1. MOASBO Spring Conference Bill Sloan – Rockwood School District sloanwilliam@rockwood.k12.mo.us 636.733.2032 Director of Purchasing and Transportation

2.  What are the expectations for Purchasing?  Are you staffed to meet those expectations?  Do you know the BOE Purchasing Policies?  Does District staff know the BOE Purchasing Policies?  Who is making purchasing decisions?  Who are your vendors and how were they selected?  How Important is Service after the sale?  Do you know how much and what is being spent with your major vendors?  When is a vendor contract appropriate?

3.  District size is not a factor!  Organizational Structure Makes a Difference ◦ Centralized vs. Decentralized?  Centralized = a few people making buying decisions.  Decentralized = multiple people and departments making buying decisions.  Centralized – more control but may not be as responsive.  Decentralized – mode is to enforce BOE policies, a resource for others  Which is Best??

4.  Lack of Price Protection?  Commitment Contracts (one sided)  Exclusivity Arrangements – Good or Bad?  Automatic Renewals at end of term  Insurance and Indemnity Clauses  Termination Clauses ◦ Breach – Cure ◦ Poor Performance ◦ With or Without Cause  Independent Contractor  Others?

5.  Internal Controls – separation of functions  Purchasing – bidding and approval limits ◦ How many bids and at what $ threshold?  Who can be a vendor? ◦ Staff and their Relatives? ◦ BOE Members and the companies they work? ◦ District Residents?  Purchasing By and Solicitation of Staff ◦ Personal Gifts and Donations!  Consultants/ Employment Procedures (State Audit)  Contracts – who can sign?  Construction Contracts and Awards – when to bid ($) and advertise  Does your District have a position on: ◦ Coop Purchasing? ◦ Local Vendors?

6.  Establishes bidding requirements – ◦ Informal: Verbal, Telephone, Internet Bids, ◦ Formal: Written bids in response to Bid Solicitation (RFP)  Establishes purchasing methods ◦ Purchase Orders, P-cards, Supplies Reimbursements  Process for hiring consultants  Process for “Sole Source” Items  Increased Construction Bid requirements  PO Approval Levels

7.  Purchasing: Bid Limits and Exemptions clarified ◦ Required to add bid info as part of requisition notes or attachments ◦ Provide guidance to exempted departments (Self-funded)  Added a Convenience Purchase Option for Employee Reimbursement ◦ Limit $100 Max per month per employee  Utilizing Consultants under $7500 ◦ CFO and HR approval ◦ Consultant cannot be hired as an employee within 1 year of completing consulting work  Increased Amount of Sealed Construction Bids to (minimum) $15K

8.  Educate staff on policies and procedures  Ongoing Communication ◦ Seasonal Topics and Reminders ◦ Beginning School, Holidays, 2 nd Semester, Spring Break ◦ Staff Appreciation, Prom Season, Close of School Year  Monthly Topics  Training  Update Internal and External Websites

9.  Conduct periodic internal purchasing audits  Position an Internal Audit as a learning Opportunity – Both Ways!  Were bids obtained?  Was BOE approval obtained?  Were PO’s issued before invoices received?  Were items received?  Were prices and quantities consistent with bid?  Was an agreement signed by someone with Authority?  Retain records - 2 Years to 5 Years and Beyond!  Were Policies Followed?

10.  Monitor PO process  Provide bid and contract templates  Review New Vendors  Establish PO Terms and Conditions  Provide an independent perspective  Encourage Vendor Negotiations  Review vendor agreements – what is being agreed to?  Offer your services to other Departments

11.  P-cards are a great tool but must be closely managed!  Auditors – will look closely at P-Cards ◦ “a potential risk”  Establish card limits by job role ◦ Document changes to limits  Establish effective p-card rules – “Employee contract” ◦ Approvals consistent with BOE Policy  Enforce the rules consistently!  Monitor Employee movement – job change, leaving the District, moving to another school  Use Bank tools to manage transactions!  State Audit? – Who qualifies for a p-card?

12.  Can you determine how much and what is being spent by vendor?  Do requisition procedures generate reliable data?  Can you combine PO and P-card purchases by vendor?  Do you have a contract file?  Do others have access to this info?  Can bid info be identified for each purchase? ◦ Bid Award Phase: Document why a vendor was selected!  Blanket PO’s are easy but provide little data or transparency!

13.  Audits are beneficial – Attitude Sets the Tone!  Auditors focus on Processes and Routines  Auditors compare Activities to Policies ◦ Bidding Policies ◦ Bid Procedures and Awards ◦ BOE Approvals  Auditors look for risks – P-Card programs ◦ Fuel for District vehicles and Buses  Vendors that are Employees  Evergreen Contracts  Construction Contracts

14.  Establish a Good Working Relationship ◦ Meet in-person! ◦ Educate your Auditor.  Ask Questions and get clarification! ◦ P-Card Account Listing ◦ Establish Rules (and justification) for a P-Card ◦ Retain information for changes to P-Card limits  Change or Add BOE Policy and Regulations if necessary! ◦ Clear BOE Policy for Hiring Consultants  Retain Information for each purchase including: Bids, PO approvals, and Invoice Payments.

15.  “We did not find any resistance to our work at Rockwood.“  “I’m optimistic the matters we’ve identified in our audit report will be fixed,"  “…they agreed to implement 90 to 95 percent of the recommendations”, and “some, they already have been working on.“  “Rockwood would have been rated “Good” had it not been for the Construction Management issues.”

16.  Don’t allow short cuts when spending tax dollars! ◦ Itemized PO’s = vendor data  BOE Policies are your guide!  Educate staff on Policy  Ask for more from your vendors!  Don’t sign contracts unless there is a long term benefit for your District.  Don’t allow contract signatures from unauthorized staff!  Require Justification when adding new vendors! ◦ Avoid Vendors related to staff – Check Policy!  Keep vendor relations on a Professional Basis!

17.  Q and A!