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AN ORDINANCE AMENDING TITLE II, ADMINISTRATION, CHAPTER 5, DEPARTMENT OF ADMINISTRATION, ARTICLE 4, DIVISION OF CENTRAL PURCHASING, OF THE REVISED ORDINANCES OF THE CITY OF NEWARK, NEW JERSEY, 2000, AS AMENDED AND SUPPLEMENTED, BY ADDING A NEW SECTION 14, POLICIES AND PROCEDURES GOVERNING THE USE OF PROCUREMENT CARDS.
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WHEREAS, the City of Newark’s appointed Interim Purchasing Agent has recommended that procurement cards be utilized where appropriate for the purchase of goods and services for the City; and
WHEREAS, the use of procurement cards can be a highly beneficial tool for local governments looking to further utilized e-Procurement and strengthen their purchasing controls; and
WHEREAS, the rules adopted by the Local Finance Board governing the use of procurement cards are set forth in N.J.A.C. 5:30-9A; and
WHEREAS, the Director of the Department of Finance agrees with the Interim Purchasing Agent’s recommendation; and
WHEREAS, N.J.S.A. 40A:5-16(c) establishes the specific circumstances when procurement cards can be used; and
WHEREAS, the Municipal Council finds that a Procurement Card Program would be beneficial to the City of Newark and wishes to authorize their use and establish policy and procedures for their use as required by law.
NOW BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, IN THE COUNTY OF ESSEX, NEW JERSEY AS FOLLOWS:
SECTION 1. Title II Administration, Chapter 5, Department of Administration, Article 4, Division of Central Purchasing, of the Revised General Ordinances of the City of Newark, New Jersey, 2000, as amended and supplemented, is hereby amended by adding a new Section 14, Policies and Procedures Governing the Use of Procurement Cards, to read as follows:
§ 2:5-14 POLICIES AND PROCEDURES GOVERNING THE USE OF PROCUREMENT CARDS.
2:5-14.1 PURPOSE.
The purpose of this section is to establish the City of Newark’s policies and procedures governing the use of procurement cards to purchase goods and services.
2:5-14.2 DEFINITIONS.
Unless otherwise indicated below, the words and terms used in this Article have the same meaning as the identical words and terms set forth in N.J.A.C. 5:30-9A.2, as that provision may be amended and supplemented from time to time.
“Employee” includes all City employees and officials.
“Employee engaged in P-Card issuance or usage” includes all P-card users, the purchasing agent, and all employees engaged in P-Card related supervisory review, activity reconciliation or disbursement of funds.
“P-Card” means “procurement card.”
“P-Card user” means a specific individual issued a P-Card in accordance with this Article.
“Program Manager” means “purchasing agent.”
2:5-14.3 ISSUANCE OF PROCUREMENT CARDS.
a. The Business Administrator, in consultation with the Finance Director and the Program Manager, shall identify the employees within the City’s organizational structure which could benefit from P-Card usage. The Business Administrator shall ensure that no P-Card issues unless its issuance is necessary for the conduct of ongoing City operations in the normal course of providing government services.
b. The Program Manager, subject to the Finance Director’s supervision, shall identify and manage all risks associated with P-Card issuance and usage.
c. The Program Manager shall issue P-Cards only in the name of a specific employee and only after that employee has completed the requisite training pursuant to ⸹2:7-5.4 of this Chapter. A P-Card may not be issued to an employee who is not covered by a fidelity bond or a blanket honesty policy held by the City. If a P-Card user becomes ineligible for coverage under the fidelity bond or blanket honesty policy, that user's P-Card shall be cancelled. The Program Manager shall, under the Finance Director’s supervision, caused to be published and distributed to all City employee engaged in the issuance and usage of P-Cards the City’s policies and procedures governing P-Card usage.
d. Before selecting an issuer, the Program Manager shall comply with the P-Card limits and controls set forth in N.J.A.C. 5:30-9A.5.
2:5-14.4 TRAINING REQUIRED.
a. The Business Administrator, the Finance Director and the Program Manager shall receive training in all aspects of the P-Card system. Thereafter, all P-Card users, shall receive complete training on the City’s policies and procedures governing the use of P-Cards to acquire goods and services on behalf of the City.
b. The Program Manager shall organize training for all City employees engaged in issuance or usage of P-Cards. The Program Manager shall notify in writing every employee identified as a prospective P-Card user in order to obtain each employee’s consent for the required training. Should a prospective P-Card user decline training, he or she shall be ineligible to receive or use a P-Card. The Program Manager shall initiate training for employees who will receive P-Cards. The topics which the Program Manager shall cover in said P-Card training include the following:
1. Explanation of the state regulations and benefits of P-Card usage.
2. Explanation of City policies and procedures regarding P-Card usage.
3. The P-Card user’s obligation to submit expeditiously (i.e., within 48 hours) receipts to the Program Manager within 48 hours of use.
4. The P-Card user’s obligation to handle returns expeditiously (i.e., within 48 hours of determination that a return is necessary or appropriate) to ensure the City is not billed for the goods or services, or is receiving proper credit.
5. The P-Card user’s obligation to use P-Cards only at pre-approved vendors for pre-approved merchant codes, which vendors and codes are to be established by the Finance Director and Program Manager.
6. Explanation that the use of P-Cards for travel for room and board, or for cash advances is expressly prohibited.
7. The P-Card user’s obligation to report lost or stolen P-Cards immediately to the Finance Director or Program Manager, who will in turn immediately cancel said P-Card.
8. The P-Card user’s obligation to relinquish P-Cards to the Finance Director or Program Manager upon the P-Card user’s retirement, termination of employment with the City or other circumstances which may warrant termination of the employee's P-Card privileges.
9. The P-Card user’s obligation to prevent vendors from retaining a P-Card or from instituting a "running total" for the P-Card.
10. The P-Card user’s obligation to notify the Finance Director and Program Manager of any suspected fraudulent acts in connection with a P-Card.
11. Explanation that the improper use of a P-Card shall result in the employee being personally responsible for any such payment, and that improper use of a P-Card may result in the termination of the employee's P-Card user privileges and may also result in disciplinary action, up to and including termination of the P-Card user’s employment with the City in accordance with the City’s Personnel Policies and Procedures Manual, as same may be amended and supplemented from time to time.
12. A requirement that all employees trained in P-Card use, upon completion of the requisite training, complete and sign an agreement to abide by the City’s P-Card policies and procedures and to assume financial responsibility for misuse of the P-Card. Such agreement shall be in the form substantially similar to Appendix B of Local Finance Notice 2018-13 and shall be retained by the City in the employee’s personnel file.
13. Prohibition on P-Card cash advances.
14. The requirement that all purchases of goods and services using a P-Card must comply with the Local Public Contracts Law.
2:5-14.5 PROCUREMENT CARD TRANSACTIONAL LIMITS AND REQUIREMENTS.
a. All P-Card purchases of goods and services must comply with the Local Public Contracts Law (N.J.S.A. 40A:11-1 et seq.).
b. The Business Administrator shall, in consultation with the Finance Director and Program Manager, establish limits on P-Card usage by amount, by category of spending, and by duration of time. Should the Program Manager not be a Qualified Purchasing Agent, the amount of any P-Card transaction may not exceed fifteen percent (15%) of the bid threshold set forth in N.J.S.A. 40A:11-3.
c. P-Cards can be utilized to purchase tangible supplies or non-tangible items under the following conditions:
1. When payment to vendors is required in advance of the delivery of certain materials or services that cannot be obtained from any other source at comparable prices. (N.J.S.A. 40A:5-16(c) (1).
i. Advance payment is required by the vendor.
ii. Comparable pricing is not otherwise obtainable for such goods or services to be available at the time and place required.
iii. The Qualified Purchasing Agent (QPA) has approved such item for purchase from a particular vendor.
2. When ordering, billing and payment transactions for goods and services are made through a computerized electronic transaction (N.J.S.A. 40A:5-16(c) (2).
i. An order is placed from computer to computer, such as on the Internet or similar computer network.
ii. Vendor requires immediate payment.
iii. The Qualified Purchasing Agent (QPA) has approved such item for purchase from a particular vendor.
3. When certification is not obtainable (N.J.S.A. 40A:5-16(c) (3)
i. Certification is not readily obtainable by the contracting unit; but such exceptions shall not include reimbursement of employee expenses or payment for personal services.
2:5-14.6 PROHIBITED TRANSACTIONS.
P-Card users may not use P-Cards for personal use or for travel and dining expenses for government employees, volunteers, or officials.
2:5-14.7 DOCUMENTATION OF PROCUREMENT CARD TRANSACTIONS.
a. The Program Manager is hereby authorized to execute documentation necessary to implement a P-Card program for the City.
b. During every P-Card transaction, P-Card users shall obtain and retain the original receipts. When P- Cards are used to purchase goods over the Internet, telephone or fax, such purchases must be evidenced by an order confirmation along with either the original packing slip that accompanied the purchased goods or an itemized receipt. A voucher must be prepared at least on a monthly basis detailing expenditures with all receipts noted above attached.
c. P-Card users shall expeditiously provide all receipts to the Program Manager, who will compare receipts to the Bank Card Statement. Returned material must be reported to the Program Manager immediately to ensure that either the charge for the material is cancelled or the local unit receives proper credit.
2:5-14.8 PROCUREMENT CARD PROGRAM OVERSIGHT, MANAGEMENT, CONTROL AND MONITORING.
a. The Program Manager shall be responsible for day-to-day oversight and management of the P-Card system, supervisory review of P-Card usage.
b. The Program Manager’s role in overseeing the P-Card program does not exempt that individual from accountability to those above them in the organization.
c. The Program Manager, subject to the Finance Director’s supervision, shall assure that internal controls are maintained concerning the integrity of vendor payments, accumulated costs for goods and services as well as other Local Public Contract Law requirements.
d. The Program Manager will develop and administer a supervisory review process, identify and manage all risks associated with P-Card use, and perform any other oversight or management duties required to ensure the proper utilization of P-Cards.
e. The Program Manager shall also ensure that:
1. All cards have imprinted on them both the P-Card users’ names and the City’s name.
2. Sufficient funds are encumbered from the proper accounts to cover any charges the user is authorized to make.
3. Employees associated with the issuance, usage and administration of the P-Card system are aware of the program and approved vendors with whom the cards maybe utilized.
f. The Finance Director shall be responsible for supervising the Program Manager’s oversight of the City’s P-Card program. The Finance Director or a person under the Finance Director’s supervision shall conduct all reconciliation activity.
g. The Finance Director shall monitor and assess the quality of internal control performance on a continuing basis to assure that all controls are actively followed each cycle without exception. Pursuant to N.J.A.C. 5:30-9A.7(e), prior to disbursement of funds to the issuer, the Finance Director shall assure that the following information is gathered and reviewed:
1. Evidence of each transaction certified by an authorized P-Card user as having been received.
2. Evidence of supervisory review.
3. A reconciliation of activity performed upon the transaction evidence.
4. A distribution report indicating the complete allocation of funds to be paid against previously appropriated and encumbered items.
2:5:14-9 OTHER LAWS APPLICABLE.
Use of P-Cards does not change or eliminate any bid thresholds or other limits set forth in the provisions of the Local Public Contracts Law, N.J.S.A. 40A:11-1 et seq.
2:5:14-10 VIOLATIONS.
Violations of the City’s policies and procedures governing the use of Procurement Cards shall result in appropriate disciplinary action as outlined in the Personnel Policies and Procedures Manual, without regard to the P-Card user’s position.
SECTION 2. Any existing ordinance, or part thereof, inconsistent with this ordinance is hereby repealed to the extent of such inconsistency.
SECTION 3. If any section, paragraph, subparagraph, clause or provision of this Ordinance shall be adjudged invalid, such adjudication shall apply only to the specific section, paragraph, subparagraph, clause or provision so adjudged and the remainder of the Ordinance shall be deemed valid and effective.
SECTION 4. This Ordinance shall take effect upon final passage and publications in accordance with the laws of the State of New Jersey.
STATEMENT
An Ordinance amending Title 2, Chapter 5, Article 4, by adding ⸹2:5-14, Policies and Procedures Governing the Use of Procurement Cards.