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HomeMy WebLinkAbout06.16.25 FCA AGENDA Brooklyn Center Financial Commission Monday, June 16, 2025 – 6:00 PM Council Commission Room (Main Level of City Hall) I. Call to Order II. Approval of Agenda III. Purchasing Policy Discussion i. Credit Card Use Policy ii. Plan for additional policy topics IV. Upcoming Meetings i. Monday, June 30, 2025: Budget Overview, Council Priorities ii. Monday, July 21, 2025: Audit Presentation, Capital Funds, Recreation, Golf iii. Monday, August 4, 2025: Central Garage, Public Works, Community Development iv. Thursday, August 14, 2025: Admin, HR, Finance, Debt Service, Technology Fund v. Monday, August 18, 2025: OCPHS, Police, Fire/Emergency Management V. Adjournment City of Brooklyn Center Minnesota Purchasing Policy Adopted: 5/1996 Updated: 7/2000, 8/2008, 4/25/2016, 12/2017, 8/2018, 4/2019, 10/2019 City of Brooklyn Center Purchasing Policy TABLE OF CONTENTS 1. PURPOSE 2. POLICY 3. PROCEDURES a. Authorization b. Federal Grants c. Invoices d. Accepting Delivery e. Payment of Bills f. Municipal Contracting Law g. Routine Transactions h. Splitting of Contracts i. Cooperative Purchasing Programs j. Bonds k. Capital Purchases l. Emergency Purchases m. Liquor Store n. Expense Reimbursement o. Budgetary Compliance p. General Office Supplies q. Technology Expenses r. Central Garage s. Billing Address t. Conflicts of Interest u. Sales Tax Exemptions v. Use of City Funds to Purchase Food, Beverages and Related Supplies 4. PURCHASE ORDERS APPENDIX A: AUTHORIZED EMPLOYEES APPENDIX B: PETTY CASH PROCEDURES APPENDIX C: CREDIT CARD POLICY PROCUREMENT CARD USE POLICY Original Adoption 09/19/2007 Revised 3/24/2014, 4/25/2016, 1/1/2018, 10/2019 1.0 PURCHASING AUTHORIZATION 1.1. The City of Brooklyn Center is authorized to make purchases by credit card under Minnesota Statute § 471.382. The use of credit cards for City business is an authorized payment method, and not a method of creating debt, therefore the card balance must be paid in full each month. To ensure this happens, the City utilizes a Procurement Card (P-Card) through US Bank that pays the balance due in full each month via electronic withdrawal from the City’s bank account. 1.2. All employees shall be responsible for complying with the directives specifically addressed in this policy as well as any directives in other City policies related to city P-Card use. 1.3. This policy supersedes any other existing policy reference to credit/purchasing cards. 2.0 AUTHORIZED ACCOUNT HOLDERS 2.1. The Finance Director has been designated as the Primary Point of Contact with the issuing Bank and is responsible for administering this policy. 2.2. The Finance Director has the authority to assign, remove, or modify users for the City purchasing card program. 2.3. Staff members who wish to obtain a city purchasing card to conduct city business shall submit a request in writing to the Finance Director. The request must articulate the business rationale for issuance of a purchasing card. The City shall not issue a P-Card merely for the personal convenience of an employee. 2.4. The City may issue Procurement Cards to staff in the following positions: 2.4.1. City Manager 2.4.2. Deputy City Manager 2.4.3. City Clerk 2.4.4. Department Directors 3.0 CARD SECURITY 3.1. City-issued purchasing cards are property of the City of Brooklyn Center 3.2. City-issued purchasing cards are considered an asset of the City and must be handled in such a manner as to protect the City’s financial interests. 3.3. Upon issuance of a P-Card, the cardholder will be required to complete a Purchasing Card User Agreement. This agreement will be kept in the employee’s personnel file. 3.3.1. In the event a replacement P-Card must be issued, a new Agreement will be completed and replace the existing one. 3.4. Purchasing cards must be kept in a secure location. The location must only be accessible to the cardholder. 3.4.1. The only person entitled to use the card is the person whose name appears on the face of the card 3.4.2. The card may not be lent to another person for any reason. 3.4.3. Card information must never be written down and distributed to another person for any reason. 3.4.4. The cardholder may use their card to make purchases on behalf of other City staff. 3.5. If the physical card is lost or stolen, the cardholder must contact the Finance Director immediately upon realizing the card is missing 3.5.1. The Finance Director will immediately contact the card issuer and request the card be inactivated and monitored for subsequent activity 3.5.2. Any pending transactions will be verified as to their validity. In the event there are fraudulent transactions, the Finance Director is authorized to file a claim with the card issuer to recoup any lost monies. 3.6. Suspected fraudulent transactions not related to a lost or stolen card must be reported to the Finance Director immediately upon discovery. The Finance Director will contact the card issuer and dispute the transactions. 4.0 CREDIT LIMITS 4.1. Credit limits on city P-Cards will be established individually based on an appropriate level of need not to exceed $5,000 4.2. Individual transaction purchase limits will be set at an amount not to exceed $1,000 4.3. The Finance Director is authorized to increase either of these limits on a temporary basis 4.3.1. When possible, requests to increase credit limits should be submitted in writing to the Finance Director for processing in advance of the purchase 5.0 CONDITIONS OF USE 5.1. Since use of the Purchasing Card is restricted to purchases for the City 5.1.1. All purchases must be for a public purpose 5.1.2. No personal use of the City Purchasing Card is permitted. Use of the Purchasing Card for personal purposes will result in disciplinary action as described in Section 8: Loss of Privileges 5.2. Each card holder will be responsible for ensuring that purchases made with their card comply with this policy and the City’s Purchasing Policy. Purchases that do not comply with this policy may become the personal responsibility of the card holder and/or purchaser. 5.3. All cardholders must follow all applicable City policies in regard to authorized purchases. 5.3.1. Authorized purchases include those purchases that cannot be completed through the City’s normal vendor payment process as outlined in the City’s Purchasing Policy 5.3.2. Amounts invoiced directly to the City must not be paid on the Purchasing Card 5.3.3. The card shall not be used for purchases from vendors where the City has an established charge account (also referred to as house accounts). Examples of this are Amazon, Cub Foods, Menards, and Home Depot. 5.4. The Purchasing Card shall not be used to obtain cash advances 5.5. All questions regarding eligible uses for the City Purchasing Card must be directed to the Finance Director or City Manager. 5.6. Sales and use tax requirements will be applied to all Purchasing Card transactions 5.6.1. Cardholders should ensure that adequate documentation is provided to ensure that sales tax is not charged for eligible tax-exempt purchases 5.6.2. Cardholders must ensure that when taxable items are purchased, the correct tax rate for the City is applied. 5.7. Any meals charged to a City purchasing card must include an explanation of the purpose of the meeting and a list of those in attendance 5.8. In any instance where a product or service purchased with a City issued credit card is returned or canceled the transaction must be refunded to the purchasing card account 6.0 DOCUMENTATION REQUIREMENTS 6.1. Appropriate documentation is required for all purchases to ensure compliance with this policy and the City’s Purchasing Policy. 6.2. The nature of goods and services received will determine what information must be included on the receipt. However, all receipts must contain basic information about the transaction 6.2.1. Vendor or Merchant Name 6.2.2. Transaction Date 6.2.3. Line-Item Information 6.2.4. Quantity of each item purchased 6.2.5. Description of each item purchased. 6.2.6. Unit Price for each unique item 6.2.7. Total Line Item Price 6.2.8. Total Receipt Amount 6.3. Documentation that does not contain sufficiently detailed information to accurately determine the nature and cost of the purchase is considered non-compliant. Receipts from vendors that only list the total charge are considered non-compliant with this policy. 6.4. Receipts or related documentation for returned items, refunded services, or any other credit to the cardholder’s account are required 6.5. Purchasing Card transactions will be made available to staff for processing on a monthly basis. 6.5.1. Staff will have approximately six (6) business days to complete the processing of the transaction. Failure to do so will be considered non-compliance with this policy. 7.0 MISSING RECEIPTS 7.1. In the event a receipt is lost, the cardholder must make an attempt to obtain a duplicate receipt from the vendor 7.2. If a duplicate receipt cannot be secured, an Affidavit of Lost Receipt must be completed by the cardholder and submitted in the same manner as other supporting documentation 7.2.1. The Affidavit of Lost Receipt must be completed in such a way as to provide the same required information listed in Section 6.2 7.2.2. An Affidavit of Lost Receipt does not relieve the cardholder of liability related to the eligibility or authorization to make the purchase 8.0 LOSS OF PRIVILEGES 8.1. All purchasing card transactions will be reviewed by the Finance Department for compliance with this policy. Additional documentation may be requested from a card user to ensure compliance with this policy and the City’s Purchasing Policy. 8.2. Failure to comply with the requirements of this policy will result in loss of purchasing card privileges 8.2.1. Any pattern of missing receipts, incomplete receipts, disputed transactions, or other examples of malfeasance in the use of the City’s Purchasing Card program is considered non-compliance with this policy 8.3. The minimum consequence of non-compliance with this policy will be cancellation of the cardholder’s account for sixty (60) days. Disciplinary action up to and including termination may occur if the card is improperly secured resulting in fraudulent transactions or is intentionally misused for personal benefit 9.0 CANCELLATION OF PURCHASING CARDS 9.1. Upon resignation, retirement, termination, leave of absence, or any other means of leaving employment, the employee must immediately surrender their purchasing card to the Finance Director or Equity and Human Resources Director 9.2. Prior to departure or termination of duties the Cardholder must provide adequate documentation for all outstanding expenditures on their card account 9.3. The City reserves the right to cancel any Purchasing Card at any time for any reason 10.0 NOT COVERED UNDER THIS POLICY 10.1. This policy does not restrict the use of personal credit cards for purchases/payments eligible for reimbursement from the City in accordance with the City’s Purchasing Policy and the City’s Personnel Policy Documentation for Purchases A copy of the invoice or receipt for payment must be included to verify the amount charged on the card. The receipt must identify all products or services purchased, shipping charges, and sales tax. A printed confirmation of an internet purchase may be sufficient to comply with this requirement. If an invoice is not immediately available, the invoice must be forwarded to the Finance department when it becomes available and another form of documentation must accompany the original charge. *Note: Use tax will be added to any item that would be subject to sales tax if purchased in Minnesota. Card users should ensure that the proper tax rate is used when a vendor collects sales tax for Minnesota, 6.875%. For purchases that are exempt from sales tax, the City is required to provide the vendor with a completed Minnesota Certificate of Exemption (ST3 Form). The City is not required to pay local sales tax, such as the Hennepin County Stadium sales tax of 0.15% or the Minneapolis Stadium sales tax of 0.5%. (The zip code 55430 includes property in both Brooklyn Center and Minneapolis, so some vendors may incorrectly charge the Minneapolis sales tax.) However, the City is required to pay any special sales tax, such as a hospitality tax charged on hotel or dining within another City or County. The budget account to which the purchase should be charged must accompany all documentation included with each statement. Staff may contact the Finance Department with questions on the appropriate account codes. Review and Payment of City Issued Credit Card Statements The Finance Department will periodically review the use of the City issued credit cards to determine if accounts can be established with vendors where repetitive purchases are made. If an account has been established with a vendor, all purchases should be made through that process, unless extenuating circumstances exist. Unauthorized Purchases/Noncompliance with Policy Personal use of the City issued credit card is prohibited. Each card holder will be responsible for ensuring that purchases made with their card comply with this policy and the City’s Purchasing Policy. Purchases that do not comply with this policy, or that are not approved by the City Council, may become the personal responsibility of the card holder and/or purchaser. Not covered under this policy