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City of Orono 7 0 5 6 <br /> Financial Management Policies <br /> Policy 4 - Expenditure and Purchasing <br /> 4-1. PURPOSE <br /> The City Council recognizes that public funds may only be spent if the expenditure meets a public <br /> purpose and the expenditure relates to the governmental purpose for which the City of Orono <br /> was created. The meaning of "public purpose" is constantly evolving. The Minnesota Supreme <br /> Court has followed a broad approach and has generally concluded that "public purpose" means <br /> an activity that meets ALL of the following standards: <br /> • The activity will primarily benefit the community as a body. <br /> • The activity is directly related to functions of government. <br /> • The activity does not have as its primary objective the benefit of a private interest <br /> whether profit or not-for-profit. <br /> This policy is intended to provide guidelines regarding which expenditures are for public purposes <br /> and authorized in accordance with the City's annual budget process, and which expenditures are <br /> not considered to fall within the public purpose definition and are therefore not allowed. There <br /> is a public benefit in ensuring high employee productivity and morale. <br /> 4-2. RESPONSIBILITY <br /> The City Administrator is the responsible authority overseeing all City expenditures and as such <br /> is the chief purchasing agent for the City. Responsibility for administering this Expenditure and <br /> Purchasing Policy has been delegated to the Finance Department. Further, all officers and <br /> employees authorized by their Department to make purchases for the benefit of their respective <br /> departments are responsible for complying with this policy and corresponding procedures. <br /> 4-3. POLICY <br /> Expenditures of public funds must comply with the public purpose standards defined above. <br /> For non-routine, non-budgeted operating expenditures over$10,000, council approval is needed <br /> before purchase. <br /> For budgeted routine operating expenditures, department heads or supervisors may submit <br /> order prior to council approval. Examples include, but are not limited to: utility bills, such as <br /> electricity or natural gas, automotive fuel, lift-station repairs, and water plant chemicals. <br /> When an invoice is received for the purchased good or service, it will be forwarded to the <br /> appropriate personnel for account coding and payment approval. All invoices need proper <br /> approval prior to submitting to Finance Department for processing of the payment. The Finance <br /> Department will verify and make sure invoices are coded correctly in the accounting system. <br /> 4-1 <br />