(19)AR 022007 Cal-Cards - Laserfiche WebLink

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• Prompt Payment Incentive o (45 - # of Days to Pay)/45 X.0045 X Invoice Amount o Example: (45-10)/45 X .0045 X $100,000 = $349.99 DISCUSSION/ANALYSIS: The purpose of a Procurement Card Program (P -Card) is to provide a method to procure and pay for low value, non-critical items and reduce processing costs. It is not intended to replace effective procurement planning by each department nor circumvent the City's Purchasing Ordinance or Travel Policy. The benefits of utilizing a sound P -Card program with appropriate built in controls and administrative oversight will allow the City to reduce its procurement cycle through consolidating tasks. DGS conservatively reports that using the CAL -Card cuts nearly $25 in transaction costs on every purchase. Other agencies estimate the reduction to be between $75 and $100 per transaction. Additional benefits include: • Vendors will be paid within 1 to 3 days, making it ideal to transact City business with small, local businesses; • Eliminates multiple vendor invoices and related invoice costs; • Facilitates Emergency Purchases & provides tracking mechanism when EOC is activated; • Built in Controls (dollar limits, commodity limits, merchant/item restrictions) • Online Transaction Management & Dispute Resolution In tandem with the New CAL -Card agreement, Purchasing proposes that the City launch a New P -Card Pilot Program with a limited number of selected volunteers (6 to 8, plus purchasing staff). Volunteers will be selected based on their varied activities and their need for off-the-shelf type purchases, as well as their willingness to adhere to strict testing procedures. The pilot program will allow Purchasing to fully test citywide control procedures to ensure the adequacy of the controls, compliance with policies and procedures, and sufficient administrative oversight. Key elements of the New P -Card Pilot Program are: a comprehensive Policy & Procedure Manual; Full use of built in system controls (buying limits, transaction limits, merchant/item restrictions); Travel arrangements made through Purchasing to ensure compliance with the City Travel Policy; Mandatory training for all Cardholders and Approving Officials; New Cardholder Agreements with disciplinary actions up to and including termination and payment for unauthorized charges; AccessOnline Training, User Guides, and Simulations for account reconciliation, dispute resolution, and reporting; and a 3rd party program audit, and appeals process. Department heads will submit Cardholder applications with a detailed description of the applicant's job duties and specific purpose of the card. The Program Administrator will review/approve or deny each application. The City Treasurer will oversee the appeals process and hear all protests. The City Treasurer's decision will be final. Approved applications will then be compared to the standard guidelines found in the New Policy & Procedure Manual to establish spend & control limits. All prospective cardholders will be required to sign the New Cardholder Agreement, listing their individual spend & control limits. A card will not be issued to the cardholder until they successfully complete the cardholder training on policies & reconciliation procedures.