PHOENIX UNION HIGH SCHOOL DISTRICT 210 Putting the

PHOENIX UNION HIGH SCHOOL DISTRICT #210 Putting the cart before the horse… Governing Board Approved: 9/3/15 After the Fact Procurements

What is an After the Fact Purchase? 2 An After the Fact purchase is an unauthorized commitment of District funds. An After the Fact procurement occurs when a school site or department orders or receives material, services or construction prior to a Purchase Order or Change Order being issued by the Purchasing Division.

So, what’s the big deal? 3 An After the Fact purchase is a violation of the Arizona Revised Statutes, Article 10 of the Arizona Administrative Code as well as the Phoenix Union High School District Governing Board policy. Each After the Fact also represents a potential audit exception for the District. Violations of these laws and policies can result in the individual or individuals responsible for the After the Fact purchase being subject to a criminal conviction and personal responsibility for payment of all costs associated with the purchase by the individual or managing supervisor. Violations may also result in employee discipline measures including termination of employment.

Article 10, Arizona Administrative Code 4 R 7 -2 -1006. Delegation of procurement authority A. The governing board may, in a public meeting held in conformity with A. R. S. Title 38, Article 3. 1, delegate procurement authority to a designee. Any delegation shall be accomplished by adopting a governing board policy for this purpose. B. Any delegation shall specify: 1. The title of the employee or employees of the school district to whom authority is delegated; 2. The activity or function authorized; 3. Any limits or restrictions on the exercise of the delegated authority, including the maximum total cost of any procurement; 4. Whether the authority may be further delegated; 5. The duration of the delegation; and 6. The conditions and procedures for revocation and modification of the delegation.

Phoenix Union’s Governing Board Policy DJE 5 “The Superintendent shall be responsible for all purchasing, contracting, competitive bidding, and receiving and processing of all bid protests, in accordance with the Arizona school district procurement rules, including A. A. C. R 7 -2 -1141 et seq. A contract shall not be awarded to an entity that does not verify employment eligibility of each employee through the E-verify program in compliance with A. R. S. 23 -214 subsection A. Each contract shall contain the warranties required by A. R. S. 41 -4401 relative to the E-verify requirements. The Superintendent shall prepare regulations to assure the District conforms to proper procedures and practices. ”

The Contract with Phoenix Union 6 The Purchase Order signed and issued by the Purchasing Division is the legal contract between the vendor and the District. The Purchase Order contains specific terms and conditions which protect the District and the vendor during and after the purchase. Separate vendor contracts, approved by the Phoenix Union Purchasing Division may also be included with the Purchase Order to constitute a contract.

!*@# I have an After the Fact! Now what? 7 After the identification of the ATF purchase, the individual will be required to fully complete and submit a “Problem Payment Worksheet” to Purchasing as well as enter a requisition for the material /service identifying the purchase as an After the Fact in the “General Description” field of the requisition. Purchasing will work with Budget and Student Activities to investigate the ATF for funding, coding issues, check for compliance to Procurement Rules and Board Policies and make a recommendation for disposition. At any time Purchasing may forward the paperwork to the Assistant Superintendent for Business and Finance for further review, and a recommendation for disposition. (ALL ATF’s that exceed $5, 000 will require review and approval from the Assistant Superintendent for Business and Finance)

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The Process for Payment 9 After the Problem Payment Worksheet has been completed and the required approvals for payment have been obtained, the Purchasing Division will perform the following steps: * Notification and corrective action with the employee responsible for the unauthorized commitment of District funds. * Notification to the vendor that the employee does not have authority to commit funds and the only way the District does business is through the utilization of purchase orders. * Forward to Accounts Payable to process the invoice for payment after gathering necessary signature approvals.

The Warning Process 10 To ensure the District is in compliance with all applicable State of Arizona laws and Phoenix Union Governing Board policies, the Superintendent’s Office, the Business Services Office and the Purchasing Division have implemented a three (3) warning process.

Warning #1 11 An After the Fact requisition is submitted. The Purchasing Division will notify the individual of their procurement violation and send a notice to the vendor advising them not to accept unauthorized orders from the District in the future. This first notice is for educational purposes.

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Warning #2 A second After the Fact requisition is submitted for processing by the same individual. The Purchasing Division notifies the individual of their second violation. The violator's direct supervisor and the Office of Business Services are also notified, and a notice will be sent to the vendor. This second notice should be used for possible disciplinary action by the direct supervisor of the employee responsible, along with further education and description of actions which will be taken upon the next occurrence. 13

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Warning #3 15 A third After the Fact requisition is submitted for processing by the same individual. The Purchasing Division notifies the individual of their third violation, as well as their supervisor, the Office of Business Services and the Superintendent's Office. A Governing Board Agenda Item is prepared to seek Board approval of the After the Fact procurement. This will require the individual and their supervisor to present to the Governing Board their determination of why the District should authorize payment of an unauthorized purchase. Upon Board approval, a purchase order will be issued. If the Board does not give approval, the After the Fact procurement may become the financial responsibility of the supervisor of the individual or the individual who authorized the improper purchase. This third notice may lead to required disciplinary action up to and including a recommendation for employment termination.

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Things to Remember 17 * Only the Superintendent and his/her designees (Assistant Superintendent for Business and Finance, and Purchasing Division) are authorized to commit district funds. * A Requisition IS NOT a Purchase Order. * There can be severe penalties for procurement violations. * An emergency procurement is for health, safety and welfare not to cover a lack of planning or to provide a convenient way to purchase. * Plan ahead. * If you do not have a Purchase Order in hand or at a minimum a valid Purchase Order number, DO NOT place an order for materials, services, or construction. If in doubt call the Purchasing Division for assistance.

Purchase Order Change/Increases 18 Sometimes existing purchase orders need to be changed or increased. All changes to purchase orders require an audit trail and must be documented and approved. Examples of changes include: Purchase order increases/decreases Account code changes Changes to specific line items or quantities Any change that modifies the $$ total of the purchase order must be submitted on a requisition form through the proper budget approvals. A change that does not affect the $$ total (quantities, sizes, colors, etc. ) may be submitted by email to the Purchasing Division but are not approved until a revised purchase order is issued.

Questions? Contact Information Don’t be afraid to ask. Purchasing Division Lila Mc. Cleery 602 -764 -1404 Jim Westmoreland 602 -764 -1403 Larry Larson 602 -764 -1402 Irma Hernandez 602 -764 -1415 19