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Consent-General Government # 11.
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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 2019-20 and approve changes to the County's Policy on Purchase Cards. (No general fund impact) (Rinde/Pistochini) |
| Recommended Action |
- Receive and file an annual report on purchase card transactions for fiscal year 2019-20; and
- Approve changes to the County's Policy on Purchase Cards.
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| Strategic Plan Goal(s) |
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In Support of All Goals |
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| 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 declined from 196 to 190. The total amount of spending made by purchase card declined by 14% year-over-year from $1.55M to $1.36M.
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 150 categories last fiscal year. The largest 25 reported categories represent approximately 73% of the total spend.
Changes in the County's Cal-Card Program
The Procurement Division assumed responsibility for Cal-Card program administration in late 2018. Since then, the Division has made a number of improvements to the program and continues to implement and propose programmatic changes based on best practices within the public procurement community. As part of this effort, the Procurement Division is proposing a set of changes to the County's Policy on Purchase Cards. The Policy changes will enable the Procurement Division to implement and maintain a significantly improved procedure. Together, these two documents implement the following:
- Define roles and expectations of all those involved in the Cal-Card Program
- Require all cardholders to attend annual training
- Establish an accountability system wherein a cardholder loses card privileges based the severity of a policy/procedure violation
- Cost recovery fee for the Procurement Division to recover program oversight costs
The Procurement Division proposes to implement these changes effective January 1, 2021 to provide time to educate the departments of the new requirements. However, implementation of the new cost recovery fee is proposed for July 1, 2021 to coincide with the new fiscal year. The annual fee is estimated to be approximately $250 per issued card and recover overhead costs associated with the program.
County Purchase Card Program Audit
The County's Division of Internal Audits issued an audit report in July 2020 reviewing the purchase card program during the period of July 2018 through June 2019. The report made a number of recommendations, which are incorporated within the policy revision and procedure rewrite. |
| 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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