The Basic Account Structure

1. Program Fund Report Code 3 - 5850-050-311 Function Object The Basic Account Structure

2. Expenditure Codes • FUND CODES The Source of $$$ State funds = 1 Local funds = 2 Federal funds = 3 Capital funds = 4 Child Nutrition funds = 5 Trust = 6 Community Schools = 7

3. Purpose CodesThe reason for the expense The purpose for the expenditure • 5000 - Instructional Programs • 6000 - System Wide Support • 7000 - Community Schools/CNP • 8000 - Non-Programmed Charges • 9000 - Capital Outlay

4. Purpose Codes • 5110- Regular Curricular Services • 5120- CTE Curricular Services • 5210- Children with Disabilities Curricular Services • 5500- Co-Curricular Services • 6110- Regular Curricular support and Development Services • 6201- Children with Disabilities Support and Development Services

5. PRC - Program Report Code What pot of money the funds are coming from?

6. Object CodesService or Item Obtained • Salaries = 100 series • Benefits = 200 series • Purchased services = 300 series • Supplies and Materials = 400 series • Equipment and Capital Outlay = 500 series

7. Object Codes • 311-Contract Services • 312-Workshop Expenses • 341-Telephone • 342-Postage • 411-Supplies and Materials • 412-State Textbooks • 414-Library Books • 418 Computer Software and Supplies • 461-Furniture and Equipment-Inventoried • 462-Computer Equipment-Inventoried • 541-Equipment-Capitalized (greater than $5000) • 542-Computer hardware-capitalized (greater than ($5000)

8. Why a Purchasing/Finance Manual? G.S. 115C-441 requires the finance officer to determine if a sufficient balance remains in the budget to pay the invoice when it is received, and that the finance officer certify this by signing a “pre-audit certificate” and put it on the contract, agreement, or purchase order before it can become an obligation of the governmental unit. Approval of the disbursement—The finance officer may approve the claim only if he/she determines the amount to be payable, the budget resolution includes an appropriation authorizing the expenditure and either (i) and encumbrance has been previously created for the transaction or (ii) an unencumbered balance remains in the appropriation sufficient to pay the amount to be disbursed. A bill, invoice or other claim may not be paid unless it has been approved by the finance officer, or under subsection (c) of this section, by the board of education.

9. Why a Purchasing/Finance Manual? • G.S. 115C-522(a) Grants Power to Contract for local boards of Education for purchasing • According to Session Law 2003-147, Section 10 (b), if during the fiscal year a local board of education is certified as E-Procurement compliant, it must use E-Procurement to expend at least 30% of its remaining unencumbered funds to purchase supplies, equipment, materials, computer software and other tangible personal property. In the first year after certification, the minimum E-Procurement purchase percentage rises to 35% of the above mentioned goods, with a State encouraged goal of 50%. In the second and following years, the mandatory minimum rises to 40%, with a State encouraged goal of 70%. • http://www.doa.state.nc.us/PandC/keyword.htm#C

10. Why a Purchasing/Finance Manual? • carrying out the purchasing process in the best interest of the Newton-Conover City Schools, the taxpayers of Catawba County, and according to N.C. General Statues, local Board of Education procedures, and recognized professional purchasing practices. • getting maximum benefits from the school system's monies for the students. • providing a climate of fair and open competition for all qualified vendors. • purchasing goods and services expediently and awarding bids to the lowest responsible bidder. The lowest responsive and responsible price allows consideration of terms and conditions, delivery schedules, types and degrees of service, inspection, transportation and delivery cost, warranties, etc. • assuring that bids are complied with in terms of price, quality, and service requirements.

11. General Provisions • Each school/department is responsible for: • (a) The selection of responsible vendors • (b) Issuance of all requisitions • (c) Searching for new products and services • (d) Preparing and/or providing assistance with preparation of specifications for products or equipment • (e) Obtaining bids for purchases exceeding $1,000 • (f) Evaluating bids to select the lowest responsible bidder • (g) Pre-auditing funds before requisition is prepared • (h) Obtaining repairs for equipment • (i) Confirming prices on goods/services with a cost of $500.00 and under $1,000, which do not have to be bid

12. General Provisions • In selecting vendors, the purchaser will consider: • (a) Quality • (b) Price • (c) Ability to deliver • (d) Warranties or guarantees • (e) Service • (f) Conflict of interest

13. General Provisions • In evaluating price quotations, the following will be considered: • (a) Price • (b) Quality of item offered • (c) General reputation and performance capabilities of bidder • (d) Suitability of items for intended use • (e) Conformity with intent of specifications • (f) Conformity with terms and conditions of the invitation to bid • (g) Conformity with mandatory site visit (if specified) • (h) Recommendation of the end user • (i) Future cost relative to sustainability

14. Procedures • The following apply only to the items not covered by a term contract…. • Purchases up to $999—price quotations are not required; however, competitive prices should be sought whenever possible.

15. Procedures • Purchases over $1,000 but less than $2,500 • Three quotes must be obtained, either written or telephone quotations. • Purchases of $2,500 but less than $5,000 • Written invitation to bid and written responses. Faxed quotations are acceptable.

16. Procedures • Purchases of $5000 but less than $90,000 • Written informal quotes • Purchases greater than $90,000 • Must be handled through a formal bid process The maximum applies to the total order rather than a line item cost.

17. Procedures • Equipment, materials, and supplies not covered by any existing contracts may be purchased locally after seeking competitive quotations according to purchasing procedures already identified. Bid dates and bid selection criteria must be fully documented. Items may not be divided to avoid this provision. • Generally, purchases requiring prepayment are not allowed because we are approving payment before the goods or services are received. Exception could be made on an individual basis if the goods/services are essential, no other source is available, and reputation of the company/person is beyond reproach. Another exception could involve travel, such as airline tickets. Good purchasing practices, however, require that invoices not be paid until the goods/services are received.

18. Procedures • Construction of repair work with third parties is governed by Chapter 143, Article 8 of the General Statutes. All such contracts are to be handled by the Finance and Maintenance Departments. • The technology director and finance director are responsible for maintaining information regarding telephones lines for school system locations. Additional telephone service requests and/or additional lines must be approved by the technology and finance director. Additional lines or additional services, upon approval, will be ordered as requested and the invoice will be sent to the school for payment each month.

19. Procedures • All transactions over $1,000 must be documented. This includes a record of all quotes received, written and verbal, and written justification for awarding to other than the low bidder. All purchasing files, regardless of dollar value must be maintained for five years. • The form used for written quotes should: • Clearly identify its purpose (ex. Request for quotes) • Identify the agency by name • Provide the FOB destination address, a clear description of the item needed, the return by date, the state’s terms and conditions (must clearly state shipping terms) • Provide a signature section for the company representative to sign confirming the price and certifying that the quotation was made competitively and without collusion • Provide a space for delivery time and all other specific requirements applicable to the purchase (for example, any additional cost for setup, additional yearly maintenance fees) • Allow at least 10 calendar days for the return unless this requirement is justifiably waived

20. Procedures • Lack of competition • Waiver of Competitive Bidding • Rejection of Bids • Award of Bids • Sole Source Page 23 and 24 • Also page 45 and 48 forms to use for phone quotes and written quotes

21. Contractual Services • Service needed clearly identified • Highest level of service for most reasonable cost • Requisition completed identifying services to be provided and the anticipated cost. Copy of signed contract should be attached. The contract should be very specific to the work to be performed. What, when, who, why should be included on the requisition, contract and follow through on the purchase order.

22. Contractual Services • The purchase order will state that the payment will not be made until the services have been complete and the appropriate invoice is received and approved for payment by the person who initiated the service request. • The invoice should be submitted after the service is provided and should state the following: description, date, and cost of the service and number of the purchase order. The invoice must be very descriptive as to what service was performed, when it was performed and any other information necessary for payment of the invoice. This is a federal requirement to have this level of detail for contract services. The contract can not say for services performed.

23. Contractual Services • A purchase order can be issued for a single occurrence or for multiple days or months of service through means of a blanket purchase; however, the actual invoice or invoices for regular or blanket purchase orders must state the dates of service, description of the service, and cost. (See the contract service form for guidance; however, this form is not required because an individual or company may have their own contract.) Page 50

24. Preparing Purchase Requisitions • Requisition to be completed by individual requesting items. (A paper requisition is attached for use by individual requesting needed supplies) p.51 • After approval from supervisor, the individual responsible for entering requisitions enters the on-line requisition. • After the on-line requisition is entered, a printed copy is sent to the purchasing director for approval. Attached should be any phone quotes or written quotes or other necessary information to show competitive bidding took place. Also, if contract services, a copy of the contract should be attached. • Once the purchasing director has approved, it will be forwarded to the finance director. The finance director will then approve the requisitions on-line. • No requisition will be approved if there is no budget amount in the account code or if the expenditure is greater than the budget amount in the account code. A message will be sent to the originator to re-code the requisition or to determine other funding sources.

25. Open Purchase Orders • As an internal control issue, effective July 1, 2007, all credit cards should be canceled. You will no longer be able to use credit cards as a means of procuring purchases. Open purchase orders will be used to obtain items from local vendors. • The dollar limit on open purchase orders is $750 except for maintenance which is $1,000. • Open purchase orders are not to be used solely for convenience.

26. Open Purchase Orders • Once the items have been picked up, the individual will sign and turn in the receipt along with a copy of the purchase order to the school treasurer or other individual responsible for approving open purchase orders. The school treasurer or other responsible individual will verify that the items purchased were appropriate items and also sign the receipt and then forward to the finance department immediately for payment. Two signatures will be required on the receipt. • The following credit card vendors have been set up to accept open purchase orders: • Harris Teeters • Sam’s Club (still working on setting this up) • Wal-mart • Lowe’s Home Improvement

27. Pressing Need/Emergency PO • We have put measures in place for emergency purchase orders. You can read the details on page 31 of the purchasing/finance manual

28. Receiving Procedures • In order for the finance department to determine an invoice to be payable, the receiving procedures are essential. • When purchase orders are issued, the yellow receiving copy of the purchase order will be sent to the appropriate school/department and the pink copy is kept in finance. • When complete orders are received, all relevant data on packages, cases, individual items, etc. should be matched against the yellow receiving copy of the purchase order, and quantities received should be verified. The receiver should then verify, stamp, sign and date the yellow copy. The yellow copy should be stapled to the vendor's invoice and sent to the Accounts Payable Department for payment processing. • If all items are not received and back-orders will not be accepted, the necessary adjustments should be made on the yellow copy. It should then be signed and forwarded to the Accounts Payable Department. Once the yellow copy has been forwarded to the Accounts Payable Department, back-orders should not be accepted.

29. Receiving Procedures • When partial orders are delivered to the schools/departments, the receiver should indicate by check marks ( ) which items are complete and by writing the quantity received in numerals by items which are incomplete. • The receiver should attach vendor invoice to the yellow receiving copy of the purchase order. • The receiver should make a copy of the yellow purchase order, write partial order on the copy, stamp, sign in the receiving space and forward the copy to the Accounts Payable Department. • Each time a partial shipment is received against the order, this process should be completed. • When the final shipment is received, the yellow copy should be marked complete, signed and forwarded to the Accounts Payable Department.

30. Fixed Assets • GASB 34 • What is a fixed asset? • $700 or useful life of 1 year or more • Example, tv may not be $700 but would be a fixed asset. Something we would report if stolen.

31. Fixed Assets • Finance department will complete acquisition form with as much data as possible from invoices and send to designated person at school/department. • The designated person where the fixed asset is located will complete the remaining portion of the form, attach the fixed asset tag and return the completed form to finance. • The fixed asset contact person will be responsible for notifying the finance department when assets are removed from inventory or transferred. • The technology department will be responsible for tagging and completing the fixed asset acquisition/retirement forms on all computer equipment. • Forms on page 43 and 44

32. School Property Disposal • Items that are declared surplus will be disposed of in three following methods: • Sold at a public auction • Sold through NC Department of Administration, Division of P and C surplus Property System • Delivered and sold to the local scrap metal buyer for the current market value scrap metal.

33. Staff Development Monies • A requisition should be submitted to the finance office for approval by the finance director and/or superintendent. The requisition should identify the vendor where food is to be obtained (grocery store, catering service, child nutrition, etc.), a description of the workshop activities, date of the activity and the cost of the refreshments. A copy of the agenda and number of attendees or participants must be attached to the requisition. • Every effort should be made to use state funds when available and you have 20 participants or more. With 20 participants or more, state funds can be used to pay $4.00 per person per day. • If there are fewer than 20 participants and/or cost for food exceeds $4 per participant local funds must be used.

34. Staff Development Monies • Meals should not be served for meetings that are less than four hours. If a meeting is four hours or longer, a meal can be served using the $4.00 allowable by state, and supplemented with local dollars to a maximum not to exceed the state rate used for lunches for travel reimbursement. (In order to use the $4.00 allowable by state, you must have at least 20 participants, otherwise local funds must be used.) • If the workshop is less than 4 hours refreshments can be served but should be limited to $2 per participant. • Every effort should be made to use the Child Nutrition Department, as they are typically more cost effective. • If any question exists about whether an activity is appropriate for use of staff development monies, finance director should be consulted for prior approval.

35. Staff Development Monies Excerpts from the NC Public Schools Travel Policies and Regulations • LODGING: Written authorization by an official designated by the local superintendent must be obtained in order to qualify for reimbursement for overnight stays. Supervisory personnel certifying the reimbursement request as necessary and proper must require documentation from the traveler to substantiate that the overnight lodging was necessary and accomplished. • Reimbursement - Specific dates of lodging must be listed and substantiated by a receipt from a commercial lodging establishment not to exceed $63.75 for in-state and $75.50 for out-of-state. • Excess - Excess lodging authorization must be obtained in advance from the local superintendent/or finance director. Excess lodging is allowed when the employee is in a high cost area and unable to secure lodging within the current allowance. Every attempt should be made to room together when possible to lower the individual rate per room.

36. Staff Development Monies Excerpts from the NC Public Schools Travel Policies and Regulations • Meals In-State Out of State • Breakfast 7.50 7.50 • Lunch 9.75 9.75 • Dinner 16.75 19.00

37. Staff Development Monies Excerpts from the NC Public Schools Travel Policies and Regulations • Daily travel (overnight) • Breakfast-depart prior to 6:00 am • Lunch-depart prior to 10:00 am • Dinner-return after 8:00 pm • Daily travel (not overnight) • Breakfast-depart 6:00 am and extend the work day by 2 hours • Lunch-not allowed if not overnight stay • Dinner-return after 8:00 pm and extend the work day by 3 hours • Must also involve a travel destination at least 35 miles from the employee’s regular assigned duty station.

38. Grant Applications • All grants submitted by departments are to be reviewed by the Finance Office prior to being submitted to the granting agency. Individual school grants exceeding $5,000 must be reviewed by the Finance Office prior to being submitted to the granting agency. Individual school grants exceeding $5,000 will be processed through the Finance Office; this includes reviewing and disbursing funds.

39. Stipend Request • This form is to be used when paying staff additional compensation for attending a workshop or for duties performed outside of the normal workday. A stipend cannot be paid if the employee is attending the workshop during the regular school day and is on payroll. Page 42