R-76-11 Adopting Purchasing Card Policy & ProcedureRESOLUTION NO.
A RESOLUTION ADOPTING A PURCHASING CARD POLICY AND PROCEDURES
WHEREAS, the Village of Lemont desires to adopt a Purchasing Authority Policy and
Procedures; and,
WHEREAS, the President and Board of Trustees find that adopting the attached Village
of Lemont Purchasing CardPolicy and Procedures is in the interest of the public.
NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD
OF TRUSTEES as follows:
SECTION 1: That the Village of Lemont Purchasing Card Policy and Procedures, attached as
Exhibit A hereto is hereby adopted and is effective January 1, 2012.
SECTION 2: This Resolution shall be in full force and effect from and after its passage
as provided by law.
SECTION 3: The Village Clerk of the Village of Lemont shall certify to the adoption of
this Resolution and cause the same to be published in pamphlet form.
PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL AND DUPAGE,
ILLINOIS on this 24th day of October 2011.
PRESIDENT AND VILLAGE BOARD MEMBERS:
Debby Blatzer
Paul Chialdikas
Clifford Miklos
Ron Stapleton
Rick Sniegowski
Jeanette Virgilio
AYES:
kis
v
NAYS: ABSENT: ABSTAIN
BRIAN K. REAVES
President
ATTEST:
CHARLENE M. SMOLLEN
Village Clerk
Village of Lemont
Purchase Card Policy and Procedures
Adopted: October 24, 2011
TABLE OF CONTENTS
A. Introduction 1
B. Policy 2
C. Procedures 2
1. Issuance 2
2. Card Profiles 3
3. Cancellation of Card 4
4. Changes 4
5. Purchasing Card Security 4
6. General Requirements for Card Use 5
7. Ordering Procedures 5
8. Charge Card Statement Reconciliation 7
9. Charge Card Statement Payment Guidelines 9
D. Management Information 10
1099 Reporting 11
Internal Controls 11
Records Retention 11
Appendix A -1 Application/Acknowledgement Form 12
Appendix A -2 Program Maintenance Worksheet 13
Appendix A -3 Transaction Log Worksheet 14
Appendix A -4 Purchasing Card Cancellation Form 15
Appendix A -5 Chase Bank Credit Card Dispute Form 16
The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011.
A. Introduction
The Purchase (Credit) Card Program is intended to streamline and simplify purchasing and
payment procedures by consolidating supplier invoices and eliminating form processing. The
Payment Settlement Entity (PSE) is selected by Village personnel to process vendor payments on
the Village's behalf. The Purchase Card Program is not intended to avoid or bypass appropriate
procurement or payment procedures. Rather, the Program complements the existing processes
available. The Purchase Card also gives personnel an opportunity to make practical decisions in
obtaining products or services for which they are knowledgeable and reduces administrative
burdens. Management information reports are available, enabling the Department Heads to
improve management control and decision - making.
This Policy provides information about the process, the types of purchases that can and cannot be
made, records that must be maintained and reconciled for each cycle, and a variety of other
Program information.
The cardholder needs to remember that he /she is committing Village funds each time the
purchasing card is used. This is a responsibility that should not be taken lightly. The cardholder
is the person responsible for all charges made to the card. Intentional misuse or fraudulent abuse
may result in disciplinary action up to and including dismissal and recovery of all unauthorized
purchases.
The card has no impact on the cardholder's personal credit. Although the card lists an
individual's name, the card is actually issued to the Village of Lemont.
The Assistant Village Administrator is responsible for implementing the Purchase Card Program
within the Village. The Treasurer (Program Administrator) is the Village's primary
representative to the purchasing card vendor. This individual is responsible for card issuance,
card cancellation and communicating to the purchasing card vendor, who, within the Village,
receives the cards, monthly billings, additional statements and management reports.
Outline of Purchase Card Procedures:
1. Cardholder orders product or service directly from supplier.
2. Supplier processes the order.
3. The PSE checks for compliance with applicable limits.
4. The supplier delivers the product or service.
5. The PSE arranges payment to the supplier in as few as three business days.
6. The PSE issues individual monthly statements to the Cardholders and a master statement to
the Program Administrator to verify purchases.
7. The Village sends a single payment to the PSE.
8. The Village uses various management information reports to review and analyze spending.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
B. Policy
The current small purchases limit is $999 per transaction. Any purchase of $1,000 and over,
requires a purchase order along with competitive quotes and /or bids. The Village of Lemont is
liable for authorized charges made using the card. Purchase cards shall be used for official
Village of Lemont purchases only. Use of the card for personal items is not permitted. Efforts
should be made to use vendors who accept the purchasing card where appropriate in order to
maximize administrative cost savings. If the employee has questions on the appropriate use of the
Purchasing Card, the employee should contact the Assistant Village Administrator.
C. Procedures
1. Card Issuance
Purchasing Cards will be issued to individuals who have a need as determined by their
Department Head and approved by the Assistant Village Administrator. Examples of
individuals requiring a Purchasing Card are:
• Anyone with authority to order supplies and materials.
• Anyone who reconciles and resolves procurement problems.
• Anyone who has a demonstratable need for the card to avoid spending
personal funds on Village business and later being reimbursed by the
Village.
• Anyone who needs to make frequent purchases while away from their usual
work location.
The ideal Cardholder will meet all four criteria. Former employees, non- employees such as
contractors, are not eligible to obtain purchasing cards.
To obtain a Purchasing Card:
1. Obtain an Application/Acknowledgement Foiul from the Purchasing Card Program
Administrator. See Appendix A -1 for a sample Application/Acnowledgement
Form.
2. The employee must complete the application including the Department Head's
signature.
3. Send the completed application with original signatures to the Assistant Village
Administrator. The application should be accompanied with a memorandum
from the Department Head recommending the appropriate Card Profile to be
applied.
4. Attend a training orientation and receive the Purchasing Card. The Purchasing
Cards are issued with the name of the Cardholder and the Village of Lemont names
embossed on the front.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
2. Card Profiles
The Village has established a list of profiles for which each employee will be appropriately
placed by the Department Heads. These profiles will be maintained by the Finance
Department. The Finance Department will monitor limits and restrictions and make
changes when appropriate. The following profiles have been established:
• Profile A:
-- Maximum dollar limit per transaction = $999
-- Maximum dollar limit per month: = $2,500
-- Merchant Restriction: authorized list of approved vendors
-- Travel /Entertainment Restriction: no travel or entertainment charges
allowed. (Employee)
• Profile B:
Maximum dollar limit per transaction = $999
Maximum dollar limit per month = $5,000
Merchant restriction: none
Travel /Entertainment Restriction: no travel or entertainment charges
allowed. (Employee)
• Profile C:
Maximum dollar limit per transaction = $999
Maximum dollar limit per month = $5,000
Merchant restriction: none
Travel /Entertainment Restrictions: travel and entertainment charges
permitted. (Supervisor)
Department Heads may elect Cardholder restrictions from the following available
options:
1. Dollar limits per transaction: This limit allows Department Heads to
designate the maximum dollar amount for Cardholders to spend on each
purchase or transaction. At the point -of -sale, the PSE verifies that the
purchase amount falls within the approval transaction limit. If the amount
requested for authorization exceeds the limit, the authorization is denied.
2. Dollar limits per Cardholder: This limit allows Department Heads to
designate the total amount an employee can spend during the monthly billing
cycle. A running balance is maintained by the PSE that increases with each
authorized charge until the Cardholder reaches the assigned monthly limit.
If the limit is reached before the end of the billing cycle, new attempts for
authorization are denied.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
3. Cancellation of Card
• Cardholders must return the Purchase Card to the Village Program
Administrator immediately upon request or upon termination of
employment.
• It shall be the responsibility of the Department Heads to ensure all cancelled
cards are collected from the employee prior to the employee leaving and
forwarded to the Program Administrator to be destroyed.
• It is imperative the Cancellation Form Appendix A -4 (obtained from
Program Administrator) be processed in an expedited manner.
4. Changes
The Village Program Administrator must be contacted when changes need to be made to
existing purchasing cards. If a new purchasing card needs to be issued, the Cardholder
should receive the replacement card in 7 -10 business days. The old card, unless it is lost,
must be turned in to the Program Administrator before the replacement card will be issued.
The Department Head should utilize the Program Maintenance Worksheet ( located at
Appendix A -2) to:
• Make name changes,
• Change mailing address,
• Increase or decrease spending limit /restrictions,
• Card replacement, or
• Change accounting information contained on the card's magnetic tape.
The Program Maintenance Worksheet should be provided to the Village Program
Administrator to effect the changes. The approximate time to complete a change is 3 to 5
business days after receipt by the PSE. Requests can be faxed to the PSE at (800) xxx -xxxx
or emailed to www.chase.com /businesscards by the Village Program Administrator.
5. Purchasing Card Security
Authorized use of the Purchasing Card is limited to the person whose name appears on the
face of the card. The Purchasing Card must not be loaned to another person; however, the
Card may be used to make purchases for an employee in the department.
The Purchasing Card, or any document containing the card account number, should be kept
in an accessible but secure location. The account number on the purchasing card should not
be posted or left in a conspicuous place. The account number must not be faxed to
vendors.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
If the Purchasing Card is lost or stolen, the Cardholder must immediately notify the
Village's Program Administrator and the PSE at (800) 346 -5538.
The Village is liable for the use of the Purchasing Card by authorized users, provided that
the use is within the single per transaction dollar limit. The Village of Lemont does not
accept liability for the following:
• Unauthorized use of the Purchasing Card.
• Account numbers that are fraudulently used.
• Purchases made with stolen or lost cards that are beyond the maximum limit
of $50, and after discovery and reporting to the PSE of card loss or theft.
Exception: If the PSE investigation finds the employee used the card for
personal gain the Village becomes liable.
6. General Requirements for Card Use
Department Heads shall require Cardholders to maintain a Transaction Log Worksheet
(Appendix A -3) of the purchases to allow monitoring of spending limits and reconciliation
of purchasing activity to the monthly purchase and statement. A new Transaction Log
Worksheet should be established at the beginning of each new billing cycle. To use the
Purchasing Card, the Cardholder should take the following steps:
1) Identify a vendor that sells the goods and services needed.
2) Call, go on -line, or go to the vendor's place of business and place the order.
7. Ordering Procedures
• Information to provide a supplier:
Provide the vendor with Cardholder name and card number.
Expiration date of the Card.
Remind the supplier that the Village is exempt from Sales Tax. The
vendor will verify the account number with the PSE. The spending limit
will be checked electronically for compliance with applicable limits.
Business ship -to address.
Preferred methods of shipment, i.e., FOB Destination, freight prepaid
and allowed.
Please Note: The purchasing card number should not appear
anywhere on the exterior of the package. This number is
CONFIDENTIAL!
Record order on Transaction Log Worksheet for reconciliation when
receiving the goods and matching to the charge card statement.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
• Infoiniation to obtain from supplier:
Order confirmation or tracking number.
Base cost of purchase.
Anticipated delivery date.
Freight cost, if available.
• Retain all documentation pertaining to the purchase. When the vendor
delivers the order, or the order is picked up, documentation of the purchase
(such as sales receipt or packing slip) should accompany the order. The
documentation must be kept on file by the Cardholder for reconciliation to
the charge card statement.
• Enter the purchase information in the Cardholder's purchasing log
worksheet. The Purchasing Log Worksheet should be designed to meet the
needs of the department. The Purchase Log Worksheet should contain, but
not be limited to, the following information.
Department name
Cardholder name
Account number of purchasing card
Date of purchase
Vendor name
Description of purchase
Amount of purchase
Account number to charge
• Returns, Credits and Disputed Items
In most cases, disputes can be resolved directly between the Cardholder
and the vendor that provides the goods and services. The Cardholder must
use the following guidelines when returning an item or for other disputed
items such as sales tax charged:
If an item needs to be returned for any reason, the Cardholder
should send the item back to the vendor in the manner agreed
upon.
Returns of material to suppliers must be handled as credits and
treated as separate transactions.
Returns are not to be handled as exchanges or combined with
other purchases.
A separate transaction must be placed to re -order the correct
material.
Cash refunds are not allowed under any circumstances!!
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
Call the supplier as soon as possible. Promptness is important.
Obtain supplier's Return Authorization Number, i.e. approval to
return.
• Information to give to supplier:
- Card Number
- Name
- Phone number
- Confirmation number /packing slip number
The vendor should issue a credit for items that are returned or
for sales tax inadvertently charged. This credit will appear on a
subsequent charge card statement.
- Confirm that the supplier will issue the credit to the
purchase card. This should be an outstanding item
on the Transaction Log Workseet until the credit
appears on the monthly charge card statement.
If the cardholder and the vendor cannot resolve an issue, the
Cardholder should dispute the charge in writing to the PSE by
faxing a completed dispute form (Appendix A -5) with a copy to
the Finance Department. The PSE will process and investigate
the dispute on the Cardholder's behalf and assist in the
resolution. A temporary credit will be issued pending final
resolution.
-- If there is still a problem, contact the department head or the
Finance Department.
8. Charge Card Statement Reconciliation
• Department Procedures
1. Overview:
• The Purchasing Charge Card billing cycle is approximately 30 days in
length.
• The PSE mails Cardholders statements approximately three to four days
after the cut -off date. Given mail cycles, the statement can be received
as late as the 7th of the month.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
• Cardholders record transactions and attach appropriate receipts to the
Transaction Log Worksheet. The Department Head signs the Worksheet
to document review and approval. The Village President or Finance
Trustee signs the Transaction Log Sheet of the Village Administrator.
(note, if the president gets a purchasing card the Finance Trustee should
review and approve the presidents log).
• Department Head forwards the Worksheet and supporting documentation
to Finance Department. No later than the 5th of the month following
the end of the billing cycle.
2. Reconciliation Procedures:
The department is responsible for retaining documentation of purchases and
returns and reconciling them to the monthly Transaction Log Worksheet.
The following guidelines are recommended for reconciliation:
• The Cardholder shall be required to retain a receipt, invoice or other
appropriate supporting documentation for each and every purchase made
on the credit card.
The Cardholder will match and attach all such receipts to the Transaction
Log Worksheet in the same order as the transactions appear on the
statement and sign and date the statement, and notate on the report,
"okay to pay."
• The department head will review the cardholder's Transaction Log
Worksheet, make the appropriate changes (account numbers), initial with
authorized signature and forward all information to the Finance
Department by the 5h of each month. Continued delinquencies in
forwarding statements to the Finance Department shall result in the loss
of credit card privileges.
- The Cardholder's Transaction Log Worksheet must be signed by
the Cardholder; reviewed, approved and signed by the
Department Head.
• If at any point a Cardholder, Department Head or Finance Department
employee identifies an issue that would otherwise cause the Village to be
paying the wrong amount to the PSE, it is imperative that
communication be initiated to all appropriate personnel involved in the
process.
The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
• All supporting documentation pertaining to the purchases and returns on
the statement should be kept on file with the Purchasing Log Worksheet
until disposition in accordance with Village policies.
3. Discrepancies
• Discrepancies should be noted on the Purchasing Log Worksheet for
subsequent resolution. It is the Cardholder's responsibility to first work
with the applicable vendor, then directly with the PSE in order to resolve
the issue with temporary credits issued during pending investigation by
the PSE.
All unresolved issues should be brought to the attention of the
Department Head and if necessary, then to the Finance
Department.
9. Charge Card Statement Payment Guidelines
• Finance Procedures
The Finance Department is responsible for processing payments to the PSE. The
following guidelines must be observed when processing payments:
Upon receipt of the monthly invoice from the PSE the Finance
Department will reconcile all of the Transaction Log Worksheets to
the master statement received from the PSE.
Upon receipt of supporting documentation and reconciliation to the
invoice (completeness, accuracy), the supporting documentation will
be attached to the invoice and filed accordingly.
Such supporting documentation should be received by the 5th of the
month the statement is received. For those departments that do not
meet such timelines, appropriate follow -up should be conducted by
the Program Administrator with continued delinquencies of the
department resulting in the loss of credit card privileges.
An annual analysis will be performed by the Program Administrator
that will compile the following information using the PSE reports as
appropriate detail.
• Total volume of transactions and dollar amount of
transactions for which a credit card was used.
The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
• Top vendors by volume of transactions report generated (to
be used to identify vendors that may be subject to credit card
purchases).
• Comparison of credit card purchases to non - credit card
purchases analysis by volume of transactions and by dollar
of transactions with trend analysis performed in subsequent
years.
The payment due date is established by the terms of the contract with
the PSE. The due date will be based upon the cycle date selected by
the Village. The PSE must receive payment within 21 days after
the statement cycle date. Do not adjust due date for holidays or
weekends. Example: If the charge card billing cutoff date is 3/01/11
the due date is 3/21/11.
D. Management Information
Management Information Reports
The PSE provides Departments detailed management information reports that
enable the Village to monitor Cardholder usage, policy compliance, and frequency
of vendor usage. Over 30 reports are available. Some of the Management
information reports currently available include:
Account Spending Analysis Detail
Account Spending Analysis
Card Program Analysis
Merchant Category Monthly Summary
Merchant Detail
Merchant Supplier Summary
• 1099 Reporting
Account Statement
Cost Allocation Detail
Account Status
Line Item Detail
Merchant Exception
Account Activity Exception
Payments made to vendors using the purchasing cards may be subject to 1099
reporting. The Finance Department is responsible for adding 1099 reportable
payments to individual vendor payment totals for proper 1099 reporting.
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
• Internal Controls
Department Heads must develop and document internal control procedures to
ensure that all approved monthly statements are turned into Finance by the 5th of
each month. The department procedures must:
• Ensure the Transaction Log Worksheets have been reviewed and
approved by the Cardholder's supervisor and that the appropriate
expense accounts have been charged.
• Ensure unacceptable materials and incomplete services are documented
on the Purchasing Log Worksheet and the purchaser took the appropriate
corrective action with the vendor, and
• Ensure the original payment processing documents are sent to the
Finance Department and a copy is maintained in a department file for
audit purposes.
• The Finance Department will perform "spot" post- audits of charge card
transaction activity to ensure compliance with the procedures contained
herein
• Records Retention
Records should be maintained for a period of seven years after final payment.
The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
Chase Bank/Village of Lemont
APPLICATION /ACKNOWLEDGEMENT FORM
A -1
Your use of the Chase Bank Village Purchasing Card issued to you is subject to the following terms and conditions. You must
comply with the terms and conditions as part of the terms and conditions of your employment.
1. You are being entrusted with a valuable tool — a Village purchase card — and will be making financial commitments on
behalf of the Village. You should strive to obtain the best value for the Village by using existing Village and State
Contract suppliers where possible.
2. You understand the Village is liable to Chase Bank for all charges made on the purchase card.
3. You must use this purchase card for approved purchases only and must not charge personal purchases. The Village will
audit the use of this purchase card and report and take appropriate action on any discrepancies.
4. You must follow the policy and procedures in the Village Purchase Card Policy and Procedures document established by
the Village for the use of the purchase card. Failure to do so may result in either revocation of your use privileges or other
disciplinary action, including termination of employment.
5. You will be given a copy of the Village Purchase Card Policy and Procedures document. You are required to read and
follow the requirements of the purchasing card use.
6. You must return the purchase card immediately upon request or upon termination of employment (including retirement).
Should there be any organizational change which causes your cost center to change, you must return the purchase card
and arrange for a new one, if appropriate.
7. If the purchase card is lost or stolen, you must notify the Village Purchasing Card Program Administrator and Chase Bank
at 1- 800 - 346 -5538 immediately.
8. The Village or Chase Bank may change the purchase card terms and conditions or its policy and procedures concerning
the use of the purchase card and you must comply with those changes. Any changes will be accomplished by Addendum
to the Village Purchase Card Policy and Procedures document.
As the employee being issued the purchase card, I have read and understand the terms and conditions stated above.
Employee name: Department name:
Employee signature (print and sign)
Date Phone:
As the employee's Department Head, I acknowledge that 1 am responsible to ensure that the employee abides by the above
conditions. I am responsible for taking appropriate action in situations involving misuse of the purchase card. I am
responsible for notifying the Village Purchasing Card Program Administrator to cancel the purchase card if the Cardmember is
terminated for any reason, or if the Cardmember transfers to another Depai (Anent within the Village. I am also responsible for
making certain that any reports I receive are checked for accuracy.
Cardmember Depai tnient Head name
Cardmember Department Head Signature (signature required)
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The Village of Lemont
Chase Purchase Card Policy & Procedures
Adopted: October 24, 2011
A -2
Chase Bank Corporate Purchasing Care PROGRAM MAINTENANCE WORKSHEET
Prepared by:
Signature:
Date:
Control Account #:
Part I: CARDMEMBER INFORMATION (complete all information in this section)
Date:
Cardmember Account #:
Name of Cardmember
Name of Company:
Business Mailing Address:
Part II: MAINTENANCE
City:
State: Zip
Name Change
Cardmember name as it appears:
Cardmember name as it should appear:
Address Change
Current Business Mailing Address:
New Business Mailing Address:
Employee ID /Cost Center/Universal Changes
Employee ID (maximum 10 characters):
Cost Center (maximum 10 characters):
Universal (maximum 25 characters):
Social Security Number:
Permanent Limit/Restriction Changes
Type of limit Increase Decrease
Type of limit Increase Decrease
Add or delete:
Amount
Amount
Temporary Limit/Restriction Changes
Type of limit Increase Decrease Amount
Type of limit Increase Decrease Amount
Dates from: To:
Type of restriction:
Card Replacement
Lost
Embossing Error
Comments:
Account Transfer
Stolen
Not Received
Mutilated
Type of restriction:
Cancellation Reinstatement
Cancellation
Other
Reinstatement
Reason:
From:
To:
Account Number:
Account Number:
Cardmember Name: Cardmember Name:
The undersigned hereby requests a name change be effected and a Corporate Purchasing Card be issued as indicated herein and renewed and replaced until
the undersigned gives notice to cease. By requesting the name change, the undersigned understands that Chase Bank will cancel any outstanding
Corporate Purchasing Cards issued under the former name. Undersigned further agrees to destroy such Cards issued under the former name.
Send to:
Village of Lemont Finance Department
(630) 243 -2708 Signature:
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Village of Lemont Purchasing Card
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Village of Lemont
Purchase Card Policy and Procedures
Adopted: October 24, 2011
Chase Bank/Village of Lemont
Purchasing Card Cancellation Form
Cardholder Name:
Account Number:
Requestor's Name:
(if different than cardholder)
Reason for cancellation:
Termination of employment
Loss of purchasing card privileges
Other:
Please submit completed foliu to the Program Administrator.
Approved: Date:
Program Administrator
E -mail completed form to: tfriedly @lemont.il.us. Print a copy of the sent file and retain with
cardholder file.
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Village of Lemont
Purchase Card Policy and Procedures
Adopted: October 24, 2011
(include copy of Chase dispute foam)
NOTE: Please provide a detailed explanation of the above dispute
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