PURCHASING SERVICES 101

1. PURCHASING SERVICES 101 Ruth Hall Director Purchasing Services Twin Rivers USD Presented to the Board of Trustees August 28, 2012

2. EXPENDITURES BUDGET AND ACCOUNTING 101 • Service Agreements/Contracts • Board Policy 3312 & Administrative Regulation 3312 • $15,000 and above require Board Approval • Less than $15,000 must be approved by the appropriate level administrator as established in the current Resolution of the Board of Trustees which authorizes District signature (Resolution No. 293) • Purchase Requisitions / Purchase Orders • Board Policy 3300 • The Superintendent or designee shall develop and maintain effective purchasing procedures that are consistent with sound financial controls • The Superintendent or designee may purchase supplies, materials, apparatus, equipment, and services… • The Board shall review all transactions entered into by the Superintendent or designee every 60 days

3. Purchasing Services • Contract and E-rate Services • Purchasing Services • Printing and Mail Services • Warehouse Services

6. Centralized Purchasing • Ensures legal compliance • Prohibits conflict of interest • Ensures strong internal control policies and procedures • Staff becomes experts in their field • Standardization • Cost savings • Vendor relationships and partnerships • Contract Tracking

7. California Vendors At the meeting of July 24, 2012, the question was raised in regards to out of state vendors. Trustee Sandoval noted concern about the District’s use of out-of state vendors and the amount of money going out of state to these companies. • In review of the payments in question and the process that Purchasing Services provides in general to insure competitive pricing and vendor partnerships, the answer is as follows: • Out of the 165 payments listed in the July 24th Consent Agenda • 143 - Were in fact listed with a California address. • 8 - Companies have a presence in California but the corporate office receives the payments and that office is located out of state. (For example: HP has a location in Roseville, but their corporate office is located in Atlanta Georgia.) • 11 – Companies are Sole Source, Publishers, Educational or Software/Technical Corporations that have products that are not available from vendors in California. • 3 – Companies were in fact chosen based on their pricing. The vendors offered significantly lower pricing than the California Company that offered equal products.

8. PURCHASING AND CONTRACTING PROCEDURES • Leadership Handbook • http://intranet/binder/files/Purchasing_Warehouse_Printing_ldrshp_info.pdf • Who Is Responsible • Comparative Shopping • How To Make A Purchase • Forms • Procedures

9. Who is Responsible • The Board of Trustees Establishes a purchasing policy to insure that goods or services are purchased in a prompt, cost-effective, and legal manner. • The Superintendent and Administration Establishes direct purchasing procedures to insure that all purchases receive the proper review, approval or disapproval by the responsible program or site manager and the Director of Purchasing. • The Employee Identifies the need, initiates the request for goods or services, and obtains the approval of the responsible site or program manager. Under no condition is the employee allowed to commit district funds without an authorized purchase order. • Principal or Department Head Insures there are funds available, approves the request, and submits the requisition to the Network Executive if required or to Budget for budget review. • NetworksReview school site requests and verifies compliance. • Budget Services Verifies that the responsible program has adequate funds to make the purchase, and forwards the requisition to the Purchasing Services.

10. Who is Responsible • Purchasing Services Has the SOLE AUTHORITY to prepare and issue PURCHASE ORDERSfor public works, goods and services. Insures legality of all purchases. Acts as a clearinghouse for vendors and vendor negotiations. Coordinates all comparative bids and advertised bids.  Establishes purchasing standards and specifications. Operates the district warehouse.  Maintains an inventory control system for district furniture, equipment and property.  Disposes of surplus, scrap, or obsolete materials. • The Purchasing Director Approves the final PURCHASE ORDER. • Receiving Department Verifies the quantity of goods or services received and forwards receiving documents to Accounting. • The Accounting Services Pays the vendor after the materials, equipment or services are received and an invoice has been submitted by the vendor.

11. Comparative Shopping • COMPARATIVE SHOPPING • To ensure that the school district is obtaining materials and services at the most competitive price, state law requires “comparative shopping” before the purchase is made. The guidelines for comparative shopping vary according to the size of the purchase, ranging from informal price quotes to official, advertised requests for sealed bids. These guidelines are described as follows: • Informal QuotesPurchases from $1,000 to $5,000 require documentation of informal quotations from three separate sources. The originator may obtain the quotes, or the purchasing staff will do so prior to actual purchase. • Formal QuotesPurchases from $5,000 up to the bid limit (currently $81,000 for Services and materials, and $45,000 to $175,000 for CUPCCAA* Public Works), require three formal written quotes. The employee may obtain a formal quote that is written on vendor letterhead or on a Twin Rivers quotation f form and signed by an authorized employee of the vendor. The quotes are to be attached to the purchase requisition. If requested, the Purchasing Department will perform this task. Purchases for services should be accompanied by a Service Agreement Contract and submitted to the Purchasing Department for approval and processing. • Advertised BidsAll purchases that exceed the legal bid limits, (currently $81,000 for services and materials, and $175,000 for CUPCCAA* Public works), must go through the advertised bid procedure required by the State of California. The recommended award must then be approved by the Board of Trustees. District funds cannot be committed prior to the Board approval on purchases of this size. Advertised bids are handled by the Purchasing Department or Facilities for Public Works. The bid process may take six to eight weeks from the time of budget approval to the final authorization of the Board of Trustees.

12. Comparative Shopping • Sole Source Any purchase of materials or services that are available from only one source. This written documentation would take the place of the required formal quote/bid and will be obtained and approved by the Purchasing Department. *All Public Works Projects Must Go through Facilities and the Contract Services Department. “If all bids received are in excess of $175,000, the governing body of the public agency may, by adoption of a resolution by a 4/5 vote, award the contract at $187,500 or less, to the lowest responsible bidder, if it determines the cost estimate of the public agency was responsible.” State law regulates the bid process PCC Section 20111(a) and 22034(f)

13. How to Make a Purchase • HOW TO MAKE A PURCHASE • The employee can make a purchase by using the follow steps: • Employee • Asks purchasing for a vendor and price • Shops for additional prices- (If available) • Fills out purchase requisition form • Obtains signature of the site / program manager • Sends requisition by electronic or hard copy version to next requisition approver (hand carries purchase requisition through system for emergencies*) • Site Administrator / Program Manager • Insures the program budget can pay for the purchase • Assigns proper budget name and numbering • Approves purchase requisition and sends it to the District Office for Categorical and or Budget Approval • Categorical and or Budget Services • Checks budget and signatures • Verifies availability of Funds • Approves purchase requisition • Sends purchase requisition for any additional required signatures and then to Purchasing Services

14. How to Make a Purchase • Purchasing Services • Checks budget and signatures • Verifies prices • Does comparative shopping • Checks for compatibility with District Standards • Performs legal research • Selects qualified / reliable vendors • Assigns vendor number • Prepares Purchase Order • Sends copies of Purchase Order to proper offices • Forwards original to vendor • Receiving Department • Notes items received on Purchase Order receiving copy • Indicates partial or complete shipment • Signs and dates receiving copy • Sends packing slip / receiving document to Accounting Services • Accounting Services • Matches Purchase Order with vendor invoice and checks receiving copy to verify for payment • Issues warrant for the amount of purchase • * If you require assistance in obtaining a Purchase Order in an emergency, contact the Purchasing Department for assistance.

15. Federal, State, and Local Regulations California Education Code (CAEC) Public Contract Code (PCC) Civil Code (CC) Uniform Commercial Code (UCC) California Business and Professions Code (CBPC) Labor Code (LC) California Disabled Veterans Business Alliance (DVBE) County Office of Education (SCOE) Board Policy (BP) Administrative Regulations (AR)

16. TYPES OF AGREEMENTS WE USE • Service Agreement $15K and Less • Service Agreement Over $15K • SA Amendments • MOU’s – Memoranda of Understanding • Outside Contracts/Agreements generated by other parties • Purchase Requisition/Order • Purchase Order Change Form

17. STATE LAW REGULATES THE BIDDING PROCESS • PCC 20111: Competitive (Formal) Bidding Required for • Furnished, sold or leased equipment, materials, or supplies • Services, non construction or public works • Repairs, including maintenance • Threshold set by State Superintendent of Public Instruction, raised each January for inflation. • Currently $81,000 • PCC 22002: Public Projects • **ALL PUBLIC WORKS PROJECTS MUST GO THROUGH FACILITIES AND THE CONTRACT SERVICES DEPARTMENT • CUPCCAA – California Uniform Public Construction Cost Accounting Act • The Uniform Public Construction Cost Accounting Act (Act), enacted in 1983 under Public Contract Code Section 22000 et seq., allows local agencies to perform public project work of up to $ 45,000 with their own workforces if the agencies elect to follow the cost accounting procedures set forth in the Cost Accounting Policies and Procedures Manual by the California Uniform Construction Cost Accounting Commission. • CUPCCAA PROCEDURES http://www.sco.ca.gov/ard_cuccac.html

18. Sole SourcePerishablesArchitectural, Engineering, MechanicalConstruction - CUPCCAAData Processing/TelecommunicationsEmergenciesPiggybackingBoard’s right to waive bid requirements if not advantageous to DistrictPCC 20111-20118.4 Exceptions & Variances

19. Formal Bidding Process • Use if over bid threshold or exception not applicable • Advertise as required by PCC • Provide consistent instructions and bid documents; provide amendments at least 72 hours before due date • Set due date for receipt of sealed bids – reject any that are late • Identify and adhere to selection criteria – cannot alter after set • Announce award to all participants (Notice of Intent – Starts clock for bid protests) • Prepare contract and process in District • Award & contract execution always contingent upon Board approval and availability of funds • Purchase Order to encumber funds • Keep complete and accurate records

20. Informal Bidding Process • May use if below threshold • No requirement to advertise • Solicit minimum of three quotes • Provide identical scope/due date to each vendor • Fair and consistent evaluation and selection • Notify all participating vendors of selection • May still be contingent upon Board approval ($15,000 for TRUSD) • Maintain accurate and complete records

21. Oversight • Sacramento County Office of Education (SCOE) Oversight • QCC Financial Software • SACS Account Code Structure • 01-0000-0-5725-050-0000-7530-000-605 • Review of all Accounts Payable Batches • Questions any purchases not showing proper procedure

22. Oversight

23. Resources • Purchasing Department Webpage: • www.twinriversusd.org/depts/purchasing/purchasing • CES Department Webpage: • www.twinriversusd.org/deps/contracting_e-rate_services • Government Codes and Laws • www.leginfo.ca.gov

24. Any questions?