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CITY OF LOUISVILLE PURCHASING POLICIES SECTI N R U 1'. S E ERS A purchase order (P.O.) authorizes a vendor to release goods or services to the City and informs them that funds have been encumbered to pay for the goods or services. A purchase order becomes a binding contract when the order is completed and signed by an authorized representative of the City and the vendor demonstrates his acceptance of the purchase order through the initiation of some action to fill the order. The Finance Department shall be responsible for the completion and issuance of all purchase orders following the approval of the purchase requisition. The Finance Department shall email the completed purchase order to the requisition initiator. A standard purchase order is to be used for all purchases of $2,500 or more excluding the following areas. Capital improvement projects cannot be exempt. EXEMPT ITEMS • Council Approved Service Contracts; • Debt Service; • Ditch Assessment Charges; • Dues & Subscriptions; • Education Expenses; • Grants, Contributions, and Intergovernmental Agreement Obligations; • Insurance; • Investment Transactions; • Land Acquisition; • Lease Payments; • Maintenance and Support Licensing Agreements (associated with an approved contract); • Payroll (checks, taxes, and deductions); • Professional Services as defined; • Travel Expenses; • Utilities PURCHASE ORDER AMENDMENTS The Finance Department has the authority to pay an invoice that exceeds the purchase order by less than 5% or $2,500 (whichever is less). When the actual expenditure exceeds the purchase order amount by 5% or $2,500 (whichever is less), a second and complete approval process must be obtained via purchase requisition (for overages of $2,500 or more) or by manual approval on the check request (for overages of less than $2,500). 8