A. 1. A purchase order is a standardized contract between the City of Somerton and a vendor or supplier for the procurement of equipment, supplies, services, materials, and the lease/purchase or rental of equipment. The city has no obligation for purchases made without an authorized purchase order despite any pattern of previous purchases from a vendor or supplier or based on prior purchasing history.
2. Department directors are responsible for maintaining budget and purchase integrity. No person will submit a purchase order for goods or service without sufficient approved funds available to meet the purchase obligations. This practice applies to all purchase orders regardless of the source of funding. Department directors are responsible for approving and/or disapproving budget requests within their areas consistent with overall guidelines established by the City Manager.
3. All purchase orders must be reviewed and approved by the appropriate operating department director or supervisor to determine that budgeted funds are available to cover the purchase. Operating departments are fully responsible for establishing internal controls to assure that sufficient funds exist within their budget to cover all purchases.
B. 1. General information. Except in emergencies, the Administrative Services Department will only allow a purchase order after receipt of an approved purchase requisition from a user department. The purchase order will be completed per the most recent approved procedure.
2. Blanket purchase orders. The use of blanket purchase orders must be very limited, or control over expenditures and economy in purchasing will decrease since these purchase orders do not encumber existing budgeted funds and therefore increase the risk of budget shortfalls.
a. Blanket purchase orders may be used for purchases that require multiple payments and/or deliveries for undetermined amounts such as automotive repair parts or when more than one department is sharing the costs of the goods or services.
b. Only Accounting may initiate blanket purchase orders. Departments requesting a blanket purchase orders must place the order in writing, and, absent the following terms, will not be approved:
i. A statement as to why a standard purchase order does not suffice;
ii. An explanation of the period covered; and
iii. A "not to exceed amount" to be purchased during the period.
3. Ratification of purchases not authorized by purchase order.
a. Conforming purchase orders will be accepted only on a proven emergency basis and must be submitted to the purchasing agent the next work day. Invoices received without valid purchase order should be returned to the vendor informing them to contact and collect from individual who placed the unauthorized order.
b. Accounts Payable shall be required to verify invoice dates against the date the purchase order was authorized prior to approving payment of a purchase order. All purchases not approved prior to the placement of the order will be returned to the department concerned.
4. Amendments to purchase orders. Employees will not add items to a purchase order once approved without the prior approval of the purchasing agent. Added items not approved in advance will be handled as outlined in this section above.
5. Failure to fill purchase order within 90 days. If a purchase order is not filled within 90 days of issuance without notification from the supplier, or if prior arrangements for specified delivery time have been made, that purchase order may be canceled. The Finance Department will discuss this with the requesting department prior to canceling an order.
6. Insufficient funds. If the account to which the purchase order applies lacks a sufficient balance to pay the funds necessary to complete the purchase, the order will be referred to the Administrative Services Director. If required the City Manager will review the proposed expenditure and if warranted notify the department director that he or she has the following courses of action he or she may take:
a. Withdraw the request;
b. Request a transfer of funds in budgeted accounts;
c. Request a budget supplement to cover cost of purchase order. Such a budget transfer of supplement funds must be fully explained by the department director and then placed on Council agenda for formal Council action.
(Res. 2008-011, passed 2-19-2008)