OCEAN CITY – The Mayor and City Council was presented with the town’s procurement card policy this week, which outlines the town’s newest system for purchasing cards, or credit cards, which will be used by a select number of town employees in lieu of purchase orders in an effort to save time and money.
The Mayor and Council were briefed on the program earlier this summer, with City Manager Dennis Dare presenting the benefits of the M&T Bank procurement card program. After hearing the benefits of the cards and the potential to save time and money, the council approved a one-year pilot program.
Finance Administrator Martha Lucey presented the town’s procurement card policy this week to the Mayor and Council.
“We’re prepared, with your approval, to go forward with this,” said Lucey.
Currently, all purchases are made though purchase orders, rather than through the use of purchasing cards. Purchase order requests are made by the employee to the department head for approval then sent to the budget manager, city manager, and finally to the purchasing director, who in turn issues the purchase order to the requesting department.
Efficient access to travel and Internet purchases are one benefit of the cards. Travel and Internet purchases are becoming more difficult to use with purchase orders. Purchasing cards would eliminate some of the problems, allowing for more online purchases, which would ultimately save money, result in better efficiency with travel and ease with larger account purchases, such as through Home Depot.
“The objective of using the procurement card is to provide a convenient and less burdensome method of procuring and paying for low dollar value goods and services as well as travel expenses. They are to be used when it is efficient, economical and operationally feasible to do so,” reads the policy.
Some of the benefits include streamlining the process for small dollar purchases and payments, reducing paperwork and processing time at various department levels, providing savings through consolidated payments, and allowing for quicker payment to suppliers and vendors.
The card will be both issued and managed by M&T Bank, which supplies a web-based application to monitor card activity.
While purchasing cards will now be available, the policy maintains that the cards will not replace the purchasing department.
The policy clearly outlines that the cards are to only be used for town business, stating, “Any use other than Town business will be reimbursed by the person responsible for the misuse.”
Cards will carry the name of the employee responsible for the card. The employee will be required to sign a purchasing card agreement before receiving the card however.
A receipt of invoice must accompany each purchase from the vendor, which will include the cardholder’s name, date and a description of the item or items purchased. Failure to supply a receipt leaves the employee responsible for the charge.
To monitor purchases, both the town’s finance department and internal auditor will have access to all card activity online. All charges require the online approval of the department head, which would insure that accounts are reviewed daily, weekly and monthly. Dare will also have access to monitoring each card’s activity.
The policy calls for any fraudulent use of the card to result in disciplinary action, such as termination of employment or criminal charges.
“I thoroughly agree with this program, I think it’s going to streamline purchasing,” said Council member Jay Hancock.
The council unanimously approved the policy.