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Layton City Policy

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7001 - Use of Purchase Orders

Purpose: Outline the requirements for using purchase orders and specific procedures to be followed.


Policy: Purchases, contracts, obligations, or other financial commitments, including orders of all tangible goods and services made on behalf of the City, will be within the City code section 2.52.  A purchase order must be completed prior to making any financial commitment in the amount of $3,,000.00 or more, except as may be provided herein.  'Completed' means the purchase order has been entered into the computer system, approved by all required persons, printed and signed by an employee authorized to sign by the Department Director.  No purchase order will be issued contrary to the purchasing ordinance.


Nothing in this policy authorizes an over expenditure of any budget, nor is it a means to circumvent any budgetary control or process.


            Caution: The purchasing ordinance requires that a purchase, contract or other commitment for supplies, materials, equipment, improvements, buildings and land where the amount is $3,000 or more shall not be awarded without informal competitive price quotations being solicited and received, except where formal competitive bidding is required in City code section 2.52.040.  A minimum of three quotations shall be obtained.  Informal quotation means that they can be written or oral but they must be recorded, kept on file and shall be completed on forms provided by the Finance Department or similar equivalent.


Building improvement projects of $40,000 or more and public works projects of $125,000 or more require formal competitive bidding described in City code section 2.52.040.  This is also a requirement of Utah State law.


            Note: Good judgment must be used in the selection of vendors.  Avoid conflicts of interest; i.e. buying from a friend or someone connected with the city.


Dollar Amount: Purchases that are $3,000 or more per order (aggregate total of an invoice) require a purchase order.  Purchases for less than this amount do not require a purchase order.  However, dividing a purchase into smaller amounts, just to avoid the purchase order requirement, is expressly prohibited because it circumvents the intended benefit of oversight and informal quotation requirements.  Department directors may choose to require purchase orders under $3,000 if they want to use the encumbrance function of the accounting system.


Form:  Purchase orders will be made and issued from the Accounting purchase order system.  No other method will be valid.  The Finance Department may approve a manual form for emergency situations.



Vendor Copy: A copy of the purchase order will be provided to any vendor who requires or requests one.  However, some vendors will not want the copy and may deliver the goods or services based on a verbal submission of the purchase order or purchase order number.  In these cases, it is okay not to send the vendor a copy.


            Caution:  Always submit the purchase order to the vendor if confirmation is needed that the vendor has received and processed the order, or when there are specific instructions for the purchase.


Receiving Copy: A receiving copy will be kept by the department until the goods or services are received.  This copy is forwarded to the Finance Department with the billing invoice acknowledging that the goods or services have been received and that payment can be made if everything else is in order.  If a department needs to approve a partial payment on a purchase order, a photocopy of the receiving copy and the invoice will be forwarded to the Finance Department.  It will be marked to show the items that can be paid, or must describe an amount or percent and reason for paying a partial payment.  The original receiving copy will be forwarded to the Finance Department when final payment is approved.


Operational Necessity Purchase Orders: When a purchase must be made because of an emergency situation; or when a purchase is needed during non-business hours, i.e. night, weekend, or holiday, then a purchase may be made without a purchase order being issued first.


Employees who purchase items under this section of the policy will identify themselves to the vendor by showing their employee ID card and telling the vendor that it is an emergency or operational necessity purchase.  The employee will ask the vendor to include the employee's name and division on the invoice.


The employee will be responsible to tell the division supervisor of the purchase on or before the next business day.  The supervisor is responsible to see that an operational necessity purchase order is issued that day.  The purchase order will include an explanation for using this type of purchase order.  One copy will be sent to the vendor.


Department Directors will monitor all operational necessity purchase orders to insure that they are used only when necessary and will take appropriate actions to remedy any misuse.  Operational necessity purchase orders should not be used just because someone failed to plan for their materials or supply needs.


Out of Town Travel, Conferences and Seminars:  Costs and purchases for travel related to out of town and local conferences, seminars or approved training programs do not require a purchase order.  The approval process will be done on the travel form provided for that purpose.  Items such as registration, airfare, hotel reservations, etc., can be made after the travel form has been approved.  Purchase orders may be used for the purpose of encumbering funds within the same fiscal year, but are not required.



Other Purchases Exempt from Purchase Orders: 

Dues, books, subscriptions, memberships to professional and civic organizations.

Postage or shipping costs on outbound items (includes federal express, etc.)

Reimbursement for small out of pocket expenses, including mileage

Insurance premiums, claims payments

Refunds of overpayment, or surety deposits

Vehicle licensing

Renewals of Annual service agreements

Utility services, i.e. electric, gas, water, telephone, sewer, etc.

 Any other purchases under $3,000

Changes to Purchase Orders After Issuance: No items will be added or changed on a purchase order after it has been signed by the authorized persons unless such change or addition is approved by the Department Director.  Employees who add items to purchase orders without following the approval process may be subject to disciplinary action.


Voiding Issued Purchase Orders: An issued purchase order may be cancelled or voided.  Department Directors will make sure that a letter is sent to the vendor notifying them of the cancellation.  Employees should be notified.  The department will notify the Finance Department, and the Finance Department will void or cancel the purchase order from the system.


Manual Purchase Orders: When it is not possible to issue purchase orders on the computer system, the Finance Director may allow them to be issued in some other fashion.  They will be signed manually by the authorized persons.  All purchase order policies apply to manual purchase orders.  Account coding will be entered on the form.


Manual purchase orders will be entered into the computer system as soon as the computer system is operating.


Electronic Signing: The automated system uses passwords to maintain security for the various authority levels for purchase order approval.  Password security insures that the approval (sign off) was actually done by the person with the authority.  Giving the password to others, or in any other way not reasonably protecting its use by others, may result in disciplinary action.


Department Directors (Level 1) will determine who may approve (sign off) purchase orders at the division level, set the upper dollar limit ($3,000), notify the Finance Department of who is authorized.  Department Directors or designee (Level 2) will approve at the department level for amounts above Level 1 and up to $9,999.  The Finance Director (Level 3) will approve at the City level for all purchases $10,000 and above.  The Finance Department will maintain a current file of all persons authorized to sign off on purchase orders.


Areas Not Covered in This Policy: If a situation arises that is not covered by this policy or that may be unclear, the Finance Director will give direction on the issue at hand as a temporary addition to this policy.  The Finance Director will then forward any temporary determination to the City Manager, and if approved, shall become an amendment to this policy.

Federal and State Pass-Through Grants:

Follow all provisions of 2CFR200:318-326, Federal Register


Vendor Quotation Form


Description of item or items being quoted: ____________________________________________

(Be specific so that the item purchased is the same as described here.)



  Vendor name: _______________________________________  Date__________________  


  Vendor location: ____________________________________________________________ 


  Vendor's representative making the quotation_____________________________________  


  Total amount quoted: $__________________                                                                              


  Quotation was: a) _______written                b) ______verbal            (attach written)    


  Name of employee receiving verbal quotation_____________________________________   




  Vendor name: ______________________________________ Date___________________    


  Vendor location: ____________________________________________________________   


  Vendor's representative making the quotation_____________________________________    


  Total amount quoted: $__________________________                                                              


  Quotation was: a) ________written              b) ________verbal          (attach written)   


Name of employee receiving verbal quotation_____________________________________   




  Vendor name: ____________________________________ Date_____________________    


  Vendor location: ____________________________________________________________   


  Vendor's representative making the quotation_____________________________________    


  Total amount quoted: $___________________________                                                            


  Quotation was: a) ______written                  b) ______verbal           (attach written)      

                                                                                                                                                              Name of employee receiving verbal quotation______________________________________     


            Purchases of $3000 or more must have at least 3 quotations.  Attach written quotes and other information to this form.  Use the back if needed.


Amended, 5/9/2007, Previous Policy 7001
Amended, 8/12/2015, Previous Policy 7001