CITY OF NORFOLK

PROCUREMENT CHARGE CARD

POLICIES AND PROCEDURES

PURPOSE:

The City of Norfolk’s Procurement Card Program is established to increase the efficiency
of procuring certain goods and services for appropriate City purposes. The Policy and
Procedures provided herein must be adhered to by all City procurement card holders.

POLICY/PROCEDURE

A. OVERVIEW OF TRANSACTIONS / DOCUMENTATION EXPECTED:

The procurement card is a tool used to purchase certain low dollar goods and services for
the City of Norfolk’s operations, maintenance and repairs with a $1,000 limit per
transaction. To the extent travel-related purchases have been authorized for
specific users, travel-related purchases have a $2,000 transaction limit. Items
carried in the City Storehouse or items covered by City Price Agreements cannot
be purchased through the Procurement Card Program.

Proper documentation must be kept confirming that adequate research was performed to
obtain the best price. The use of the procurement card does not exempt a user
from complying with the City of Norfolk’s Procurement Code. All competition
requirements contained in those guidelines apply. Often, this means proof that
three quotes have been obtained. The method of payment does not eliminate this
requirement.

B. PROGRAM ADMINISTRATION:

The City of Norfolk's Program Administrator is in the Department of Finance and Business
Services. This individual is registered with the procurement card vendor as the
only person authorized to make changes (e.g., add or cancel cards, change limits)
for the Procurement Card program at the agency or corporate account level. This
individual will also be responsible for any necessary communication with the credit
card company, to include, but not limited to, the names of those who will receive
cards, monthly billings, additional statements and management reports, resolution
of payment discrepancies, formatting of payment transmittal data, and ensuring the
timely reconciliation and payment of credit card company invoices.

C. PURCHASE LIMITS AND INDUSTRY / TRANSACTION RESTRICTIONS:

A monthly purchase transaction limit for each user is determined by a Department Head,
Manager or Supervisor when the procurement card is originally requested. This
amount should be determined based on the volume of transactions and the cost of

Revised February 2009

 each on a monthly basis. Requested limits above $10,000 will require written
justification to the Program Administrator. A cardholder may not, under any
circumstances, authorize any charge in excess of the transaction limit set by the
Program Administrator. In compliance with the City’s procurement code, no single
purchase transaction limit shall exceed $1,000.

Additionally, industry restriction flexibility is available to limit transactions. When applying

for procurement cards for new users, the Program Administrator can set
restrictions within merchant category codes (MCC’s) to provide departments with
additional controls to ensure compliance with the City’s Procurement Guidelines
and to customize each user’s purchasing ability to their expected requirements for
accommodations, car rentals (generally excluded with limited exceptions), oil/gas
(excluded), restaurant food and travel. Subsequent changes to cardholder’s
restrictions can also be requested. Travel-related purchases require specific
authorization for each user (as noted below).

The purchase of gift certificates with the procurement card is prohibited. Tracking the
ultimate purchases made with gift certificate after they are disseminated would be
difficult if not impossible, in violation of the City’s Procurement Code.

D. UTILIZATION FOR TRAVEL AND MEALS:

Completion and submission of the “Procurement Card Travel Authorization Form” with
cardholder and department head signatures is required to enable the Purchasing
Card to be used for travel-related purposes. Once enabled for a cardholder, the
procurement card is authorized and may be convenient for the purchase of
conference registrations, airline tickets, rail passes, hotel accommodations, and
the procurement of books and supplies for the attending conference subject to the
approval procedures described in the City’s Travel Policy. The use of the City’s
procurement card for car rental is restricted, with very limited exceptions, and gas
purchases using the procurement card are prohibited.

Note: Airline and rail ticket purchases, like all other purchases made with the card, may
not exceed the card limits. With electronic tickets, new airline and rail travel
regulations may require that passengers who purchase electronic tickets with a
charge card produce the card at check-in. It is recommended that verification be
performed with the airline of choice or Amtrak to determine its practices.

Departments making hotel reservation must contact an individual at the hotel location to
verify:
1) The hotel location is willing to accept a corporate procurment card as the
form of payment for only the hotel room and applicable taxes.
2) The hotel does not require a card imprint on file for the card being used for
the hotel room and applicable taxes.
3) The hotel does not require a faxed or mailed copy of the card.
4) The hotel can accommodate another form of payment for all incidentals for
the traveler (i.e.,. room service, phone calls, Internet, movies, etc).

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 5) If all of these guidelines can be met according to the staff at the hotel
location, then the charge can be placed on the card. The name of the
individual with whom the cardholder spoke must be documented to include
the date and time on the Charge Log (described below).

Prepared and non-prepared meals must be purchased for City purposes only, consistent
with the City’s current Travel Policy, and a detail explanation logged on the Charge
Log detailing the purpose of the meal purchase and for whom it was for. The
original itemized receipts must be attached to the corresponding Charge Log
before payment is made.

E. PROCEDURES:

1) Card Issuance, Cancellation and Changes: Procurement cards will be

issued in the names of the designated individuals. An Acknowledgement for
Receipt of the Corporate Purchasing Card will be provided to the cardholder
upon obtaining their procurement card. Upon request by the City or upon
termination of employment, cardholders must return the procurement card to
the Program Administrator. Additionally, when any changes to existing
procurement cards need to be effected, cardholders and/or supervisors must
contact the Program Administrator. If a card is lost or stolen, replacement
procurement cards will be provided to cardholders within 7-10 business days
following deactivation of old card. The card will be mailed to the Program
Administrator and the cardholder will be contacted when the card has arrived
and is available for pick-up.

Name change requests by a cardholder must be validated against a

legal document before the name change can be processed. Departments must
provide proper documentation that the cardholder’s name has officially been
changed (i.e. Social Security Card) to the Program Administrator. Each
Department must maintain verification in case there are questions at a later
date.

2) Security: Authorized use of the procurement card is limited to the person in

whose name the card was issued. The procurement card must not be loaned
to another person.

3) General Requirements for Card Usage: Cardholders must record all

purchases made with the procurement card on an individual Charge Log. All
related charge receipts for each transaction must be retained with the Charge
Log. At the end of each billing cycle, cardholders must forward the charge log
with the attached original receipts to the department’s Charge Card
Representative or the cardholder’s supervisor for approval. A new Charge Log
will be established at the beginning of each new billing cycle. To use the card,
the cardholder must:

a) Identify a supplier that sells the required goods and services. A list of
vendors participating in the credit card company’s procurement card

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 program is attached. The Program Administration will provide periodic
updates of this information by maintaining a current list on the City’s
intranet.

b) Call or go to the supplier's place of business and place their order.

Provide any specific point of sale information their department desires
to capture for reconciliation purposes (an object code for each
transaction must be provided if charge is to be made to an object code
other than your default object code).

c) Give the supplier the account number and expiration date of their
procurement card. The supplier will verify the account number with the
charge card vendor. The purchase amount will be verified
electronically for compliance with applicable limits.

d) Retain all documentation pertaining to the purchase. When the

supplier delivers the order, documentation of the purchase (such as a
sales receipt or packing slip) should accompany the order. This
documentation must be maintained with the log and forwarded to the
Departmental Coordinator for reconciliation to the monthly charge card
statement.

4) Returns, Credits, and Disputed Items: Cardholders must attempt to resolve

disputes directly with the supplier of the goods or services. The cardholder
should use the following guidelines when returning an item:

a) If an item needs to be returned for any reason, the cardholder should

return the item to the supplier or notify the supplier to pick up the item.

b) Documentation of the return (such as a credit receipt) must be issued by

the supplier. All documentation pertaining to returns must be retained
with the Charge Log and forwarded to the Departmental Coordinator for
reconciliation to the monthly charge card statement

c) Problems with deliveries or returns must be resolved between the

supplier and the cardholder.

d) If the cardholder and the supplier cannot resolve an issue, the

cardholder should then contact the Program Administrator.

5) Payment Of The Credit Card Company Invoice: Accounts Payable must

process the credit card company's summary statement within 7 days of the
purchasing card company’s due date in order to avoid finance/late charges.
Limited time is available to reconcile these charges prior to payment; therefore,
the following processing procedures must be followed:

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 a) The credit card company monthly billing cut off date will be the 15th of
each month.

b) The credit card company will mail each cardholder’s paper statement to
the address provided on the cardholder’s application. Contact the
Program Administrator if the invoice is not received by the 25th of each
month.

c) The departmental charge card representatives will be responsible for

collecting all Charge Logs for the departments. A reconciliation of
approved Charge Log(s) against the detailed invoice(s) will be
completed at the department or bureau level. Identify any changes to
the default account distribution furnished by the charge card company
for each charge, and summarize charges by account distribution. A
General Accounting Expenditure (GAX) document will be created for the
full amount of the detailed statement made payable to the purchasing
card company. Further processing instructions will be given by the
Program Administrator and must be adhered to. The scheduled pay date
for the voucher will default to the 28th of each month. Please check to
make sure this date does in fact populate before completing all levels of
approval. Each line of the GAX will reference a specific procurement
card account in the description field and will be charged to the
appropriate expense account.

6) Reconciliation of the Charge Card Statement: Each department, division

and/or bureau must be responsible for retaining documentation of purchases
and returns on the Charge Log and for reconciling them to the monthly charge
card statement. The credit card company invoice must be reconciled against
the monthly charge card statement as follows:

a) For purchases listed on Charge Log sheet but not on invoice:

i. Highlight item on Charge Log sheet an annotate "missing

from invoice."

ii. Add a note of explanation to next Charge Log sheet when

item appears on invoice.

b) For purchases on the credit card company invoice, but missing on

Purchase Log:

i. Pay total credit card company statement charges in full.

ii. Reconcile differences with vendor.

c) For returns, the credit card company will issue credits on a subsequent
bill.

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 7) Audit Procedures: The Program Administrator will conduct unannounced
departmental audits. Retained purchase documentation must be reviewed and
compared with Charge Logs and vendor invoices. Returns and exchanges must
be reviewed to verify proper credits to the accounts.

8) Card Suspension: Program Administrators have the ability to suspend cards

for a stated period of time. This option can be used for many reasons to
include:

a) History of abuse and suspension of card for a period of time

b) Cardholder is on extended period of leave such as Disability, Medical,
etc.
c) Late payments entered into the AFMS System

9) Failure to Follow These Procedures: Procurement cardholder failure to follow

these procedures may result in one or more of the following:

a) Reporting of the violation to the department head.

b) Revocation or suspension of the procurement card.
c) Appropriate disciplinary action as warranted.
d) Appropriate criminal credit card fraud charges as warranted.
e) Cardholder reimbursement to the City for unauthorized charges.

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