Budget and Finance Policies and Procedures

Transcription

1 Procurement Procedures Purpose: To establish a procedure for Offices of the Budget and Control Board to procure goods and services. A. Office of Internal Operations-Procurement is the central location for assistance on the procurement methods and types of procurements utilized by the Board Offices. The Procurement Office is the liaison between the Materials Management Office, the Information Technology Management Office, and the Board Offices to ensure that statewide procurement policy and regulations are followed. Some of the responsibilities of the Procurement Office are to administer the Board s procurement function for purchases up to $50,000, set procurement policy for the Board Offices, administer the Visa Purchasing Card Program, manage the Minority Business Plan and Goals, and represent the Board at external events and activities as a business contact for vendors. B. The Board s Materials Management Office directs the solicitations for all statewide contracts and awards, except those for information technology equipment and software, and administers and publishes the SC Consolidated Procurement Code and Regulations, and Exemptions to the Code. The Board s Information Technology Management Office directs the solicitations for statewide information technology contracts and awards for computers, printers and supplies, and software and equipment. Information on obtaining procurement documents is available in Section VII Procurement Procedures of this document. Please refer to Section VII for general contact information for the Office of Internal Operations- Procurement, the Materials Management Office, and the Information Technology Management Office. Procurement Methods and Types There are four methods for procurements utilized by Board Offices. Methods describe the documents utilized to initiate and pay for purchases. 1. Purchase Order (including Blanket PO s) 2. Direct Purchase Order 3. Direct Expenditure Form 4. VISA Purchasing Card Purchase Order The Purchase Order is the original method for procurements and is acceptable for all types of procurements identified in these procedures. The Purchase Order is the only procurement method where the initiation of one document (the Purchasing Requisition) generates the issuance of another document (the Purchase Order). An Office must complete a Purchasing Requisition and submit it to Office of Internal Operations-Procurement to generate a Purchase Order. The component copies of a Purchase Order are the Original, the Office of Internal Operations Procurement Copy, the Accounting Copy 1 and Accounting Copy 2, and the Office Copy

2 Direct Purchase Order The Direct Purchase Order allows Offices to initiate direct office to vendor purchase transactions, and can be used for the majority of the categories described as General Procurements. The DPO may not be used for Sole Source Procurements. The component copies of the Direct Purchase Order are the Vendor Copy, the Office of Internal Operations Procurement Copy, the Accounting Copy 1 and Accounting Copy 2, and the Office Copy. A Direct Purchase Order can be used for the procurement of goods and services, including equipment. (The purchase limit for a single procurement using the Direct Purchase Order is $10,000, which must include freight and installation, but not tax.) When a Direct Purchase Order is used for a Blanket Purchase Agreement, the total purchase amount is limited to $2,500 per purchase. Offices must not devise situations to circumvent the purchasing limits for a Direct Purchase Order. When using a Direct Purchase Order to procure goods and services under statewide term contracts or agency contracts, the $10,000 limit is not imposed. Direct Expenditure Form The use of the Direct Expenditure Form was established as a method to process recurring and non-recurring invoice payments for contractual services, rent, utilities, seminars and training, travel, and items exempted from the SC Consolidated Procurement Code and for purchase amounts that are less than $2,500. Although the Purchase Order or Direct Purchase Order can be used to pay for the same expenditures, using the Direct Expenditure Form is an option that will help to expedite the payment process. The component copies of the Direct Expenditure Form are the Accounting Copy and the Office Copy. For payment forward the Accounting Copy of the Direct Expenditure Form and two copies to the Office of Internal Operations-Accounts Payable. Visa Purchasing Card Offices may use the Visa Purchasing Card for supplies and materials without using a Purchase Order, Direct Purchase Order, or Direct Expenditure Form. The Visa Purchasing Card works the same as a credit card. Procurements may be via fax, phone, Internet, or point of sale. Offices are not required to submit invoices or other documentation with payments, although these supporting documents must be maintained in the Office. Board Offices must provide Office of Internal Operations- Procurement with default account information for new Visa purchasing cards before a new card is issued. The default accounts are subsequently charged each time a purchase occurs. Office of Internal Operations loads the accounting information for purchases made using the card into GAFRS when the credit card statement is paid. Additional information, restrictions and use, for the Visa Purchasing Cards are available in the Visa Purchasing Card Program Policies. (Note: The Visa Purchasing Card is to be used ONLY for official State business.) Offices must maintain a Visa Purchasing Card file for their internal records for transactions, vendor invoices, and monthly statements from the bank. Records may not be destroyed or disposed of without approval of the Board s Records Retention Officer. The request to dispose of Procurement Card records/receipts must be processed through Office of Internal Operations-Finance

3 Types of Procurement: There are four types of procurements utilized by Board Offices: 1. General procurements 2. Blanket purchases 3. Emergency purchases 4. Sole source procurements General Procurements General Procurements are the routine purchases of goods and services for Offices to maintain their daily operational needs. General procurements would include the purchases of supplies and materials, contractual services, fixed charges, training and travel, and office equipment and furniture. Other types of general procurements are Leased Equipment, Service/Maintenance Agreements, Trade-ins, Statewide Contracts, Contracts Between State Agencies, and In-state Conference Facilities. In addition to the procurement method used for these procurements, Offices are required to provide more detail, complete other forms, and/or to obtain additional authorizations for these types of procurements. Leased Equipment Descriptions on a Purchase Order or Direct Purchase Order for rental, lease, lease purchase, or the installation of any type of equipment or software must include information that identifies the following: model, software version, series and brand name; terms of the agreement including the beginning and ending date; cost per month plus any interest; total cost including interest charged over the life of the agreement; freight or installation cost; and the complete amortization schedule for lease purchase and installment payments as a part of, or as an addendum to, the written contract from the vendor; and the invoices referencing the Purchase Order number. The distribution of the Purchase Order or Direct Purchase Order must be as indicated on the component copies of the document. The Standard Equipment Agreement Form must be used and can be printed from the MMO Web site located at: Service/Maintenance Agreements A separate Purchase Order or Direct Purchase Order must be used to purchase a Service/Maintenance Agreement for equipment or software. Service/Maintenance Agreements set the parameters for the requirements and conditions on the vendor. Descriptions provided on the purchasing document must include information about the equipment or software that identifies the following: model, software version, series and serial number; beginning and ending date of agreement; expected period during which service is to be provided (example: 8:00 a.m. 5:00 p.m., Monday Friday); hourly rate and minimum charge for services provided after normal hours; monthly cost; inclusions or exclusions of service in the agreement; and any changes to the terms of a maintenance agreement. The Office must retain the original of the Service/Maintenance Agreement and attach a copy to the Office of Internal Operations Procurement Copy of the Purchase Order or Direct Purchase Order. The distribution of the Purchase Order or remaining copies of the Direct Purchase Order must be as indicated on the component copies of the document

4 Examples of Service/Maintenance Agreements include Agreements for copiers, printers, postage machines, etc. Trade-Ins A trade-in is a used piece of equipment given a monetary value by the vendor to reduce the cost of purchasing a new piece of equipment. All Trade-ins, regardless of the dollar amount, must be approved by Office of Internal Operations-Procurement. A description of the item(s) and dollar value of the trade-in must be completed on a Request for Trade-in Form (MMO #107). In addition, trade-ins with acquisition cost of more than $5,000 must be approved by the Materials Management Office or the ITMO Office prior to the asset being traded. The Office must retain the original of the approved Trade-in Form and attach a copy to the Office of Internal Operations Procurement Copy of the Purchasing Requisition. The distribution of the Purchase Order must be as indicated on the component copies of the document. A Direct Purchase Order may be used for trade-ins. Statewide Contracts Offices must document and retain information for goods or services purchased from statewide term or agency contracts and attach a copy to the Office of Internal Operations Procurement Copy of the purchasing requisition or Direct Purchase Order. The distribution of the Purchase Order or remaining copies of the Direct Purchase Order must be distributed as indicated on the component copies of the document. Contracts Between State Agencies Purchases between the Board and other state agencies must be submitted in duplicate on a Contract Between State Agencies Form (MMO # 136) to the Materials Management Office for approval thirty days prior to the expected delivery of the goods or services. The Office must retain the original of the approved Contracts Between State Agencies Form and attach a copy to the Office of Internal Operations Procurement copy of the purchasing requisition or Direct Purchase Order. The distribution of the Purchase Order or remaining copies of the Direct Purchase Order must be as indicated on the component copies of the document. Contracts for Small Architect-Engineer and Land Surveying Services Offices can use direct negotiation and selection to award contracts to vendors for architect-engineer or land surveying services where estimated costs will not exceed $25,000. To execute a contract and procure these services, the following considerations must be taken into account: 1. Nature of the project 2. Proximity of the architect-engineer 3. Capability of the architect, engineer, or land surveyor to produce the required services within a reasonable time 4. Architect, engineer, or land surveyor s past performance 5. Ability to meet project budget requirements

5 The maximum fees paid to a person or firm during the 24 month period immediately preceding the contract negotiation may not exceed $75,000. Persons or firms seeking to provide professional services shall furnish a list of professional services and the fees paid for them during the fiscal year immediately preceding the fiscal year in which negotiations are occurring and during the fiscal year in which negotiations are occurring. Offices are prohibited from breaking large projects into smaller projects to circumvent the provisions for obtaining services. The Office must submit a copy of the contract, including the negotiated scope of services and fees awarded, to the State Engineer s Office for information. The Office must retain the original of the contract and attach a copy to the Office of Internal Operations Procurement Copy of the Purchasing Requisition or Direct Purchase Order. The distribution of the Purchase Order or remaining copies of the Direct Purchase Order must be as indicated on the component copies of the document. In-State Conference Facilities Offices will designate a conference planner to initiate an agreement with potential facilities. Offices are to provide a fair and equitable opportunity for different vendors to host their conferences, whenever possible. This consideration should be applicable to the geographical area, and the particular hotel or motel. Materials Management Office policy states that a minimum of two sites shall be contacted in at least two different cities of the State. South Carolina State Park facilities must be considered whenever they meet conference requirements. The Office must complete a written determination of the site selection on a Justification for In-State Conference Form (MMO # 138). The Office must retain the original of the Justification for In-State Conference Form and attach a copy to the Office of Internal Operations Procurement copy of the purchasing requisition or Direct Purchase Order. The distribution of the Purchase Order or remaining copies of the Direct Purchase Order must be as indicated on the component copies of the document. Blanket Purchases Blanket Purchase Orders (BPOs) are for purchasing repetitive items that can be procured by an Office on an as needed basis. Blanket Purchase Orders are normally issued on a fiscal year basis. Examples of services or products purchased from BPOs include: wrecker services, auto parts, auto repairs, cartridge and toner recharges, overnight mail express services, blueprint services, electrical supplies, hardware or plumbing supplies, fire extinguisher services, painting supplies, mail services, legal advertisements etc. (A Purchase Order or Direct Purchase Order can be used to initiate a Blanket Purchase Order). A Blanket Purchase Order may be used for repetitive purchases from a single vendor for goods or services that are not on statewide term contracts or agency contracts. A BPO may be used for purchases exceeding $2,500; however, the Office must solicit three quotes and attach to the BPO when submitting it to Office of Internal Operations. 1. The agreement with a specified timeframe and extent of the obligation. 2. The names of the employees authorized and the dollar amounts approved for each to place orders from the agreement. 3. All shipments under the agreement shall be accompanied by delivery tickets or sales slips which shall contain the following information: name of supplier; Blanket Purchase Order number; itemized list of supplies or services; quantity, unit price and price extension; and date of delivery

6 Offices must submit invoices for the goods and services received on the Blanket Purchase Order at least monthly. Each payment request must be notated to inform Office of Internal Operations-Accounts Payable to process a partial payment. The original Accounting Copy 2 will be retained in the Office until the expiration of the Blanket Purchase Order to use for the final payment to the vendor. Employees authorized to make purchases against Blanket Purchase Orders should not agree to purchase goods or services until a price has been confirmed. When concurrent agreements for similar items are in effect, calls shall be equitably distributed by the Office. Emergency Purchases Emergency Purchases occur when the process for general procurements or other procurement method is preempted by extenuating circumstances that preclude the normal processes for planning, budgeting, or obtaining competitive bids. Examples of Emergency Purchases are the repair of a water-damaged roof caused by a storm, repair or replacement of parts for an inoperative air conditioning unit in extremely hot and humid weather or repair of vehicles in use by employees traveling on official State business. An Emergency Procurement Form (MMO#103) is to be completed and signed by the Executive Director of the Budget and Control Board or his or her designee after a purchase is made. Information provided on the Emergency Purchase Form must include: the name of the vendor; description of the emergency; and amount to be paid. The Office must retain a copy of the Emergency Purchase Form and attach the original to Office of Internal Operations Procurement Copy of the Purchasing Requisition or Direct Purchase Order. The distribution of the Purchase Order or remaining copies of the Direct Purchase Order must be as indicated on the component copies of the document. A copy of each Emergency Purchase Form will be forwarded to the Executive Director and Chief of Staff of the Budget and Control Board by Internal Operations and reported quarterly to the Materials Management Office. Sole Source Procurements Sole source procurements are purchases made from a vendor who has been determined as the only source and sole provider for specific supply items, services, or construction. After it has been determined that a Sole Source Procurement is necessary, a Sole Source Form (MMO # 102) is to be completed and signed by the Executive Director of the Board or his or her designee before the purchase is initiated. Information provided on the form must include: the name of the vendor, justification for the Sole Source Procurement, the amount to be paid in the current fiscal year. If the sole source covers multiple years, the amount expected to be expended over the life of the agreement must be included. If the cost over the expected life of the agreement exceeds the authority level for the Office, the Executive Director must sign the form prior to initiating the procurement. The Office must retain a copy of the Sole Source Procurement Form and attach the original to the Office of Internal Operations Procurement Copy of the Purchasing Requisition. The distribution of the Purchase Order must be as indicated on the component copies of the document. For Sole Source Procurements over $50,000, a Drug Free Workplace Affidavit is required

7 This form is also required if there is a SC Consolidated Procurement Code Exemption for goods and services that total over $50,000. Offices can obtain the Drug Free Workplace Affidavit from the Office of Internal Operations- Procurement. Offices have the responsibility to ensure that it is completed by the vendor and attached to the appropriate component copies of the procurement document (Code of Laws, Title 44, Chapter 107, Section 20). Sole Source Procurements that have not been properly authorized prior to a Purchase Order being issued are considered unauthorized procurements. The Office must have the purchase ratified by the Chief of Staff of the Budget and Control Board. All unauthorized procurements are reported quarterly to the five member Budget and Control Board. Regulations on the Dollar Amounts for Purchases The criteria established by the Board s Materials Management Office to determine if competition is necessary to select a vendor is based on the dollar amount of the procurement for goods or services. For purchases from $0 - $2,500, no competition is required. This means that it is not necessary to obtain vendor quotes to procure the desired goods or services. Prices are fair and reasonable must be notated on the purchasing document for received goods and services. Even with this provision, Board Offices are encouraged to provide different vendors a fair and equitable opportunity to do business with State. For purchases from $2,500 - $10,000, three written quotes are required on vendor letterhead. This means that the Office must contact at least three vendors to obtain prices for the goods or services desired. Vendors can mail, fax, or electronically send the information. For purchases from $10,000 - $50,000, Offices are to advertise in the South Carolina Business Opportunity (SCBO) Newsletter. Resident vendor preference must be solicited and tabulated for the lowest quote or bid. A statement of award must be issued for sealed bids. An Office that desires to obtain quotes or bids above $10,000 must receive training from Office of Internal Operations-Procurement. This is required to ensure that the SC Consolidated Procurement Code and Budget and Control Board policy are followed. Accounting Information Accounting information is required for all procurements to ensure that payments are processed as intended by the Board Offices, each transaction is correctly recorded in the Board s accounting system, and the policies and procedures governing procurements are properly followed. This information can also be used by Offices to manage their fiscal year budgets. Specifications were included in the design of the accounting system to allow Offices to use the Purchasing Requisition/Purchase Order, Direct Purchase Order, and the Direct Expenditure Form to preencumber/encumber the funds to purchase goods and services. Questions about accounting procedures can be directed to Office of Internal Operations- Finance

8 Some information completed on procurement documents is standard regardless of the procurement method used. The most common information required for a Purchase Order, Direct Purchase Order, or Direct Expenditure Form includes the following: Purchase Order (P.O.) Number and Date will be assigned by GAFRS when the Purchase Requisition is entered into the accounting system by the Internal Operations Procurement Manager. Name and Title of the Requestor This identifies the employee in the Office initiating the procurement. The Telephone Number of the Requestor must be provided on the procurement document. Date This is the date the procurement document is prepared. Vendor The name and address of the business of the vendor selected. Invoice To Code This code identifies the name and address of the Office responsible to encumber the expense of the procurement and to receive and pay the vendor s invoice. Invoice To Codes are assigned by the Office of Internal Operations-Procurement. Ship To Code This code identifies the Office and location where the goods or services must be delivered. Ship To Codes are assigned by the Office of Internal Operations-Procurement. Vendor Number or Social Security Number This is also referred to as the Vendor s Federal Identification Number. It identifies the address where the vendor s payments are to be sent. This information is available in GAFRS. If not, a Request for Tax Payer Identification Number and Certification Form (W-9 Form) must be obtained from the vendor and submitted to the Office of Internal Operations-Accounts Payable to be entered into the Comptroller General s files and GAFRS. Contract Number This must be the complete contract number as it appears for a statewide term contract or agency contract provided by the Materials Management Office or the Information Technology Management Office. Accounting Distribution Detail Transaction Code This number identifies whether a transaction has been pre-encumbered by the Office. Budget Unit Code (BUC) This is a three-digit, alpha-numeric code that identifies an Office s source of funding. Budget Unit Codes are created by the Office of Internal Operations-Finance. Expenditure Object Code This is a four-digit, numeric code that identifies the type of goods or services purchased. Expenditure Object Codes and their descriptions are determined by the Comptroller General s Office. A two-digit, alpha-numeric suffix code is often added to the expenditure object code to provide additional details about a purchase. They are created by the Office of Internal Operations-Finance. Index Codes This is a four-digit, numeric code that helps to identify an Office s location or cost center. Offices can contact the Office of Internal Operations-Finance if they choose to setup Index Codes. Multipurpose This is a free field and may be used by each Office to record information of its choice

9 Transaction Amount This is the total amount for the transactions on the procurement document. Partial Payment A copy of the Accounting Copy of a procurement document must be used to process a partial payment to a vendor. The original Accounting Copy must be submitted only when a final payment is to be processed. Item Number List each sequentially. Quantity - Enter the number or quantity desired of each item listed. Unit of Measure: Identifies the measurement in which the quantity of an item is sold: ea (each), bx (box), package (pkg), dozen (dz), etc. Commodity Code This is a five digit code listed in the National Institute of Government Purchasing (NIGP) Commodity Code Book that identifies the classifications of goods and services. Commodity Codes are required on purchasing requisitions over $50,000, Sole Source Procurements, Emergency Purchases, and Trade-ins. Description This describes the goods or services to be received. Be specific and enter as much information as possible to identify the items desired: order number, manufacturer, color, size, material, or other required information based on the category of the procurement. Descriptions for payments for registration fees must include: seminar name and the location; individuals attending; social security numbers for each one attending, if requesting payment for meals. Estimated Unit Cost Leave blank if the Unit Price and Total Price are known. If not, enter an estimate based on a prior purchase or from a price list or catalog. Unit Price - Leave blank unless you know the cost is current and accurate. Total Price - Leave blank unless you know the Unit Price is current and accurate. The Total Price entered must be the Quantity multiplied by the Unit Price. Requested Delivery Date - Enter a specific delivery date for goods or services, if required by the Office. Name and Title - Authorized or Approved This information identifies the authorizations or approvals for the procurement and payment. Special Delivery Instructions Be specific. Instructions for when and how goods and services are to be delivered must be clear for the Office to obtain its desired results. Clear instructions are to be included on Purchasing Requisitions to inform the Office of Internal Operations- Procurement to fax or mail a Purchase Order to the vendor. For recordkeeping purposes, this same information must be included on other procurement documents to identify how orders were conveyed to the vendor: via fax, mail, electronically, delivery to the vendor, or telephone. Invoice Number This is the number assigned by the vendor to record the procurement and post the payment for the goods and services provided. Actual vendor invoices may be mailed, faxed, electronically sent from the vendor to a Board Office, picked up, or received by the Office directly from the vendor s business location

10 Total Amount of Invoice(s) This is the total amount of one or several invoices to be processed for payment. There may be occasions when goods or services are received on different days and with different invoices. If so, the procurement document, which would most likely be a Direct Purchase Order or Purchase Order, must be matched with each invoice until the process for receiving and paying for the goods and services is completed. All invoices for Visa Purchasing Card procurements must be compared to the monthly statements from the card issuer. Special Instructions and Additional Forms Requirements Amendments An amendment is the documentation for a changed order that records the difference between the transactions amount(s) on a procurement document and the vendor s invoice. Amendments provide the Offices and vendors some flexibility in the estimated and actual or quoted and amended cost for goods and services. A 10 % tolerance is allowed. Documentation for amendments ensures that vendors are properly paid for the goods or services they provide. Offices must notify Office of Internal Operations-Procurement/Accounts Payable in writing via fax, mail, direct delivery, or electronically if orders using a Direct Purchase Order are amended or cancelled. Offices must notify vendors directly about cancelled orders from a Direct Purchase Order. Office of Internal Operations-Procurement will notify the Offices, vendors, and the Office of Internal Operations- Accounts Payable about amendments to Purchase Orders to reflect differences between the estimated unit costs on a Purchasing Requisition and the unit price and total price on the Purchase Order. Offices must notify Office of Internal Operations-Procurement in writing via fax, mail, direct delivery, or electronically if orders using a Purchase Order are cancelled. Office of Internal Operations-Procurement will notify vendors about cancelled orders from Purchase Orders. Offices must retain a copy of amendments. If the total transaction amount of an invoice is 10 % or less of the procurement document, a pen and ink change is all that is required on the Accounting Copy 1 and Accounting Copy 2 of the Direct Purchase Order or Purchase Order submitted for payment. Approved for payment with a signature must be written on the invoice. If the amount of the invoice is more than 10 % of the procurement document, a written amendment or cancellation must be processed and copies sent to all who received the Purchase Order or Direct Purchase Order. Documentation of Savings for Procurements from Non-Contract Vendors Offices are encouraged to make every effort to use contract vendors to procure goods or services available on statewide term contracts. However, procurements for non-contract goods and services from a non-contract vendor are acceptable if the Office can substantiate a savings of at least 10 % and can document that a contract vendor was given the opportunity to match or further reduce the lower price. The Office must retain a copy of the documentation and attach the original to the Office of Internal Operations Procurement Copy of the Purchasing Requisition or Direct Purchase Order. The Office will retain a copy of the documentation in its Visa Purchasing Card file if that was the method used for the procurement

11 Changes to Contracts When there is a price increase for goods or services provided in statewide term contracts, the Materials Management Office or the Information Technology Management Office must be contacted for approval to pay the increased amount. The Materials Management Office or the Information Technology Management Office will issue a Change Notice to the requesting Office. Offices must attach a copy of the Change Notice to the Direct Purchase Order for all subsequent payment requests that are sent to Office of Internal Operations-Accounts Payable. Justification for Determination of Nonresponsibility (MMO #105) When a dispute arises between an Office and a vendor that cannot be resolved, the Office must write a narrative that details the nature of the dispute and send it to Office of Internal Operations-Procurement. The narrative must be very specific with details about the dates, actions taken, and results obtained. Office of Internal Operations-Procurement will attempt to resolve the dispute. If the dispute still cannot be resolved, OIO-Procurement will complete a Determination of Nonresponsibility Form and send a copy to the vendor and a copy to the Office. Decisions to discontinue current or future business with vendors are based on the actions that they take to resolve disputes. Distribution of Capital Asset Forms The Accounting Copy 2 of a Purchase Order or Direct Purchase Order for capitalized equipment (equipment with a total cost for each item that is greater than $5,000, or inventory equipment with a total per item cost that is between $1,000 and $5,000) must be forwarded to Office of Internal Operations- Capital Assets. OIO-Capital Assets will attach a Property Record Entry Form and a pre-numbered property identification decal to the Accounting Copy 2 of the Purchase Order or Direct Purchase Order and forward them to the originating Office. After receiving the vendor s invoice, the Office must attach it to the Accounting Copy 2 of the procurement document and forwarded them to Office of Internal Operations-Accounts Payable. When the equipment is received, the Office must complete the required information on the Property Record Entry Form and affix the property identification decal to the new equipment. The completed Property Record Entry Form with the accounts payable documents must be returned to Office of Internal Operations - Capital Assets. [A red Budget and Control Board Property decal may be requested from OIO-Capital Assets for noncapitalized equipment which the Office may wish to track]. Instructions for completing the Property Record Entry Form or questions about property identification decals must be addressed to Office of Internal Operations-Capital Assets. Separation of Duties and Inspection of Goods Offices must complete each of the sections of a procurement document that identifies the employee who prepared the document, received the goods, and approved the payment prior to submitting the Accounting Copy of the document to Office of Internal Operations-Accounts Payable. This information helps to ensure a proper separation of duties. This information will vary somewhat according to the procurement method utilized. The Direct Expenditure Form has sections that provide for the employee name who prepared the document and the signature of the employee who approves the payment. Section approval and fund approval are optional

12 The proper separation of duties for the Visa Purchasing Card are identified by the name of the employee authorized to use the Visa Purchasing Card and receive the monthly bank statements, the internal records of an Office s transactions, the vendor invoices, and the employee who reviews the internal records and signs the bank statements. The Purchase Order and Direct Purchase Order have sections for the names and signatures of the employees who prepared the document, received the goods, and approved the payment. The name of the employee who signs and dates the delivery ticket is also an indication of the proper separation of duties. Employees who actually receive the goods must sign and date the receiving section of the Accounting Copy 2 of the procurement document. The goods or services received date and the prepared date of the procurement document must not be the same unless the goods or services were actually received on that date. Check To Accompany PO must be notated on the Purchase Order or Direct Purchase Order for registrations, memberships, subscriptions, postage, and prepaid publications. Goods and services must always be inspected prior to taking possession where possible. Compare the goods or services received to the descriptions, quantities, and amounts on the procurement document. 1. Sign and date the delivery document. The person signing the delivery ticket must write "quantity correct only," unless the actual quality can be verified. The Office must retain the original delivery ticket and attach a copy to the vendor s invoice and the Accounting Copy of the procurement document and forward them to Office of Internal Operations-Accounts Payable. 2. If there are discrepancies in the quantity received and the quantity ordered, accept the goods and make a notation of the shortage on the delivery ticket. 3. It is important that discrepancies be communicated to the delivery person, by telephone to the vendor, and recorded in the Office. A written statement delineating the details of the shortage must also be provided to the vendor. The Office must retain a copy and send one to Office of Internal Operations-Procurement. The documentation for the delivery and the Accounting Copy of the procurement document must be retained in the Office until the problem is resolved. 4. If the goods are not in satisfactory condition, do not accept delivery. Provide a written statement of nonacceptance to Office of Internal Operations-Procurement and retain a copy in the Office. After the problem has been resolved, forward the Accounting Copy of the procurement document, vendor invoice, and a copy of the revised delivery ticket to Office of Internal Operations-Accounts Payable. 5. If a delivery is made in error, advise the delivery person of the correct location and employee responsible for receiving the goods or services. If this information is not available to you, contact the Office of Internal Operations-Procurement

13 Obtaining Procurement Documents and Contact Information Budget and Finance Policies and Procedures Purchasing Requisitions can be printed from the Materials Management Office s Web site. Printed and pre-numbered copies of the Direct Purchase Order and Direct Expenditure Form may be obtained from Office of Internal Operations- Procurement or from GAFRS. Templates of these documents can be completed in GAFRS through the Comprehensive Automated Reporting System (CARS) that is managed by DSIT. The information used to generate the forms can be completed and printed from GAFRS, and then pre-encumbered. GAFRS assigns a document number for each procurement method used. Authorization as a user of GAFRS must be obtained from the Office of Internal Operations. Please use the information below to contact the Board Offices responsible for Board and statewide procurement policy and regulations. Erick Austin eaustin@io.sc.gov Office of Internal Operations-Procurement Visa Purchasing Card Procedures Materials Management Office SC Consolidated Procurement Code Procurement Code Exemptions Term Contracts and information for non-information Technology All Public Forms Information Technology Management Office Term contracts and information on computers, printers, and servers; software and support; and other related supplies and materials

14 VISA Purchasing Card Program Purpose: Budget and Finance Policies and Procedures The purpose of the Visa Purchasing Card is to assist Board Offices to better manage supply purchases and to pay certain types of utility expenses in an efficient and cost effective manner benefiting not only the Board but participant vendors. WHAT IS THE PURCHASING CARD The purchasing card (PCard) is a Visa credit card issued by Bank of America. It is a fast, flexible tool which offers an alternative to the existing payment processes. The purchasing card must be used for official State business and may not be used for personal use. The South Carolina Consolidated Procurement Code must be followed for ALL purchases, even those paid with the purchasing card. The purchasing card will enable you to purchase nonrestricted commodities by phone from vendors. It may eliminate the need for low dollar Purchase Orders, Direct Purchase Orders, Blanket Purchase Agreements and Direct Expenditure Forms. PURCHASING CARD BENEFITS Cardholders: Cardholders will be able to purchase items directly from vendors which will streamline the purchasing process and can help improve turnaround time on receipt of orders. The purchasing card significantly reduces the workload and processing cost related to the purchase and payment processes, while providing a very detailed audit trail for transactions. The Board: Features of the program make it easy to control, manage, and reduce processing cost at all levels by reducing the number of requisitions, Purchase Orders, Direct Purchase Orders, Direct Expenditure Forms, invoices and checks. The purchasing card gives the additional benefit of an electronic audit trail that makes the purchasing card the preferred method of payment. Vendor: The purchasing card will be welcomed by vendors who accept Visa. When vendors accept the card for official purchases, they will receive payment directly from Bank of America. GENERAL PROCEDURES AND GUIDELINES Purchasing cards must be issued to individuals in their name. The purchasing card may not be loaned or used by anyone other than the cardholder. The cardholder must be an employee of the Board. The Office Liaison must submit an appropriately approved application for an individual to receive a purchasing card. The cardholder must sign a cardholder agreement indicating that he/she has read the Budget and Control Board s Procurement Card Policies and will abide by the policies and procedures herein and as amended in the future. Office of Internal Operations will process payment of the corporate statement to Bank of America each month. Questions can be addressed to Office of Internal Operations Purchasing Card Administrator, Erick Austin at

15 Purchasing cards are limited to certain types of allowable Board business transactions: Types of Purchases Allowed on the Purchasing Card Purchases of goods under $2,500 (unless a higher limit is approved) Airline tickets for employee travel Advertising Subscriptions Registration for training and conferences Books Equipment Freight, express delivery Office supplies Utilities (any amount) Agency contracts (any amount) Statewide contracts (any amount) Employee Recognition Day: Cards will be open for legitimate one time employee recognition events in May. Contact Office of Internal Operations Procurement Manager to schedule a date. Services that do not require supplemental reporting to the Internal Revenue Service such as a 1099 for payments to individuals or sole proprietors. (Please check with Office of Internal Operations-Procurement to determine whether a vendor is eligible for payment using the P-Card.) Types of Purchases NOT allowed on the Purchasing Card Purchases over assigned card limit (Note: card limits can be temporarily increased with approval from OIO Procurement to expedite payments). Hotel room charges Car rentals Consulting services or other service type procurements from individuals or sole proprietors because of 1099 tax reporting requirements Employee meals Entertainment-food-florist, etc. Personal charges, individual professional licenses (regulated by LLR), gifts, etc., and/or parties for any state employee Employee travel expenses except airline tickets Cardholder Responsibilities The cardholder may use the purchasing card for legitimate business purposes only. The card may not be used for travel, entertainment, cash or purchases from merchants who are blocked by the Comptroller General s Office (i.e. alcoholic beverages, restaurants and hotel merchants). Misuse will subject the cardholder to disciplinary actions and/or possible termination, criminal charges. The cardholder must: Ensure the purchasing card is used for official State business purposes only Not allow anyone, regardless of the reason, to use the cardholder s card. Use by anyone, other than the cardholder is strictly prohibited Adhere to the purchase limits and restrictions of the purchasing card

16 Obtain all sales slips, register receipts, and/or purchasing card slips and provide them to the Office liaison and/or manager Attempt to first resolve a dispute or billing error directly with the vendor and notify Bank of America if the dispute or billing error is not satisfactorily resolved. A cardholder must ensure that an appropriate credit for the disputed item or billing error appears on a subsequent cardholder statement. All credits must be on the procurement card. Under no circumstances should a cardholder accept cash or gift cards in lieu of a credit to the cardholder s account Call Bank of America at immediately (24 hours a day) to report a purchasing card lost or stolen. A cardholder must notify the Office liaison of a lost or stolen purchasing card at the first opportunity during business hours Sign the original bank statement to document that all purchases appearing on the bank statement have been reviewed and comply with these policies and procedures and the South Carolina Consolidated Procurement Code. Return purchasing card to Office liaison upon terminating employment with the Board or transferring to a different Office within the Board Office Liaison and Manager/Supervisor Responsibilities Each Office must designate an Office liaison who will: Submit applications for new cardholders Ensure solicitations that are over $2,500 but under $10,000 have the appropriate number of quotes (3) and a copy of the quotes is forwarded to the Internal Operations Procurement Manager Notify Office of Internal Operations-Procurement of lost or stolen card(s) Request cancellation of a card Collect cancelled cards from cardholders and forward to Office of Internal Operations-Procurement. Confirm that a receipt exists for all purchases and maintain all card receipts Confirm items listed on receipts are for legitimate business purposes Obtain manager s approval of transactions Confirm billing statement is signed and approved Code all transactions by the tenth of the month to the appropriate budget and expenditure categories Locate contract information for purchases of goods or services on statewide term contracts or agency contracts and retain copies of the contract information in the file with the associated purchase Notify Internal Operations - Capital Assets Section when equipment or software requiring capitalization is purchased using the card by submitting a copy of the card receipt and/or invoice to Internal Operations Capital Assets Section with the appropriate budget and expenditure codes notated on the receipt and/or invoice. Each Office must designate a manager/supervisor on the Authorized Approval for Financial Transactions who will: Review cardholder purchase to confirm that items listed on credit card receipts/invoices are for legitimate business purposes Sign the original bank statement of the cardholder to document that all purchases appearing on the bank statement have been reviewed and comply with these policies and procedures and the South Carolina Consolidated Procurement Code Approve requests for new procurement cards or increases in card limits

17 Office of Internal Operations-Procurement Responsibilities Act as Liaison with Bank of America Review applications for completeness and accuracy Obtain cardholder signature, signifying agreement with the terms of the purchasing card program. Resolve disputed charges/discrepancies not resolved by cardholder Secure cancelled and revoked purchasing cards and submit information to Bank of America Change monthly purchasing card credit limits when requested by the Office liaison Change single purchase limit based on demonstrated need, as appropriate, when requested by the Office liaison and reduce limit, in a timely manner, after completion of procurement Request information from Bank of America when purchasing card is erroneously declined by a vendor and diligently pursue correction of the error. Request new cards. Coordinate all contact with Bank of America for card set up, maintenance and closure Cardholder Liability It is the cardholder s responsibility to ensure that the card is used according to the guidelines of this manual as well as the South Carolina Consolidated Procurement Code, and the policies and procedures of the Board. Card Cancellation Cards will be cancelled when any of the following occur: Cardholder moves to a new job/separate division/office. Termination of Board employment. Card is misused. Any of the following reasons would also subject a cardholder to disciplinary action in accordance with Board policies and procedures: The purchasing card is used for personal or unauthorized purposes. The purchasing card is used to purchase alcoholic beverages or any substance, material or service which violates applicable policy, law or regulation pertaining to the Board. The cardholder does not adhere to all the Purchasing Card policies and procedures. The cardholder allows the card to be used by another individual. The cardholder artificially divides a purchase to circumvent the competitive process required by the South Carolina Consolidated Procurement Code or the dollar limit of his or her card. The cardholder uses another s card or allows his or her card to be used to artificially divide a procurement so as to reduce its value and circumvent the dollar limitations of his or her card or the competitive processes required by the South Carolina Consolidated Procurement Code. The cardholder fails to provide, when requested, information about any specific purchase. The cardholder is negligent in providing required receipts. Spending Controls The purchasing card is to be used only for the purchase of allowable goods and services. The Board spending parameters for each Visa purchasing card issued is set at $2,500 per transaction, including applicable tax and freight. Where need is demonstrated the per transaction amount may be increased based upon the Office liaison s recommendation. The monthly credit limit may be increased, also based upon a demonstrated need and

18 recommendation of the Office liaison. The South Carolina Consolidated Procurement Code must always be followed regardless of the credit limit established. Emergency Transactions Emergency transactions over $2,500 may be handled with the purchasing card as long as internal office procedures and the SC Procurement Code are followed and an Emergency Justification Form is completed and submitted to the Office of Internal Operations. Credits/Rebates Vendors will issue all credits to the individual purchasing card account for any item they have accepted for return. This credit will appear on a subsequent statement, if the cycle time has elapsed for the current billing cycle. All credits for items returned should be substantiated by a receipt/invoice from the vendor indicating the items returned or a copy of the original receipt/invoice with a notation of the items returned. Under no circumstances should a cardholder accept cash/gift cards in lieu of a credit to the purchasing card account. Rebates for Board purchases are the property of the Board and must be directed to the appropriate account. Security and Storage Cardholders must always treat the purchasing card with at least the level of care a reasonably prudent person would exercise with their own personal credit cards. The card must be in a secure location and the account number must be carefully guarded. The only person entitled to use the card is the person whose name appears on the face of the card. The card must not be loaned to another person for any reason. Vendor receipts/packing slips/charge slips concerning the purchasing card program must be maintained in a secure file within the Board Office. All cardholders will be subject to audit by Office of Internal Operations, Internal Audit and Audit and Certification of MMO. Sales and Use Tax Vendors are responsible for collecting retail sales tax at the point of sale. The amount of sales tax should be indicated on the receipt provided by the vendor. If sales tax is paid in another state, no tax will be due to the SC Department of Revenue. The individual receipt provided by the vendor must indicate whether any out-of-state sales tax has been collected at the point of sale. Should no tax be charged then the Office liaison must note that no sales tax was charged by the vendor by entering the appropriate code in the use tax field in Bank of America s purchasing card application (Works). Internal Operations will file the appropriate Sales and Use Tax documents with the SC Department of Revenue