Purchasing, Procurement and Contracting Policy

I. PURPOSE

The purpose of this policy is to establish procedures for carrying out purchasing, procurement and contracting functions of the charter school and to provide efficient management of public monies and ensure compliance with all applicable state and federal laws including requirements when using federal funds to make purchases under Minnesota’s special education program.

II. GENERAL STATEMENT OF POLICY

It is the policy of the Stride Academy (STRIDE) School board to utilize resources to the greatest benefit of our students’ education and to establish procedures for all expenditures made with charter school funds to ensure efficiency, economy, legal compliance, internal control, ethical behavior by all staff members, and fairness in dealing with vendors.

General Purchasing Procedures

1. Authorization: The STRIDE director, in conjunction with the board treasurer, are
responsible for overseeing the procurement process, including establishment of procedures, internal controls, quality assurance, methods of greatest economy, and compliance with all applicable laws. The official charter school expenditure budget (as adopted by the Board of Education) is authorization for the
director to make purchases within the budget under his/her control. To be valid, all contracts must be
approved by the school board. The school board may empower the director to enter into contracts that will be subsequently approved by the board.

2. Scope: Purchasing procedures apply to procurement of equipment, supplies, and services used to support the educational process. Expenditure of charter school funds may only be for the public purposes of the charter school and may not benefit an individual.

3. Administrative Approval: In order to provide efficient budget management, the director, in collaboration with the board treasurer, must approve each expenditure.

4. Monitor: The director will monitor and facilitate best practices and ensure best pricing.

5. Economy: Good business practice dictates that products will be purchased for the lowest price for acceptable quality. Lower prices can be achieved through researching best prices, cultivating business relationships, negotiating price contracts, buying in quantity, competitive quotation, or formal bid process.

6. Purchasing Methods: All STRIDE purchases must be made through methods authorized
by the Board of Education. Approved methods include purchase orders, purchasing card, internet sites from reputable companies with which the school does business, request for a check, reimbursement to employees upon presentation of receipts for school district purchases and imprest cash. Advanced payment will only be made when required by the vendor.

7. Purchasing Process: STRIDE payments for goods and services shall be reported to the school board for review no later than the next board meeting. The school board not only desires to have the opportunity to review purchases but wants no penalty or loss of discount to occur from making payment after the next board meeting. Purchasing card use and office supply web site purchases shall be reviewed by the school board at the meeting following payment. At no time shall any invoice remain unpaid by the school for more than 35 days to ensure prompt payment to the vendor and to avoid being cited in the annual audit.

a. Requesting Goods and Services:

i. Requisitions for purchase orders. The school has a written procedure for the process of generating a purchase order for goods or services.

ii. District purchasing card (credit card). The charter school is to have a written procedure for determining card holders, method of reconciliation of monthly statements, a plan for attaching of all receipts and the process for authorizing payment. Each cardholder is responsible for producing supporting documents that reconcile with the credit card bill. The supporting documents must be available for inspection by the director and the board of education as requested.

iii. Internet site. Purchase from approved vendors using the purchasing card. Office supplies can be purchased from vendors with which a data communication relationship is maintained and no purchase order is necessary. When goods are received, purchaser notifies director (or designee) and payment will be generated.

iv. Request for check. Services or supplies received and invoiced prior to initiating a purchase order may be paid by filling out a “request for check” form and getting director approval. Examples include attorneys, auditors, employee reimbursement for purchase of goods or mileage, and other contracted services where the total cost cannot be determined ahead of time.

v. Employee reimbursement. Employees may be reimbursed for school expenses using a “request for check” form by attaching receipts and getting the director’s approval. State sales tax cannot be reimbursed, so purchasing cards or purchase orders should be used whenever possible.

vi. Advance payment. From time-to-time it may become necessary to get an advance payment
for goods or services. Upon approval of the director, advance payment will be made for such things as extended field trips, conference travel by staff and/or for vendors who won’t accept a purchase order. All receipts, along with any unspent funds must be turned in upon completion.

b. Receiving/Return/Storing: The director or his/her designee, upon receipt of ordered goods, will make an inspection to insure accuracy of the order and condition off the STRIDE goods. The initialed and dated packing slip/invoice should be filed for matching with invoice for payment.

c. Invoice/Payment: Payment for goods and services will be made only after the receipt of the goods or services, with rare exceptions. MN Statute 471.425 requires payment within
35 days with exception for a negotiated shorter payment period between vendor and school. No company shall be paid late fees for payment within the 35 days.

d. Check Run/Emergency Purchase Orders/Emergency Payments: The business management company, or office personnel, generally prints checks for payment two times a month. Emergency purchase orders and/or emergency payments will be made only with the recommendation of the director and after a conversation with the business management firm or office personnel and verification that the need is an emergency.

e. Outstanding Purchase Orders and Year End Cleanup: Purchase orders remain unfilled and open until all items have been received and paid. Full year purchase orders (i.e., blanket POs for cell phone bills) and any unfilled purchase orders at June 30 of the fiscal year must be closed out and if necessary renewed with a different PO # for the new fiscal year. Authorization to make future purchases cannot extend beyond the end of the fiscal year.

Procedures for Purchases from $10,000 to $49,999 with non-federal money

A contract for supplies, materials, equipment or construction estimated to cost from $10,000 to $49,999 must be made by obtaining two (State Statute) or more competitive quotes or by sealed bid. Charter school contracts of this size must be in compliance with MN Statute 471.345. The director and the board treasurer must oversee this process.

Procedures for purchases $50,000 and over with non-federal money

A contract for supplies, materials, equipment or construction estimated to cost $50,000 and over must be solicited by sealed bid after a public notice period. Contracts of this size must be in compliance with MN Statute 471.345. The director and the board treasurer must oversee this process.
Procedures for using federal funds to purchase materials, products, or services under

Federal Special Education

A. Follow the eight steps as outlined above for General Purchasing Procedures. This will assist the school in following a free and open competitive process in securing those products or services. It will allow the school to properly document their purchasing activities and decisions. In addition, this policy will assist the school in following the special rules for particular kinds of purchases typically used under the federal special education program. The federal requirements for thee administrative areas are found in the Code of Federal Regulations (CFR) at 34 CFR 80.36 for governmental subrecipients and 34 CFR 74.40-48 for subrecipients that are non- profit organizations (e.g. subgrantees). The regulations are found at www.ed.gov/policy/fund/reg.

B. The Federal grant has permitted three Procurement Methods as follows:

a. Small purchases (34 CFR 80.36(d)(1)):

• May be used for procurement of $100,000 or less in the aggregate:
• Small purchases are usually made through the use of purchase orders for purchases of goods and written contracts for purchases of consultant vendor services;
• Proposals must be solicited from a three to five qualified sources (Federal Special Education Grant Requirements) consistent with the nature and requirements of the procurement;
• Competition is sought through oral or written price quotations; and
• For procurement of goods, catalogs or price lists may also be used.

b) Competitive Proposals (34 CFR 80.36(d)(3)):
• A procurement in excess of the small purchase threshold (more than $100,000) may not be inappropriately broken up into smaller components solely to qualify for the less complicated procedures followed under the “small purchases” approach.
• Contact MDE at (651) 582-8449 for guidance on competitive proposal procedures

c) Noncompetitive proposals/sole source procurement (34 CFR Part 80.36(d) (4)) Noncompetitive negotiations may be utilized only under very limited circumstances. The Special Education subgrantee must show that another method of procurement was infeasible because:
• The item or service was only available from a single source;
• A public emergency or condition requiring urgency existed which did not permit the use of competitive procurement; or
• Competition was determined to be inadequate after receiving proposals from numerous sources.
C. Contracting with small and minority firms and women’s business enterprises [34 CFR Part80.36 (e)]. Grantees and subgrantees will take all necessary affirmative steps to assure that small and minority firms and women’s business enterprises are used when possible. Affirmative steps include:

a. Placing qualified small and minority business and women’s business enterprises on solicitation lists;
b. Assuring that small and minority business and women’s business enterprises are solicited whenever they are potential sources;
c. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority business, and women’s business enterprises;
d. Establishing delivery schedules, where the requirements permits, which encourage participation by small
and minority business and women’s’ business enterprises; and
e. Using the services and assistance of the Small Business Administration, and the
Minority Business Development Agency of the Department of Commerce.

D. The Administrative Process. The administrative procedures shall include a system of contract administration that includes the following:

WRITTEN PROCUREMENT PROCEDURES
For procurements within the small purchase threshold ($100,000) the procurement procedure ensures that
the purchase of unnecessary or duplicate items is avoided; and a cost or price analysis will be performed for every proposed procurement action, including contract modifications, and documentation to that effect is maintained in the procurement file.

SELECTION PROCEDURES
The charter school selection procedures ensure that:

• Awards will be made to the bidder/offer or whose offer is responsive to the solicitation and is most advantageous to the Special Education subgrantee, price and other factors considered;
• Any and all offers may be rejected when it is in the Special Education subgrantee’s interest to do so;
• The Special Education subgrantee ensures that the award is only made to responsible contractors possessing the ability to perform successfully under the terms and conditions of the proposed
procurement;
• Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources; and
• The school will check references, contact current and prior clients, check resource organization web sites, etc.
• The school ensures that there are protest procedures in place to handle and resolve disputes relating to procurement and in all instances report such disputes to the State (34
CFR 80.36(b)(12)).

CONTRACT ADMINISTRATION PROCEDURES

If a charter school has contract administration procedures it will:
• Insure all purchase orders (and contracts) are signed by the authorized official(s) of the Special

Education subgrantee;
• Determine the adequacy of contractor performance (34 CFR 80.36(b)(2)); and Establish reasonable payment schedules defining amount and timing of funds to be paid (we recommend payment after services rendered).
• Insure items delivered and paid for are consistent with the purchase order and/or contract for the goods or services;
• Provide that timely payment to vendors occurs once the order is delivered, inspected, accepted, and payment authorized.

WRITTEN CONTRACTS WITH VENDORS WILL INCLUDE THE FOLLOWING:

• Provisions or conditions that allow for administrative, contractual or legal remedies in instances in which a contractor violates or breaches the contract term, and provisions which provides for such remedial actions as may be appropriate;
• Provisions for termination by the recipient, including the manner by which termination shall be effected and the basis for settlement; and
• Conditions under which the contact may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.

RECORDS TO BE MAINTAINED

According to 34 CFR 80.36(b) (9), as a Special Education school will maintain records to detail the significant history of a procurement. STRIDE’s records include, but are not limited to documentation on:

• The rationale for selecting the method of procurement used;
• The rationale for selecting/rejecting the contractor;
• The rationale for selecting the type of contract;
• The basis for the cost or price of a contract;
• The receipt of an adequate number of price or rate quotations from qualified sources; and
• Justification for lack of competition when competitive bids or offers are not obtained.