followed. D. The P-Card can be used to purchase supplies, materials, and equipment and services that do not exceed the single transaction limits as set forth in this policy or higher transaction limits as approved by the City Manager for selected cardholders on an individual basis. E. Failure to follow this policy, including any outlined procedures for P-Card purchases contained in this policy, may lead to the suspension or termination of a P-Card and disciplinary action up to and including termination. F. P-Cards may not be used by any other person other than the authorized P-Card holder. G. The Director of Finance acts as the Citywide P-Card Administrator, serves as the primary contact for the financial institution issuing P-Cards and administers the City wide program. H. The P-Card will only be issued to cardholders who certify that they have read, understand, and will comply with this policy. Employees issued a P-Card are responsible for any and all use of the P-Card. Administrative Procedures Manual FIN-004 (B) Policy on the Issuance and Use of Procurement Cards Page 2 of 5 I. Use of a P-Card is a privilege and the City Manager or Director of Finance may suspend or revoke cards at any time in according to his/her assessment of the City’s best interests such as, but not limited to, lack of timely review and approval of P-Card invoices and violations of this policy. Such revocation is not subject appeal. J. Emergency Exception - In the case of an emergency (even if not so declared) or to ensure the continued provision of essential City services that have been interrupted, the City Manager or Director of Finance, or their designee may authorize an increase in card and/or individual transaction limits as well as authorize P-Cards to be temporarily re-assigned to designated staff. (The process for reconciling charges shall be the same as all other purchases). IV. P-CARD TRANSACTION POLICIES A. Purchases shall not be split into multiple transactions to circumvent P-Card transaction limits. B. Within reason, P-Card users shall purchase the least expensive item that meets performance specifications and applicable policies. C. All P-Card transactions shall be documented with the appropriate original receipt documentation. P-Card users are responsible for obtaining and maintaining substantiating documents. If transaction documentation is lost, the P-Card user must substantiate the charge when there is no way of duplicating the receipt. D. Transaction supporting documentation shall not be modified by employees for any P- Card transaction unless said transaction is disputed. E. Failure to provide documentation for transactions on a routine basis may result in suspension or revocation of a P-Card. V. ALLOWED USES, RESTRICTIONS AND PROHIBITIONS OF P-CARDS A. Allowed Uses All Cards: 1. Travel related expenses in accordance with the City’s established travel policy. 2. A single purchase which does not exceed $500 including online transactions that require immediate payment. 3. Utilities, postage and some subscription services including online subscriptions or hosting costs with prior written approval of the Director of Finance or City Manager. 4. Any use the City Manager deems necessary to conduct the business of the City and that cannot be invoiced to the City to obtain the services within a reasonable timeframe. 5. The City Manager may authorize an exception to this policy including a temporary use or assignment and adjustment of policy purchase limits, when doing so is in the best interest of the City. B. Restrictions on Uses for City Cards include, but are not limited to: 1. International Purchases that require a currency conversion from the U.S. Dollar. 2. Subscription services that require signing of a maintenance agreement except when approved in writing in advance by the Director of Finance Administrative Procedures Manual FIN-004 (B) Policy on the Issuance and Use of Procurement Cards Page 3 of 5 3. Equipment rentals for longer than seven (7) consecutive days must have prior authorization by the Director of Finance, the Assistant City Manager or the City Manager. 4. Purchase of equipment or machinery which requires signing a maintenance agreement except when approved in writing in advance by the Director of Finance. C. Prohibited uses of a P-Card include but are not limited to: 1. Non-City business. 2. Cash advances. 3. Purchase of flowers, shower gifts, birthday gifts, etc., for employees without prior written approval of the Director of Finance or City Manager. 4. Purchase of items for personal use or that may be included in any per diem. 5. Any other purchase which would be prohibited under any other City policy or directive. VI. Obtaining a City P-Card A. The City Manager shall evaluate the operational necessity1 for issuance of P-Cards to employees based on their duties and responsibilities and operational requirements. The operational necessity shall be documented on the Application for Procurement Cards. The City Manager will review and approve/deny all such applications at his/her discretion. B. The P-Card credit limits established at the time of the issuance of this policy are as follows (such limits may be amended by the City Manager without amendment to this policy at any time): Position Approval of Issuance Card Limit*: City Manager Upon hire $7,500.00 Authorized ACM/Directors City Manager $5,000.00 City General Card (3 issued) Revolving - Upon Account Establishment $5,000.00 *Exceptions to a card limit may be allowed for certain expenses that facilitate timely payments including utilities, postage, mail services and similar inter-quasi- governmental services. A User Agreement for City-Issued Credit Card form is to be completed and signed by the cardholder for all P-Cards that are issued to City Employees; a copy is given to the employee and the original is maintained in the employee personnel file. 1 To evaluate operational necessity, departments shall take into consideration frequency of purchases, types of purchases (materials, equipment, supplies, services), and anticipated monthly average procurement card transaction. Administrative Procedures Manual FIN-004 (B) Policy on the Issuance and Use of Procurement Cards Page 4 of 5 The Department Director is responsible and accountable for: (1) adherence to this policy by Department Cardholders; (2) personal adherence to this policy; and (3) maintenance of appropriate internal controls. C. City General P-Cards – Three (3) general P-Cards will be issued in the name of the City for allowable uses including reservations, registrations, travel expenses and for City business and incidental department purchases for which an invoice cannot be issued. Procedures for Using a General P-Card: 1. Department Director notifies Director of Finance, the name of the employee authorized to utilize the general P-Card, purposes of charges, and duration of use. 2. Director of Finance will temporarily assign P-Card to authorized employee. 3. Employee and Finance staff will sign out the P-Card including the dates and reason for use. Employee will be given a Procurement Card Use form that includes the conditions of use. 4. At the end of the period of use or at least once monthly, employees will complete the Procurement Card Use form attaching receipts and documentation for all transactions. Department Director shall approve prior to submission to Finance. VII. P-Card Individual Monthly Statements Each month Finance will provide a copy of the P-Card Statement of Activity to each card holder. Individual cardholders will attach (hard copy or digital) their accumulated receipts to the monthly statement with a brief explanation of the purchase and the amount of each transaction broken down by accounts to be charged. VIII. Responsibilities A. Cardholder Responsibilities Subject to the provisions in this policy, Cardholders are authorized to make purchases using the P-Card once the Application for Procurement Card Form has been submitted and approved by the City Manager. Responsibilities of a P-Cardholder include, but are not limited to: 1. Acknowledging receipt of the P-Card and understanding the P-Card Policy by completing the User Agreement for City-Issued Credit Card Form. 2. Directing questions about the proper use of the P-Card to the City Manager, or Director of Finance. 3. Never purchasing items which violate any City policy. 4. Never assigning or loaning the P-Card to other employees unless specifically authorized in writing by this policy or the City Manager. 5. Ensuring the P-Card is secure from theft and misuse. 6. Returning the P-Card upon request from the City Manager, Director of Finance, or designee. Administrative Procedures Manual FIN-004 (B) Policy on the Issuance and Use of Procurement Cards Page 5 of 5 7. Notifying the Director of Finance immediately if the P-Card is lost or stolen. 8. Verifying that the amount on the sales draft/receipt corresponds to the items purchased, including applicable taxes, before signing the sales draft/receipt. 9. Keeping documentation of purchases and ensuring the itemized receipt includes a description of the goods and/or services purchased, the quantity purchased, the price per item, amount of sales tax, total amount, shipping charges (if applicable), and date of purchase. 10. Disputing charges, as appropriate, with the financial institution. 11. Recording appropriate account codes on the monthly Statement of Account and a description of each transaction if not already included. 12. Identifying, if applicable, all transactions that require accrual of California Sales Tax to the Finance Department. B. Department Director Responsibilities 1. Evaluate the operational necessity for issuance of P-Cards to Department employees submit the Application for Procurement Cards to the City Manager for approval. 2. Accountable for the adherence to this policy for Department Cardholders. 3. Accountable for the maintenance of appropriate internal controls. 4. Review and approve all Monthly Statement of Accounts for Department Cardholders ensuring that Cardholders’ P-Card Monthly Statement of Account includes the appropriate documentation to support transactions. 5. Review the utilization of the P-Cards on a periodic basis for the purpose of identifying P-Cards that may no longer be needed or that may be under-utilized. 6. Report violations of this policy to the City Manager and/or Director of Finance and follow appropriate disciplinary measures for violations of this policy. C. Program Administrator for Procurement Cards 1. Maintaining a Procurement Card Policy. 2. Establishing and updating P-Card accounts, including termination of P-Cards. 3. Administering dollar limits and transaction templates, which limit the utilization of P-Cards. 4. Review Monthly Statement of Accounts to verify that the Cardholders’ Statement of Account includes the appropriate documentation to support transactions. 5. Ensure appropriate internal control policies are in place. 6. Reporting violations of this policy to the City Manager and/or Department Director. 7. Ensure destruction of P-Cards of Cardholders who left the City or a particular department and termination of the card with the issuing financial institution. ATTACHMENTS a. Application for Procurement Card b. User Agreement for City-Issued Procurement Card c. Procurement Card Use Form