audits and governmental efficiency committee c/o city...

July 5, 2012

Honorable Dennis P. Zine, Chair

WENDY GREUEL

CONTROLLER

Audits and Governmental Efficiency Committee c/o City Clerk Room 395, City Hall

Dear Committee Chair and Members:

At its meeting of June 12, 2012, your Committee requested the Controller to report on the City's purchasing card program. Specifically, your Committee requested the following information:

a) Number of purchasing cards used Citywide b) Personnel who has access to the purchasing cards c) The annual cost to the City for the purchasing cards d) Tracking mechanisms to prevent waste, fraud, and abuse

The City's purchasing card program was established through the collaborative efforts of the Controller, the General Services Department (GSD), and the Office of Finance/Treasurer. The GSD, as the designated Purchasing Agent of the City, is responsible for the purchase of all materials, supplies and equipment required for any officer, board or employee of the City. The GSD is the primary City department responsible for monitoring compliance with the City procurement or purchasing guidelines and procedures. The City purchasing card program was established to create a more efficient, cost-effective method of paying low-value, non-inventory, non-capital and non-contracted items. While the program provides a more efficient payment mechanism, it does not release cardholders from compliance with the City's procurement or purchasing guidelines and procedures.

Presently, there are 1,096 open purchasing cards issued to City employees (Attachment A). City purchasing cards are issued only to employees whose duties and responsibilities require them to provide City staff with appropriate supplies to avoid disruption of City services. Qualified City employees must complete an application form (Attachment B) to obtain a purchasing card . City employees must also sign an acknowledgement form (Attachment C) that outlines cardholder responsibilities.

200 N. MA I N STREET, SU ITE 300, L OS ANGELES, CA 90012 • (213) 978-7200 • HT1P://CONTROLLER.LACITY.ORG

AN EQUAL EMPLOYMENT OPPORTUNITY- AFFIRMATIVE ACTION EMPLOYER

Audits and Governmental Eh:~,ency Committee July 5, 2012

The City, through the Office of Financerrreasurer, has a contract with US Bank for the City's purchasing card program. Under the contract, there is no annual fee associated with each purchasing card issued. The average total annual City purchase through the City's purchasing card program is approximately $4.7 million. Generally, purchases that could be processed through blanket purchase orders or petty cash vouchers are also eligible for purchase using the purchasing card.

The Controller administers the City's purchasing card program for Council-controlled Departments. The Controller and the City Departments work to ensure that abuse, waste, and fraudulent transactions do not occur. Each City department is required to designate a Department Purchasing Card Coordinator who is tasked with reviewing purchasing card payment record (PCPR) packages for completeness and notifying the Citywide Purchasing Card Administrator to deactivate purchasing cards as necessary. The Department Purchasing Card Coordinators also ensure that PCPR packages are submitted in a timely manner. Further, the Department Purchasing Card Coordinators are responsible for maintaining the PCPR packages for compliance audits by the Controller. There are currently 44 Department Purchasing Card Coordinators. Department supervisors ensure that the purchasing cards are used for City business purposes only. Department supervisors review, approve, and confirm all transactions as reported in the PCPR on a monthly basis. Each cardholder is responsible for ensuring that purchases are for City business usage and obtaining register receipts, sales slips, invoices and/or packing slips. Cardholders are also responsible for resolving disputes or billing errors directly with vendors and US Bank. Cardholders are responsible for notifying US Bank of lost or stolen cards.

The Controller has a Citywide Purchasing Card Administrator who audits purchasing card transactions on a daily and/or monthly basis. Periodic audits of purchasing card transactions are also conducted by the Controller under the Certification and Fiscal Monitoring Program.

Additionally, the Controller developed the Purchasing Card Program Cardholder Manual (Attachment D) that contains detailed policies and procedures on the use of purchasing cards. The manual provides a list of prohibited card usage and other information to provide direction and guidance to Departments on the use of purchasing cards.

The Controller uses several tracking mechanisms to prevent abuse, waste and fraudulent transactions. Each purchasing card is subject to the following standard limits:

• $5,000 per billing cycle <~~ $1,000 per single transaction ® 30 transactions per billing cycle • 1 0 transactions per day

In addition to the standard limits, each purchasing card is embedded with merchant category codes (MCC). Under the MCC system, purchases from the most common vendor types, such as office supply companies, are allowed while purchases from highrisk vendor types such as bars, liquor stores, hotels, motels are blocked or declined.

Audits and Governmental E1..~jency Committee July 5, 2012

Another tracking mechanism currently in place is the PCPR form (Attachment E) mentioned above. Each cardholder is required to submit a PCPR form that details each and every transaction within a billing period. Original receipts and supporting documentation must be attached to the PCPR form for audit purposes. All transactions are verified and reconciled by the cardholder through the PCPR form on a monthly basis.

Emergency Card Program

In addition to the City's purchasing card program, the Controller also established the emergency card program. This program created a more efficient method of purchasing items in extraordinary circumstances and provides a means for City Departments to continue to function during emergencies. The Controller developed an Emergency Card Program Manual (Attachment F) for this program.

Travel Card Program

The Controller administers a travel card program to address travel needs of certain City offices and departments. The travel card program, established in 2007, is limited and restricted to security personnel for the Mayor, certain members of Mayoral staff, certain staff members of the Fire Department and the Convention Center. The Controller developed "Travel Card Program Guidelines" (Attachment G) for this program.

Proprietary Departments and Neighborhood Council Purchasing Card Programs

The Department of Water and Power (DWP), the Los Angeles World Airports, the Port of Los Angeles and the Department of Neighborhood Empowerment all administer their own purchasing card programs. The Controller does not provide direct oversight over the programs but may conduct audits on these programs, and has done so in the past. The Controller conducted audits of the DWP purchasing card program in 2011 and the Neighborhood Council purchasing card program in 2010. The Controller provided a blueprint for stronger internal oversight of the purchasing card programs through these audits. Copies of the audits are available at the Controller's website.

Lastly, I would like to note that the 2003 Controller's audit of the City's purchasing card program found that a vigorous monitoring program and proper controls are in place. The 2003 audit recommended expanding the City's purchasing card program and increasing purchase card usage to achieve additional savings.

Sincerely,

I ' • ! I \A llc {; I 4 In 1 Lr 1.1 • r- ,, ,'{ (./\_j ~~, ' f,J \.."'-jL ,,,~, \_~

. I WEND rl GREUEL City CorHroller

Attachments

CITY OF LA - MCARD - L

ICJTY OF .LA

Confidential

J

# of Pcards

City of Los Angeles Procurement Cords

Prepared 06/20/12

Attachment A

Page 1 of 26

Confidential

#of Pcards


Prepared 06/20/12 Page 2 of 26

Confidential

# of Pcards



Confidential

#of Pcards

City of Los Angeles Procurement Cards


Confidential

# of Pcards



Confidential

#of Pcards



Confidential

# of Pcards


P1·epored 06/20/12 Page 9 of 26

Confidential

# of Pcards


Prepared 06/20/1 2 Page 10 of 26

Confidential

# of Pcards


Prepared 06/20/12 Page ·1 1 of 26

Confidential

# of Pcards



Confidential

#- of Pcards



OF LA- R&P

Confidential

# of Pcards



Confidential

#of Pcords


Prepared 06/20/ 12 Page 20 of 26

Confidential

# of Pcards


Prepared 06/20/12 Page 2·1 of 26

Confidential

#of Pcards



Confidential

#of Pcards

Ci1y of Los Angeles Procurement Cords


Confidential

# of Pcards



Confidential

It of Pcards



Total:

Confidential

# of Pcards

1096

Ci1y of Los Angeles Procurement Cards


CITY OF LOS ANGELES

Purchasing Card Application Attachment B

Mail complete Application and Employee Acknowledgement of Responsibilities to:

PURCHASING CARD ADMINISTRATION~ MAIL STOP 183 CONTROlLER'S OfFICE, CITY HAll EAST, ROOM 400

The Controller's Office is required to maintain a minimum level of security for purchasing cards and require that each cardholder personally pick up their credit card and present identification.

ochange D Delete/Close Last 4 digits of credit cord ~{Complete fields io be changed only)

When deleting/closing account. complete only Cardholder Nome and

Company Name:

Applicant's Name

CITY OF lOS ANGElES- ADMIN CORP ID 3586

Applicant's Required Information

Employee !D #

999-99-

Nome Line 2 CITY OF LOS ANGELES-ADMN

Dept Name Address Line 1

Address line 2

City

Email

Accounting Code: Ask your Acc!g Unit

Applicant's Signature:

(Work Location-Address)

F11nd No. Dept#

MS# Password (Mail Stop No.)

Work Phone

State CA Zip Code

APPR Acct Object

Supvr's

Facility Nome

AGENT 1586

last 4 digits

Date:

Print Supvr's Name Signature: Date:

Pcard Administrator Controls ...:. -- --------------""- -:>

Monthly Cycle Limit $5,000

Authorizations Per Day 10

MCC Group CLA, CLA2, CLA3

Hierarchy Level Levell

Single Purchase Limit

Transactions Per Cycle

Level2

Approved By: Monica Alvarez Signature: Citywide Pcard Administrator

Bank Usc Only Account#

Unit /\ssigned:

Signature Verified: Date: Initials:

Standard App Upclatecl 4/7/08

$1,000

30

Level3

lv\gmt:

Date:

Attachment C

City of los Angeles PURCHASING CARD EMPlOYEE

ACKNOWlEDGEMENT OF RESPONSIBliTIES

This document outlines the responsibilities I have as a holder of the City of Los Angeles Purchasing Card ("Card"). My signature indicates that I have read and understand these responsibilities, and further, that I agree to adhere to the guidelines established for the program contained in the City's Purchasing Card Procedures Manual.

I, agree to the following regarding my use of the Purchasing card:

1.

2.

3.

4.

5.

6.

7.

I understand that the Cily of Los Angeles Purchasing Card is intended to facilitate the purchase and payment of materials required for the conduct of City Business.

I understand that under no circumstances will I use the Card to make personal purchases, either for myself or for others.

Use of the Card not authorized within this manual can be considered misappropriation of City funds. This could result in (a) immediate and irrevocable forfeiture of the Card, (b) disciplinary action.

I understand that the Card must be surrendered upon termination of employment whether for retirement, voluntary separation, resignation or dismissaL Additionally, the Card must be surrendered upon transfer or promotion from one City department to another.

I agree to maintain the card with appropriate security whenever and wherever I may use the Card. If the Card is stolen or lost, I agree to immediately notify USBank and the City's Program Administrator using the steps outlined in the City's Purchasing Card ManuaL

I understand that when I follow the procedure as outlined in the City's Purchasing Card Manual, I relieve the City of Los Angeles and myself of liability for fraudulent use.

If I fail to abide by the lost or stolen card procedure as outlined in this procedure, I will be responsible for any charges made against my card.

The Card is issued in my name. I will not allow any other person to use my Card.

I understand that since the Card is the property of the City of Los Angeles, I am required to comply with internal control procedures designed to protect City assets. This may include being asked to produce the Card to validate its existence and account number and produce receipts and statements to audit its use.

Print Pcard Applicant's Name Signature

Print Supervisor's Name Signature

Updated 09/2009

8. I understand that I will receive a statement This statement will report all activity during the statement period. Since I am responsible for all charges on the Card (but not for payment), I will resolve any discrepancies by contacting either the merchant or the Bank and the Citywide Purchasing Card Administrator. I understand that I will be required to obtain a copy of the cash register receipt or packing slip and keep it until the monthly statement: for the credit card arrives, and then verify the receiptwto the statement, sign the statement, and have it approved by my supervisor before forwarding my credit card package to my Department's Accounting Unit.

9. I understand that all charges will be billed to and paid directly by the City of Los Angeles. I understand that the Bank cannot accept any payment from me directly. Therefore, any charges made against my cards, which are personal, will be billed to the City of Los Angeles and will be considered misappropriation of City funds.

10. I agree to charge only those purchases consistent with type of purchases authorized by my manager.

11. I understand that the Card is not provided to all employees. Assignment of the City's Purchasing Card is based on my understanding that I have a need to purchase material required for the conduct of City business. My card may be revoked based on change of assignment or location. I understand that the card is not an entitlement nor reflective of title or position.

12. I have been given a copy of the Purchasing Card Program Cardholder Manual and understand the requirements for the Card's use.

13. I agree that should I willfully violate the terms of this agreement and use the Card for personal use or gain, that I will reimburse the city of Los Angeles for all incurred charges and any fees related to the collection of those charges.

Date

Date

Attachment D

ITY OF Los ANGELES

ARDHOLDER ANUAL

Revised September 21, 2009

Table of Contents

Purchasing Card Program 1. Purpose 2. Program

2.1. Standard Card Umits 3. Responsibilities

3.1. Citywide Pcard Administrator 3.2. Dept Pcard Coordinator 3.3. Supervisor 3.4. Cardholder

4. Prohibited Card Usage 4.1 . Practices 4.2. Vendors 43. Products 4.4. Services

5. Allowable Card Usage 6. Applying for a Purchasing Card 7. Purchasing Card Pick Up 8. Purchasing Card Security and Storage 9. Points of Purchase

9. 1. Vendor's Location 9.2. Order's by Internet I Telephone I Fax I Mail 9.3. Reviewing Documentation

1 0. Deliveries 1 1. Declines 12. Requesting an Exception 1 3. Record Keeping 14. Statement Reconciliation with the PCPR 15. Canceling or Closing an Account 16. Audits 17. Violation Consequences 18. Incorrect Billings, Returns and Disputes 19. Lost or Stolen cards 20. Key Contacts

Forms

Revised 09/0 l/09

Purchasing Card Payment Record & Instructions Purchasing Card Application Acknowledgement of Responsibilities

Page 2 of 10

Purchasing Card Program

1" Purpose The Program was established to create a more efficient, cost-effective method of paying low-valued items costing less than one thousand dollars ($ LOOO). The Program is not intended to circumvent procurement or purchasing guidelines or procedures, and cannot be used for travel or travel~ related items.

2. Program The Purchasing Card Program with US Bank (Bank) was executed by Treasurer's Office and implemented by the Controller's Office. The Program is a credit-card based system to pay for low-value, non-inventory, non-capital and non-contracted items less than one thousand dollars ($1 ,000). Most purchases processed through blanket purchase orders or petty cash vouchers are eligible for purchase through the cord. This Handbook is developed to provide information on card program, policy and practice and to provide direction and guidance to departments when paying items with the card. The Manual is strictly enforced and cardholder usage is monitored through both the departments and Controller's Office by conducting daily and monthly audits.

Cards are embossed with the City of Los Angeles and an individual's name on the face of the card. The individual whose name appears on the card is the only individual authorized to use the card. Usage by any other individual is strictly prohibited.

The Controller's Office maintains the right to audit or revoke a purchasing card at any time. The individual to whom the card is issued is the only individual authorized to use the card. Repeated infractions may result in revocation of the purchasing card.

2.1. Standard Card Umits Card standard limits are issued with:

.. $5,000 per cycle "' $1,000 per single transaction .. 30 transactions per cycle ., 1 0 transactions per day

The Program allows departments to select greater restrictive card controls as long as the limits do not conflict with the standard limits. Departments may contact the Controller's Office to discuss exceptions to these controls.

Revised 09/0 l /09 Page 3 of 10

3. Responsibilities 3.1. Citywide Pcard Administrator

.. Daily management of pcard program " Audits transactions on a daily and/or monthly basis "' Provides summaries, pcard statements and/or reports to

Management. auditors and departments " Submit timely wire transfer to Bank " Acts as primary bank liaison " Communicates with Bank regarding online bank system, lost cards and

reporting issues " Resolves any pcard problems not resolved by Department's Pcard

Coordinator " Administers and monitors the City's sub-pcard programs " Reviews pcard exception requests ., Makes recommendations to DWP, LAWA and Harbor's pcard program ~~> Issues new cards

3.2. Department's Pcard Coordinator .. Facilitates department PV payment to Controller's Office " Provides the pcard statements to the cardholders .. Reviews pcard packages for completeness .. Maintains the department pcard packages " Notifies the City Pcard Administrator of closing accounts for

terminated, transferred staff or lost pcard privileges

3.3. Supervisor .. Ensures the pcard is used for City business purposes only ., Reviews Pcard packages for completeness ., Signs the Purchasing Card Payment Record " Resolves problems when procedures or policy are not followed ., Notifies the Department Pcard Coordinator upon termination of the

cardholder's employment or re-assignment

3.4. Cardholder '" Ensures the pcard is used for City business purposes only " Adheres to the Purchasing Card Program Cardholder Manual "' Maintains the pcard in a secure location ~~> Obtains all register receipts, sales slips, invoices, packing slips, etc. * Timely completion of the pcard reconciliation package e Attempts to resolve disputes or billing errors directly with the vendor

and the Bank * Notifies the Bank of lost or stolen cards * Must not accept cosh instead of a credit to the pcard " Notifies the Deportment Pcard Coordinator upon termination of

employment or re-assignment

Revised 09/01/09 Page 4 of 10

4. Prohibited Card Usage The Program strictly prohibits the following purchasing practices and items. This listing serves as a guideline and should not be construed as an all~

inclusive or all-exhaustive listing of prohibited card usages.

4.1. Practices 4.3. Products 4.4. Services

"' Personal .. Airline tickets "' Cor Wash Purchases " Alcoholic .. Cash Advance

.. Contracted beverages @ Services, items ® Carpeting including dry

"' Split charges ® Chemicals cleaning

"' Monthly .. Computer uniform I transactions hardware carpet over $5,000 .. Draperies " Entertainment

.. Any transaction "' Flowers .. Equipment of product. "' Gasoline, diesel rentals serv1ce or fuel .. Consultants vendor ., Jewelry ® Contributions considered .. Meals .. Cleaning inappropriate .. Medical drugs, .. On-site

.. Cash in lieu of supplies services credit to card " Uniforms " Rental

.. Sponsorships agreements 4.2. Vendors .. Electronic items ie: ® Service

.. Bars, Taverns laptops. palms. agreements

.. Night clubs fax machines, TVs. .. Telephone

.. Cocktail digital cameras. cal!s lounges DVD players .. Transportation

" Discotheque @ Capital " Tuition

" Hotels. motels Equipment reimbursement

" Liquor stores "' Computer .. Vehicle leases ., Travel agency Hardware ie: " Gas Stations

monitors, drives. " Post Office memory and web .. Payment by cameras "Paypal" or

" Computer other non~ Peripherals descriptive

payment service

Exceptions to the aforementioned may be granted by the Controller's Office with proper justification. Exception requests must be submiHed in writing.

5. Allowable Card Usage "' Trainings, seminars, workshops less than five hundred dollars ($500) "' Newspaper or magazine subscriptions less than one hundred dollars ($1 00) "' Office Depot, the only City contracted vendor allowed usage by the

program, except for equipment, furniture or electronic purchases.


6. Applying for a Purchasing Card Who should have a P~card? Employees whose duties and responsibilities require them to provide staff with appropriate supplies required by the unit in order to continue service(s) to departments and/or the public. To obtain a purchasing card, an individual needs to complete the Purchasing Card Application and the Acknowledgement Form. Acquire the employee's supervisor's signature on both forms and fo1ward to the Department P-card Coordinator for account allocation, review and submittal to the Citywide Purchasing Card Administrator. The Controller's Office will only accept wet signatories and will return incomplete or illegible applications to the applicant. The Citywide Pcard Administrator will inform the individual when the card is available for pick up.

7. Purchasing Card Pick Up The Controller's Office is required to maintain a mm1mum level of security for purchasing cards. The Controller's Office requires that each cardholder present identification and personally pick up their credit card for security reasons. The Citywide Purchasing Card Administrator informs the cardholder when the card is available for pick up: • Cardholder must attend a purchasing card orientation before receiving the

cord. • Cardholder accepts responsibility of the card policy as outlined in the Manual

by signing the "Purchasing Card Acknowledgment Form".

8. Purchasing Card Security and Storage Cardholders are responsible for purchasing card security and storage. A cord should be accessible only to the cardholder and always stored in a secure location.

9. Points of Purchases Transactions using the P-card are generally the same as using a personal credit card. Cardholders are required to: 9.1. Vendor's location

• Obtain an itemized original invoice or customer receipt, sign it and keep a copy for record keeping purposes. The original invoice or receipt should be attached to the Purchasing Card Payment Record (PCPR).

9.2. internet/Telephone/Fax/Mail Purchases "' Instruct the supplier to indicate cardholder's name, business location, and

delivery address on the invoice/packing slips. • Request the itemized invoice/receipt indicate payment by purchasing

card. .. Have vendor send invoice or receipt directly to cardholder. A facsimile or

emailed receipt/invoice is an acceptable original receipt. 9.3. Reviewing Documentation ...

0 At the workplace, the cardholder should have another individual review the receipts/invoices; verify cost and confirm receipt of goods by signing the invoice/receipt. (The signature should be that of a City employee from the same unit and at on equal or higher classification as the cardholder, and signature must be legible.)

.. Cardholder logs the purchase and the applicable data on the Pu1·chasing Card Poyment Record (PCPR).


1 0. Deliveries Certain purchases may be delivered to warehouses. It is the cardholder's responsibility to provide the vendor with complete delivery instructions and inform receiving employees of pending purchasing card deliveries.

When receiving ... .. Cardholder asks that the receipt be reviewed, merchandise verified, and

receipt signed by individual receiving the goods. " Cardholder Jogs the receipt and applicable data in the Purchasing Card

Payment Record (PCPR) in preparation for submitting documentation with the monthly statement.

11. Declines If a transaction is declined, please contact the Bank for the reason. Declines occur if the vendor type is not allowed on the purchasing card, insufficient funds or the transaction exceeds the allowed monetary or transaction limit. Contact the Deportment Pcard Coordinator for purchasing alternatives. If the item is an emergency and necessary for the department to continue services for the employees and/or public then an exception must requested in writing.

12. Requesting an Exception Prior to requesting an exception from the Controller's Office, please contact the Department Pcord Coordinator for purchasing options. Approvals are granted on a case-by-case basis and are dependant on the urgency and cost of the transaction. Email or fax the request to the Citywide Purchasing Card Administrator and send copies to the immediate supervisor and the Deportment Pcard Coordinator. Depending on the purchase, a formal memo and additional justification may be requested from the department. Each request must include the following: oa. Cardholder's nome "' Pcard's last 4 digits .. Cardholder's phone number ~~> Justification for the purchase ,. Description of item(s) to be purchased "' Purpose of the item 0 Cost of the total transaction including taxes and shipping " Budget or funding information ., Vendor name, website address and phone number

13. Record Keeping To ensure proper and appropriate use of the purchasing card, documentation to substantiate purchasing card transactions is required. All original documents and the PCPR are reconciled and sent to the Department Purchasing Card Coordinator/ Accounts Payable Division within l 0 business days of the closing cycle date. e Purchasing Card Payment Record (PCPR) detaillng, at a minimum, each

transaction by date. vendor name, item/description and total amount. The PCPR must be reconciled by the cardholder and approved by the immediate or assigned supervisor.

"' Include any supporting documentation to further substantiate or detail the purchase. such as a brochure, advertisement. copy of catalog, subscription, order form. etc

Revised 09/0 l /09 Page 7 of 10

.. Include any supporting documentation to further substantiate or detail a return of goods, such as a credit memo. shipping/packing slip showing return of merchandise to vendor, card holder dispute form, etc.

During a cardholder's absence the supervisor is responsible for reconciliation and completing the PCPR in a timely manner. The immediate or assigned supervisor will sign on behalf of the cardholder, and have another supervisor sign the supervisor's line. The PCPR requires two different people review and authorize that all documentation is attached and complete. If the immediate or_assigned supervisor is not available to review and approve the PCPR's, then the next person-in-charge is responsible for their submittal.

14. Statement Reconciliation and Payment Each month the Department Purchasing Card Coordinator sends monthly billing statements to cardholders with activity during the previous month. The Purchasing Card carries City liability, and not individual liability. The card in no way affects the cardholder's personal credit rating. However, a central billing statement is forwarded to the cardholder. Duplicate statements may be obtained from the Department Purchasing Card Coordinator. Duplicate receipts or sales drafts may be obtained by calling the bank or the vendor. The bank charges $5 per sales draft. When the cardholder receives the monthly statement, the following steps must be taken:

1. Reconcile statement with the PCPR and check all receipts for accuracy, and the cardholder's signature and a second verifying signature. (The second signature is verifying and confirming that purchases have been received by the City and are for City business. The second signature must be that of a City employee, from the same unit, at equal or higher classification as the cardholder. )

2. Sign and date the statement and PCPR. 3. Attach all receipts to the statement and PCPR. 4. All errors should be reported to the Bank. 5. Submit statement and backup to the approving official for review and

signature within 10 business days after the 4th of each month.

15. Canceling I Closing an Account Departments are responsible for informing the Citywide Purchasing Card Administrator of card cancellation due to the employee's death, disability, transfer, resignation, leave of absence or other circumstances of similar nature, and when the department recognizes that a need no longer exists for the purchasing card. To ensure timely and proper cancellaiion of cards, cardholders should email the Citywide Purchasing Card Administrator requesting cancellation as well as forwarding a completed application for cancellation and the cut-up pcard to the Controller's Office, attention Pu1·chasing Card Administrator.

16. Audits Daily audits are conducted by the Citywide Purchasing Card Administrator and periodically by the Certification and Fiscal Monitoring Program (CFMP). The audits are conducted to ensure that cardholders are using the card in

Revised 09/0 l /09 Poge 8 of 10

accordance with policy and procedure. Cardholders may receive a memo requesting copies of the receipt and an explanation for purchasing the items in question.

CFMP audits determine appropriate documentation, recordkeeping and approval. Auditors review the physical documents, determine if items are received, accepted and that all documentation is provided to the Department Purchasing Cord Coordinator.

Audil findings under either type of audit ore grounds for revoking or canceling cords. If a holder's card is revoked. then the individual may not request another card in the future.

17. Violation Consequences

The Controller's Office enforces pcard compliance by conducting random audits of cardholders, review of purchasing patterns and participating in fraud investigations. Continuous violation of pcard policy, purchases of inappropriate transactions. or from questionable vendor types may initiate an audit of the cardholder's pcard history and future transactions. The cardholder may receive a request from the Controller's Office for additional information and/or justification of a questionable transaction. If the audit finds that the transaction is inappropriate or is not in compliance with the pcard policy, the Controller's Office will suspend or may cancel the purchasing card for repeated offenses.

Findings may require the cardholder to reimburse the City for unauthorized or inappropriate transactions. Blatant violation may result in immediate card suspension or card cancellation without prior written notice. Fraudulent usage of the pcard may result in disciplinary action up to and including termination of employment, according to the City Policy, and at the department's discretion.

18. !ncorred Billings, Returns and Disputes The cardholder should attempt to resolve any incorrect billings, returns and disputes with the vendor as soon as possible.

To dispute erroneous charges card holders should take the following steps within 21 days ofthe dispute date:

<~> If the issue cannot be resolved with the vendor, then go into US Bank's Access Online to dispute transaction. Cardholder may print out a Dispute Form that can be faxed to the Bank a-t (70 1 ) 46 1 ~3463 or mail to the following address: US Bank National Assn, ND, c/o US Bancorp Service Center, Inc. PO Box 6344, Fargo, ND 58125

w Continue with Statement process . ., Cardholder is responsible for following up with dispute until resolved

Note: The Citywide Purchasing Card Administrator does not get involved with purchasing card disputes.

Returned items should have a receipt/invoice indicating items returned. "' Cardholder asks that receipt be reviewed, merchandise verified, and

receipt signed by another individual. Revised 09/0 I /09 Poge 9 of I 0

e Cardholder logs the receipt and applicable data in the Purchasing Card Payment Record (PCPR) in preparation for turning in documentation with monthly statement.

19. lost or Stolen Cards Lost or stolen cards should be reported immediately to the Bank, then submit the Lost/Stolen Card Notification Form to the Department's Coordinator, and the Citywide Purchasing Card Administrator.

Upon receipt the Bank will block usage of the cord. A new card will be ordered after the Citywide Purchasing Card Administrator has been contacted.

20. Key Contacts US Bank - Cardholder Support, for general account inquiries including Statements, Transactions, Balances, and Lost or Stolen cards:

(800) 344-5696

Questions about your department's purchasing cord procedures, reconciliation, usage or to apply for a Purchasing Card, contact the Department Purchasing Card Coordinator

Questions about exceptions or purchasing card policy, contact the Citywide Purchasing Card Administrator (213) 978-7364

Assistance with City contracted vendors call: Supplier Relations (213) 928-9500

Revised 09/0 l/09 Page 10 of 10

• cYcLE DA 1is · ·CARDHoUSERNAME:···-·· to

CARDACCNT #- J~st 4 digits only WORK NUMBER

City of Los Angeles PURCHASING CARD PAYMENT RECORD

DEPARTMENT & DIVISiON NAME

FAX NUMBER

of

INSTRUCTlONS: This form is used f~r reconciling the Purchasi~g Credit Card statement with the transaction stated within the billing period. Po'st the requested information immediately after a transaction. Attach the original receipts and additional documentation as needed for auditing purposes. The Controller's Office may request additional documentation or justification for purchasin.g. card ~~tivity ~t anytime:

:1

'2

:3

5

'6

7

8

9

:>10

: 11

·Date of • Vendor Name Purchase

Transaction Description, Purpose, Program Event (Attach additional documentation when nE3cessary)

ciate Material: Total cost: Received'

TOTAL ::t> rt

$0.00 ' rt OJ

I understand the card is property of the City and confirm all expenses ·I confirm receipt of goods, and all expenses are authorized for City-business usage. ! certify procured by the Purchasing Card are for City-business usage. I certify that that the proper receipts and documentation are attached verifying the materials purchased, the purchased items were made in conjunction with the Program policies and 'vendor name, costs, program purpose, receipts and required signatures. I am aware that .·

n ::r a (D

::I rt

procedures as stated in the Purchasing Card Program ManuaL I am aware any non-City business related purchases(s) or transaction (s) from a questionable vendor(s):i tr1

that any non-City business related purchase(s) or transaction (s) from a may subject the cardholder's card to suspension or revocation. Gross negligence or · :questionable vendor(s). may subject my card to suspension or revocation. I repeated offenses may subject the cardholder to disciplinary action by my City Department. :am aware that gross negligence or repeated offenses may be subject to ·My signature implies my cooperation in an audit or disciplinary action. disciplinary action by my City Department.

Verified and Reconciled by Cardholder · Date·· Approved and Confirmed by lin.medi<;ite Supervisor ·Date ·

Revised 1 0/1/07 PCPR

Attachment F

City of Los Angeles

MERGENCY

ARD ROGRAM ANUAL

Revised October 1, 2007

Table of Contents

Purchasing Card Program 1. Purpose 2. Program

2.1. Card Limits 3. Responsibilities

3.1. Controller Citywide Pcard Administrator 3.2. Department Pcard Coordinator 3.3. Department Supervisor 3.4. Department Cardholder

4. Prohibited Card Usage 5. Applying for an Emergency Card 6. Card Pick Up 7. Purchasing Card Security and Storage 8. Points of Purchase

8.1. Vendor's Location 8.2. Orders by Internet I Telephone I Fax I Mail 8.3. Reviewing Documentation

9. Deliveries 1 0. Declines 11. Record Keeping 12. Statement Reconciliation with the ECPR 13. Canceling or Closing an Account 14. Audits 15. Violation Consequences 16. Incorrect Billings, Returns and Disputes 17. Lost or Stolen Cards 18. Key Contacts

Forms e Dispute Form • Lost I Stolen Card Notification e Lost Documentation Form "' Emergency Card Payment Record & Instructions e Emergency Card Application 0 Emergency Card Acknowledgement of Responsibilities

Revised Oct 1, 2007 2

Emergency Card Program

1. Purpose The Emergency Card provides a method of permitting users to purchase any required supplies, equipment, clothing, food and accommodations as deemed appropriate by the Department's General Manager during a declared or activated emergency response situation per the Mayor's emergency memo description.

2. Program The Emergency Card Program was established to create a more efficient method of purchasing items in extraordinary circumstances. The Program is intended to streamline processes, including petty cash transactions and purchase orders and not intended to circumvent the procurement process. Instead it provides a means for departments to continue to function and perform as intended during an emergency and may not be used for entertainment, personal use, vehicle fuel and other inappropriate items, vendors or services.

Cards are embossed with the City of Los Angeles and an individual's name on the face of the card. The individual whose name appears on the card is the only individual authorized to use the card. Usage by any other individual is strictly prohibited. The Emergency card's expenditure limits are determined by the requesting Department. The transaction volume is standardized at ninety-nine per day and nine-hundred, ninety-nine per cycle.

The Controller's Office maintains the right to audit or revoke a purchasing card at any time.

2.1. Card limits Departments determine the monthly and single expenditure limits. The transaction limits are standardized as follows:

w Total Monthly Expenditure Provided by the Dept ® Single Transaction Limit Provided by the Dept e 999 Allowable Transactions per Cycle • 99 Allowable Transactions per Day

The Program allows Departments to select greater restrictive card controls as long as the limits do not conflict with the standard limits. Departments may contact the Controller's Office to discuss exceptions to these controls.

3. Responsibilities 3.1. Controller Citywide Pcard Administrator

0 Daily management of pcard program w Audits transactions on a daily and/or monthly basis e Provides summaries, pcard statements and/or reports to Management,

Auditors and Departments @ Submit timely wire transfer to Bank @ Acts as primary bank liaison


"' Communicates with Bank regarding online bank system, lost cards and reporting issues

., Resolves any pcard problems not resolved by Department's Pcard Coordinator

® Administers and monitors the City's sub-pcard programs c Reviews pcard exception requests "" Makes recommendations to DWP, LAWA and Harbor's pcard program "' Issues new cards

3.2. Department's Pcard Coordinator c Facilitates Department's PV payment to the Controller's Office c Provides the pcard statements to the cardholders e Reviews pcard packages for completeness " Maintains the Department's pcard packages "' Notifies the City Pcard Administrator of terminated staff, transferred staff or

lost pcard privileges

3.3. Department Supervisor • Ensures the pcard is used for City business purposes only c Reviews Pcard packages for completeness ., Signs the Purchasing Card Payment Record e Resolves problems when procedures or policy are not followed " Notifies the Department Pcard Coordinator upon termination of a

cardholder

3A. Department Cardholder ® Ensures the pcard is used for City business purposes only * Adheres to the Purchasing Card Program Cardholder Manual • Maintains the pcard in a secure location ® Obtains all register receipts, sales slips, invoices, packing slips, etc. e Ensures timely completion of the pcard reconciliation package c Attempts to resolve disputes or billing errors directly with the vendor and

the Bank * Notifies the Bank of lost or stolen cards • Should not accept cash in lieu of a credit to the pcard

4. Prohibited Card Usage The Emergency Card Program strictly prohibits the usage of the card for personal use, vehicle fuel, entertainment or non-City business. Please contact GSD about purchasing vehicle fuel during a declared or activated emergency response situation. The Program allows for Departments to setup temporary office accommodations to operate and perform City functions and may not be construed as an opportunity for maverick spending.


5. Applying for an Emergency Card Who should have a P-card? Employees whose duties and responsibilities require them to provide staff with appropriate supplies required by the unit in order to continue service(s) to Departments and/or the public. To obtain a purchasing card, an individual needs to complete the Emergency Card Application and the Acknowledgement Form. Acquire the appropriate signatures on both forms and forward to the Department's Pcard Coordinator for account allocation, review and submittal to the Citywide Purchasing Card Administrator. The Controller's Office will only accept wet signatures and will return incomplete or illegible applications to the applicant. The Citywide Pcard Administrator will inform the individual when the card is available for pick up.

6. Card Pick Up The Controller's Office is required to maintain a m1mmum level of security for purchasing cards. For security reasons, the Controller's Office requires that each cardholder personally pick up their credit card and present identification. The Citywide Purchasing Card Administrator informs the cardholder when the card is available for pick up: • Cardholder must attend a purchasing card orientation before receiving the

card. • Cardholder accepts responsibility of the card policy as outlined in the Manual

by signing the "Emergency Card Acknowledgment Form".

7. Purchasing Card Security and Storage Cardholders are responsible for purchasing card security and storage. A card should be accessible only to the cardholder and always stored in a secure location.

B. Points of Purchases Transactions using the Ecard are generally the same as using a personal credit card. Cardholders are required to: 8.1. Vendor's location

"' Obtain an original invoice or customer receipt, sign it and keep a copy for record keeping purposes. The original invoice or receipt will be attached to the Emergency Card Payment Record (ECPR).

8.2. Internet/Telephone/Fax/Mail Purchases a Cardholder instructs the supplier to indicate cardholder's name, business

location, and delivery address on the invoice/packing slips. a Invoice or receipt must indicate payment by purchasing card. • Have vendor send invoice or receipt directly to cardholder. A facsimile or

emailed receipt/invoice is an acceptable original receipt. 8.3. Reviewing Documentation

® At the workplace, the cardholder has another individual review the receipt/invoice; verify cost and receipt of items by initialing the original invoice/receipt as confirmation of receipt.

@ Cardholder logs the purchase and the applicable data on the Emergency Card Payment Record (ECPR).

Rev!sed Oct 1, 2007 5

9. Deliveries Certain purchases may be delivered to warehouses. It's the cardholder's responsibility to provide the vendor with complete delivery instructions and inform receiving employees of pending Ecard deliveries.

When receiving ... @ Cardholder asks that the receipt be reviewed, merchandise verified, and

receipt initialed by another individual. "' Cardholder logs the receipt and applicable data in the Emergency Card

Payment Record (ECPR) in preparation for submitting documentation with the monthly statement.

10.Dedines If a transaction is declined please contact the Bank for the reason. Declines occur if there are insufficient funds or the transaction exceeds the allowed monetary or transaction limit Contact the Citywide Pcard Administrator for purchasing alternatives.

11. Record Keeping To ensure proper and appropriate use of the Emergency card, documentation to substantiate transactions is required. A written statement describing the emergency occurrence, along with all original documents must be reconciled with the ECPR The packet is forwarded to the Departmental Purchasing Card Coordinator/Accounts Payable Division within 10 business days of the closing cycle date_ ® The Emergency Card Payment Record (ECPR) should minimally detail each

transaction by date, vendor name, item/description and total amount. The ECPR must be reconciled by the cardholder and approved by the immediate supervisor.

@ Original charge slips, invoices or receipts are required for each transaction. "" Include any supporting documentation to further substantiate or detail the

purchase, such as a brochure, advertisement, copy of catalog, subscription, order form, etc_

® Include any supporting documentation to further substantiate or detail a return of goods, such as a credit memo, shipping/packing slip showing return of merchandise to vendor, card holder dispute form, etc.

During a cardholder's absence the supervisor is responsible for reconciliation and completing the ECPR in a timely manner. The immediate supervisor will sign on behalf of the cardholder, and have another supervisor sign the supervisor's line. The ECPR requires two different people to review and authorize that all documentation is attached and complete. If the immediate supervisor is not available to review and approve the ECPRs, then the next person-in-charge is responsible for their submittal.

12.Statement Reconciliation and Payment Each month the Departmental Purchasing Card Coordinator sends monthly billing statements to cardholders with activity from the previous month" The Emergency Cards carry City liability and not individual liability. The card in no way affects the cardholder's persona! credit rating. The centra! billing statement is mailed to the


Controller's Office. Duplicate statements may be obtained from the Departmental Purchasing Card Coordinator. Duplicate receipts or sales drafts may be obtained by calling the bank or the vendor. The bank charges $5 per sales draft. When the cardholder receives the monthly statement, the following steps must be taken:

1. Reconcile the statement with the ECPR and check all receipts for accuracy. 2. Sign and date the statement and ECPR. 3. Attach all receipts to the statement and ECPR. 4. Report a II errors to the Bank. 5. Submit statement and backup to the approving official for review and signature

within 10 business days after the 4th of each month.

13.Canceling I Closing an Account Departments are responsible for informing the Citywide Purchasing Card Administrator of card cancellation due to the employee's death, disability, transfer, resignation, leave of absence or other circumstances of similar nature, and when the Department recognizes there no longer exists a need for the purchasing card. To ensure timely and proper cancellation of cards, cardholders should email the Citywide Purchasing Card Administrator requesting cancellation and forward the cutup card to the Controller's Office. Cards inactive for 18 months are automatically cancelled by the Bank.

14.Audits Daily audits are conducted by the Citywide Purchasing Card Administrator and quarterly by the Certification and Fiscal Monitoring Program (CFMP). The audits are conducted to ensure that cardholders are using the card in accordance with policy and procedure. Cardholders may receive a memo requesting copies of the receipt and an explanation for purchasing the items in question.

Quarterly audits determine appropriate documentation, recordkeeping and approval. Auditors review the physical documents, determine if items are received, accepted and that all documentation is provided to the Departmental Purchasing Card Coordinator.

Audit findings under either type of audit are grounds for revoking or canceling cards. If a cardholder's credit card is revoked, then the individual may not request another card in the future.

15. Violation Consequences The Controller's Office enforces emergency card compliance by conducting random audits of cardholders, review of purchasing patterns and participating in fraud investigations. Continuous violation of emergency card policy, purchases of inappropriate transactions, or questionable vendor types will initiate an audit of the cardholder's card history and future transactions. The cardholder will receive a request from the Controller's Office for additional information and/or justification of a questionable transaction. If we find the transaction inappropriate or an insufficient justification, then the cardholder will receive a written warning of noncompliance. The cardholder's transactions will continue to be monitored up to six months or more, or until Hie Controller's Office is satisfied that the cardholder


is in compliance with the emergency card program. The following is the order of violation consequences.

1. Written warning 2. Ecard suspension for 1 month 3. Card cancellation

Findings may require the cardholder to reimburse the City for unauthorized or inappropriate transactions. Blatant violation may result in immediate card suspension or card cancellation without prior written notice. Fraudulent usage of the emergency card may result in disciplinary action up to and including termination of employment, according to the City Policy, and at the Department's discretion.

16.1ncorrect Billings, Returns and Disputes The cardholder should attempt to resolve any incorrect billings, returns and disputes with the vendor before contacting the Citywide Purchasing Card Administrator.

To resolve an incorrect billing the cardholder should take the following steps: • If the issue cannot be resolved with the vendor, then complete a "Card

Holder Dispute Form", fax it to the Bank at (84 7) 931-8861 and send copies to Departmental and Citywide Purchasing Card Administrator.

• Call the Bank to ensure fax was received (800) 316-6056 ext. 7050. e Continue to process the Statement. e The cardholder is responsible for following up with dispute until resolved. o Contact the Citywide Purchasing Card Administrator for further help if

unresolved.

To dispute erroneous charges card holders should take the following steps: e Call the Bank for instructions within 90 days of the transaction post date. e Until the issue is resolved, the cardholder's Department is responsible for

payment. Note: The Citywide Purchasing Card Administrator does not get

involved with purchasing card disputes.

Returned items should have a receipt/invoice indicating items returned. • Cardholder asks that receipt be reviewed, merchandise verified, and

receipt initialed by another individual. eo Cardholder logs the receipt and applicable data in the Purchasing Card

Payment Record q::CPR) in preparation for turning in documentation with monthly statement.

17. Lost or Stolen Cards Lost or stolen cards should be reported immediately to the Bank, then submit the Lost/Stolen Card Notification Form to the Department's Coordinator, and the Citywide Purchasing Card Administrator.


Upon receipt, the Bank will block usage of the credit card account. A new card will be ordered automatically and mailed to the Citywide Purchasing Card Administrator for distribution.

18. Key Contacts JPMorgan Chase Bank- customer service, disputes or if lost or stolen, available 24 hours a day: (800) 316-6056

Questions about your Department's Purchasing Card Procedures, reconciliation, usage or to apply for a Purchasing Card, contact the Department Purchasing Card Coordinator

Questions about the Emergency Card Policy, contact the Citywide Purchasing Card Administrator (213) 978-7364

For assistance with City contracted vendors (contract items), call: Supplier Relations (213) 928-9500


Attachment G

CITY OF LOS ANGELES TRAVEL CARD

GUIDELINES

The Official City of Los Angeles Travel Card is for official city business only and can be used for the following:

m Purchase of airfare 0 Meals "' Hotel (Room and tax only) • Car Rental I Transpmiation ® Parking • Business Center Expenses

BACKGROUND:

The travel program of the City of Los Angeles proposes to expand its activities to include the use of travel cards. Over the years, Controller's Office has received numerous requests for a travel card. To try to accommodate these requests, Controller's Office decided to institute a pilot program where travel cards will be available to the security personnel of the Mayor, certain members of Mayor Staff, cetiain members of the Fire Department, and certain members of Convention Center under the policies and procedures set out below. The use of the Card will also be govemed by City of Los Angeles Travel policies and procedures as detailed in the Controller's Manual.

Consequently, the program will be evaluated and reviewed by the Controller's Office after six months, at which time the office will decide whether to move forward or curtail the Card's use.

Page I ol'4

POLICIES:

1. The travel card is the property ofthe City of Los Angeles. The card will be managed by Controller's Office and may be revoked by the same office at any time.

2. This travel card is for official business only. Improper or unauthorized use ofthe card may be subject to the following actions: reimbursement by the cardholder to City for any unauthorized charges, suspension of the card, administrative and/or disciplinary action.

3. Usage of the travel card for the purchase of airfare, meals, hotel and car rental charges will follow the travel rules as detailed under the Travel Policies and Procedures of the Controller's ManuaL

4. The Travel card may not be used to obtain cash advances.

5. The travel card may not be used for personal travel or in town expenses (even if business in nature). Use of the card should be strictly for out of town travel.

6. No personal charges are allowed.

7. Hosting is prohibited due to the card's dollar limitation.

8. Employees who knowingly misrepresent the facts conceming travel for official business or who file or sign any travel fonn which contains deliberate false statements given with the intent to defraud the City may be subject both to administrative and/or disciplinary action, including the possibility of termination and criminal action.

9. A Personal Expense Statement (PES) must be prepared immediately at the end of each travel and submitted to Controller's Office within 10 business dav.s. The Travel Policies and Procedures in the Controller's Manual specified preparation and submission of the PES within 30 calendar days. The rule will change with the use of the Trave I Card.

10. Controller's Office will administer and monitor the use of the card and regularly run a usage report to review for unnecessary and inappropriate charges.

PROCEDURES:

1. Cardholder is required to adhere to the present travel policies and procedures when usi.ng the card. Cardholder is responsible for maintaining receipts and preparing personal expense statements. Personal expense statements must be prepared and submitted to Controller's Office within 10 business days after the

!'age 2 of 4

date of travel. Non-submission or late submission of a personal expense statement may be a cause for card revocation.

2. In general, airfare purchases should be made with American Express One Travel. In most instances, hotel accommodation may also be made with airfare reservation. When calling American Express One Travel, it is necessary to give them your Travel Card number. No Travel Authority (TL) number is needed.

The Travel Card may be used to purchase airline tickets online if cardholder decides that this is the most expeditious way to travel. Tn most cases, buying both airline and hotel package is the most economical way.

3. Police Department will notify Controller's Office in advance if travel card will be used for overseas traveL Controller's Office will in turn notify the card company to open the card for overseas charges.

4. It is the responsibility of each department to review credit card charges and monthly statements to reduce unnecessary and inappropriate charges. Additionally, it is the department's responsibility to pay all charges in full before the deadline. ·

S. Depmiments are responsible for informing the Program Administrator of cardholder's death, disability, transfer, resignation, leave of absence or other circumstances of similar nature and when the Depmtment recognizes the Card is no longer needed hence, the Program Administrator may cancel the Card.

6. Lost or stolen cards should be reported immediately to the Bank, then to the Department's Coordinator, and subsequently to the Program Administrator.

STANDARD LIMITATIONS:

@ The Travel Card is a MasterCard issued by JP Morgan Chase Bank. The card should have sufficient credit to accommodate three (3) trips per month.

INSURANCES:

The following insurance and benefits are provided to the Travel Cardholder: 1. $500,000 worldwide automatic travel accident insurance 2. Lost luggage insurance up to $1,250.00 3. Travel assistance services when traveling 100 miles or more from home. For

services, call 1 ~800-MC-ASSIST.

DOCUMENTATION:

Preparation of a personal expense statement (PES) after each travel and submission of the same to the depatiment coordinator is required. Receipts for all charges should be submitted with the PES. The completed PES must then be submitted to the Controller's Office within 10 business days after the last day of travel.

KEY CONTACTS:

e JP Morgan Chase Bank- for customer service, disputes or if lost or stolen. Service is available 24 hours a day. Telephone: (800) 316-6056,

• American Express Travel One -for reservations and customer service Toll Free -1-800-548-5272

e Department's Travel Coordinator- for questions about Card procedures, reconciliation, usage or to apply for a Card.

• Card Administrator- for questions about policies Monica Alvarez- (213) 978-7364

l'age4of4

audits and governmental efficiency committee c/o city...

Documents