Purchasing Training January 2011

Training Overview Process Improvement & Change Department Responsibilities Purchasing Responsibilities Accounts Payable Responsibilities Why are we doing this: Auditing purposes – we have been doing things the wrong way for years a. Accounts payable should not know how many widgets you ordered or how many you received. Sustainability – purchasing is going paperless Efficiency – establishing a net 30 pay for vendors to look for discount opportunities. No longer will we be driving our invoices and requisitions all over town. The NaviLine way – when we completed the needs assesment last year we made a commitment to conduct business in a way that used NaviLine to its fullest function. This was one of the recommendations. Performance Measurement – we are requesting that all our vendors register with us via the website. Through this process we are able to capture additional data that will help us identify our current and prospective vendors, create a list to help departments shop, identify minority and women owned business, identify local vendors. Communication – purchasing is establishing a more proactive communication with our vendors.

Purchasing Process How We Do it Today How We Will Do it Tomorrow Buy Items without sourcing Buy items without approval Buy items without encumbering funds Risk of over commitment of funds to our suppliers Risk excessive spending of tax payer dollars Buy items by sourcing through quotations & intergovernmental agreements Buy items with approval prior to purchase through requisition process Buy items after funds have been encumbered in PO Eliminate risk of over commitment of funds Eliminate risk of excessive spending

Purchasing Workflow Purchasing/ Inventory GMBA (done daily) Requisition Entry Requisition Approval Buyer Processing P.O. Generation Encumber Receipt Processing Invoice Processing Scan to Optiview GMBA (done daily) Transaction Entry Edit group Update group Submit Journal Check Reports Disbursement Processing Create EALPrint Checks The Purchasing Department commitment to internal departments and our vendors – all purchase orders faxed or e-mailed Monday through Friday by 4 p.m. How are we going to do this? First we need to clean out the que. Therefore, purchasing will be closed Monday, January 31st through Friday, February 4th. During that time we will be processing all end of the year payments and any requisitions sent the week prior. Please do not send any new requisitions to purchasing after this time. This week also coincides with finance closing out 2010.

Requisition Level Approvals Amount Range Approval Level 1 Q 2009 – 2 Q 2010 Requisitions Value Average per Requisition Under $1,000 First Level 28,992 $4,973,755.93 $171.86 $1,000 - $4,999 Second Level 3,242 $7,058,380.67 $2,177.17 Over $5,000 Third Level 1,100 $82,651,428.70 $75,137.66 Total 33,334 $94,683,565.30 The figures here are generated over 6 quarters or 18 months. What this tells us is that we as a city are not using our procurement cards correctly and as a result are creating more requisitions and more work for ourselves than is necessary. Therefore, we are going to be advocating use of the procurement cards for the following reasons: Less requisition entry and purchase order creation Streamline payment to vendors The city can get rebates based on the volume used Purchasing and Finance commitment to the users – expanded use of the procurement card. Purchasing has proposed releasing the restrictions for procurement cards based on a three tier system. Hand out procurement card request form and let them know that they need to tell us who needs a card to shop. The other goal with procurement cards is to close the existing store accounts that the city has. This helps protect us from fraud. Give example of the snow blower, the stage, Carlos at Menards.

Department Responsibilities Requisition entry and approval Use of comment field to communicate Procurement cards for all purchases under $1,000 Quotes 2 verbal for $1,000 to $4,999 3 written for $5,000 to $19,999 Council approval and publicly bid for $20,000 + Sole Source – form available on intranet Receipt of goods and services Management of service contracts & agreements Change order requests We are providing a handout that gives full instructions. These instructions are available through the NaviLine help screen. If you need to know how to access that ask ITS or simply look for the question mark in the upper right hand corner in NaviLine. When you click on it the help for the screen you are in appears. Therefore, if you need help entering requisitions or quotes…go to that screen and simply click on the question mark. Need to stress that departments use the proper commodity codes when entering requisitions. A change in the approval process is that we have added a new level of approval for all technology purchases. Those will be routed to ITS to confirm that it is compatible with our server and that they have the knowledge and ability to provide service for the equipment that is being purchased. It is not to tell departments what to buy, rather a partnership and understanding that we need to work together. There is an option for NaviLine to send e-mails to individuals with approval rights that requisitions are ready for approval. Check with ITS if the individuals in your department would like these e-mails to remind them. Otherwise our recommendation for the staff who do requisition approval is to set designated times daily to approve requisitions. Again, our intent is to go paperless in the Purchasing Department. For all purposes, departments can as well as all quotes will be entered into NaviLine for the approvers to see. However, we understand that many departments have their own processes in place for routing requisitions. This training is simply to provide you the most effective and efficient way to purchase goods and services. We have the ability to provide you a purchase order in one day as long as the department provides the approval needed. Quotes will be added in OptiView by departments once purchase order is created For new vendors please make note in comments field and supply the remit to address

Purchasing Responsibilities Buyer Processing – Maggie Hernandez Daily printing of purchase orders (fax or e-mail) Verification of quotes Maintains vendor database Trains staff on entering requisitions Maintains tab sheets for bids Distributes bid documents to contractors and maintains plan holder list Internal Auditing

Purchasing Responsibilities Assistant Purchasing Director – Daina DeNye Assists departments with shopping Bids (required for all items over $20,000) State of Illinois Contract Prices Joint Purchasing Agreements E-Bridge for goods and services over $100,000 IAPPO and NIGP Maintains procurement cards Assists with preparation of RFPs, RFQs, RFIs Vendor Scorecard Blanket Purchase Orders (Fleet Services Only)

Purchasing Responsibilities Budget & Purchasing Officer – RuthAnne Hall 3rd level requisition approval for purchases over $5,000 City Council level approval for purchases over $20,000 Approval of change orders requiring council approval Identify open purchase orders opportunities Answer budget questions and assist with budget transfer requests

Accounts Payable Responsibilities Invoice payment – Debbie Bauer Matching invoice with receipt of purchase order Following up with departments regarding missing receipts. Scanning and filing – Julia Brown Creation of electronic filing system via OptiView

Questions? Requisition Entry – Maggie Hernandez x5605 Bids & P-Cards – Daina DeNye x5604 Budget - RuthAnne Hall x6104 OptiView – Sara O’Riley x6085 or Tanuja Daniels x5643 Account Access – Colleen Lavery x5636 Requisition Approval Notification – ITS x5641