In recent months, CTAS has received a number of inquiries about the use of purchasing (credit) cards in counties. It seems that at least one large retail establishment has stopped accepting purchase orders and instead has been distributing purchasing cards to any county employees who make purchases on behalf of the county, which has prompted several counties to look into this issue.
Although there is no state law on this subject, sound accounting practices require that some controls on the usage of such cards be in place prior to their use in counties. The method of adopting these controls will depend on the purchasing laws under which your county operates, as well as the established procedures your county follows relative to purchasing.
Any county desiring to use purchasing cards should consult with its county attorney to determine the appropriate method for authorizing the use of purchasing cards and adopting policies and procedures. As a very general guide, CTAS has developed sample documents which a county may use as a starting point for developing its own set of documents authorizing purchasing cards and governing their use. These sample documents include:
1. A sample resolution to be passed by the county legislative body authorizing the use of purchasing cards and approving general policies governing their usage.
2. Sample general policies governing the use of purchasing cards.
3. A sample cardholder agreement which should be signed by any county official or employee to whom a purchasing card is issued.
4. A sample letter to be sent to any retailer who may have been issuing unauthorized purchasing cards to employees of your county.
These four sample documents are attached. As you can see, the existence of a “purchasing agent” is assumed in the examples. If your county does not have a purchasing agent, the documents will need modification to reflect the purchasing framework in your county. These documents are to be used ONLY AS GUIDES for developing appropriate documents tailored to the specific needs of each county. We hope they will be useful to you in developing your own purchasing card program.
If you have questions, please contact your CTAS county government consultant.
RESOLUTION NO. _____
TO AUTHORIZE THE USE OF PURCHASING CARDS (CREDIT CARDS) FOR SMALL PURCHASES BY VOLUNTEER COUNTY, AND TO ESTABLISH WRITTEN PROCEDURES GOVERNING THE USE OF SUCH CARDS
WHEREAS, it appears that the implementation of a purchasing card program on behalf of Volunteer County would increase the efficiency of the Volunteer County Purchasing Department and provide a more efficient and cost-effective alternative for making supply-type purchases below the County’s bid amount; and
WHEREAS, the county legislative body desires to approve the use of purchasing cards for small purchases within established guidelines;
NOW, THEREFORE, BE IT RESOLVED by the county legislative body of Volunteer County, meeting in __________ session at _______________,
Tennessee, on the _____ day of __________, 20___, that:
Section 1. The use of purchasing cards (credit cards) by Volunteer County is hereby approved.
Section 2. The Volunteer County Purchasing Card Policy governing the use of purchasing cards is attached hereto as EXHIBIT A and is hereby adopted.
Section 3. The use of purchasing cards shall be governed by the Purchasing Card Policy hereby adopted, together with such rules and regulations the Purchasing Agent may adopt pursuant to such Policy. The Volunteer County Purchasing Agent is hereby authorized and directed to adopt policies limiting purchases made with purchasing cards to ensure that purchases made with such cards do not exceed the current monetary limit beyond which sealed competitive bids are required.
BE IT FURTHER RESOLVED, that a copy of this Resolution, together with EXHIBIT A hereto, be distributed by the County Clerk to each county official and department head in Volunteer County.
This resolution shall take effect upon adoption, the public welfare requiring it.
County Executive County Clerk
[EXHIBIT A to Resolution]
PURCHASING CARD POLICY
The use of purchasing cards is strictly limited to Volunteer County officials and employees. All purchasing cards must be approved in advance by the Volunteer County Purchasing Agent. Volunteer County officials and employees must receive prior approval to use a purchasing card and must sign a Cardholder Agreement before using a Volunteer County purchasing card.
Applications for purchasing cards must be submitted to the Volunteer County Purchasing Agent. All applications for issuance of a Volunteer County purchasing card must be signed by the appropriate county official or department head under whose direction the applicant works.
All purchasing cards will be issued in the name of the individual employee or official who is responsible for the use of the card. The card will also have the County’s name and tax exempt number embossed on the card. The official or employee whose name appears on the card is responsible for ensuring that all purchases made using that card are in accordance with all policies, rules and regulations of Volunteer County.
The person whose name appears on the card may be held personally liable for any unauthorized purchases made with the card, including purchases exceeding the purchasing limits.
Single purchases shall not exceed One Thousand Dollars ($1,000.00). Monthly purchasing card total purchases shall not exceed $ per card and $ per department.
Each county official or department head will be responsible for ensuring that the purchasing limit is not exceeded in any one month, or for any single purchase, with respect to all purchases using purchasing cards issued to the official or department head and to any employees of that office or department.
All purchases will be reconciled monthly by the person whose name appears on the card. Monthly reconciliations for all cards issued to the office or department, with the appropriate county official or department head’s signature, will be submitted monthly to the Purchasing Agent.
The Volunteer County Purchasing Agent shall adopt such rules and regulations as the Purchasing Agent deems necessary to implement this Policy.
Purchasing cards which are used in any manner inconsistent with this Policy are subject to immediate revocation by the Volunteer County Purchasing Agent.
[EXHIBIT A to Resolution]
VOLUNTEER COUNTY PURCHASING CARD PROGRAM
As part of your employment with Volunteer County, you are being entrused with a purchasing card to enable you to make purchases on behalf of Volunteer County. You are authorized to use this card ONLY upon the terms and conditions stated below. Sign this agreement only after reading and
agreeing to each of the numbered statements below.
1 – This card is issued in my name, and I am the only person authorized to use this card. I will not allow anyone else to use the card without written
authorization from .
2 – I understand that I will be making financial commitments on behalf of Volunteer County and I will strive to obtain the best value for Volunteer County.
3 – I have read and will follow the Purchasing Card Policy for Volunteer County.
4 – Under no circumstances will I allow this card to be used to make personal purchases, either for myself or others. I understand that personal purchases using this card may be considered misappropriation of Volunteer County funds. If this card is used to make personal purchases, I agree that I am financially responsible for payment of those charges and any fees related to the collection of those charges.
5 – This card is the property of ________________ and Volunteer County.
6 – If the card is lost or stolen, I will notify ____________________ immediately by telephone at (___)________, and I will also notify
__________________________, the Volunteer County _____________, immediately by telephone at (___)________.
7 – I will obtain receipts and maintain detailed information for each card transaction. It is my responsibility to match receipts to each transaction.
8 – I will receive a monthly statement reporting all purchasing activity with the card during the statement period. I will review the statement for accuracy and sign the statement to certify that all charges are appropriate and in conformance with Volunteer County policies and procedures. I will be responsible for resolving any discrepancies on the statement by contacting the merchant/supplier.
9 – I understand that I may be subject to disciplinary action, up to and including termination of my employment with Volunteer County, for any violation of this Agreement.
I HAVE READ AND UNDERSTAND THE FOREGOING, AND I AGREE TO THESE TERMS AND CONDITIONS.
Employee Name (print): Department:
Employee Signature: Date:
[EXHIBIT A to Resolution]
[RETAILER NAME AND ADDRESS]
Attention: Accounting Department
Re: Unauthorized purchasing cards
Please be advised that Volunteer County will not be responsible for payment of invoices for purchases made using purchasing cards issued in the name of Volunteer County without prior written authorization from this office. We are returning herewith [number] cards which were issued to employees of Volunteer County without proper authorization. If other cards have been issued without our written authorization, please deactivate those cards immediately.
We appreciate your cooperation in this matter. Should you have any questions, please contact the undersigned at (_____) _______________.
Director of Purchasing