Newton-Conover City Schools

Transcription

1 Newton-Conover City Schools Finance and Purchasing Manual Introduction and General Procedures Policies of Division of Purchase and Contract Pertinent Purchasing Standards Section I General Provisions Section II Operating Policies and Procedures Section III Purchasing Codes and Regulations Section IV Specific Purchasing Procedures Section V Contractual Services Section VI Preparing Purchase Requisitions Section VII Preparing Purchase Orders Section VIII Open Purchase Orders Section IX Pressing Need/Emergency Purchase Orders Section X Receiving Procedures Section XI Accountability of Fixed Assets Section XII School Property Disposal Procedures Section XIII Guidelines for Use of Staff Development Monies Section XIV Grant Applications Section XV Stipend Request Appendix Purchasing Forms 1 Revised July 1, 2012

2 INTRODUCTION Local Boards of Education are delegated the authority to purchase goods and services and to enter into contracts by the North Carolina General Assembly. Therefore, school systems' purchasing operation and procedures are controlled by North Carolina General Statutes. Areas not specifically addressed by the General Statutes are covered by local Board of Education procedures. The Department of Administration through the Division of Purchase and Contract is charged with jurisdiction and control over the specifications and purchase of equipment, materials and supplies required by local Boards of Education, except certain items such as textbooks and food. Under the requirements of G.S. 115C-522, it is the duty of local Boards of Education to purchase or exchange all their supplies, equipment, and materials according to contracts made by or with the approval of the Department of Administration. Public schools can, however, contract directly for any services they require. 2 Revised July 1, 2012

3 PURCHASING NOTES The following purchasing notes were taken from the North Carolina Purchasing Manual (November 1992) distributed by the Division of Purchase and Contract. INTRODUCTION: The North Carolina General Statutes related to purchasing are primarily found in Chapter 143, Article 3, 3C. The North Carolina Administration Code, Title I, Chapter 5 sets forth the primary operating rules for Purchasing. HISTORY OF GENERAL STATUTES: The 1931 General Assembly created the Division of Purchase and Contract establishing purchasing standards based on good business practices. The 1957 session established the Department of Administration and incorporated the Division of Purchase and Contract into it. In 1971, the purchasing act was revised substantially to update a number of provisions. In 1975, Chapter 143, Article 3C was enacted to cover contracts for consultant services. Subsequent sessions have changed the purchasing delegations from $2,500 to $5,000 in 1985, and again in 1989 to $10,000. Changes occurring in the 2004 session provided school systems maximum flexibility by no longer requiring the State s Purchase and Contract to facilitate competitive bidding on any purchase regardless of dollar amount. COMPETITIVE BIDDING: North Carolina's purchasing program is built on the principle of competitive bidding at all levels of expenditure. Fostering competition is an attitude more than a procedure. It is reflected in writing of specifications, searching for sources, making bids simple and inviting, and communicating with vendors in a courteous manner. Price should not be the absolute but the lowest responsive and responsible bid price is the benchmark in NC's purchasing program. The lowest responsive and responsible price allows consideration of terms and conditions, delivery schedules, types and degrees of service, inspection, transportation and delivery cost, warranties, etc. The purchaser's responsibility is critical evaluation of the bid in relation to specific aspects of the bid rather than personal likes and dislikes or information from unconfirmed sources. SPECIFICATIONS: Product specifications should identify need, should be written to invite competition, and should not be unduly restrictive. INTEGRITY: Fairness and impartiality in all phases of the process are essential ingredients in public purchasing. Communications must be open, honest, and objective. ETHICS: Purchasers shall not have financial interest, directly or indirectly, in the purchase of materials equipment or supplies. Purchasers shall not accept or receive, directly or indirectly, any rebate, gift, money, or anything of value from a person, firm, or a corporation to whom a contract may be awarded. ANTI-TRUST: Price-fixing, bid rigging, and/or collusion among bidders is unlawful. 3 Revised July 1, 2012

4 POLICIES OF THE STATE OF NORTH CAROLINA PURCHASE AND CONTRACT DIVISION It is the policy of the Division of Purchase and Contract to: Require items covered by established state contracts to be purchased according to these contracts. Conduct all purchasing activities according to applicable laws, rules, and regulations of good purchasing practices, and professional principles. Establish a practical degree of standardization of equipment, supplies and materials with reasonable allowance for varying requirements of the agencies served. Encourage fair and open competition by legitimate and ethical means. Obtain, whenever feasible, favorable prices through volume buying. Extend honest, courteous and impartial treatment, along with fair and equal opportunity, to all interested and qualified suppliers. Require satisfactory and proper performance of contractual obligations from all vendors. 4 Revised July 1, 2012

5 Finance/Purchasing Department The Newton-Conover City Schools' Purchasing Department is committed to: carrying out the purchasing process in the best interest of the Newton- Conover City Schools, the taxpayers of Catawba County, and according to N.C. General Statues, local Board of Education procedures, and recognized professional purchasing practices. getting maximum benefits from the school system's monies for the students. providing a climate of fair and open competition for all qualified vendors. purchasing goods and services expediently and awarding bids to the lowest responsible bidder. The lowest responsive and responsible price allows consideration of terms and conditions, delivery schedules, types and degrees of service, inspection, transportation and delivery cost, warranties, etc. assuring that bids are complied with in terms of price, quality, and service requirements. 5 Revised July 1, 2012

6 PERTINENT PURCHASING INFORMATION EXEMPTIONS AND DELEGATION OF AUTHORITY: Some items and services are exempt from the policies listed on the prior page and the State therefore delegates authority to local agencies in purchasing the following: SECTION EXEMPTIONS, EMERGENCIES AND SPECIAL DELEGATIONS.1601 EXEMPTIONS (a) Except as provided in Paragraph (c) of this Rule, it is not mandatory for the items and services listed in this Rule to be purchased through the Division of Purchase and Contract. (1) perishable articles such as fresh meats; (2) published books, manuscripts, subscriptions to printed material, packaged copyrighted software products, and like material; (3) services provided by individuals by direct employment contracts with the State; (4) public utility services (gas, water and electricity); (5) telephone, telegraph and cable services furnished by those companies; (6) services provided which are subject to published tariff rates as established by the North Carolina Utilities Commission; (7) services which are merely incidental to the purchase of supplies, materials or equipment such as installation services; (8) contracts for construction of and structural changes to public buildings; (9) personal services provided by a professional individual (person) on a temporary or occasional basis, including (by way of illustration, not limitation) those provided by a doctor, dentist, attorney, architect, professional engineer, scientist or performer of the fine arts and similar professions; the exemption applies only if the individual is using his/her professional skills to perform a professional task; a personal service may also be a consulting service; (10) services provided directly by an agency of the State, federal or local government, or their employees when performing the service as a part of their normal governmental function. In addition to products and services exempted by statute, the SPO may exempt other products and services from purchase through the Division provided that the SPO makes findings: (a) that competition will not enhance the price that the State would receive for the product or service; and (b) that competition will not enhance the quality of the product or service that the State would receive. History Note: Authority G.S. 7A-6(B); ; ; ; Eff. February 1, 1976; Readopted Eff. February 27, 1979; Amended Eff. April 1, 1999; February 1, 1996; May 1, 1988; July 1, Revised July 1, 2012

7 EMERGENCIES: Emergencies are defined as situations that endanger lives, property, or the continuation of an important program that can be corrected only by immediate on-the-spot purchase or rental of equipment, supplies, materials, or services. Emergencies will be handled by the Purchasing Department on an individual basis with the approval of the Director of Finance. Poor planning does not constitute an emergency. SPECIFICATIONS: A purchase specification is restrictive in that it sets limits on what is acceptable. Specifications must not be unreasonably restrictive as this eliminates competition. Usually, more than one make or brand of a particular item is satisfactory. In developing specifications, an attempt must be made to specify a quality that is suitable for the intended use, but not restricted beyond what is reasonable. SINGLE SOURCE ITEM: Single source (franchise) items are items for which there is only one dealer, distributor, or manufacturer from which to purchase that item in a particular area. Purchases for single source items costing more than the $90,000 formal bid threshold must receive approval by the local board of education. ORDERING ON APPROVAL: Ordering on approval is not a recommended practice. However, if this becomes necessary, a purchase order must be sent to the vendor requesting that the material be sent for preview. Materials may not be sent from a vendor without a purchase order number. If the item is returned before the due date, notify the vendor and the accounts payable department that the item has been returned with verification of ship date. 7 Revised July 1, 2012

8 ENCUMBERING FUNDS: State law requires that funds be encumbered for each purchase prior to the actual placement of the order. All purchase orders must be signed by the Finance Officer prior to the order being released. ***The Newton-Conover City School s Board of Education is not responsible for the payment of invoices for orders placed without authorization and without being assigned a purchase order number. RENTALS AND LEASES: Contracts or agreements for rental of equipment, materials, or supplies shall be handled under the same rules, regulations or procedures applicable to commodity purchases. Rental and lease contracts do not include any intent for ownership. The state never actually receives the title for rented or leased equipment. LEASE-PURCHASE School systems, by law, cannot enter into a lease-purchase agreement except to purchase vehicles, real property, and guaranteed energy savings contracts. The difference between a lease and a lease purchase agreement relates to ownership. Under a true lease or rental agreement, the renter never intends to obtain any ownership interest in the property. If a lease contains an option to purchase (regardless of the dollar amount), it must be treated as a purchase from the beginning and must follow purchasing procedures. RELOCATABLE OR MODULAR CLASSROOMS: The Division of Purchase and Contract directs local school units to purchase relocatable or modular classrooms locally. AFFIRMATIVE ACTION PROCEDURES FOR HISTORICALLY UNDERUTILIZED BUSINESSES (HUB) FORMERLY REFERRED TO AS MINORITY, HANDICAPPED AND WOMEN'S BUSINESS ENTERPRISES: The Purchasing Department shall actively seek and identify qualified historically UNDERUTILIZED businesses (minority, disabled, and women business enterprises and offer them the opportunity to bid on items. The Purchasing Department is required by General Statutes to report all bids extended to and purchases made from HUBS to the Division of Purchase and Contract quarterly for inclusion in a consolidated report to the General Assembly. 8 Revised July 1, 2012

9 PURCHASES FROM NONPROFIT WORK CENTERS FOR THE BLIND AND DISABLED: Beginning January 1, 1996, local school units will be exempt from otherwise applicable procedures when they purchase directly from a nonprofit work center for the blind and the severely disabled if the item is not on term contract. Items purchase must be of suitable price and quality but do not have to be bid. PURCHASES OF NORTH CAROLINA PRODUCTS: Under North Carolina law, state agencies authorized to purchase foodstuffs or other products are required to "give preference as far as may be practicable to such products or services manufactured or produced in North Carolina. However "no loss in price or quality shall be permitted." NORTH CAROLINA CORRECTION ENTERPRISES PRODUCTS: G.S requires local education agencies supported in part by the state to give preference in purchasing to products produced by the Department of Correction. Therefore, local school units must purchase these products whenever doing so will satisfy their needs. The state purchasing manual authorizes units to purchase directly from the sources under a special delegation. In addition, the statute exempts the purchase of Correction Enterprises products from the competitive bidding procedures of Article 3. PURCHASE OF USED ITEMS: Purchase of used equipment, materials, or supplies is allowed when, in the State Purchasing Officer's opinion, it is in the interest of the state. If a school unit wishes to buy a used item when new items of that type are covered by a state term contract, the unit must get special permission from the Division of Purchase and Contract before purchasing the used items. The Division will give the permission if purchase of the used item would result in substantial savings and would be in the best interest of the state. CONSTRUCTION OR REPAIRS WORK-CONTRACTED: For contracts of construction or repair projects of $30,000 up to $500,000, the school system must secure written informal bids and keep a public record of those bids. Contracts of $500,000 or more require formal bids with advertising and a 5% bid deposit. (See G.S ) (revised July 2012) CONSTRUCTION OR REPAIR WORK-USE OF OWN FORCE: Renovation projects with a total project cost, direct and indirect costs of $125,000 or less may be undertaken by the Maintenance Department. Materials for such projects are subject to the purchasing regulations listed in Section II. In addition, if labor costs do not exceed $50,000, work can be done with the system's own forces even if the cost exceeds $125, Revised July 1, 2012

10 REMOVAL OF CERTAIN ITEMS FROM CONSTRUCTION CONTRACTS: Requirements such as venetian blinds, water coolers, laboratory furniture, food service equipment, etc. should be removed from general construction contracts and purchased through the Division of Purchase and Contract. Furniture and carpet should not be bid as part of a general construction contract. PURCHASING ITEMS FROM CONSTRUCTION CONTRACTS: Every reasonable effort shall be made to avoid making purchases from or through employees of State Government or any of its agencies or public school administrative units. Any instances that may develop in doing business with such personnel shall be reported to Secretary of Administration for action he/she deems appropriate. USE OF PURCHASING POWER FOR PRIVATE GAIN: The purchasing power of the State shall not be used for private advantage or gain. Purchases under contracts made by the State are not to be allowed for personal use out of private funds, nor are agencies or institutions to place orders for articles for ownership by employees or other individuals. 10 Revised July 1, 2012

11 Section: I Subject: General Provisions Effective: July 1, 2007 Newton-Conover City Schools Procedures Manual 1. This Finance/Purchasing Manual is written for all school personnel to aid them in following the proper purchasing procedures. Normally all materials, supplies, and equipment are ordered through the purchasing department if local, state, or federal funds are used. Every effort will be made to make purchases that are acceptable to the purchaser. Commitments to purchase items from a particular company or salesperson cannot be made by any school employee until the proper purchasing procedures have been followed. 2. Each school/department is responsible for: (a) The selection of responsible vendors (b) Issuance of all requisitions (c) Searching for new products and services (d) Preparing and/or providing assistance with preparation of specifications for products or equipment (e) Obtaining bids for purchases exceeding $1,000 (f) Evaluating bids to select the lowest responsible bidder (g) Pre-auditing funds before requisition is prepared (h) Obtaining repairs for equipment (i) Confirming prices on goods/services with a cost of $ and under $1,000, which do not have to be bid 3. In selecting vendors, the purchaser will consider: (a) Quality (b) Price (c) Ability to deliver (d) Warranties or guarantees (e) Service (f) Conflict of interest 4. In evaluating price quotations, the following will be considered: (a) Price (b) Quality of item offered (c) General reputation and performance capabilities of bidder (d) Suitability of items for intended use (e) Conformity with intent of specifications (f) Conformity with terms and conditions of the invitation to bid (g) Conformity with mandatory site visit (if specified) (h) Recommendation of the end user (i) Future cost relative to sustainability 11 Revised July 1, 2012

12 Newton-Conover City Schools Procedures Manual Section: II Subject: Procedures Used For Obtaining Materials, Supplies, Equipment or Services Effective: July 1, 2007 All Funds (special, Federal, local, gifts, bequests, receipts, fees, State) used for the purchases of equipment, materials, supplies, and services shall be handled under the provisions of Article 3 of Chapter 143 of the General Statutes and following procedures established pursuant thereto by the Division of Purchase and Contract. Purchases under delegated amounts should seek competitive proposals in accordance with good purchasing practices and with or without public advertisement. Although bidding is not specifically required for contractual services, it shall be general policy to acquire them by seeking competition as may be practical. GENERAL DELEGATIONS: The State Purchasing Officer has authorized all agencies to purchase directly all commodities with a dollar value less than the benchmark, subject to the restrictions and guidelines listed below: BENCHMARK: The following delegations apply only to the items not covered by a term contract. These delegations may be withdrawn or reduced by the State Purchasing Officer if an agency is found to be in violation of statutes, rules, or procedures. Restrictions: 1. Agencies must be sure that they do not exceed their benchmark in handling any type of purchase. This includes monthly and quarterly purchases and indefinite quantity contracts. 2. Purchases that exceed the benchmark must be sent to Purchase and Contract for bidding. 3. The maximum applies to the total order rather than a line item cost. 12 Revised July 1, 2012

13 Guidelines: 1. Purchases up to $999 On dollar values up to $999, a purchase requisition must be completed by the Department Head or Principal and submitted to the purchasing agent. Price quotations are not required; however, competitive prices should be sought whenever possible. 2. Purchases of $1,000 but less than $5,000 (revised July 2012) On supplies, equipment, or other materials that cost $1,000 but less than $5,000, three quotations must be obtained if possible. These may be written quotations or telephone quotations and should be noted on the revised requisition. Minimum information to be obtained includes: company name, person supplying quotation, price, and description of item, date, and person who obtained quote. If for any reason, the quotations cannot be obtained, reason must be noted on the requisition. i.e. Published material available from only one source. All transactions over $1, must be documented. 3. Purchases of $5,000 but less than $10,000 (revised July 2012) Purchases totaling $5,000 but less than $10,000, not on state contract and not in an exempt category, require written invitations for bids and written responses. Faxed quotations are acceptable for orders totaling $5,000 to $9, Purchases of $10,000 or more (sealed bids required) (revised July 2012) For all orders $10,000 and above, a request for price proposals shall be advertised on the State of North Carolina Interactive Purchasing System (IPS). Vendors should complete the bid packet and return it to the Purchasing Department in a sealed envelope. The bids shall be attached to the purchasing file copy of the purchase order and the requisition and shall be a permanent part of the bid file. A fair and open competition climate shall be maintained in seeking competitive bids. All requests for proposal must include standard terms and conditions applicable to the requirement. A statement must be included on the bid that the bidder submitted the bid in fair and open competition. Ten (10) calendar days should be allowed for the return of sealed bids; however, in certain cases, this requirement may be waived if justified. All purchasing files must be maintained for five years, including purchase orders, quotes, waivers, and emergency purchase. The request for proposal must clearly identify its purpose, show agency name, FOB address, clear description of item needed, return date, state's terms and conditions, a signature section for the company to fill out and delivery time, and all other specific requirements applicable to the purchase. 13 Revised July 1, 2012

14 5. Purchases of $90,000 or more Purchases of $90,000 or more must be handled through a formal bid process, requiring public advertisement of the request for proposals. One full week must pass between the running of the advertisement and the bid opening date. Advertisements may be run in any general media including electronic advertising. All formal bids become public record at time of opening unless exempted as trade secrets. On certain items purchased from state term contracts, such as furniture and carpet, an inspection is required by the Division of Purchase and Contract before payment is made. Notification will be sent to the Purchasing Department from the field representative when the inspection is completed and the payment can be made to the company. Purchase and Contract advises that under no circumstances should invoices be paid until inspection is completed. It is extremely difficult to get problems corrected once invoices have been paid. 14 Revised July 1, 2012

15 Exceptions Some of the exceptions listed below apply only to purchase contracts, while others apply to both purchase and construction or repair contracts. Community colleges are subject to state rules for purchase contracts. Therefore, exceptions in this section that apply to purchase contracts do not apply to community colleges. Exceptions to the bidding requirements for community colleges can be found in the procedures and policies of the Division of Purchase and Contract. 1. Exceptions that apply to purchase contracts only a. Purchases from other governmental agencies [G.S (e)(1)] b. Competitive group purchasing [G.S (e)(3)] c. Gasoline, diesel fuel, alcohol fuel, motor oil, fuel oil, or natural gas [G.S (e)(5)(informal bidding required)] d. Sole sources [G.S (e)(6)(requires governing board approval, specified criteria must be met)] Separate provisions for soles sources apply to hospitals under this exception. e. Information technology goods or services purchased through state Office of Information Technology [G.S (e)(7)] or under request for proposals (RFP) procedures authorized under G.S [G.S ] f. State contract purchases [G.S (e)(9)] g. Used apparatus, supplies, materials, or equipment (does not include remanufactured, refabricated, or demo items) [G.S (e)(10)] h. Previously bid or piggybacking contracts [G.S (g)(requires governing board approval at a regular meeting upon ten days public notice)] i. Purchase of goods and services from nonprofit work centers for the blind and severely disabled [G.S ] 2. Exceptions that apply to construction or repair contracts only a. Change order work [G.S (e)(4)] b. Construction management at risk projects [G.S (e)(11); but note requirements of G.S for these projects.] c. Force account work (see Part IV, section G) [G.S ; note dollar limitations and bidding requirements for materials purchased for these projects] d. Projects using unemployment-relief labor paid for in whole or in part with state or federal funds [G.S (d)] e. Contracts with North Carolina Department of Transportation for street construction and repair [G.S ] 3. Exceptions that apply to both construction and purchase contracts a. Special emergency involving the health and safety of the people or their property [G.S (e)(2)] b. Guaranteed energy saving contracts [G.S (e)(8); but note the requirements of G.S through G for these projects] Solid waste management facilities [G.S ] 15 Revised July 1, 2012

16 Newton-Conover City Schools Procedures Manual Section: III Subject: Regulations Regarding Expenditures of Instructional and Other Funds Effective: July 1, 2007 Basic Account Structure Function Object Fund Fund Codes: (The source of $$$$) State Funds = 1 Local Funds = 2 Federal Funds = 3 Capital Funds = 4 Child Nutrition Funds = 5 Trust Funds = 6 Community Schools = Program Report Code Function Codes: The purpose for the expenditure for example 5110 is for regular classroom instruction Instructional Services 6000-System Wide Support Services 7000-Ancillary Services 8000-Non-programmed charges 9000-Capital Outlay 5110 Regular Curricular Services Costs of activities which are organized into programs of instruction to provide students with learning opportunities to prepare for and achieve personal, health and career objectives CTE Curricular Services Costs of activities that provide students with the opportunity to develop the knowledge, skills and attitudes needed for training in a specialized field of employment (or occupational field), and are not on the college preparatory track Children with Disabilities Curricular Services Costs of activities for students identified as being mentally impaired, physically handicapped, emotionally disturbed, those with learning disabilities, physical therapy, or other special programs for student with disabilities. 16 Revised July 1, 2012

17 5500 Co-curricular Services Costs of school-sponsored activities, under the guidance and supervision of LEA staff, designed to motivate students, provide enjoyable experiences, and assist in skill development. Co-curricular activities normally supplement the regular instructional program and include such activities as band, chorus, speech and debate. Also included are student-financed and managed activities such as clubs and proms Regular Curricular Support and Development Services Costs of activities to provide program leadership, support and development services for regular curricular programs of instruction to provide students with learning opportunities to prepare for and achieve personal, health and career objectives Children with Disabilities Support and Development Services Costs of activities to provide program leadership, support, and development services primarily for students identified as being mentally impaired, physically handicapped, emotionally disturbed, those with learning disabilities, or other special programs for students with disabilities. Program Report Codes (PRC): The designation of funding, in other words what pot of money the funds are coming from. Object Codes: Service of Item Obtained 100 series = salaries 200 series = benefits 300 series = purchased services 400 series = supplies and materials 500 series = equipment and capital outlay 311 Contracted Services Include the amounts paid for non-payroll professional and technical services performed under contract, excluding Workshop Expenses. 312 Workshop Expenses/Allowable Travel Include amounts paid for contracted services, supplies, and participant s travel costs for workshops and in-service seminars designed to enhance the quality of a program. This includes reimbursement to employees for mileage for workshops on personal vehicles equal to or less than the IRS allowable rate for business use. 341 Telephone 342 Postage 345 Security Monitoring 17 Revised July 1, 2012

18 411 Supplies and Materials Include all supplies and workbooks used by the students for the instruction of pupils. Examples of supplies: construction paper, crayons, pencils, pencil sharpeners, and other small unit cost equipment that meets the criteria for a supply item as outlined above. Examples of workbooks: map skills, handwriting, bookkeeping workbooks, etc. Include amounts expended for supplies and materials other than instructional supplies. (Expendable tools used in the garage and School Food Service should be recorded here.) Include amounts expended for periodicals and newspapers. A periodical is any publication appearing at regular intervals of less than a year and continuing for an indefinite period. Include amounts expended for audiovisual supplies and materials in the local school administrative unit. Include amounts expended for processing and cataloging books and materials in a school library. This would include kits and other supplies used for this purpose. Include amount for subscriptions to internet based educational resources and for the purchase of on-line educational media/materials used for the instruction of pupils. 412 State Textbooks Include the value of the State Textbook fund expended for prescribed textbooks purchased for pupils or group of pupils, and resold or furnished free to them. 414 Library Books Include amounts expended for regular or incidental purchases of library books available for general use by students, including any reference books used solely in the classroom. Also includes costs of binding or repairs to library books. 418 Computer Software and Supplies Include amounts expended for computer programs, floppy disks, printing paper, ribbons, etc. Also included are annual renewable license code and maintenance fees for software. 461 Furniture and Equipment Inventoried Includes expenditures for the initial, additional and replacement costs of equipment for both instructional and support areas. Use this code only if you will inventory the items purchased. (Cost of $1,000 to $4,999.99) 462 Computer Equipment Inventoried Includes expenditures for computer hardware whose small unit costs and/or lease/purchase arrangement make it inadvisable to capitalize the item. (Cost of $1,000 to $4,999.99) 541 Purchase of Equipment Capitalized Includes expenditures for the initial, additional and replacement items of capitalized equipment such as furniture and machinery. (Cost of $5000 or more.) 542 Purchase of Computer Hardware-Capitalized Includes expenditures for the initial, additional and replacement items of capitalized computer hardware. (Cost of $5000 or more.) 18 Revised July 1, 2012

19 Section: IV Subject: Purchasing Procedures Effective: July 1, 2007 Newton-Conover City Schools PROCEDURES MANUAL The purpose of this manual is to be both informative and instructive to those associated with acquiring goods and services for the Newton-Conover City Schools. This manual will describe the procedures to be used to ensure that statutory requirements relating to purchasing have been met. This manual also contains information regarding shipping, receiving, and accounts payable functions and the relationship of these functions to purchasing. G.S. 115C-522 states that all purchasing by school administrative units are subject to the policies and procedures of the North Carolina Department of Administration (Division of Purchase and Contract). Individual schools, as part of the local school administrative unit, must also comply with these statutes. It is the responsibility of each employee involved in the procurement process to understand the policies upon which these procedures are based. The following policies affecting purchasing by school administrative units and individual schools are drawn to comply with the requirements of the North Carolina General Statutes and regulations of the N.C. Purchase and Contract Division. I. GENERAL PURCHASES Purchase of equipment, materials, and supplies must be purchased in one of these ways: A. E-Procurement Purchases Local boards of education are empowered under G.S. 115C-522(a) to purchase or exchange all supplies, equipment, and materials in accordance with Article 8 of Chapter 143 of the General Statutes. This statute mandates the use of safety standards adopted by the State Board for purchases of commodities that need safety features. Purchases may be made under contracts made by the Department of Administration. However, where competition is available, local school administrative units may utilize the: 1) E-Quote service of the NC E-Procurement system as one means of solicitation in seeking informal bids for purchases subject to the bidding requirements of G.S , and 2) The Division of Purchase and Contract's electronic Interactive Purchasing System as one means of advertising formal bids on purchases subject to the bidding requirements of G.S and the applicable rules regarding advertising. According to Session Law , Section 10 (b), if during the fiscal year a local board of education is certified as E-Procurement compliant, it must use E- Procurement to expend at least 30% of its remaining unencumbered funds to purchase supplies, equipment, materials, computer software and other tangible 19 Revised July 1, 2012

20 personal property. In the first year after certification, the minimum E-Procurement purchase percentage rises to 35% of the above mentioned goods, with a State encouraged goal of 50%. In the second and following years, the mandatory minimum rises to 40%, with a State encouraged goal of 70%. B. Items not on State Term Contract Equipment, materials, and supplies not covered by any existing contracts may be purchased locally after seeking competitive quotations according to purchasing procedures already identified. Bid dates and bid selection criteria must be fully documented. Items may not be divided to avoid this provision. Verbal or written quotations must be obtained based on procedures detailed in Section II. C. Items on State Contract on Convenience Contracts Computer Hardware and some software can be purchased from a convenience contract with IBM, Apple, and Tandy. The convenience contract works much the same way as a term contract in that purchases can be made without obtaining competitive prices regardless of the dollar amount of purchase. However, the contract is not mandatory. Computer hardware and software may be obtained from other sources provided competitive prices are secured. D. Items may be purchased From Federal Surplus Property Agencies Items may be purchased for public institutions from Federal Surplus Property Agencies/Warehouses by following these procedures: (1) Obtain a letter of authorization from the purchasing director to use the school system's authorization to purchase federal surplus property. (2) The letter should identify the teacher/official, date they will visit the warehouse and be signed by the purchasing director. (3) Items selected must be used by the school system (not personal use) and become the property of the school system. E. Purchases Requiring Prepayment Generally, purchases requiring prepayment are not allowed because we are approving payment before the goods or services are received. Exception could be made on an individual basis if the goods/services are essential, no other source is available, and reputation of the company/person is beyond reproach. Another exception could involve travel, such as airline tickets. Good purchasing practices, however, require that invoices not be paid until the goods/services are received. F. Purchasing Equipment, Materials, and Supplies for Repair The purchase of equipment, materials, and supplies necessary for construction or repair work is to be handled according to purchasing procedures as outlined in Section II. 20 Revised July 1, 2012

21 G. Purchasing Contractual Services Purchasing of contractual services by school units is not established by North Carolina Statutes. See local procedures in Section VIII. H. Purchasing of Construction or Repair Work with Third Parties Construction of repair work with third parties is governed by Chapter 143, Article 8 of the General Statutes. All such contracts are to be handled by the Finance and Maintenance Departments. I. Maintaining Telephone Lines The technology director and finance director are responsible for maintaining information regarding telephones lines for school system locations. Additional telephone service requests and/or additional lines must be approved by the technology and finance director. Additional lines or additional services, upon approval, will be ordered as requested and the invoice will be sent to the school for payment each month. II. PURCHASING DOCUMENTATION AND BID INFORMATION All transactions of $1,000 or more must be documented. This includes a record of all quotes received, written and verbal, and written justification for awarding to bidder other than the low bidder. Waiver and emergency purchases must also be documented. All purchasing files, regardless of dollar value, must be maintained for five years. This includes purchase orders, quotes, sole source documentation, waivers, and emergency purchases. A. Written Quotations Documentation The form used for written quotes should: Clearly identify its purpose (ex. Request for quotes) Identify the agency by name Provide the FOB destination address, a clear description of the item needed, the return by date, the state s terms and conditions (must clearly state shipping terms) Provide a signature section for the company representative to sign confirming the price and certifying that the quotation was made competitively and without collusion Provide a space for delivery time and all other specific requirements applicable to the purchase (for example, any additional cost for setup, additional yearly maintenance fees) Allow at least 10 calendar days for the return unless this requirement is justifiably waived B. Lack of Competition The purpose of soliciting bids is to seek and to obtain competition; the responsibility is dual. If only one bid is received or reasonable competition is not available, the reason(s) shall be discovered and made a matter of record. 21 Revised July 1, 2012

22 C. Waiver of Competitive Bidding Circumstances allowing a waiver and direct negotiations include, but are not limited to, the following: 1. a needed product or service is available from only one source. 2. bids have been solicited but not received 3. standardization or compatibility is the overriding consideration 4. person or certain professional services are required 5. a particular medical product or prosthetic appliance is needed 6. equipment is already installed and in service 7. products are bought for over the counter resale 8. a particular product is needed for experimental, development, or research work Although a waiver of competitive bidding is allowed, competitive bidding is required wherever practical. Where a waiver is contemplated, except for small purchases, the reason(s) must be documented and shall be reviewed as in a canvass of bids. D. Rejection of Bids In requesting proposals, all quotations received may be rejected in whole or in part. Basis for rejecting shall include, but not limited to, the following: The proposal being deemed unsatisfactory as to quantity, quality, delivery, price, or service offered; the proposal not complying with specifications, lack of competitiveness, and limitation or lack of available funds. Action in rejecting all offers in whole or part shall be taken by canvass of bids for award, and the reasons therefore made a matter of record. E. Award of Bids The award of the bid should be made to the lowest responsible bidder. Consideration should be given to price, quality, and ability to deliver in a reasonable time, warranties, service, and conformity to specifications. Late bids should not be considered unless received before the bid is awarded and if it can be found that the bidder was not responsible for the delay. F. Sole Source A purchase of $1,000 or more to a sole source vendor must have proper documentation. The documentation must identify the item to be purchased, request price information, date the price is valid, and the signature of a company official. Depending on the total amount of the purchase, a statement accepting the terms and conditions of the state may be required. Sole source documentation must also be supplied about why it is a sole source and how the item best meets the needs of the end user. Time can be saved if the purchasing department is consulted in advance as to the documentation that will be required before the purchase order can be issued. 22 Revised July 1, 2012

23 Section: V Subject: Contractual Services Effective: July 1, 2007 Newton-Conover City Schools PROCEDURES MANUAL State and Local Government Purchasing defines service as "work performed to meet a demand especially work that is not connected with manufacturing a product." Examples of common service contracts include insurance, janitorial services, solid waste collection, legal services, auditing, accounting, and training services. These are all contracts that do not require bidding under North Carolina's bidding laws. However, certain services are governed by other statutes, such as procurement of architectural, engineering, and surveying services. The procedure for obtaining contractual services should be: 1. The type of service that is needed should be clearly identified and described by the principal, department director, and/or purchasing officials. 2. Negotiation should occur between the person needing the service and possible suppliers of the service to obtain the highest level of service possible for the most reasonable cost. 3. After a clear understanding is reached between the parties, a requisition must be sent to the purchasing department identifying the services to be provided and the anticipated cost. The cost could be defined as rate per hour, rate per day, total cost of the workshop (including travel expenses, and other rated costs.) When exact figures cannot be determined, estimated costs should be stated on the requisition. 4. The requisition must be sent to the purchasing department prior to the service or workshop taking place so that a pre-audit of funds can be done and the contract established between the provider and the receiver through means of a purchase order. A copy of the signed contract should be sent with the requisition. The requisition should include a very descriptive detail of services to be performed. The description should include what services are to be performed, when the services are to be formed and also the time frame the services are to be performed along with the rate of pay. 5. The purchase order for the contractual service is the contract between the parties and will state that payment for the service will not be made until the appropriate invoice is received and approved for payment by the person who initiated the service request. 6. The invoice should be submitted after the service is provided and should state the following: description, date, and cost of the service and number of the purchase order. The invoice must be very descriptive as to what service was performed, when it was performed and any other information necessary for payment of the invoice. 23 Revised July 1, 2012

24 7. A purchase order can be issued for a single occurrence or for multiple days or months of service through means of a blanket purchase; however, the actual invoice or invoices for regular or blanket purchase orders must state the dates of service, description of the service, and cost. (see the contract service form for guidance; however, this form is not required because an individual or company may have their own contract.) 8. Maintenance contracts on equipment should also be covered by a purchase order which describes the service that is covered by the contract rather than signing a company generated maintenance agreement. NOTE: Do not sign a vendor agreement for equipment maintenance contracts. The attorney general has consistently advised against the signing of vendor prepared agreements. State Purchase and Contract has advised that local educational agencies should issue their own purchase orders or contracts. 9. When contractual services also involve equipment; the equipment may need to be bid if over $1,000, even though the training would not have to be bid. The purchasing department can provide assistance in determining the proper procedure. 24 Revised July 1, 2012

25 Newton-Conover City Schools PROCEDURES MANUAL Section: VI Subject: Preparing Purchase Requisitions Effective: July 1, 2007 The purchase requisition is the first step in the routine purchasing cycle. It is used to specify products or services needed and delivery requirements. It is the source document from which the purchase order is prepared. The purchase requisition should be completed by the school/department desiring to purchase goods or services. The requisition must indicate quantities, description, (once again this description needs to be very detailed) company telephone number, and delivery requirements, etc. Requisitions for registrations, permits, etc. which require checks to be mailed with the purchase order should be so noted on the requisition. A copy of the requisition should be kept on file at the school. If any additional forms or information need to be mailed with the purchase order, they need to be attached to the requisition. Steps to be completed: Requisition to be completed by individual requesting items. (A paper requisition is attached for use by individual requesting needed supplies) After approval from supervisor, the individual responsible for entering requisitions enters the requisition. After the requisition is entered, a printed copy is sent to the purchasing agent for approval. Attached should be any phone quotes or written quotes or other necessary information to show competitive bidding took place. Also, if contract services, a copy of the contract should be attached. Once the purchasing agent has approved, it will be forwarded to the finance director. The finance director will then approve the requisition. No requisition will be approved if there is no budget amount in the account code or if the expenditure is greater than the budget amount in the account code. All requisitions will be processed as quickly as possible. We will make every effort to process emergencies; however, we encourage you to send in your regular requests in ample time to obtain them by your delivery date. Special deliveries can add to the cost of items if immediate delivery is required rather than a company's normal shipping schedule. 25 Revised July 1, 2012

26 Section: VII Subject: Preparing Purchase Orders Effective: July 1, 2007 Newton-Conover City Schools PROCEDURES MANUAL A purchase order must be issued for all materials, supplies, equipment, service, construction or repair projects. No invoices may be honored for such items or services unless it is supported by a properly signed purchase order. Purchase orders also serve as a vehicle to encumber funds. State law requires that funds be encumbered for each purchase prior to placement of the order. By utilizing computer generated purchase orders, the Finance Department meets all pre-audit requirements (G.S. 115C-441-a.) By checking the requisition for bid documentation, approval signatures, compliance with terms contracts, and correct use of fund codes; the Purchasing Department certifies that all transactions have been made according to established purchasing procedures. The following procedures apply to purchase orders issued and approved by the Purchasing Department for all schools and departments in the system using Newton- Conover City School Board funds. Purchase orders should be prepared directly from information gathered from the approved purchase requisition submitted by schools/departments and processed according to the following procedures: 1. Access to fund code balances enables personnel to immediately determine if sufficient funds are available for each order before the purchase order is completed. If funds are not available, the originating school/department is contacted for an alternate fund source. If no other code is available, the rejected order is returned. 2. Processed purchase orders are signed finance officer. The finance department distributes copies of the approved orders as follows: (a) White copy: distributed to the vendor (b) Golden Rod copy: sent to the originator for their files (c) Pink copy: kept in the finance department (d) Yellow copy: sent to originator to be used as receiving copy 3. Purchase orders cannot be generated except through the ISIS program in the central office. Purchase numbers are not available until the purchase order is generated. In an emergency or if ISIS is down, emergency purchases will be handled in the best way possible on an individual basis. 26 Revised July 1, 2012