R2001-0043 03-26-01 RESOLUTION NO. R2001-43
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING A SERVICE AGREEMENT WITH BANK OF
AMERICA FOR PURCHASING CARD SERVICES.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City received contract pricing from interlocal cooperative
partner the State of Texas, General Services Commission, for purchasing card services
through Bank of America.
Section 2. That the City Council hereby authorizes a service agreement with
Bank of America for purchasing card services through the interlocal cooperative
program with the General Services Commission.
Section 3. The City Manager or his designee is hereby authorized to execute
a service agreement for purchasing card services with Bank of America.
PASSED, APPROVED and ADOPTED this the 26 day of March ,
A.D., 2001.
TOM REID
MAYOR
ATTEST:
S E,,C,/R ETARY M ~/
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
PE ARLAND
City of Pearland
Purchasing Department
PURCHASING CARD PROGRAM GUIDELINES
March 12, 2001
3519 LIBERTY DRIVE · PEARLAND, TEXAS 77581-541&19 · 281-652-1600 · www. cLpearland.tx.us
PURCHASING CARD PROGRAM GUIDELINES
OVERVIEW
Welcome to the City of Peafland Purchasing Card Program. This Purchasing Card is generally
intended to be utilized to purchase Iow-value, maintenance, repair, and operational expense items
locally and for travel expenses. Many items that are processed today using Blanket Purchase
Orders, Petty Cash, or Check Requisitions are candidates for Purchasing Card use. The Purchasing
Card is a Visa offered by Bank of America. The goal of the Purchasing Card Program is to improve
internal controls while reducing purchasing restrictions. To delegate the authority, responsibility, and
capability for the purchase of these small dollar supplies and services directly to the end user at the
departmental level.
BENEFITS
Users will be able to obtain goods and services easier than ever before. Paperwork and processing
in User Depadments, Purchasing and Accounts Payable will be sharply reduced. These efficiencies
will allow all groups and individuals involved to be more effective and focus on the value-added
aspects of their jobs.
CONTROLS
The Program uses both intemal management controls and features from Bank of America to manage
and audit the process to ensure that Program Guidelines are followed.
Following are examples of Purchasing Card controls:
~ Single purchase limits.
)~ Merchant category code restrictions.
GENERAL INFORMATION
> Department Directors designate the permanent employees to use Purchasing Cards. Employees
on probation and temporary employees are not eligible.
:> The Card will have the Department name and account number embossed on it.
Use of this Card is restricted to authorized employees, which authority is obtained via the
Purchasing Card program.
> Use of the Purchasing Card may not be delegated.
> The Purchasing Card is for use for official City of Peadand business only and may not be used
for personal purchases.
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1. OBTAINING A PURCHASING CARD AND AUTHORIZATION FOR USE
A. The Department Director must contact the Purchasing Card Administrator via e.mail or
memorandum and request a Card or Cards.
B. The Card Administrator will forward a Departmental Agreement Form for each Card
requested by the Department.
C. The completed Form(s) will be forwarded to the Card Administrator for processing.
D. The Card Administrator will coordinate with Bank of America for Card issuance.
E. The Card(s) will be sent to the Card Administrator who will then coordinate with
Departmental Liaisons for training for the Card Users.
F. After completion of the training, the employees will then be authorized to use the Card.
2. GUIDELINES FOR PURCHASING CARD USE
A. The Purchasing Card is a supplement to the Purchasing program. Use of the Card is not
intended to replace effective Purchase planning which enables volume discounts. A
complete listing of Purchasing Contracts is available from the Purchasing Department.
B. Purchasing Card use is intended for Iow-value supplies and services. Examples of the
type of purchases the Purchasing Card should be used for include:
1. Small dollar miscellaneous maintenance, repair, and operational supplies.
2. Items purchased on Blanket Purchase Orders.
3. Petty Cash purchases.
4. Check Requisition purchases.
5. Requests associated with Professional Development travel and training.
6. RESTRICTIONS
A. If an Order totals more than the single purchase limit established by the Using
Department Director and the Purchasing Department, the Purchasing Card may not be
used for the Order. The Order shall not be broken down into several purchases that are
less than the applicable dollar limit merely to permit use of the Purchasing Card or to
avoid any requirements that apply to purchases exceeding the assigned dollar limit. In
addition, the Purchasing Department requests that the Purchasing Card not be used with
Vendors listed on the document entitled "1099 Vendors" due to Federal Internal Revenue
Service restrictions.
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B. The Pumhasing Card shall not be used for:
1. Personal use.
2. Cash advances.
3. Cash refunds. Merchandise returns or other adjustments must be applied back to
the same Card.
4, Purchases exceeding the assigned dollar limit.
5. Capital outlay items.
6. Bars, taverns, nightclubs, cocktail lounges, alcoholic beverage package stores,
beer, wine, liquor.
7. Purchases from any source in which the purchaser has a direct or indirect
financial interest.
8. Items under Contract.
9, Items available from a City Warehouse or Inventory.
4. PURCHASING CARD ADMINISTRATOR'S RESPONSIBILITIES
A. Maintain a listing of all Authorized Users by Department as well as the associated files.
B. Participate in program review and enhancements.
C. Coordinate implementation of the Purchasing Card Program throughout the City
including Card User training via Departmental Liaisons.
D. The Card Administrator will be the authorized signer to approve new accounts, new
hierarchy data, or change requests, and act as a liaison between Bank of Amedca and
the Card Users.
E. Forward Statements of Account to the Departments.
F. Process Statements of Account for payment.
G. If a Department's Statements of Account are not timely processed, the Card
Administrator will notify the Department Director to resolve any problems. It is imperative
that Statements of Account be returned in enough time to allow for processing by the
Finance Department Accounts Payable section. Please note, any Cardholder's
Purchasing Card privileges may be suspended or cancelled at any time.
H. Conduct random reviews of Departments' Statements of Account to identify purchasing
trends which may indicate split Purchasing Card purchases intended to circumvent
established limits.
I. Conduct analyses of purchasing to identify:
1. The need to establish annual pdcing agreements for repetitively obtained goods or
services.
2. Additional matedal being available in a City Warehouse or Inventory.
J. Provide administrative assistance to the Departments.
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1. Provide copies of the Purchasing Card Guidelines to the Department Directors and
Authorized Users.
2. Provide each Authorized User with a Sales Tax Exemption Form.
3. Process requests for new cards, new users, changes, and deletions.
4. Answer questions about the Purchasing Card Program and the procedures and
policies of Bank of America.
5. Assist Departments (as a final step) in resolving billing disputes. Note: All
questioned items must be communicated in writing within sixty (60) days of the cycle
date when the item originally posted.
6. Assist Departments if Cards are lost or stolen.
7. Assist Departments in case of fraudulent use of the Card.
5. DEPARTMENTAL RESPONSIBILITIES
A. General
1. It is the Department Director's responsibility to ensure compliance with the
Purchasing Card Program Guidelines.
2. It is the Department Director's responsibility to ensure that only authorized employees
utilize the Department's Purchasing Card.
3. It is the Department Director's responsibility, in conjunction with the Purchasing
Officer, to determine the single purchase limit amount.
B. Ordedng and Receiving
1. Card Users may be required to present their City identification cards along with the
Purchasing Card as proof of authorized use.
2. All purchase-related documents (i.e., receipts, sales slips, etc.) must be retained by
the Department for Statement reconciliation. Note: City Purchases are exempt from
State Sales Tax.
3. The Department is responsible for ensuring receipt of materials and services, and
resolving any receiving discrepancies or damaged goods issues.
4. The Department is responsible for obtaining items at the lowest cost possible. The
Purchasing Department will negotiate discounts with local firms.
5. Transactions must not be split into two or more transactions in order to stay below
the assigned dollar limit.
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6. When telephone orders are placed, the Merchants must be provided with complete
shipping instructions including address (Department location), Department name,
and user name. The Merchant must also be instructed to include in the delive~
package a sales receipt, invoice, and/or the charge slip.
C. Reconciliation and Approval Process
1. Ail purchase-related documents will be retained in a secure location until matched
with the Statements of Account.
2. Statements of Account will be sent to the Department at the end of each billing cycle
by the Card Administrator.
3. Statements will be reviewed for overall legitimacy and accuracy of the charges.
Receipts must be matched to the charges. If an unauthorized purchase is
discovered, the Card Administrator should be contacted immediately.
4. Acknowledge missing receipts by initialing the transaction on the Statement of
Account. This will be allowed on an exception basis only.
5. After completing the review, sign the Statement acknowledging approval of
purchases, attach all related receipts, and forward to the Card Administrator for
payment processing. It is the Department Director's responsibility to ensure that all
Statements of Account are returned to the Card Administrator within seven (7)
business days of receipt.
6. It should be noted that payment to Bank of Amedca will be accomplished in
accordance with its expressed deadlines regardless of whether approved Statements
of Account have been received from the Department.
D. Resolution of Billing Problems
1. The Depadment is responsible for settling any disputes, cleadng erroneous charges,
and requesting credit for returned merchandise directly with the Merchant.
2. The Department is responsible for follow-up with the Merchant on any erroneous
charges, disputed items, or returns, and to ensure that the proper credit is given on
subsequent statements.
3. Most billing problems can be resolved promptly in the above manner. If the
Department, however, is not able to reach an agreement with the Merchant, the
Statement of Questioned Item(s) Form must be completed and forwarded along with
supporting documentation to the Card Administrator.
4. Upon completion of an investigation by Bank of America, the Department will be
notified of the resolution. If the dispute is not settled in the Department's favor, the
account will be charged for the disputed transaction amount.
E. Fraudulent Use of the Purchasing Card
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1. The Department is responsible for immediately reporting any fraudulent use or
misapplication of the Pumhasing Card to the Card Administrator. Misuse of the
Purchasing Card could lead to revocation of the card or other disciplinary actions.
2. Consequences for failure to comply with Program Guidelines:
a) Temporary/permanent revocation of use of the Card.
b) Notification to the City Attorney's office and/or the City of Peadand Police
Department.
c) Disciplinary measures up to and including termination and legal action.
F. Lost or Stolen Purchasing Cards
1. Report any lost or stolen cards immediately to Bank of America. Bank
representatives are available 24-hours per day at 1-800-300-3084. Bank of America
will immediately cancel the card and forward a replacement card within seven (7) to
ten (10) business days.
2. The Department must contact the Card Administrator as soon as possible thereafter
and submit a Lost or Stolen Purchasing Card Notification Form.
3. Failure by the Card User to report a lost or stolen Card in a timely manner (and the
Card is subsequently used) may result in financial liability to the City. This liability will
be charged to the Using Department's budget. However, "as long as the employee
notifies Bank of Amedca within a reasonable time frame that the Card has been lost
or stolen, the City will not be liable for any fraudulent transactions resulting from that
Card."
G. Cancellation
1. In the event a Department no longer wishes to participate in the Purchasing Card
Program, the Card(s) must be turned in to the Card Administrator at which time the
Card account will be closed.
2. Card Users' privileges may be canceled at any time. Cards may be revoked for
misuse or non-compliance with Purchasing Card Program Guidelines.
CARD PROVIDER: Bank of America
Lost or Stolen Cards:l-800-300-3084
24 hours per day, 7 days per week
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