INTRADEPARTMENTAL CORRESPONDENCE SUBJECT: MANAGEMENT'S RESPONSE RELATIVE TO PURCHASING CARD AUDIT, FIRST QUARTER FY 2010/11, (IAID NO.

Transcription

1 INTRADEPARTMENTAL CORRESPONDENCE May 26, TO: The Honorable Board of Police Commissioners FROM: Chief of Police SUBJECT: MANAGEMENT'S RESPONSE RELATIVE TO PURCHASING CARD AUDIT, FIRST QUARTER FY 2010/11, (IAID NO ) RECOMMENDED ACTION 1. That the Board of Police Commissioners RECEIVE and FILE the Department's report relative to the Purchasing Card Audit, First Quarter, FY 2010/11, (IAID No ), dated September 30, DISCUSSION Recommendation: It is recommended that Fiscal Operations Division advise cardholders that documented evidence of "independent" confirmation for all Pcard purchases is required. This recommendation is currently being implemented. Fiscal Operations Division (FOD) has ed all cardholders on September 16, 2010 (Attachment I) and April 12, 2011 (Attachment II) informing them that all receipts and invoices must be signed by both the cardholder and their supervisor, according to page 6, Section 9.3 Reviewing Documentation, of the Purchasing Card Manual (Attachment III). Recommendation: It is recommended that Fiscal Operations Division (FOD) periodically review terminated employee lists from Personnel Division to ensure the City Controller's Office is notified of employee terminations to ensure Pcard cancellations are appropriately requested. Additionally, FOD should verb) that requested card cancellations are actually made by the City Controller's Office. This recommendation is currently being implemented. As of May 12, 2011, FOD has reviewed the terminated employees list from Personnel Division, and will continue to review the list of Pcard holders bi-annually to ensure that all cardholders are active employees of the Department. Fiscal Operations Division has also notified the City Controller's Office to cancel all Pcards issued to retired employees and is currently working with the Controller's Office to obtain verification that the Pcards have been cancelled.

2 The Honorable Board of Police Commissioners Page If you should have further questions, please contact Gerald L. Chaleff, Special Assistant for Constitutional Policing at (213) Respectfully, CHARLIE BECK Chief of Police Attachments

3 From: To: MARIBELLE DUMLAO CC: Date: 9116/2010 2:09 PM Subject: Purchasing Card Receipts Attachments; Pcard%20Manual%20rev pdf Effective immediately, all card holders should sign all receipts including their supervisor per Purchasing Card Manual-page Please see attached. If you have any questions, you may call me. Thanks you very much. Maribelle Durniao

4 Attachment II From: To: MIL CC: Date: Subject: MARIBELLE DUMLAO 4/ :38 AM Purchasing Card Holders Good morning everyone, Per dated September 16, 2010, make sure that all receiatsfinvoices are elan by you and your supervisor as a requirement to all cardholders. Please see attachment. If you have any question, you may call me. Thank you very much. Maribelle Dumlao Fiscal Operations Division Appropriation Section N2308@lapd.lacity.ory Work Fax EDO/1.00d wd EE : N HAN 6 ABVI X2j

5 Attach M nt III CITY OF Los ANGELES PURCHASING CARD PROGRAM CARDHOLDER MANUAL Revised September 21, 2009

6 Table of Contents Purchasing Card Program 1. Purpose 2. Program 2.1. Standard Card Limits 3. Responsibilities 3.1. Citywide Pcard Administrator 3.2. Dept Pcard Coordinator 3.3. Supervisor 3.4. Cardholder 4. Prohibited Card Usage 4.1. Practices 4.2. Vendors 4.3. Products 4.4. Services 5. Allowable Card Usage 6. Applying for a Purchasing Card 7. Purchasing Card Pick Up 8. Purchasing Card Security and Storage 9. Points of Purchase 9.1. Vendor's Location 9.2. Order's by Internet / Telephone / Fax / Mail 9.3. Reviewing Documentation 10. Deliveries 11. Declines 12. Requesting an Exception 13. Record Keeping 14. Statement Reconciliation with the PCPR 15. Canceling or Closing an Account 16. Audits 17. Violation Consequences 18. Incorrect Billings, Returns and Disputes 19. Lost or Stolen cards 20. Key Contacts Forms Purchasing Card Payment Record & Instructions Purchasing Card Application Acknowledgement of Responsibilities Revised 09/01/09 Page 2 of 10

7 Purchasing Card Program 1. Purpose The Program was established to create a more efficient, cost-effective method of paying low-valued items costing less than one thousand dollars ($1,000). The Program is not intended to circumvent procurement or purchasing guidelines or procedures, and cannot be used for travel or travelrelated items. 2. Program The Purchasing Card Program with US Bank (Bank) was executed by Treasurer's Office and implemented by the Controller's Office. The Program is a credit-card based system to pay for low-value, non-inventory, non-capital and non-contracted items less than one thousand dollars ($1,000). Most purchases processed through blanket purchase orders or petty cash vouchers are eligible for purchase through the card. This Handbook is developed to provide information on card program, policy and practice and to provide direction and guidance to departments when paying items with the card. The Manual is strictly enforced and cardholder usage is monitored through both the departments and Controller's Office by conducting daily and monthly audits. Cards are embossed with the City of Los Angeles and an individual's name on the face of the card. The individual whose name appears on the card is the only individual authorized to use the card. Usage by any other individual is strictly prohibited. The Controller's Office maintains the right to audit or revoke a purchasing card at any time. The individual to whom the card is issued is the only individual authorized to use the card. Repeated infractions may result in revocation of the purchasing card Standard Card Limits Card standard limits are issued with: $5,000 per cycle $1,000 per single transaction 30 transactions per cycle 10 transactions per day The Program allows departments to select greater restrictive card controls as long as the limits do not conflict with the standard limits. Departments may contact the Controller's Office to discuss exceptions to these controls. Revised 09/01/09 Page 3 of 10

8 3. Responsibilities 3.1. Citywide Pcard Administrator Daily management of pcard program Audits transactions on a daily and/or monthly basis Provides summaries, pcard statements and/or reports to Management, auditors and departments Submit timely wire transfer to Bank Acts as primary bank liaison Communicates with Bank regarding online bank system, lost cards and reporting issues Resolves any pcard problems not resolved by Department's Pcard Coordinator Administers and monitors the City's sub-pcard programs Reviews pcard exception requests Makes recommendations to DWP, LAWA and Harbor's pcard program Issues new cards 3.2. Department's Pcard Coordinator Facilitates department PV payment to Controller's Office Provides the pcard statements to the cardholders Reviews pcard packages for completeness Maintains the department pcard packages Notifies the City Pcard Administrator of closing accounts for terminated, transferred staff or lost pcard privileges 3.3. Supervisor Ensures the pcard is used for City business purposes only Reviews Pcard packages for completeness Signs the Purchasing Card Payment Record Resolves problems when procedures or policy are not followed Notifies the Department Pcard Coordinator upon termination of the cardholder's employment or re-assignment 3.4. Cardholder Ensures the pcard is used for City business purposes only Adheres to the Purchasing Card Program Cardholder Manual Maintains the pcard in a secure location Obtains all register receipts, sales slips, invoices, packing slips, etc. Timely completion of the pcard reconciliation package Attempts to resolve disputes or billing errors directly with the vendor and the Bank Notifies the Bank of lost or stolen cards Must not accept cash instead of a credit to the pcard Notifies the Department Pcard Coordinator upon termination of employment or re-assignment Revised 09/01/09 Page 4 of 10

9 4. Prohibited Card Usage The Program strictly prohibits the following purchasing practices and items. This listing serves as a guideline and should not be construed as an allinclusive or all-exhaustive listing of prohibited card usages Practices 4.3. Products 4.4. Services Personal Airline tickets Car Wash Purchases Alcoholic Cash Advance Contracted items Services, including dry beverages Carpeting Split charges Chemicals cleaning Monthly transactions Computer hardware uniform / carpet over $5,000 Draperies Entertainment Any transaction Flowers Equipment of product, service or Gasoline, diesel fuel rentals Consultants vendor Jewelry Contributions considered Meals Cleaning inappropriate Medical drugs, On-site Cash in lieu of supplies services credit to card Uniforms Rental Sponsorships agreements 4.2. Vendors Electronic items ie: Service Bars, Taverns Night clubs Cocktail lounges laptops, palms, fax machines, TVs, digital cameras, DVD players agreements Telephone calls Transportation Discotheque Capital Tuition Hotels, motels Equipment reimbursement Liquor stores Computer Vehicle leases Travel agency Hardware ie: Gas Stations monitors, drives, memory and web cameras Computer Peripherals Post Office Payment by "Paypal" or other nondescriptive payment service Exceptions to the aforementioned may be granted by the Controller's Office with proper justification. Exception requests must be submitted in writing. 5. Allowable Card Usage Trainings, seminars, workshops less than five hundred dollars ($500) Newspaper or magazine subscriptions less than one hundred dollars ($100) Office Depot, the only City contracted vendor allowed usage by the program, except for equipment, furniture or electronic purchases. Revised 09/01/09 Page 5 of 10

10 6. Applying for a Purchasing Card Who should have a P-card? Employees whose duties and responsibilities require them to provide staff with appropriate supplies required by the unit in order to continue service(s) to departments and/or the public. To obtain a purchasing card, an individual needs to complete the Purchasing Card Application and the Acknowledgement Form. Acquire the employee's supervisor's signature on both forms and forward to the Department P-card Coordinator for account allocation, review and submittal to the Citywide Purchasing Card Administrator. The Controller's Office will only accept wet signatories and will return incomplete or illegible applications to the applicant. The Citywide Pcard Administrator will inform the individual when the card is available for pick up. 7. Purchasing Card Pick Up The Controller's Office is required to maintain a minimum level of security for purchasing cards. The Controller's Office requires that each cardholder present identification and personally pick up their credit card for security reasons. The Citywide Purchasing Card Administrator informs the cardholder when the card is available for pick up: Cardholder must attend a purchasing card orientation before receiving the card. Cardholder accepts responsibility of the card policy as outlined in the Manual by signing the "Purchasing Card Acknowledgment Form". 8. Purchasing Card Security and Storage Cardholders are responsible for purchasing card security and storage. A card should be accessible only to the cardholder and always stored in a secure location. 9. Points of Purchases Transactions using the P-card are generally the same as using a personal credit card. Cardholders are required to: 9.1. Vendor's location Obtain an itemized original invoice or customer receipt, sign it and keep a copy for record keeping purposes. The original invoice or receipt should be attached to the Purchasing Card Payment Record (PCPR) Internet/Telephone/Fax/Mail Purchases Instruct the supplier to indicate cardholder's name, business location, and delivery address on the invoice/packing slips. Request the itemized invoice/receipt indicate payment by purchasing card. Have vendor send invoice or receipt directly to cardholder. A facsimile or ed receipt/invoice is an acceptable original receipt Reviewing Documentation... At the workplace, the cardholder should have another individual review the receipts/invoices; verify cost and confirm receipt of goods by signing the invoice/receipt. (The signature should be that of a City employee from the same unit and at an equal or higher classification as the cardholder, and signature must be legible.) Cardholder logs the purchase and the applicable data on the Purchasing Card Payment Record (PCPR). Revised 09/01/09 Page 6 of 10

11 10. Deliveries Certain purchases may be delivered to warehouses. It is the cardholder's responsibility to provide the vendor with complete delivery instructions and inform receiving employees of pending purchasing card deliveries. When receiving... Cardholder asks that the receipt be reviewed, merchandise verified, and receipt signed by individual receiving the goods. Cardholder logs the receipt and applicable data in the Purchasing Card Payment Record (PCPR) in preparation for submitting documentation with the monthly statement. 11. Declines If a transaction is declined, please contact the Bank for the reason. Declines occur if the vendor type is not allowed on the purchasing card, insufficient funds or the transaction exceeds the allowed monetary or transaction limit. Contact the Department Pcard Coordinator for purchasing alternatives. If the item is an emergency and necessary for the department to continue services for the employees and/or public then an exception must requested in writing. 12. Requesting an Exception Prior to requesting an exception from the Controller's Office, please contact the Department Pcard Coordinator for purchasing options. Approvals are granted on a case-by-case basis and are dependant on the urgency and cost of the transaction. or fax the request to the Citywide Purchasing Card Administrator and send copies to the immediate supervisor and the Department Pcard Coordinator. Depending on the purchase, a formal memo and additional justification may be requested from the department. Each request must include the following: Cardholder's name Pcard's last 4 digits Cardholder's phone number Justification for the purchase Description of item(s) to be purchased Purpose of the item Cost of the total transaction including taxes and shipping Budget or funding information Vendor name, website address and phone number 13. Record Keeping To ensure proper and appropriate use of the purchasing card, documentation to substantiate purchasing card transactions is required. All original documents and the PCPR are reconciled and sent to the Department Purchasing Card Coordinator/Accounts Payable Division within 10 business days of the closing cycle date. Purchasing Card Payment Record (PCPR) detailing, at a minimum, each transaction by date, vendor name, item/description and total amount. The PCPR must be reconciled by the cardholder and approved by the immediate or assigned supervisor. Include any supporting documentation to further substantiate or detail the purchase, such as a brochure, advertisement, copy of catalog, subscription, order form, etc. Revised 09/01/09 Page 7 of 10

12 Include any supporting documentation to further substantiate or detail a return of goods, such as a credit memo, shipping/packing slip showing return of merchandise to vendor, card holder dispute form, etc. During a cardholder's absence the supervisor is responsible for reconciliation and completing the PCPR in a timely manner. The immediate or assigned supervisor will sign on behalf of the cardholder, and have another supervisor sign the supervisor's line. The PCPR requires two different people review and authorize that all documentation is attached and complete. If the immediate or_assigned supervisor is not available to review and approve the PCPR's, then the next person-in-charge is responsible for their submittal. 14. Statement Reconciliation and Payment Each month the Department Purchasing Card Coordinator sends monthly billing statements to cardholders with activity during the previous month. The Purchasing Card carries City liability, and not individual liability. The card in no way affects the cardholder's personal credit rating. However, a central billing statement is forwarded to the cardholder. Duplicate statements may be obtained from the Department Purchasing Card Coordinator. Duplicate receipts or sales drafts may be obtained by calling the bank or the vendor. The bank charges $5 per sales draft. When the cardholder receives the monthly statement, the following steps must be taken: 1. Reconcile statement with the PCPR and check all receipts for accuracy, and the cardholder's signature and a second verifying signature. (The second signature is verifying and confirming that purchases have been received by the City and are for City business. The second signature must be that of a City employee, from the same unit, at equal or higher classification as the cardholder. ) 2. Sign and date the statement and PCPR. 3. Attach all receipts to the statement and PC PR. 4. All errors should be reported to the Bank. 5. Submit statement and backup to the approving official for review and signature within 10 business days after the 4th of each month. 15. Canceling / Closing an Account Departments are responsible for informing the Citywide Purchasing Card Administrator of card cancellation due to the employee's death, disability, transfer, resignation, leave of absence or other circumstances of similar nature, and when the department recognizes that a need no longer exists for the purchasing card. To ensure timely and proper cancellation of cards, cardholders should the Citywide Purchasing Card Administrator requesting cancellation as well as forwarding a completed application for cancellation and the cut-up pcard to the Controller's Office, attention Purchasing Card Administrator. 16. Audits Daily audits are conducted by the Citywide Purchasing Card Administrator and periodically by the Certification and Fiscal Monitoring Program (CFMP). The audits are conducted to ensure that cardholders are using the card in Revised 09/01/09 Page 8 of 10

13 accordance with policy and procedure. Cardholders may receive a memo requesting copies of the receipt and an explanation for purchasing the items in question. CFMP audits determine appropriate documentation, recordkeeping and approval. Auditors review the physical documents, determine if items are received, accepted and that all documentation is provided to the Department Purchasing Card Coordinator. Audit findings under either type of audit are grounds for revoking or canceling cards. If a holder's card is revoked, then the individual may not request another card in the future. 17. Violation Consequences The Controller's Office enforces pcard compliance by conducting random audits of cardholders, review of purchasing patterns and participating in fraud investigations. Continuous violation of pcard policy, purchases of inappropriate transactions, or from questionable vendor types may initiate an audit of the cardholder's pcard history and future transactions. The cardholder may receive a request from the Controller's Office for additional information and/or justification of a questionable transaction. If the audit finds that the transaction is inappropriate or is not in compliance with the pcard policy, the Controller's Office will suspend or may cancel the purchasing card for repeated offenses. Findings may require the cardholder to reimburse the City for unauthorized or inappropriate transactions. Blatant violation may result in immediate card suspension or card cancellation without prior written notice. Fraudulent usage of the pcard may result in disciplinary action up to and including termination of employment, according to the City Policy, and at the department's discretion. 18. Incorrect Billings, Returns and Disputes The cardholder should attempt to resolve any incorrect billings, returns and disputes with the vendor as soon as possible. To dispute erroneous charges card holders should take the following steps within 21 days of the dispute date: If the issue cannot be resolved with the vendor, then go into US Bank's Access Online to dispute transaction. Cardholder may print out a Dispute Form that can be faxed to the Bank at (701) or mail to the following address: US Bank National Assn, ND, c/o US Bancorp Service Center, Inc. PO Box 6344, Fargo, ND Continue with Statement process. Cardholder is responsible for following up with dispute until resolved Note: The Citywide Purchasing Card Administrator does not get involved with purchasing card disputes. Returned items should have a receipt/invoice indicating items returned. Cardholder asks that receipt be reviewed, merchandise verified, and receipt signed by another individual. Revised 09/01/09 Page 9 of 10

14 Cardholder logs the receipt and applicable data in the Purchasing Card Payment Record (PCPR) in preparation for turning in documentation with monthly statement. 19. Lost or Stolen Cards Lost or stolen cards should be reported immediately to the Bank, then submit the Lost/Stolen Card Notification Form to the Department's Coordinator, and the Citywide Purchasing Card Administrator. Upon receipt the Bank will block usage of the card. A new card will be ordered after the Citywide Purchasing Card Administrator has been contacted. 20. Key Contacts US Bank - Cardholder Support, for general account inquiries including Statements, Transactions, Balances, and Lost or Stolen cards: (800) Questions about your department's purchasing card procedures, reconciliation, usage or to apply for a Purchasing Card, contact the Department Purchasing Card Coordinator Questions about exceptions or purchasing card policy, contact the Citywide Purchasing Card Administrator (213) Assistance with City contracted vendors call: Supplier Relations (213) Revised 09/01/09 Page 10 of 10