HomeMy WebLinkAboutDocumentation_Regular_Tab 08_10/12/2023Agenda Item #8.
Regular Council
STAFF MEMO
Meeting: Regular Council - Oct 12 2023
Staff Contact: Jeffery Snyder, Finance Director Department: Finance
TITLE
Consider Adoption of Procurement Card Policy and Procedure
SUMMARY:
The Village is changing Procurement Card Processors. The new approved vendor will be PNC Bank.
As the final step in the migration to the new procurement card we need a strong policy and procedure
manual for the protection of the Village. The Policy and Procedure document spells out the process
for using the procurement card, establishes parameters of procurement card usage, and defines
expectations of proper usage of this program. This will 1) Provide for an efficient and cost effective
method of procurements and paying for goods and services, 2) Reduce the use of check requests,
purchase orders, and blanket purchase orders. 3) Reduces the time and effort spent processing low
dollar transactions, 4and 4) Provide for disciplinary action if the procurement cards are misused.
This document and any attachments may be reproduced upon request in an alternative format by
completing our Accessibility Feedback Form, sending an e-mail to the Village Clerk or calling 561-768-
0443.
BUDGET INFORMATION:
BUDGET AMOUNT N/A AMOUNT AVAILABLE N/A EXPENDITURE AMOUNT: N/A
FUNDING SOURCES: N/A IS THIS A PIGGYBACK:
Yes N/A
DID YOU OBTAIN 3 QUOTES?
Yes N/A
COMMENTS/EXPLANATION ON SELECTION Consider approving the new procurement card policy
POTENTIAL MOTION / DIRECTION REQUESTED:
Consider approving the Procurement Card Policy and Procedures to govern the new procurement card
program.
ATTACHMENTS:
Procurement Card Policy - 10-23
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Agenda Item #8.
Finance Department
345 Tequesta Drive • Tequesta, Florida 33469
561-768-0427•www.Tequesta.org
Procurement Card Policy & Procedure
Table of Contents
PURPOSE ........................................................................................................................................................ 2
SCOPE ............................................................................................................................................................ 2
POLICY........................................................................................................................................................... 2
PROCUREMENT CARD PROCEDURES ................................................................................................................. 2
I.Definitions ............................................................................................................................................. 3
II.How It Works ......................................................................................................................................... 4
III.Responsibilities .................................................................................................................................. 4
IV.Processes ........................................................................................................................................... 6
A.Requesting a Procurement Card............................................................................................................. 6
B.Modifying Procurement Card Limits ....................................................................................................... 6
C.Using the Procurement Card .................................................................................................................. 7
D.Reconciling Monthly Statement ......................................................................................................... 8
E.Paying for Supplies or Services ............................................................................................................... 9
F.Resolving Returns and Credits, Disputes and Erroneous Charges. .......................................................... 9
G.Reporting a Lost or Stolen Procurement Card ...................................................................................... 10
H.Procurement Card Termination............................................................................................................10
I.Violations - The following actions are prohibited: ............................................................................... 11
CARDHOLDER ACCEPTANCE FORM................................................................................................................. 12
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Agenda Item #8.
PURPOSE
To establish the procurement card policy and procedures which meet the following criteria:
Provide an efficient and cost effective method of procurementand paying for goods and
services.
Reduce the use of check requests, purchase orders (PO’s), and blanket purchase orders
(BPO’s)
Ensure procurement card purchases are in accordance with the Village’s ordinances,
policies, and procedures, as well as the Florida Statutes.
Reduce the time and money spent processing low dollar transactions.
Ensure the Villagebears no legal liability from inappropriate use of procurementcards.
Provide for disciplinary action if the procurement cards are misused.
SCOPE
The policy and procedures outlined in this document apply to all Village of Tequesta employees
participating in the program.
POLICY
The procurementcard shall be used only in strict conformity with this Village policy and
procedures and within the terms and conditions of the cardholder acceptance form from Visa.
The procurement card may be used only by the Village employee whose name is embossed on
the card. No other person is authorized to use the card. The cardholder is responsible and
accountable for all transactions that occur on their card. Every precaution shall be taken to
maintain confidentiality of the cardholder’s account number, expiration date, and security code.
The procurementcard is to be used for Villageof Tequesta authorized purchases only and cannot
be used for any personal use.
PROCUREMENT CARD PROCEDURES
A purchase may be made of multiple items, but the invoice cannot exceed the authorized single
invoice limit of the authority assigned to the cardholder. Purchases will be denied if the
authorized single purchase limit is exceeded. Payments for purchases shall not be split to stay
within the single purchase limit. Splitting charges will be considered abuse of the procurement
card program.
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Agenda Item #8.
I.Definitions
Account manager: Employees designated by department supervisors and department heads
to be responsible for the reconcilement, documentation,and account coding of procurement
card transactions for a specified group of cardholders. Also known as proxy.
Bank:The financial institution which has entered into an agreement with the Village to
provide the procurement card program, PNC Bank.
Billing cycle: The interval of time between billing statements.
Department head: The department head (or designee)will perform the duties outlined in
Section III below, which include requesting the procurement cards for employees of that
division and designating account managers.
Capital equipment: Assets with a cost of $5,000 or more and a useful life of one year or more,
including but not limited to furniture, equipment, vehicles, and computer hardware. These
purchases must be recorded in the Village’s BS&A accounting system.
Cardholder acceptance form: Visa's terms and conditions that define cardholder use of the
procurement card.
Commercial card portal: The website upon which the cardholder views and records the details
about procurement card purchases. Information to be recorded includes the account code,
purchase description, and receipt of each transaction.
Merchant category code (MCC) limit: A method to control where spending is allowed. All Visa
merchants are assigned an industry-specific MCC code which the Village can restrict from
procurement card access. Once a MCC code is blocked, all merchants within that category
will be declined.
Monthly limit: The maximum dollar value of charges a cardholder is authorized to make
during the billing cycle.
Procurement card administrator (PCA): The finance director or designee. This person is
responsible for the administration of the procurement card program.
Single purchase limit: The maximum value of charges a cardholder is authorized to make
during a single transaction.
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Agenda Item #8.
II.HowItWorks
a. A department head authorizes the issuance of a procurement card to an employee.
b. The procurement card administrator coordinates issuance of a procurement card to an
employee.
c. Once issued, the employee becomes a cardholder and presents goods or services for
purchase to a vendor who accepts Visa.
d. The vendor processes the card information to obtain authorization for the purchase.
e. The bank receives the transaction information electronically from Visa.
f. The bank verifies the account number and spending control limits on the card.
g. Once approved, the cardholder receives the merchandise and a copy of the receipt.
h. The cardholder maintains the original receipt and updates the commercial card portal
with transactional information for timely remittance to the account manager.
i. The vendor receives payment for the merchandise within 3 days.
j. The account manager reviews the information listed on the commercial card portal and
approves the account codes, description, and receipt uploads.
k. Finance receives a monthly consolidated statement for the Village.
l. The account manager reconciles all purchases and credit activity to the commercial card
portal.
m. The purchasing card administrator imports the reconciled transactions, along with the
receipts/supporting documentation into BS&A, which are then approved by the
department director after the billing cycle ends.
n. Finance pays the consolidated statement to the bank.
III. Responsibilities
Cardholder is responsible for the following:
a. Holding and securing the procurement card and card number;
b. Buying supplies and services;
c. Informing vendor of tax exempt status prior to processing sale transactions;
d. Collecting and saving sales receipts;
e. Documenting the account number and description of the item to be charged foreach
receipt;
f.Receiving and inspecting all ordered materials and services;
g. Reporting discrepancies to vendors;
h. Identifying and handling disputed charges;
i.Reviewing/verifying charges with the account manager;
j. Uploading receipts into commercial card portal following purchases;
k. Complying with Village policy and procedures.
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Agenda Item #8.
Account Manager is responsible for the following:
a. Matching receipts with the monthly statements;
b. Reviewing the monthly cardholder statement with cardholder;
c.Assisting in the handling of disputed items;
d. Maintaining the commercial card portal and verifying all credits are posted;
e. Verifying/assigning account codes and descriptions where needed;
f. Uploading the receipts into commercial card portal if not already done so by
cardholder;
g. Approving transactions in the commercial card portal.
Department Head (or designee) is responsible for the following:
a. Reviewing the monthly procurement trends of cardholders with the department;
b. Reviewing fund balances to ensure sufficient budget dollars are available for
cardholders;
c. Review cardholders’ use of cards;
d. Assisting in the handling of disputes with vendors;
e. Assuring that all documentation is uploaded into BS&A and coded properly by
applicable schedule dates;
f. Evaluating the need to cancel or reissue cards;
g. Collecting revoked cards from cardholders and remitting to the PCA;
h. Designating account managers and communicating same to the PCA.
Procurement Card Administrator (PCA) is responsible for the following:
a. Reviewing and communicating to the bank all procurement card requests and
changes to card limits;
b. Training cardholders;
c. Coordinating the issuance and cancellation of cards;
d. Maintaining program policy and procedures, cardholder guides and/or manuals and
all cardholder requests;
e. Maintaining a list of all current account managers;
f. Pursuing supplier discount opportunities;
g. Evaluating procurement card feedback from suppliers;
h. Coordinating and maintaining internal controls;
i. Participating in ongoing program reviews;
j. Participating in resolving billing disputes;
k. Monitoring program for compliance with all Village policy and procedures and
notifying Finance Director and Department Head of issues when applicable;
l. Monitoring the program’s aggregate monthly spending relative to the aggregate
established credit limit with the bank for potential required increases.
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Finance Department is responsible for the following:
a. Reviewing the file of coded purchases made by the departments;
b. Performing a pre-audit over receipts and charges;
c.Paying monthlycharges from the consolidated statement;
d. Monitoring for adherence to this policy;
e. Conducting periodic audits and report findings to the Village Manager.
Bank is responsible for the following:
a. Activating and deactivating procurementcards at the request of the PCA;
b. Paying vendors and suppliers;
c. Controlling pre-defined cardholder limits;
d. Providing monthly statements and reporting information;
e. Providing customer service.
IV. Processes
A. Requesting a ProcurementCard
1. Procurement cards will be issued to Village employees who frequently purchase goods
or services.
2.All requests for procurement cards must be submitted bythe department head to the
PCA.
3. The PCA reviews the request and submits it to the bank for processing.
4. The bank issues the procurement card and mails it to the PCA.
5. The cardholder signs the procurement card in the signature space on the back of each
card, witnessed by the PCA.
6. The cardholder attends a mandatory procurement card program training session, signs
the cardholder acceptance form, and receives theprocurement card.
B.Modifying Procurement Card Limits
1.All requests for modifications to cardholder limits must be submitted by the Department
Head to the PCA.
2.The PCA reviews the modification and submits it to the bank for processing.
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Agenda Item #8.
C.UsingtheProcurementCard
1.The cardholder may receive supplies or services, or place an order for these by telephone
or online.The supplies or services must be immediately available for pick up, shipped, or
delivered within the monthly billing cycle. The order should not be placed without this
assurance. No back-ordering is allowed when using the procurement card.
2. Online Orders: The cardholder should print out, electronically or on paper, the detailed
receipt to ensure that the Village can prove and validate each and every transaction. This
is accomplished by supplying information that will identify what was purchased, how
many items were purchased, the individual cost of each item, the date of purchase, and
the total cost of the purchase for each transaction.
3. Telephone Orders/Online Orders: The cardholder must confirm that the vendor will charge
the procurement card when shipment is made so that receipt of the supplies may be
certified on the monthly statement. This is also a requirement of the vendor's contract
with Visa.
4. Prohibited Purchases: The procurement card is to be used for Village authorized
purchases only. The procurementcard cannot be used for any personal use. The
following supplies and services shall not be purchased with the procurement card:
Personal Items;
Cash Advances;
Gift Certificates (Approved under certain circumstances by Village Manager);
Meals if in travel status (Approved under certain circumstances by Village Manager
as per diem is the standard for meals while traveling);
Entertainment (Approved under certain circumstances by Village Manager)or;
Alcohol.
5.Dollar Limits: A purchase may be made up of multiple items, but the total invoice
(including shipping) cannot exceed the cardholders single purchase limit. Charges for
purchases shall not be split to stay within the single purchase limit. Splitting charges will
be considered abuse of the procurement card program.
6.Sales & Use Tax: The Village is exempt from paying any State of Florida sales and/or use
tax, using the procurement card. It is the responsibility of the cardholder to make the
vendor aware that the sale transaction will be tax exempt prior to processing the sale. If
the vendor charges sales tax, the cardholder must contact the vendor and obtain a credit
equal to the amount of the sales tax. Do not permit the vendor to issue cash to settle a
sales tax error. If you have a problem with any vendor about sales or any other tax, please
contact the PCA.
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Agenda Item #8.
7.Documentation: For all transactions, the cardholder must retain the original receipt
which identifies every item purchased and the corresponding item cost. Online orders
must be kept, either electronically or by printed detailed receipt. Telephone orders, the
cardholder must retain the receipt and/or packing slip. The cardholder must also write
theaccount number, or a narrative description of the account/project to be charged, on
each receipt or added to the commercial card portal.
8. Missing Documentation: Where supporting documentation is missing, the cardholder
must contact the vendor and request a duplicate receipt. If the cardholder is still unable
to obtain documentation, they must contact the procurement card administrator. Failure
to consistently provide adequate documentation will result in disciplinary action and
employees may be required to make payment for any such transaction.
9. Returns: The cardholder must keep a credit log of items returned to the vendor to verify
credit is received for returns. Reductions in a procurement card sale amount due to an
error, decrease in quantity, price discount, or erroneous charging of sales tax must also
be noted on the credit log.
10. Denied Purchase: The cardholder may report a denied point of sale or other rejected
purchases to the account manager. The account manager must advise the PCA of any
known denied cardholder purchase. Information to be provided includes cardholder
name and account number, vendor, and date of declined sale. The PCA shall inquire into
the denied sale, take appropriate action, and report back to the account manager.
D. Reconciling Monthly Statement
1.The bank will provide the cardholders with monthly memo statements for verification of
charges and reconcilement. These statements willbe available on the commercial card
portal.
2.The cardholder must verify receipt of goods or services for all purchase transactions on
the monthly memo statement. If the supply or service was purchased from a Village
annual agreement vendor, the annual agreement number must be written on the
corresponding, supporting documentation or noted electronically. The cardholder must
also verify all credit transactions were processed to the statement from their credit log.
3.Upon fully reconciling the monthly statement, the cardholder ensures all documentation
in the commercial card portal has been reviewed.
4. The account manager must also review and then approve the cardholder's monthly
transactions, match each receipt to the corresponding charges, verify the purchases were
for a proper public purpose, check to see that the appropriate annual agreement number
has been written, if necessary, and verify/assign the account codes.
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Agenda Item #8.
a. Unauthorized purchases made by cardholders will result in disciplinary action up to
and including termination and the cardholder will be required to make payment for
any such transaction. When purchases are questioned, the account manager is
responsible for resolving the issue with the cardholder. If the account manager is not
satisfied that the purchase was necessary and for official use, the cardholder must
provide either a credit voucher proving the item(s) were returned for credit or a
personal check made payable to the bank for the full amount of the purchase plus
applicable sales tax. Checks must be sent along with the statement to finance, with
an explanation of why the violation occurred.
5. Use of the commercial card portal is an internet application that provides the ability to
review and report daily on information from procurement card transactions. The
application allows the account manager and others to access purchase activity on
demand. Account managers will utilize the commercial card portal as a reconciling and
reporting tool. Access to the internet and an internet browser are the only requirements
necessary to utilize the commercial card portal.
E. Paying for Supplies or Services
1.The vendor is paid by the procurement card provider within 3 days of the receipt of
supplies or services.
2.Finance will pay the billing consolidated statement within 10 daysfrom the end of the
billing cycle. The Village retains the right to dispute a purchase up to 30 days after the
statement date in which the transaction occurred.
F.Resolving Returns and Credits, Disputes and Erroneous Charges.
1.The cardholder must attempt to resolve problems directly with the vendor. The vendor
must issue a credit for billing errors, sales tax, defective supplies or unacceptable
services, returned supplies,or canceled orders. This credit should appear on the
cardholder's statement within 30 days. Do not permit the vendor to issue cash to settle
a disputed amount. Under no circumstances can the employee accept cash.
2. If the cardholder is unable to resolve the issue with the vendor, or cardholder's credit
does not appear on the monthly statement within 30 days, cardholder (with assistance
from the account manager) should log into the commercial card portal, select
transactions, transaction management, find the charge in question, and select Dispute.
Fill out the required information and select: Submit Dispute.
3. When an account is in a dispute status, the disputed amount is still included in calculating
the available money for authorizations (monthly limit). However, disputed items are
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Agenda Item #8.
removed from all finance charges, late charges, over-limit fees, past due amounts and
calculations. Finance charges, which accrue from posting until the item is placed in dispute,
must be handled in accordance with Village policy. Any cardholder statements generated
while the account is in dispute will display a message similar to the following message:
“YOUR ACCOUNT IS IN DISPUTE FOR $XXX.XX. THIS AMOUNT HAS NOT BEEN INCLUDED
IN THE FINANCE CHARGE OR PAYMENT CALCULATIONS.”
4. After the item has been entered as a dispute, the bank must determine who is responsible
by researching the transaction, including requesting a copy of the sales receipt when
necessary.
5. If the problem is resolved between the merchant and the cardholder while the item is in
dispute, the cardholder should notify the account manager and PCA as soon as possible.
6. If it is ultimately determined that the cardholder is actually responsible for the transaction,
then the questioned amount will be added to the next monthly statement. If the cardholder
is not responsible for the transaction, the dispute is settled for the cardholder and the
questioned amount will be subtracted from the next monthly statement.
7. If there continues to be problems with a particular merchant, the cardholder should notify
the PCA of the problems as soon as possible.
G. Reporting a Lost or Stolen Procurement Card
If a card is lost or stolen, the cardholder must immediately notify PNC Bank’s Customer
Support (800-685-4039)and the PCA. Access to the card will be immediately blocked, and
the cardholder shall not be responsible for any charges after the card is reported lost or
stolen. The cardholder must provide the bank with the procurement card’s 16 digit account
number. A replacement card will be issued by the bank and delivered to the PCA.
H. Procurement Card Termination
1. Terminated Employees:The department head will immediately notify the PCA and account
manager of terminated employees and collect their procurement card. The PCA is required
to notify the bank to cancel the card of a terminated employee.
2. Revocation of Card: Procurement card privileges may be revoked upon the cardholder’s
failure to follow Village policy and procedures. The department head, the PCA and the
account manager will coordinate the revocation of procurementcards. The PCA will
immediately notify the bank to cancel any such cards.
a. The account manager will obtain the revoked procurement card from the employee.
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Agenda Item #8.
b. The account manager must destroy the revoked procurement card by cutting it into
pieces and delivering it to the PCA.
I. Violations
Thefollowingactionsareprohibited:
1. Personal use of the procurementcard;
2. Purchases of items specifically prohibited by this policy;
3. Purchases that exceed procurement card limits;
4. Not reporting lost or stolen procurement cards;
5. Inadequate record keeping and/or documentation of purchases;
6. Acceptance of cash in lieu of a credit to the procurement card;
7. Splitting purchases to stay within the single purchase limit.
Failure to comply with this policy may result in employee removal from the procurementcard
program and other disciplinary action up to and including termination as appropriate in
accordance with personnel policies.
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CARDHOLDER ACCEPTANCE FORM
I AGREE TO THE FOLLOWING REGARDING THE USE OF THE VILLAGE OF TEQUESTA PROCUREMENT
CARD ASSIGNED TO ME FOR OFFICIAL VILLAGE BUSINESS ONLY.
1. I understand that I am being entrusted with a powerful and valuable tool and will be making
financial commitments on behalf of the Village of Tequesta and will strive to obtain the best value
for the Village.
2. I understand that under no circumstances will I use the procurement card to make personal
purchases, either for myself or others. Willful intent to use the procurement card for personal gain
or unauthorized use may result in disciplinary actions up to and including termination of
employment and prosecution to the extent permitted by law.
3. I agree to provide all receipts for purchases made and upload them to the commercial card
portal or submit them to my department’s account manager for processing.
4. I agree that, should I violate the terms of the policy, I will be subject to disciplinary action up
to and including termination of employment and that I will reimburse the Village for all incurred
charges and any costs related to the collection of such charges.
5. I authorize the Village of Tequesta to make payroll deductions for any unauthorized charges
or non-reimbursed personal charges.
___________________________________________ ____________________________
Cardholder Name (Print) Date
___________________________________________
Cardholder Signature
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