Implementing Purchase-Implementing Purchase-Cards at MESDCards at MESD

User TrainingUser Training

Why Are You Here?Why Are You Here?

To Change the To Change the ParadigmParadigm of MESD Procurementof MESD Procurement

Why?Why?MESD Budget EqualizationMESD Budget Equalization

• Loss of General Fund BudgetLoss of General Fund Budget

• Business Office ReductionsBusiness Office Reductions

• Single Purchasing Agent for AgencySingle Purchasing Agent for Agency– SupervisorSupervisor– Co-op Inventory Control ResponsibilitiesCo-op Inventory Control Responsibilities– Co-op Cycle Order CoordinatorCo-op Cycle Order Coordinator– Purchasing Rules/Process/Policy/Training/Tech AssistancePurchasing Rules/Process/Policy/Training/Tech Assistance

• Simply Put, there is no-one available to Simply Put, there is no-one available to process your requisitions in a timely process your requisitions in a timely fashionfashion

Benefits of the Procurement Benefits of the Procurement CardCard

The “Silver Lining”The “Silver Lining”• Purchasing Authority is delegated to Purchasing Authority is delegated to

ProgramsPrograms

• Increases Your Flexibility & ResponseIncreases Your Flexibility & Response

• Allows Business Office to have you Allows Business Office to have you provide services to your own provide services to your own programs without additional programs without additional purchasing employeespurchasing employees

Why are we Certifying You?Why are we Certifying You?

• You are being trained for a job you You are being trained for a job you haven’t done or been responsible for haven’t done or been responsible for before nowbefore now

• You will have a different type of You will have a different type of credit card in your hands credit card in your hands – More Spending AuthorityMore Spending Authority– Greater variety of potential items to buyGreater variety of potential items to buy

Training & Certification – Training & Certification – This is the Certification This is the Certification Program:Program:• 1. The Paradigm Shift & Ethics of 1. The Paradigm Shift & Ethics of

PurchasingPurchasing

• 2. Purchasing 2. Purchasing

• 3. P-card program administration3. P-card program administration

• 4. Q & A4. Q & A

• 5. Exam5. Exam

• 6. Certificates6. Certificates

1. The Paradigm 1. The Paradigm Shift & the Shift & the Ethics of Ethics of

PurchasingPurchasing

The Paradigm ShiftThe Paradigm Shift

• YOU are now the government YOU are now the government purchasing agentpurchasing agent

• YOU become the focal point for YOU become the focal point for justifying your actionsjustifying your actions

• YOU become the object of any media YOU become the object of any media or legal attention as to your actions or legal attention as to your actions (along with MESD)(along with MESD)

Pcard Purchasing Pcard Purchasing PrerequisitesPrerequisites

• Certified by MESD Business OfficeCertified by MESD Business Office

• Approval of your Department to Approval of your Department to make Purchasemake Purchase

• Budgetary approvals (what $$$ ???)Budgetary approvals (what $$$ ???)

• Proper Purchasing ProceduresProper Purchasing Procedures

• Ethical Use DeterminationEthical Use Determination

The jurisdiction of the GSPC is limited to the following areas:

•Use of public office for financial gain (ORS Chapter 244)•Conflict of interest (ORS Chapter 244)

• Statements of Economic Interest (Chapter 244)• Executive session provisions of Public Meetings law (ORS 192.660)• Lobbying regulation law (ORS Chapter 171.725 — 171.785;;171.992)

Government Standards & Government Standards & Practices Commission Practices Commission

(GSPC) Jurisdiction(GSPC) Jurisdiction

Definition of “Public Official”Definition of “Public Official”

ORS 244.020(15) defines a public official as "any person who… is serving the State of Oregon or any of its political subdivisions or any other public body of the state as an officer, employee, agent or otherwise, and irrespective of whether the person is compensated for such services.“ This definition includes:

•volunteer members of a soil and water conservation board

•Chancellor of higher education

•Governor

•Clerk in a branch office of a state agency

•Persons who serve the state or a political subdivision by performing government services under a contract.

It is important to note that a person who was a public official at the time of an

alleged violation will be subject to the authority of the GSPC, for a period of four

years after the alleged violation, regardless of whether or not the person is still a

public official at the time a complaint is filed.

The Ethical Issues (cont)The Ethical Issues (cont)

Use of Public Office for financial gain –

•"No public official shall use or attempt to use official position or office to obtain financial gain or avoidance of financial detriment that would not otherwise be available but for the public official’s holding of the official position or office..."

Financial Gain Avoid Financial Gain Avoid DetrimentDetriment• Frequent Flyer Frequent Flyer

MilesMiles

• For example, free For example, free camera case with camera case with camera purchase.camera purchase.– All goods/services/benefits All goods/services/benefits

associated/received with P-associated/received with P-Card purchase belong to Card purchase belong to MESD. If you use them for MESD. If you use them for personal use = potential personal use = potential violation of ethics violation of ethics regulationsregulations

• ““Free Admissions”Free Admissions”

• Waived FeesWaived Fees

The Ethical Issues (cont)The Ethical Issues (cont)Conflict of Interests -

•A potential conflict of interest occurs when a public official takes official action that could affect the financial interests of the public official,or the official ‘s relatives or businesses with which they are associated.

•An actual conflict of interest occurs when a public official takes official action that definitely would have such an effect.

2.2.PurchasingPurchasing• Less than $4,500.00 for goods, equipment & Less than $4,500.00 for goods, equipment &

servicesservices

• From $4,500.00 up to $75,000.00 for goods & From $4,500.00 up to $75,000.00 for goods & equipment—but not services…and a three-equipment—but not services…and a three-quote process is requiredquote process is required

CoordinationCoordination• FACILITIES SERVICES: If you are going to use a trade service FACILITIES SERVICES: If you are going to use a trade service

contractor to glue, nail, screw, drill, use concrete or repair at a MESD contractor to glue, nail, screw, drill, use concrete or repair at a MESD or even at a non-MESD site.or even at a non-MESD site.

Mark Wheeler, Facilities Services Supervisor X1786Mark Wheeler, Facilities Services Supervisor X1786

• TECHNOLOGY SEVICES: If you are purchasing technology related TECHNOLOGY SEVICES: If you are purchasing technology related items that will work with the network or for which you expect items that will work with the network or for which you expect support from T.S.support from T.S.

Gary Nelson Technology Services X1541Gary Nelson Technology Services X1541

The Purchasing ProcessThe Purchasing Process

• Your Needs Your Needs are clearly specified and are clearly specified and understandable by a bidderunderstandable by a bidder

• All bidders are treated All bidders are treated fairly and equallyfairly and equally in an open and competitive environmentin an open and competitive environment

• It is in a It is in a written format written format (email, fax or letter)(email, fax or letter)

• The award results are The award results are public public informationinformation

• A written record is maintained for A written record is maintained for filing filing and fixed asset identificationand fixed asset identification

APPENDIX I   

Small Purchase Process for FY 2004-05 Use Only

Item/System Value less than $4,500 Guiding Principle: Your purchases under these procedures should be above reproach and not present the appearance of impropriety…. 

If in doubt, ASK! If you CANNOT ask, then DON’T! As a matter of the high ethical standards of MESD, each individual will refrain from participating in any purchasing business which is being conducted with individuals or vendors whom you have a close personal, professional or family connections. If this situation is anticipated or encountered, transfer the purchasing activity to another person to accomplish

AVOID SPLIT REQUIREMENTS !!! 1.                  Contact desired competitive vendor and describe service / item desired, quantity & timeframe. 2.                  Use designated bankcard to purchase item from vendor.3.                  If vendor doesn’t accept P-Card, DO NOT PURCHASE – Contact Purchasing Services for purchasing options.4.                  Otherwise comply with the Local Contract Review Board rule 125-310-020.

APPENDIX J  

2004-05 Procurement Card ProcessSupplies/Equipment Informal Bid Process (3-Quote)

Item/System Value - Exceeding $4,500 but not exceeding $75,000 Guiding Principle: Your purchases under these procedures should be above reproach and not present the appearance of impropriety…. Remember: You are NOT authorized to purchase SERVICES over $4,500 with the Procurement Card at this time. Remember: You are NOT authorized to purchase ANY Supplies or Equipment exceeding $75,000 

If in doubt, ASK! If you CANNOT ask, then DON’T! As a matter of the high ethical standards of MESD, each individual will refrain from participating in any purchasing business which is being conducted with individuals or vendors whom you have a close personal, professional or family connections. If this situation is anticipated or encountered, transfer the purchasing activity to another person to accomplish. 1.                  Using the “Price Quotation Summary” worksheet, clearly detail your needs in writing so that all bidders can understand them.2.                  Contact minimum of 3 Competitive Vendors . (FOB destination and give zip code 97220)a.      Specify you are obtaining competitive quotes (Describe service / item desired, quantity & timeframe). b.      Caution: you are required to communicate identically to each vendor. Complete Price Quotation Summary form. c.      Request written quote if possible (email, fax, letter, etc.).3.                  Use designated P-Card to purchase item from lowest bidder. If lowest bidder doesn’t accept the P-Card, DO NOT PURCHASE – Submit the Price Quotation Summary form and a requisition to Purchasing.  

APPENDIX D

Multnomah Education Service DistrictREQUEST FOR QUOTATIONS (GOODS)

This is a Request for Quotation only and not an order  

Multnomah Education Service District is seeking competitive quotations on the following item(s), based upon F.O.B. Destination, at:

Ship To Address:

(type Ship-to Address here)

  QTY UNIT DESCRIPTION UNIT QUOTE PRICE

EXTENDED PRICE

                  $      $     

                  $      $     

                  $      $     

                  $      $     

                  $      $     

  See attached list. 

Delivery is requested by (date). Please note if you cannot comply with this request. Quotes are due back no later than (time) on (date).

 Please respond by (e-mail, fax, etc) at (e-mail address or fax number), 

Attn: (Your name) If you have questions, please feel free to contact me at (your phone no. or e-mail address). Quoter’s Name:       Quoter’s Company:       Quoter’s Telephone/Email:       

for compliance w ith Rule 125-310-025 of the Local Contract Review Board

MULTNOMAH EDUCATION SERVICE DISTRICT Date: 11611 NE AINSWORTH CIRCLEPortland, OR 97220-9097 Quote Received by:(503) 257-1791 / 257-1790

Quantity Description Vendor #1 Vendor #2 Vendor #3 Vendor #4

Vendor #1 Contact Person:

Address :

Phone : Comments:

Vendor #2 Contact Person:

Address :

Phone : Comments:

Vendor #3 Contact Person:

Address :

Phone : Comments:

Vendor #4 Contact Person:

Address :

Phone : Comments:

PRICE QUOTATION SUMMARY

Miscellaneous Purchasing Miscellaneous Purchasing IssuesIssues

•Remember: No Split Remember: No Split Requirements!Requirements!

•MESD Website Established MESD Website Established ContractsContracts

•Samples/GiftsSamples/Gifts

Talk to Purchasing………Talk to Purchasing………

Mike Mlynarczyk x1791Mike Mlynarczyk x1791

3. P-Card 3. P-Card Program Program

AdministrationAdministration

History of Procurement CardHistory of Procurement Card

The Government Finance Officers Association The Government Finance Officers Association (GFOA):(GFOA):

• 19951995 published its first guideline published its first guideline• 1998 1998 recommends governments explore the use of P-recommends governments explore the use of P-

Card to improve the efficiency of their purchasing Card to improve the efficiency of their purchasing proceduresprocedures

• 20032003 published a recommended practice published a recommended practice

The Internal Revenue Service:The Internal Revenue Service:• 20042004 published final regulations for 1099 reporting published final regulations for 1099 reporting

pertaining to P-Card purchases for contract servicespertaining to P-Card purchases for contract services

What is a Procurement What is a Procurement Card?Card?

A credit card issued by Bank of America, toA credit card issued by Bank of America, to

• An individual agency employee, orAn individual agency employee, or• A department, orA department, or• For a specific purposeFor a specific purpose

For purpose of making authorized purchases within For purpose of making authorized purchases within certain limits.certain limits.

When to use the card ?When to use the card ?

• To the maximum extent possible. To the maximum extent possible.

• Purchases can be madePurchases can be made– In personIn person– By phoneBy phone– By faxBy fax– The internetThe internet

Why use Procurement Card?Why use Procurement Card?

The use of P-Card is intended to The use of P-Card is intended to

• Promote efficiency in the Promote efficiency in the procurement of goods and servicesprocurement of goods and services

• Provide a convenient method for Provide a convenient method for obtaining goods and servicesobtaining goods and services

Department ResponsibilitiesDepartment Responsibilities

• Physical Security/Control for CardsPhysical Security/Control for Cards• Control Use/Restrict AbuseControl Use/Restrict Abuse• Keep all receipts, invoices, packing slips Keep all receipts, invoices, packing slips

and quotation documentsand quotation documents• Reconcile Monthly Statements Reconcile Monthly Statements • Return statements to Business Services Return statements to Business Services

each month within 3 days of receipt, with each month within 3 days of receipt, with account codes to be charged and account codes to be charged and signaturessignatures

• Provide all documentation for review Provide all documentation for review during auditsduring audits..

Department Responsibilities Department Responsibilities (Cont.)(Cont.)

• It is suggested that card users It is suggested that card users complete the P-Card transaction complete the P-Card transaction log after each purchase. This log log after each purchase. This log is used to track purchases and is used to track purchases and ensure all proper documentation ensure all proper documentation has been obtained, and then used has been obtained, and then used to reconcile to the monthly bank to reconcile to the monthly bank statement.statement.

  

Department Responsibilities Department Responsibilities (Cont.)(Cont.)

Personal Services ContractPersonal Services Contract

• Collect a W-9 form for payment that exceeds Collect a W-9 form for payment that exceeds $600.00 annually and forward to Business $600.00 annually and forward to Business Services.Services.

Fixed AssetFixed Asset

• Good that exceeds $5,000 is considered Good that exceeds $5,000 is considered inventory item. Make a copy of packing slip, inventory item. Make a copy of packing slip, invoice, etc. and forward to Business Services.invoice, etc. and forward to Business Services.

Business ServicesBusiness Services

ResponsibilitiesResponsibilities

•Pay the monthly statements by the due date Pay the monthly statements by the due date and to the correct account and to the correct account

•Review P-Card activity for proper usage and Review P-Card activity for proper usage and produce required IRS 1099 form produce required IRS 1099 form

•Provide opportunities for initial and annual Provide opportunities for initial and annual refresher training every month.refresher training every month.

•Conduct quarterly P-Card User Group (PCUG) Conduct quarterly P-Card User Group (PCUG) meetings for all users for additional training, meetings for all users for additional training, information transfer, updates and policy information transfer, updates and policy guidance needs.guidance needs.

•Conduct internal auditConduct internal audit

INTERNAL AUDITINTERNAL AUDIT

Business Services Business Services will conduct audits to monitor will conduct audits to monitor compliance with agency policy on purchasing, card compliance with agency policy on purchasing, card usage, record keeping and ethics. For example, we may usage, record keeping and ethics. For example, we may check that:check that:

–P-Card log is accurate and all receipts have been obtainedP-Card log is accurate and all receipts have been obtained–Documentation for competitive bid is maintainedDocumentation for competitive bid is maintained–Account limits have been adhered toAccount limits have been adhered to–Expense transactions have been authorized Expense transactions have been authorized

–Inactive accounts have been closedInactive accounts have been closed–P-Card based purchasing has been consolidated P-Card based purchasing has been consolidated when practicalwhen practical–Instant P-Card activation and deactivation Instant P-Card activation and deactivation procedures have been used appropriately (dept. card procedures have been used appropriately (dept. card and ghost account)and ghost account)–Exit procedures have been updated to add a specific Exit procedures have been updated to add a specific line item for collecting the P-Cardline item for collecting the P-Card

Lost ReceiptsLost Receipts

In the unlikely event that you have In the unlikely event that you have misplaced your receipt, you must fill misplaced your receipt, you must fill out the out the Lost, Stolen or Missing Receipt Lost, Stolen or Missing Receipt form and submit it to your director for form and submit it to your director for approvalapproval. .

This form is available in your manual and This form is available in your manual and on the agency web siteon the agency web site

Records RetentionRecords Retention

All receipts, invoices and P-Card All receipts, invoices and P-Card Transaction Logs, bank statements and Transaction Logs, bank statements and quotation forms are to be kept as quotation forms are to be kept as follows:follows:

• Expenditures of federal fundsExpenditures of federal funds: : 5 5 years after final or annual expenditure report years after final or annual expenditure report

acceptedaccepted..• Other recordsOther records: : 2 prior years2 prior years

Who is eligible to use Who is eligible to use Procurement Card?Procurement Card?

•Regular employees who have Regular employees who have successfully completed initial and successfully completed initial and annual refresher trainingannual refresher training

• Limited Temp/Seasonal employees Limited Temp/Seasonal employees who have successfully completed initial who have successfully completed initial or annual refresher trainingor annual refresher training

Who is NOT eligible to use Who is NOT eligible to use Procurement Card?Procurement Card?

•Employees of temporary staffing Employees of temporary staffing agenciesagencies

•Outside contractors/consultantsOutside contractors/consultants

•Employees on extended leave such as Employees on extended leave such as FMLA, Medical, Disciplinary and other FMLA, Medical, Disciplinary and other leaves of absenceleaves of absence

•Employees who have not successfully Employees who have not successfully completed initial or annual refresher completed initial or annual refresher trainingtraining

What is the purpose of the What is the purpose of the manuals?manuals?

•Minimize MESD’s exposure to legal Minimize MESD’s exposure to legal liability from inappropriate use of P-liability from inappropriate use of P-Cards through training of card usersCards through training of card users

•Ensure appropriate internal controls Ensure appropriate internal controls are established within each department are established within each department procuring with P-Card.procuring with P-Card.

•Ensure that goods and services are Ensure that goods and services are obtained in an ethical and competitive obtained in an ethical and competitive mannermanner

Unapproved UsesUnapproved Uses

• Frequent Flyer ProgramsFrequent Flyer Programs

• Percentage Off ProgramsPercentage Off Programs

• Gift Cards, etc.Gift Cards, etc.

• Personal PurchasesPersonal Purchases

• Cash or cash-type transactionCash or cash-type transaction

• Purchase of items expressly prohibited by Purchase of items expressly prohibited by policypolicy

• Habitual late submission of transaction Habitual late submission of transaction log/continual receipt losslog/continual receipt loss

Unapproved Uses Unapproved Uses (Cont.)(Cont.)

• EScrip ProgramEScrip Program

– A resource for fundraising where A resource for fundraising where participating business partners participating business partners contribute a percentage of your credit contribute a percentage of your credit card purchases to the school, group or card purchases to the school, group or organization of your choice.organization of your choice.

The use of EAGLS of BOAThe use of EAGLS of BOA

• A secure, web-based expense A secure, web-based expense management toolmanagement tool

• Allows you to perform administrative Allows you to perform administrative tasks onlinetasks online

• Provides automated reporting toolsProvides automated reporting tools

Potential ProblemsPotential Problems

• Suppliers that do not accept credit cardsSuppliers that do not accept credit cards

• Blocked Merchant Category CodesBlocked Merchant Category Codes

• ReturnsReturns

• Disputed ChargesDisputed Charges

APPENDIX A 

 PROCUREMENT CARD AGREEMENT

  

As a holder of this Procurement Card:       I confirm that I have read and understand the terms and conditions of its use:       I MAY NOT use the procurement card for the restricted commodities set forth in the Manual.       I must follow any additional restrictions as described by my Department. I have been informed of and understand my Department’s restrictions (these restrictions may include spending limits and requisition protocols).       I understand that misuse of this card may result in disciplinary action, up to and including TERMINATION of employment.       I understand MESD and/or my Department will audit the use of this procurement card.       I understand that I must reconcile my transactions within the time limits specified in this manual. Failure to do so may result in forfeiture of the card.       I understand my Department is liable to Bank of America for all charges made by me.       I agree to allow MESD and/or my Department to collect any amounts owed by me even if I am no longer employed by MESD.       I understand MESD and/or my Department may terminate my rights to use this card at any time for any reason.        I agree to return the card to my Department immediately upon request or upon termination of employment.       I acknowledge receipt of the Procurement Card procedures manual, and agree to comply with the terms and conditions in this and any subsequent revisions of this manual.       I agree to accept responsibility for the protection and proper use of this card according to the terms set forth in the manual.       I will immediately report theft/loss of card and/or difficulties with the card to the central administrator in my Department, and to the Procurement Card Administrator, Business Services Department

Date:  

Cardholder Signature:  

Cardholder Name (Please PRINT):  

Cardholder Job Title:  

Department:

Work Phone:  

  

I acknowledge receipt of Purchasing Card # _______________________with a monthly limit of $________________And a Transaction Limit of $________________  Distribution: Business Services – 1 copyCardholder Supervisor – 1 copy

4.4.Questions & Questions & AnswersAnswers

Remember:Remember: Regular review is Regular review is the most reliable means to the most reliable means to

ensure the card is used ensure the card is used properly.properly.

Department ResponsibilitiesDepartment Responsibilities• Physical Security/Control for CardsPhysical Security/Control for Cards• Control Use/Restrict AbuseControl Use/Restrict Abuse• Maintain Receipts, invoices, packing slips and Maintain Receipts, invoices, packing slips and

quotation documentsquotation documents• Reconcile monthly statements to the transaction logReconcile monthly statements to the transaction log• Make note of any exceptions that must be dealt with Make note of any exceptions that must be dealt with

and verify that any past exceptions have been and verify that any past exceptions have been resolved.resolved.

• Return statements to Business Services each month Return statements to Business Services each month within 3 days of receipt with account codes to be within 3 days of receipt with account codes to be charged and signaturescharged and signatures

• Provide all documentation for review during auditsProvide all documentation for review during audits..