UW-Stout Administrative Procedure Office: Number: Subject: Effective: Last Revision: I.
Business & Financial Services 019 Purchasing Cardholder Manual August 16, 2007 January 22, 2014
Purpose This procedure provides guidelines for the use of the Purchasing Card via the attached University of Wisconsin-Stout Purchasing Cardholder Manual. The Purchasing Card is a tool for agency employees to make low-dollar purchases for official agency business needs. It allows an agency head to delegate the authority to purchase low-dollar items to delegated cardholders, enabling them to purchase supplies and other commodities without a purchase requisition prior to buying qualifying items. The VISA Purchasing Card payment system is an individual bill/central payment system. Cardholders receive a bi-weekly account statement for information and reconciliation purposes only. An electronic billing file is sent centrally to the accounting system, together with a summary of all charges with supporting detail. Accounting makes one payment to VISA on behalf of all cardholders. Expenditure transactions are processed through the state's or campus' accounting system and posted to the various accounting code combinations. In brief, a Purchasing Card is: Authority granted by the agency head to individual state employees For official state use only Authorized for purchases $1,500 and under Authorized for purchases greater than $1,500 on statewide contracts where indicated Authorized for use with only certain categories of merchants and commodities A Purchasing Card is NOT: A means to avoid appropriate procurement or payment procedures A card to access cash or credit For interagency or intra-agency use (except for retail purchases) A right of employment For personal use including reimbursable meal costs or other miscellaneous lodging expenses such as phone calls
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To be used for purchasing printing or photocopies To be used for computers and printers
References University of Wisconsin-Stout Purchasing Cardholder Manual (see Appendix)
III.
Procedures 1.
IV.
All purchasing cardholders will follow the guidelines issued in the University of Wisconsin-Stout Purchasing Cardholder Manual (see Appendix)
Records The Internal Auditor will be responsible for administering these procedures.
V.
Approvals
Brent Tilton Director of Procurement & Materials Management Administrative and Student Life Services
Date
Kim Schulte-Shoberg Director of Business and Financial Services Administrative and Student Life Services
Date
Phil Lyons Interim Vice Chancellor Administrative and Student Life Services
Date
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PURCHASING CARDHOLDER MANUAL Table of Contents Overview of Purchasing Card Program ................................................................. 1 Responsibility ........................................................................................................ 1 The Benefits of a Purchasing Card ....................................................................... 2 Obtaining a Purchasing Card ................................................................................ 2 Personal Liability and Credit Ratings .................................................................... 2 Guidelines for Card Use ........................................................................................ 2 Merchant Category Code Standards..................................................................... 3 General Instructions for Card Use......................................................................... 3 Statement Verification ........................................................................................... 4 Records Retention ................................................................................................ 5 Suppliers Who Do Not Accept Credit Cards ......................................................... 5 Returns, Credits and Disputed Items .................................................................... 5 Credit Card Security.............................................................................................. 5 Random Audits ..................................................................................................... 6 Consequences of Failure to Comply with Program Guidelines ............................. 6 Penalties ............................................................................................................... 7 Leaving the Agency or Transfer to Another Unit ................................................... 7 Key Contacts ........................................................................................................ 7 Agency Purchasing Card Program Administrator.................................................. 8 US Bank Cardholder Customer Service: 800/393-3526........................................ 8 Chart of Procurement Card Responsibilities ......................................................... 9
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Forms and Links: Purchasing Card Application (linked from Purchasing Card page) State Merchant Category Code Exclusion Standard UW Certificate of Exemption Purchasing Card Record (DOA-3585) Access Online Cardholder Reference Guide Welcome to Access Online (link to US Bank – you must register first) Department of Administration General Records Schedules (Purchasing and Procurement General Schedule)
Food Justification and Requisition Form Ineligible Vendors State Procurement Manual
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PURCHASING CARDHOLDER MANUAL Overview of Purchasing Card Program The Purchasing Card is a tool for agency employees to make low-dollar purchases for official agency business needs. It allows an agency head to delegate the authority to purchase low-dollar items directly to delegated cardholders, enabling them to purchase supplies faster and more easily than before. There is no need to create a purchase requisition prior to buying qualifying items. Instead, cardholders may purchase these low-dollar items with a VISA credit card issued in their name. The VISA Purchasing Card payment system is an individual bill/central payment system. Cardholders receive a bi-weekly account statement for information and reconciliation purposes only. An electronic billing file is sent centrally to the accounting system, together with a summary of all charges with supporting detail. Accounting makes one payment to VISA on behalf of all cardholders. Expenditure transactions are processed through the state's or campus's accounting system and posted to the various accounting code combinations. In brief, a Purchasing Card is: Authority granted by the agency head to individual state employees For official state use only Authorized for purchases $1,500 and under Authorized for purchases greater than $1,500 on statewide contracts where indicated Authorized for use with only certain categories of merchants and commodities A Purchasing Card is NOT: A means to avoid appropriate procurement or payment procedures A card to access cash or credit For interagency or intra-agency use (except for retail purchases) A right of employment For personal use including reimbursable meal costs or other miscellaneous lodging expenses such as phone calls
Top of the Document Responsibility Responsibility for financial control and stewardship of the purchasing card program rests with each department. The department is responsible for ensuring that each cardholder is performing their purchasing duties with competence and honesty, and for monitoring the effectiveness of the accountability structure. Through effective controls, a department can: Safeguard University assets. Prevent, detect, and correct errors and irregularities. Ensure reliability of financial information. Last updated: 2/11/2014
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Ensure compliance with purchasing card policies and procedures. Maintain appropriate records in a safe and secure location. All statements should be sent to the Purchasing Office within 3 weeks of statement date.
The Benefits of a Purchasing Card The Purchasing Card enables cardholders and Procurement and Materials Management staff to perform more effectively and focus on the value-added aspects of their jobs by: Reducing time needed to purchase and receive supplies Reducing the number of requisitions and purchase orders Reducing reimbursements from petty cash Reducing the number of invoices and invoicing problems Reducing the number of checks issued
Obtaining a Purchasing Card 1. Contact the Agency Purchasing Card Program Administrator. 2. Complete a Purchasing Card Application. Participation must be approved by management at the level required to approve purchases up to the default limit of $1,500. The applicant can request a transaction limit above the $1,500 default, but the application must include a business justification for the increase. In addition, a current Purchasing Card holder can request a limit increase if $1,500 is not sufficient; in these cases, the card holder will work directly with the Purchasing Card Program Administrator and provide business justification for the higher limit. In no case, will the transaction limit be set to more than $5,000. 3. Complete D2L training. 4. The agency or campus Program Administrator keeps the original application in ImageNow. 5. An employee may have more than one card. However, Purchasing may limit the number of cards held by any one employee. Expenses can be re-allocated to other accounting codes rather than managing multiple cards. At some point, the effort to maintain multiple accounts outweighs the time needed to re-allocate account codes.
Personal Liability and Credit Ratings The use of the Purchasing Card results in agency liability, NOT a personal liability for the cardholder. Personal credit ratings will not be affected. However, remember that by signing an agreement with the university prior to receiving the card and as such, the cardholder is responsible for any misuse of the card as outlined in this manual. The US Bank/VISA Purchasing Card Program provides liability protection to the State once notification of any loss, theft or fraudulent use is made. However, the same level of liability protection does not apply to cards that are made available to multiple users. Therefore, each purchasing card must be used only by the person whose name appears on the card.
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Guidelines for Card Use The Purchasing Card is: 1. For official state use only. 2. Authorized for individual purchases through $1,500. 3. Authorized for use with only certain categories of merchants and commodities. The Purchasing Card is not: 1. A means to avoid appropriate procurement or payment procedures. 2. A card to access cash or credit. 3. For tax (1099) reportable services. To prevent difficulties in reporting to the IRS, the purchasing card should not be used. 4. A right of employment. 5. For cardholder personal use including reimbursable meal costs. Meals are NOT allowed to be charged on the purchasing card. 6. For interagency or intra-agency use (except for retail purchases from agency operations that sells goods to the public and accepts a credit card; e.g., document sales and campus bookstores). 7. The splitting or stringing of purchases with the purchasing card is prohibited. Splitting or stringing is the practice of committing multiple purchasing card transactions to circumvent delegated authority levels, bypass University competitive bidding requirements, or avoid maximum-delegated authority levels. 8. To be used for the purchasing of printing or photocopies. 9. To be used for computers or printers.
Merchant Category Code Standards All vendors are assigned a Merchant Category Code (MCC) by their bank. There are three state MCC standards for the purchasing card program: The State Merchant Category Code Exclusion Standard, the State Merchant Category Code Standard Specification for Travel and the State Foreign Emergency Major Medical Expense Standard. Attempting to buy from merchants that are not included in the specifications will cause transactions to be denied. Occasionally, a bank may have incorrectly assigned a vendor’s MCC. If such a situation occurs, where a transaction is rejected for an appropriate purchase, have the Program Administrator ask the vendor to check with their bank and request a code change, if necessary.
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General Instructions for Card Use 1. If a transaction exceeds $1,500, Purchasing may temporarily increase the per transaction limit in some circumstances. Contact Purchasing BEFORE making any purchases that exceed the limit. Splitting or stringing purchases to avoid the limit is prohibited. 2. If the transaction value is $1,500 or less: Determine an appropriate vendor for the materials desired. Some vendors are not registered with the State of Wisconsin and may not be used. A list of such vendors is available at Ineligible Vendors. Note: There are two separate lists: one for vendors not in compliance with affirmative action requirements, and one for vendors not complying with state sales tax laws. Check BOTH lists. Give the vendor the Purchasing Card number and expiration date or present the card at the point of sale. The University is tax exempt and should not pay sales tax. The cardholder is responsible for insuring that no sales tax is charged at the time of purchase. The University's tax exempt number is on the front of each purchasing card. Some vendors may request a copy of the tax exempt form. See UW Certificate of Exemption for a copy of the certificate. If sales tax is charged by mistake, the cardholder's department may decide whether the cardholder must contact the vendor to request a refund. Exercise due diligence in pursuing sales tax refunds. When paying for food or meals in the Menomonie area, complete a Food Justification and Requisition form with all required documentation. If the material will be shipped or delivered, ask the vendor to enclose or mail a copy of the receipt/invoice with each shipment. Have the vendor mark it "Credit card order - paid" to avoid duplicate payments. If the material is picked up, obtain the itemized receipt indicating the purchase price. 3. Save the original receipts/shipping invoices with each statement.
Statement Verification 1. You will receive a statement for your account directly from the card company. (An electronic billing file is sent to the State for payment processing.) 2. It is the responsibility of the cardholder to verify the correctness of the statement against the purchase record and receipts. If there are inaccuracies and/or erroneous charges, report them to the Program Administrator immediately. 3. Sign a copy of the statement and submit it with the receipts to your supervisor, or whomever is responsible for approving the cardholders’ time and leave reporting. 4. All statements will then be sent to the Purchasing Office.
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Records Retention Maintain all documentation and follow the University's guidelines for retention. Records Retention Schedules, Purchasing and Procurement. General Guideline: Record Series 90131
See General
Purchasing Card Logs
This record series includes all credit card receipts and other supporting information included with the log as documentation (training requests, agendas, car rental agreements, hotel folios, airfare ticket stubs, conference registration forms, etc.) The log should also contain any information for re-allocation or re-coding of the charges to another area. Retention/Disposition: FIS+4 years Retain for the current fiscal year and 4 complete back fiscal years and destroy.
Suppliers Who Do Not Accept Credit Cards Not all suppliers accept Purchasing Cards. If this happens: Choose another supplier or Complete the transaction using traditional purchasing procedures, then ask the supplier if they are interested in accepting VISA. If yes, refer them to the Agency Purchasing Card Program Administrator for information about signing up as a VISA merchant.
Returns, Credits and Disputed Items The cardholder is responsible for following up with the merchant or bank on any erroneous charges, disputed items or returns as soon as possible. Disputed billings can result from failure to receive the goods charged, defective merchandise, incorrect dollar amounts, duplicate charges, credit not processed, as well as fraud and misuse. If there is a problem with a purchased item or a billing resulting from use of the VISA Purchasing Card, first try to reach a resolution with the supplier that provided the item. In most cases, disputes can be resolved directly between the cardholder and the supplier. Credits: Referring to the receipt, request from the merchant that a credit be placed on the card account. If the item was shipped, refer to the shipping form kept with your purchase record. Returns: A credit should be issued for any item that the supplier has approved for return. The credit will appear on a subsequent statement. Any item purchased with the VISA Purchasing Card that is returned must be returned for credit. Do not accept a refund in cash or check format. Keep documentation of credits, returns and exchanges with your purchase record. Disputed Items: If there is a disputed charge that cannot be resolved with the supplier, complete the US Bank Visa Purchasing Card Billing Inquiry Form and send it to US Bank Financial Services; copy your Agency Purchasing Card Program Administrator. US Bank must receive this written dispute notice within 60 days of the date that US Bank sent the first statement or transaction file.
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Credit Card Security Purchasing Cards should be treated with the same level of care used with your personal credit cards. Do not lend the card to anyone. The only person authorized to use the Purchasing Card is the person whose name is on the front of the card and who completed the Purchasing Card Application and Use Agreement (DOA 3584). Guard the Purchasing Card account number carefully. Do not post it or write it in any location that is accessible to others. Use extreme care when sending the card number over the Internet. Purchasing Card inactivity is a security concern. The Purchasing Card Program Administrator will run an activity report for all Purchasing Cards on an annual basis. Purchasing Cards with no activity for the 12 month period will be disabled.
Reporting Lost or Stolen Cards Notify the Agency Purchasing Card Program Administrator immediately if the card is lost or stolen. Unlike personal credit cards where cardholders are responsible for paying the first $50.00 if the card is stolen or misused, the Purchasing Card program holds the agency responsible for paying all charges resulting from stolen or misused cards until US Bank has been notified. On weekends or after agency business hours, report a lost or stolen card or other emergencies by calling US Bank at 800/393-3526. At the first available opportunity, report the same information to your Agency Purchasing Card Program Administrator.
Random Audits Agency purchasing and accounting offices, Internal Audit, as well as the State Bureau of Procurement and the State Controller’s Office, conduct random audits of card use. These audits ensure that the Purchasing Card program procedures are being followed and that
a. b. c. d. e. f. g. h. i.
Purchase volume appears reasonable (dollar amounts and number of transactions) The card is being used for appropriate transactions Documentation is complete (invoices, reconciliation, timely approvals) Sales tax is not charged Use of minority vendors Use of mandatory state contracts – using purchasing card to evade purchasing guidelines Serial or stringing purchases Use of barred vendors Compliance with records retention schedules
Internal Auditor Three-year cycle
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X X
X X
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Purchasing Bi-weekly Review
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Consequences of Failure to Comply with Program Guidelines Any misuse of the card or other failure to comply with these procedures will result in the following cardholder consequences: Revocation of the card. Disciplinary measures, if appropriate, up to and including termination of employment. In addition, if the misuse involves personal transactions, the cardholder must repay to the State all personal amounts, including any applicable state, county or city taxes. Even if the merchant does not charge these taxes, the agency must remit the taxes to the Department of Revenue.
Penalties When policy violations by a particular cardholder are identified during the Pcard administrators’ review of the bi-weekly transactions (or internal auditors’ review), the following steps shall take place: If a non-serious offense occurs by a cardholder, the cardholder will receive a written warning with regard to the issue. If a serious offense, or repeat non-serious offense, occurs by a cardholder, the card will be suspended for a period of 90 days. The cardholder will be required to retake the D2L Pcard training prior to having the card reactivated. If a second instance of serious offense occurs by a cardholder, the card will be suspended for a period of 1 year. If the abuse appears to be deliberate, the Pcard administrators, along with the controller and internal auditor, will discuss steps needed to reconcile the issue. An auditor or Pcard administrator can skip all of the steps if the incident is severe enough and suspend the card permanently. The Purchasing Department can impose the same penalties stated above if problems are found during department reviews. If warnings are issued by the Purchasing Department, the cardholder, Pcard administrator, internal auditor, and cardholder supervisor will be notified. The vice chancellor, dean, or department head will also be notified if the card is temporarily or permanently suspended.
Leaving the Agency or Transfer to Another Unit If a cardholder leaves their agency or transfers to another unit within the agency, the Purchasing Card must be returned to the supervisor. The supervisor is responsible for contacting the Agency Purchasing Card Program Administrator, who will cancel the card. Returned Purchasing Cards are not reissued to other employees for use. Before returning a canceled Purchasing Card, cut the card in half. Note if accounts have been established with vendors that relate to your card number, these also will need to be canceled and re-established as a new account with any successors (i.e., MDS).
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Key Contacts The following resource persons are available to provide assistance, answer questions, or to help solve any problems that arise:
Agency Purchasing Card Program Administrator Brent Tilton, Director of Purchasing, 140A University Services Bldg., 715-232-2346,
[email protected] Michelle Klass, Purchasing Agent, 140 University Services Bldg. 715-232-2453,
[email protected] To apply for a Purchasing Card. For questions about policies and procedures. To replace damaged cards. For assistance with suppliers. For account inquiries. For billing information. If you do not receive your monthly statement. To report a lost or stolen card.
US Bank Cardholder Customer Service: 800/393-3526 To report lost or stolen cards. For questions about your statement, authorization assistance.
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Chart of Procurement Card Responsibilities Cardholder General
Application Purchasing Card Application and Use Agreement (DOA3584) Purchasing Card Account Setup Form
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Department
Purchasing
Safeguard University assets. Prevent, detect, and correct errors and irregularities. Ensure reliability of financial information. Ensure compliance with purchasing card policies and procedures. Maintain appropriate records in a safe and secure location. Attend training Attend training Provide training for cardholders and managers Do not use for Establish specific personal policies: number of transactions. cards to be issued, the credit limits, and categories of employees, etc. Implement periodic reviews to determine if cardholders have a need for a card Initiate Approve Approve Retain a copy of the Establish supervisor Retain the original form form authority other than the purchase card holder so employees cannot approve their own purchases Complete Complete the cardholder account setup. Coordinate the accounting information for the cardholder with agency accounting. Maintain a record of each cardholder, including single transaction limits and total credit limits.
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Accounting Make purchase card payments promptly to avoid interest penalties
Internal Audit
Cardholder Transaction value $1,500 or less
Transaction value $1500.01 - $4,999.99 Transaction value >$5,000 Statements
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Department
Purchasing
Use best judgment Monitor that purchases are appropriate to determine vendor Check the barred Monitor use of barred vendor lists. vendors. Assure no sales tax is charged. Exercise due diligence in pursuing sales tax refunds. Complete the Food Approve form Justification and Requisition form when paying for food/meals in the Menomonie area. Utilize available Maintain a purchasing technologies to card record. prevent or catch fraudulent purchases Retain all original receipts. Request approval Forward request to Approve if request is prior to making a purchasing if justified. purchase. justified. Request approval Forward request to Request approval from prior to making a purchasing if DOA if request is purchase. justified. justified. Verify all charges to Review charges and Review charges from receipts; sign the receipts in a timely reports monthly; request statement. manner; sign documentation on statements. questionable purchases; remind cardholders to pursue sales tax credits where appropriate. Self-report errors Take appropriate Take appropriate steps (card erroneously steps when misuse when misuse or abuse used for personal or abuse occurs. occurs. Report abuse to purchase, etc.) Report abuse to the department. Purchasing.
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Accounting
Internal Audit
Utilize available technologies to prevent or catch fraudulent purchases
Perform ongoing reviews of statements and supporting documentation.
Recommend sanctions or penalties as needed.
Cardholder
Department
Purchasing Maintain all documentation and follow the University's guidelines for retention. Keep a record of all transactions. Provide assistance when needed
Documentation
Disputed Items
Safekeeping/Security
Submit disputed purchase card charges to the bank according to the proper procedure Keep the card and all records in a safe, secure place.
Provide assistance when needed
Maintain records for employees who leave the university
Do not loan cards to others
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Destroy old cards; invalidate cards when employees leave the agency or transfer
Accounting
Internal Audit Spot check records retention requirements are being met.
