- Real Estate
- Paris Flash
Addressing a concern raised a week ago by Mayor AJ Hashmi, the PEDC board on Tuesday specifically addressed the possibility someone could circumvent authorized spending levels by spreading purchases over several days.
The mayor raised the point during an Oct. 1 special called meeting of the Paris Economic Development Corporation that was devoted mostly to a proposal by board members Bruce Carr and Vicki Ballard of eight sections of a new “Policies and Procedures” manual.
A section labeled “Authorized Levels for Spending” recommended authorized spending per transaction be capped at $5,000 for the board chairperson; $2,000 for the executive director (down from $7,500); $1,500 for the assistant executive director; and $250 for the administrative assistant.
The mayor interrupted last week’s discussion to ask: “On the authorized levels of spending, $2,000 for the executive director, is this per day, per event, per year, or what?”
“Per transaction,” Carr replied.
“So, continuously, he can spend $2,000 every day for 20 days, for $40,000?” the mayor continued.
“You could, but I think that would be a bit irresponsible,” Carr said.
“I realize that, but when you’re making the rules, I just want to know if there’s a limit to it, because what’s the purpose of having it if there’s no cap?” the mayor said.
On Tuesday, at the PEDC’s regular October meeting, Carr proposed four more “Policies and Procedures” sections, including an “Operating Standards” section that addressed the mayor’s concern and also what happens if a credit card is used for an inappropriate expense.
Carr also went over three other new sections: Volunteer Recruitment, Changing Processes and Procedures, and Procurement of Services and Contracts
Here are the key points:
VOLUNTEER RECRUITMENT – The PEDC would benefit from the implementation of an index of different business owners/managers, retired people, and individuals of general interest, compiled into a roster to meet with site selectors and key decision makers. If more than one person is interested in a particular volunteer opportunity, those individuals could be rotated or possibly grouped together. Those meetings could be locally held at minimal cost to the organization. “Our goal should be what is best for our community. Let’s not leave anyone out that wants to be a part of helping us succeed.”
CHANGING PROCESSES AND PROCEDURES – All processes and procedures will remain in place and require adherence to until reviewed and changed by a majority vote of the PEDC board. Proposed changes must be submitted to the board in writing along with the justification for the change. Only after the board has affirmatively adopted the modified or proposed change may the modified process or procedure be used.
PROCUREMENT OF SERVICES AND CONTRACTS – The cost of purchasing items to operate the business, secure services and acquire tangible assets may vary significantly, thus the procurement process will vary depending upon the spending level:
When Carr completed his presentation, the board unanimously approved all 12 new Policies and Procedures brought so far — eight last week and four this week, and Clifford commended Carr and Ballard for their work.
The board also approved adding Clifford’s name onto the PEDC credit card account and deleting the credit card held by administrative assistant Shannon Jones. The board voted last week to allow only two credit cards — one for Executive Director Steve Gilbert and the other for Assistant Executive Assistant Shannon Barrentine. Adding Clifford’s name to the account will allow her access to the account.
In meetings to come, Carr and Ballard still have five more Policies and Procedures sections to present. They have not yet been briefed by the staff.
Carr said the new policies and procedures borrow heavily on practices that he and Ballard observed while visiting with some of the larger local firms.
Here were the key points of the first eight Policies and Procedures sections that Carr brought to the board:
CREDIT CARDS — Credit Cards have been used for “an array of different things,” but Carr said from now on it will be used mainly for travel and entertainment, not for purchases. Only two credit cards will be issued, to the executive director and assistant executive director. Credit card vouchers for travel and entertainment, along with abbreviated charge forms will be filed by month and readily available for audit. Any unauthorized charges must be repaid by the card holder.
AUTHORIZED SPENDING LEVELS — The executive director will have the authority to spend up to $2,000 per transaction, with the exception of travel, which will have a limit of $1,000. The $2,000 limit is a $5,500 reduction from his current authority to spend $7,500. The assistant executive director will have authority to spend $250, and the PEDC chairperson will have authority to spend $5,000. Any proposed spending over $5,000 will have to be authorized by the PEDC board. Annually reoccurring expenses identified and approved in the budget will not be subject to these authorization levels.
TRAVEL — Travel for which the PEDC is bearing the expense and involves more than one person will require pre-approval by a board member not traveling in the party. The PEDC will absorb all reasonable and normal travel expenses for those traveling. Any upgrades for airlines, hotels and car rental will be born by the traveler. Allowance for meals must fall within the IRS guidelines. If travel involves a day trip, meals will not be reimbursed unless the travel exceeds normal work hours.
ENTERTAINMENT — In conducting PEDC business, “it is customary to entertain prospects, site selectors, real estate developers, consultants and other associated with recruiting industry to a community,” Carr said. Additionally, from time to time dignitaries and company officials may visit the community to explore opportunities or wish to recognize local industrial development achievements. “The purpose of the event generally will dictate local participation.That said, care should be taken to limit local participation to those needed to assess the value of the prospect or move it forward, those that may have a unique background on the project’s scope, those intimately involved in the achievement, or those local dignitaries, officials and persons who form the face of the community.” The executive director, in consultation with the PEDC chairperson, will determine the participants. An entertainment expense form must be completed within five business days, and a board member not participating in the event must sign off on the expense if it exceeds $250. Whether spur-of-the-moment or advance-planned, care should be given to keeping expenses reasonable.
DELEGATION OF AUTHORITY — Levels of spending cannot be delegated on the organizational chart for the staff. In the absence of the executive director, the chairperson or their designee on the board may sign or authorize all documents or transactions under the authority delegate to the executive director. “Since we have prescribed levels of spending, and we have prescribed authorization levels, if someone is away, even if it’s for a day, you need to delegate those authorities, using the Delegation of Authority Form.”
DEVELOPING PROSPECT PROPOSALS – Recruiting industrial prospects and retaining existing industry “are the core of what the PEDC is tasked with accomplishing,” Carr said. “While time is not always the ally of the staff or the board, it is essential to maintain a process that provides expediency and maintains consistency and thoroughness yet stays within the community’s fiscal capability to compete.” In other words, some proposals are not in the community’s best interest to pursue. For those proposals worth the PEDC’s interest, the executive director should 1) notify the board members verbally or electronically of the prospect and circulate the form “Prospect Profile”; 2) Call a meeting of the board for authority (in executive session) to proceed with the proposal; 3) with consensus from the board, prepare a formal proposal and submit it to the client; 4) with the board, develop a policy for criteria and incentives.
AUDITING OPERATIONS — In addition to the audit conducted annually by an outside auditor, the chairperson has the authority to form a committee to do a compliance audit once or twice a year “to insure compliance with PEDC processes and procedures, and to provide guidance in the event the PEDC needs to redirect its actions, modify its process and procedures, to affirm that the organization is on a fiscally responsible path, and to bring board members closer to the mechanics of operating an EDC.”
PETTY CASH — The purpose of the petty cash fund should be to purchase minor incidental items imperative to doing daily business. The petty cash fund should hold $300. All expenditures using the fund should be well-documented. All receipts should be kept along with a purpose for each expense. Petty cash should not be used for civic organization dues, or other items of a personal matter.
By Charles Richards, eParisExtra