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Regular-General Government # 27.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Receive and file an annual report on purchase card transactions for fiscal year 2018-19. (No general fund impact) (Rinde/Pistochini) |
| Recommended Action |
| Receive and file an annual report on purchase card transactions for fiscal year 2018-19. |
| Strategic Plan Goal(s) |
| Operational Excellence |
| Reason for Recommended Action/Background |
The purchase card program has been successfully utilized by the County since 1995 and is a recognized method of streamlining the purchase process for lower cost items. The County participates in the State of California's Cal-Card Program, adopted by the Board of Supervisors on March 25, 2003. The Purchase Card policy directs the Chief Financial Officer to file an annual report including the purchase card limits for each department head, elected official or equivalent; the total number of cards in use by department; the volume of transactions both in number and amount; and other information relative to the effectiveness of the purchase card program. Such report is submitted herein as Attachment A - Purchase Card Summary.
Cardholder Program History
Page 1 of the Summary shows the number of cardholders in the County and associated transactions by department during last fiscal year. The number of cardholders increased from 171 to 196. The total amount of spend made by purchase card declined by 2% year-over-year from $1.59M to $1.55M.
Transaction History by Merchant Category Code
Page 2 of the Summary summarizes the top 25 merchant categories the County spent money during last fiscal year. Each vendor that a Cal-Card user purchases from is assigned merchant category code by the vendor’s payment processor. The County spent money in 157 categories last fiscal year. The largest 25 reported categories represent approximately 72% of the total spend.
Transaction History by Location
The County is able to obtain location data by state of where the County spent money at through the purchase card program. Page 3 of the Summary document summarizes the spend by location. Over 63% was spent in California. Most of the transactions occurring in Washington are due to business conducted with Amazon. The amount of purchase card spend with Amazon is expected to decline during the next reporting period because the County has since migrated to a centralized pay-by-invoice Amazon Business account to enhance internal controls. Texas is the third largest spend location primarily reflecting purchases from airline companies headquartered in Texas.
Changes in the County's Cal-Card Program
In September 2018, the Department moved program administration to the Procurement Division. Since then, a number of actions occurred to improve purchase card administration:
- A number of expenses are redirected to other programs to provide enhanced spending data and/or require a pre-approval process
- An analytics system was activated to monitor for certain higher risk transactions
- A training program was developed and deployed
- Changed the annual certification process to identify those responsible for review assigned cardholder's activities
- Addressed and eliminated a backlog of unprocessed cardholder statements
County Purchase Card Program Audit
The County's Division of Internal Audits issued an audit report in May 2019 reviewing the purchase card program during the period of July 2016 through June 2018. The report made a number of recommendations that are being addressed, with expected completion of all recommendations by December 31, 2019.
Purchase Card Review Process
Attachment B summarizes how the purchase card program's monthly review process is structured. The purchase card program involves multiple people and departments to review cardholder activity and ensure the transactions are reasonable, necessary for County business and receive authorization for the expenses. |
| Collaborations (including Board advisory groups and external partner agencies) |
| None. |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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