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City updates its purchasing practices

Updated: 06/08/2017

Last month, the City Council approved a revised purchasing policy and amended Shakopee city code to update the employee purchasing thresholds and strengthen the city's internal financial controls.

The revised purchasing policy identifies which staff positions are authorized to make purchases and at what threshold. These purchasers can purchase budgeted items up to a certain amount.

A major change to the policy is that all purchases now require supervisor approval. Under past practice, items under $5,000 needed to be accounted for in the budget but did not require supervisor approval. Thus, this change was made to strengthen internal controls and protect the city and its employees. As stewards of public funds, it is our responsibility to ensure purchases are made in the city’s best interests. The policy ensures staff is following both legal and best practices for city purchasing and that the organization has at least two sets of approvals for each purchase.

Cutting out the paper

Later this month, the city will go live with a new automated accounts payable system that will require invoices to be authenticated and approved by the appropriate personnel in conjunction with the revised purchasing policy. This system will eliminate the need for paper invoices as the city continues to move toward paperless accounting.

Weekly vendor payments

In coordination with the revised purchasing policy and the automated accounts payable process, the City Council also passed a resolution last month delegating authority to the city administrator to pay all claims. Bill lists are still presented to the council at each meeting but for informational purposes only.

The purpose behind this change is to improve our customer relations with vendors by ensuring more timely payments for goods and services. Previously, vendor payments were typically not mailed until nearly 30 days after an invoice was received. This simply was not good customer service.

By implementing the automated accounts payable system, the revised purchasing policy and releasing checks weekly, the city may have the opportunity to negotiate better pricing or receive additional discounts.