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P-Card Policy User Acceptance

  1. PURCHASING CARD POLICY AND PROCEDURES

    The Procurement Card (P-Card) program is designed to delegate the authority and capability to efficiently purchase items directly from the supplier in compliance with all procurement laws and local policies.

    Issuance of a P-Card represents trust in personnel and empowers employees to act as responsible fiduciary agents to safeguard and protect the City of New Braunfels.

    A number of unique controls have been developed for our P-Card Program. These controls ensure that the cards will be used for only official operational purchases and within specific dollar limits.

    The Cardholder policy has been developed to assist you in better understanding the program. Please take the time to read and understand the policy before you begin using your P-Card. You will be asked at the end to verify that you have read the Purchasing Card Policy and Procedures below.

    1. PURPOSE

    To establish policies and procedures for procuring goods and/or services using a Purchasing Card. The Purchasing Card program is designed to streamline the purchasing and accounts payable process by reducing paperwork generated by small dollar, high volume transactions, providing immediate access to goods and/or services, and facilitating quick payment to vendors. All Purchasing Card (P-Card) purchases must be made in compliance with statutory and City Charter requirements for public procurement.

    This policy includes procedures for the following:

    • Establishing Purchasing Limits
    • Establishing Allowable/Prohibited Purchases
    • Security
    • Charge Transaction Declines
    • Merchandise Returns
    • Monthly Statements and Reports
    • Reconciliation
    • Payment Processing
    • Records Management

    2. SCOPE

    This policy applies to all City of New Braunfels departments and employees. All Purchasing Cards shall be governed by this policy and used in a manner that complies with State Law and the City of New Braunfels policy regulating the procurement of goods and services.

    3. POLICY

    Employees who use Purchasing Cards to perform official City business will adhere to policies as provided.

    4. DEFINITIONS

    A. Purchasing Card – The Purchasing Card is a commercial credit card for small dollar purchases of goods and/or services necessary for official city business. The Purchasing Card may be issued to a permanent employee for purchases by the designated employee only.

    B. Purchasing Card Program Administrator – An employee in the finance department who will serve as the point of contact between the City of New Braunfels and the bank for general oversight of the Purchasing Card Program.

    C. Purchasing Cardholders – Full-time, permanent employees that have been designated by the Department Director to be issued a Purchasing Card in their name for use under these policies and procedures. Cardholders and/or their designee are responsible for administration and control of the purchasing card policies and procedures.

    D. Bank – The bank selected by the City to provide the Purchasing Card program.

    5. RESPONSIBILITIES

    A. Purchasing

    Develop policy and procedures for the use of Purchasing Cards complying with State Law.

    Administer the Purchasing Card Program, to include the following responsibilities:
    • Serve as primary contact with the bank for the purchasing card program.
    • Serve as primary contact with the cardholders and/or there administrative designee.
    • Approve/Process applications for the issuance of purchasing cards for users in compliance with policy.
    • Establish guidelines for transactions and cumulative dollar limits for purchasing cards.
    • Process changes to cardholder limits and restrictions as authorized by department Directors or the departmental purchasing card coordinators.
    • Keep a current list of cardholders, card numbers and card limits.
    • Coordinate training on purchasing card usage and transaction processing and approval through JPMorgan online system.
    • Maintains and updates purchasing card guidelines.
    • Cancel and suspend cards as requested by Department Directors or departmental purchasing card coordinators.
    • Review transactions for verification of small dollar purchases and price agreement opportunities.
    • Cardholders are considered assistants of the Purchasing Department for purposes of Purchasing Card use. Therefore, final authority for usage and control resides with Purchasing. Purchasing may cancel a Purchasing Card at any time without cause.
    • Spending limits may be adjusted at the Purchasing Department’s discretion to accommodate emergency purchases.
    • Cancel purchasing card if and when a cardholder has not adhered to the purchasing card policy and procedures.
    • Review transactions to ensure the proper use of City funds.


    B. Finance

    • Review monthly billing statement from the bank and supporting documentation from departments ensuring timely payment of monthly indebtedness.
    • Process general ledger interface for monthly Purchasing Card purchases. Coordinate any system updates needed to interface with the City’s financial system.
    • Review or perform necessary accounting transactions to process all departmental charges and ensure the reconciliation account zeros out monthly.
    • Conduct random audits of Purchasing Card transactions to act as a check on departments carrying out their responsibility for audit and compliance with state law and City policies.


    C. Department Directors and Administrative Designee (if applicable)

    Department Directors will make recommendations as to which employees will receive a Purchasing Card with recommended limits for each account. Cardholder limits will include single transaction limits, monthly transaction limits and merchant category restrictions. These limits will be based on the Cardholder’s purchasing requirements and will not exceed the limits established by Purchasing.

    • Timely approve all departmental transactions for processing by Finance.
    • Recommend suspension or cancellation of a card to Purchasing.
    • Enforce timely compliance of submission requirements.
    • Notify Purchasing to cancel card privileges, if employee is terminated or changes positions; collection of card from employees.
    • Verify that information on Requests for Purchasing Cards is correct and that Purchasing Cards are issued within the guidelines established by Purchasing Card Program Administrator. (Exhibit #1)
    • Monitor purchases made by Cardholders.
    • Review receipts.
    • Review Purchasing Card applications or changes to card controls prior to submission.
    • Designate a system to maintain receipts and reconcile to the monthly statement for each cardholder reporting to them.


    D. Designated Cardholders

    • Read and sign a Purchasing Card Cardholder Agreement (Exhibit #1) prior to being issued a Purchasing Card.
    • Keep the Purchasing Card in their possession, not allow anyone else to use the Purchasing Card issued in their name.
    • Assume responsibility for all purchases made with the Purchasing Card, adhering to this policy, insuring that no unauthorized purchases are made. Unauthorized purchases could be considered misappropriation of City funds. Validate that the merchandise is received.
    • Maintain the Purchasing Card data in a secure location at all times.
    • Inform merchant of tax exempt status; cardholder will be responsible for reimbursing the tax amount to the City if any is incurred on a charge.
    • Keep receipts and update transactions on a weekly basis. Cardholder will be held personally responsible for items purchased without the supporting documentation.
    • Immediately report lost or stolen cards to the bank toll-free number and Purchasing by phone and then notify the department purchasing card coordinator.
    • Make every reasonable effort to resolve disputed purchases with the vendor.
    • Immediately report all unresolved disputed purchases to the Department Director and Purchasing.


    6. PROCEDURES

    A. Purchasing Limits

    Each Department will recommend limits for individual Purchasing Cards. The maximum amount of a single item purchase of supplies or materials will not exceed $3,000. In all cases, a monthly maximum per card will be established by the Department Director.

    B. Purchases Allowed with the Purchasing Card

    Purchasing Cards may be used to purchase any item and/or service for immediate use not prohibited by law, this policy, or other policies approved by City Council. The total purchase with the Purchasing Card will not exceed the limits established for that card. All other purchasing policies remain in effect and Purchasing Cards should not be used to circumvent them.

    • Single vendor purchase less than $3,000
    • Travel - expenses using the P-Card must align to the Cities Travel Policy.
      • P-cards should not be used for meals – The Travel Policy requires per-diem be filed in advance.
      • If there is a special cause for meals to be purchased with the P-Card, prior authorization by City Manager or Assistant City Manager is required.
      • To avoid duplication of payment for services the Supervisor is required to reconcile the requested travel related expenses, (including per-diem if authorized), with P-card transactions and cash advancements through accounts payable.


    C. Purchases Prohibited with the Purchasing Card

    • Personal expenditures
    • Cash advances, refunds, gift cards/certificates
    • Celebratory food and/or supply purchases, such as birthday, welcome and holiday meals. Exception:
      • Work through meals
      • Guest functions
      • Retirement meals, food and supplies approved by the City Manager or his designee
    • Recurring staff meeting snacks, meals (i.e. breakfast tacos, doughnuts).
    • Transaction amounts greater than Cardholder’s transaction limit, unless prior approval from Purchasing is received.
    • Single vendor purchases of $3,000 or more, unless prior approval from Purchasing is received.
    • Sales tax, except in cases where State law does not exempt local governments, ex: Hotel Tax. If tax is included, the cardholder will be responsible for reimbursing the tax amount to the City.
    • Purchases that exceed the City’s policy for purchases of equipment of any type.
    • Weapons, Firearms, Ammunition
    • Animals
    • Consulting services
    • Inventoried assets or controllable inventory , this includes technology purchases such as tablets, computers, phones and software. These purchases should be coordinated with IT and follow the purchase order process.
    • Prescription drugs or over the counter medications/drugs
    • Purchases involving equipment trade-in
    • Entertainment of any kind, including the purchase of alcohol or patronage of drinking establishments unless by law enforcement personnel for covert operations
    • Purchases of items/services under contract, unless purchasing from the contracted vendor or an emergency exception is granted
    • Separate, sequential, and component purchases or transactions made with the intent to circumvent state law or City policy including:
      • Multiple, sequential purchases of less than $3,000 from a single vendor for similar purchases adding up to more than $3,000
      • Purchases that are split to stay within card transaction limits
    • Other purchases specifically excluded in other City policies or by law

    The items shown above are intended to guide you in which form to use for processing payments and orders. These are not representative of all restrictions, and may change without notice. It is recommended that you contact Purchasing/Finance to ensure the proper expenditure of funds.

    D. Security – Because the Procurement Card is issued in an employee’s name, he/she is responsible for the security of the card and any transactions made against the Procurement Card. This card should be treated with the same level of care as the Cardholder would use with his/her own personal charge cards.

    • Your card should be carried with you or kept in a secure location.
    • Know where your card is at all times.
    • Do not share your card with anyone.
    • Secure your card number. Do not write your card number on outgoing email or faxed orders. Instruct the supplier to call for the credit card information and do not keep credit card numbers on file with suppliers.
    • Make sure security is in place before making any Internet orders.
    • Guard your personal information. Do not provide any non-essential information on-line.

    E. Supporting Documentation for Card Purchases – All transactions must be supported by itemized receipts or credit slips. In instances where the receipt is lost, Cardholder must obtain a copy at their own expense from the Bank or vendor. For purchases made over the phone or on the Internet, a logging system with unique transaction identifiers should be maintained and a faxed copy or e-mail confirmation of the order retained as the receipt.

    F. Declined Transactions – If a Vendor receives a “Decline” response from the Bank after attempting to put through a Purchasing Card transaction, Cardholders should contact the Purchasing Card Administrator to determine the cause for decline. The following information ill be needed for resolution:

    • Account number
    • Business where decline occurred
    • Total transaction amount of the decline
    • Date the decline occurred

    G. Using the Card – A need for an item and/or service is established when it is not readily available through a City contract. In making a purchase, the Cardholder must abide by the following rules:

    • The Cardholder must ensure that the item or service purchased is not restricted under paragraph 6.C.
    • In purchasing an item or service, the Cardholder must ensure that sales tax is not included in the purchase price before issuing payment with the Purchasing Card.
    • The Cardholder must retain the purchase receipt.

    H. Purchasing Return – The Cardholder is responsible for obtaining a credit memo from the Vendor when merchandise is purchased with the Card is later returned to the Vendor for any reason. The credit memo must be kept with the sales receipt.

    I. Sales Tax As a tax-exempt government agency, the City does not pay sales tax. There is exception in cases where State law does not exempt local governments from sales tax. Cardholders will be provided a copy of the City’s tax exemption certificate. Cardholders are then responsible for insuring that the merchant does not include sales tax in the transaction. If tax is included, the cardholder will be responsible for correcting the charge or reimbursing the tax amount to the City.

    J. Monthly Bank Statements and Expense Reports –Each month the cardholder will reconcile the transactions and assign correct account to be charged to each transaction. Failure to meet timely submission requirements from Cardholders will cause suspension or cancellation of Purchasing Cards as authorized by this policy. Finance will reconcile all reports against the monthly payment made by Automated Clearing House.

    • Cardholders and supervisors are required to assign account information and obtain supervisor approval no later than 30 days after the close of the statement date. Finance staff will notify cardholders and supervisors of these deadlines and outstanding approval issues.
    • If the Purchasing Card reconciliation is not received in the Finance Office by the 30th of each month, (the Monday after if on a weekend), the use of card (s) will be suspended.

    K. Records Management –

    • Submitting Statement - The cardholder’s billing cycle ends on the 5th day of each month unless the 5th is on a weekend and then the cycle ends on the next Monday. Upon completion of the cycle, the cardholder is required to complete the following steps.
    • Statement Review Process
      • Monthly, each cardholder will receive an on-line statement (s) identifying each transaction made against the Purchasing Card during the billing cycle.
      • Purchasing Card Reconciliations including the following:
        • Expense Report from Smart Data On-line - The statement must be reconciled against your retained receipts for accuracy.
        • All original, itemized receipts shall be attached to the expense report and approved by the card holder.
    • The cardholder and/or their administrative designee must maintain all original receipts in a secure location.

    L. Lost or Stolen Purchasing Cards – When it is determined that a Purchasing Card has been lost or stolen, IT IS IMPERATIVE TO FIRST CANCEL THE CARD WITH THE BANK BY CALLING THE BANK’S TOLL-FREE NUMBER. In addition, the Cardholder must also notify the Purchasing Card Program Administrator of the loss. The City is liable for all charges until the card is reported lost or stolen. Thus, the Cardholder may be responsible for all charges made against the Purchasing Card from the time it is lost or stolen until the time the Bank is notified, if the Cardholder fails to immediately notify the Bank upon discovering the loss or fails to discover the loss within a reasonable amount of time.

    M. Request for Issue of a Purchasing Card or Making Changes to Existing Accounts – To request a new Purchasing Card, cardholder must read and sign a Purchasing Card Cardholder Agreement. To make changes to an existing Purchasing Card account, an email to Purchasing for this request will suffice. The email should also be sent to the Department director.

    N. Unauthorized Use of the Purchasing Card – Any purchases that the Purchasing Card Program Administrator and/or Finance staff deems prohibited as defined in paragraph 6C will be sent back to the Cardholder for justification and/or explanation. If any prohibited charges appear the following may occur:

    Purchasing/Finance staff will investigate all circumstances surrounding alleged misuse of the Purchasing Card and in cases where there is evidence of a procedure or policy violation; refer that information to the appropriate authority for investigations and/or disciplinary action.

    Employee may be required to repay the City of New Braunfels for the unauthorized action.

    Termination of employment and forfeiture of the Purchasing Card are potential disciplinary actions for improper use of the card.

    In those cases where there is evidence of negligent use of the Purchasing Card, but no fraudulent acts have been committed, the Cardholder will be required to surrender the Purchasing Card with all further privileges revoked.

    Any employee having knowledge of violations to this procedure or any other procedure or policy governing the use of the Purchasing Card must immediately report such activity to the Purchasing Card Program Administrator.

    The Purchasing Card may be suspended or terminated if a Purchasing Cardholder is suspected of fraud, theft, or illegal drug use. Should the suspicion prove founded, appropriate action shall be taken in accordance with existing City policies and procedures.

    O. Disputed Items – Disputes, if possible, should be resolved promptly between the Cardholder and the Vendor. Cardholders should raise disputes immediately. As failure to do so will result in an authorized purchase that the department is responsible for paying even though the charge is incorrect. If the dispute cannot be resolved within 10 days, the Cardholder should notify the Purchasing Card Program Administrator. A charge should not be disputed on the current statement if it was returned for credit after the billing cycle is closed. The credit should be reported on the next statement with a notation being made on the current statement that there is a disputed charge and expected credit.

    P. Termination Clause – The Purchasing Card is issued to an employee for the City’s convenience and may be terminated at any time by Purchasing. Purchasing Card privileges may be cancelled for non-compliance with City policies and procedures. Transfer, resignation, or terminations of employment are grounds for cancellation of the Purchasing Card.

    It is important to cancel a card immediately upon an employee’s separation from employment. The Bank or the Credit Card Recovery Program will not cover any charges incurred between the employee’s termination date and the date the card is cancelled. The department will be responsible for payment of charges incurred by an employee no longer working in that department; if a delay in canceling privileges resulted of the department’s actions.

    By this policy, the City of New Braunfels, City Council authorizes the use of City provided purchasing cards. The purpose of the purchasing cards is to provide the City with an efficient and controllable method of making small dollar, high volume commodity and service purchases. This card policy is not intended to replace, but rather supplement existing purchasing and other City policies.

  2. I understand and accept the responsibility to access and read the policy and procedures, and to abide by the contents. I further understand to direct any questions I may have to the Purchasing Manager

  3. Verification*

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