CORPORATE PURCHASING CARD SCHEME

Corporate Purchasing Cards have been in use at Norfolk County Council for nearly four years. These cards are Visa cards, provided by HSBC Bank and can be used with any supplier capable of accepting Visa. During this period several schools have been trialling the cards and we would now like to offer the scheme to all schools.

The aim of the purchasing card is to reduce transaction costs for low value purchases by reducing time spent on processing orders and invoices. It enables purchasers to pay for goods and services in a cost effective manner and is especially suitable for purchases, which involve petty cash or reimbursing a member of staff. The card has in-built controls with transaction and monthly limits which will be set by Headteachers/Chair of Governors, which can be subsequently changed if necessary.

Cardholders receive training before cards are used and are also provided with Procedures detailing how to use their cards as well as how to keep a Transaction Log and reconcile this with the HSBC statement each month. Norfolk County Council will pay HSBC on schools' behalf on a monthly basis and download costs to subjective code 4999. It is then the school's responsibility to recharge entries to the appropriate subjective analysis code and budget account code and to reclaim any VAT due, although some suppliers are VAT enabled and these costs will be downloaded nett of VAT.

If you would like to apply for a Purchasing Card please contact your Finance Support Officer.

Finance Leases
We have had a few incidences just lately of schools signing up for lease agreements without consulting the Local Authority beforehand. May I remind you that before a school enters into any financial arrangement of a leasing nature details must be forwarded to The Chief Accountant, Douglas Slade, Children's Services (Finance & ICT) to determine its nature. The agreement of The Chief Accountant must be obtained before any lease agreement is signed. This should be done irrespective of any advice given by the leasing company on the nature of the lease.

A lease can be an operating lease or a finance lease. It is vital the correct type of lease is used. Schools are not allowed to borrow without the express permission of the Secretary of State, which is rarely, if ever, given. A financial lease counts as borrowing and schools must not sign a finance lease. If you do sign a finance lease, apart from meeting the annual repayments due you will also suffer a reduction in devolved formula capital equal to the net present value of the payments due throughout the period of the lease.

Where a school has insufficient funds to purchase a fixed asset from a single year's budget share and the only option is to spread the cost over a number of years the Local Authority can offer financial assistance in the form of a loan scheme. This scheme, unlike external borrowing is permissible under the Local Management of Schools Scheme and enables the cost of purchase to be spread over a maximum of 5 years. This scheme is significantly cheaper than commercial leasing options.

Care should also be taken with telecomms and photocopier contracts to ensure that best value is achieved. Please see attached appendix from Legal Services about these contracts.

Appendix