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PURCHASING CARD POLICIES AND PROCEDURES GUIDE FOR CARDHOLDERS Ms. Becky J. Proctor, Administrator
A. Purpose
The Lock Haven University Purchasing Card (PCard) Program is built on an internationally accepted Visa credit card issued to authorized University personnel, to be used only for legitimate business purposes. It is primarily designed for small dollar purchases of goods and supplies. The use of the PCard enhances purchasing efficiency from beginning to end by delegating purchasing responsibility for small dollar items to the PCard user and allows purchases to be made without the need for purchase requisitions, purchase orders and processing by the Purchasing Department. The card may not be used for personal purposes or for payment of contracted services. Spending controls are determined individually for each card, ensuring that the card can only be used for specific purposes and within specific dollar amounts.
The Purchasing Card
National City Bank (NCB) is the vendor that issues the Lock Haven University of PA PCard. The PCard is issued to designated Lock Haven University employees that routinely make small dollar purchases and are approved by their supervisor or manager with budget authority. A PCard is issued to a designated employee only after the employee has signed a PCard Enrollment Form and Cardholder Agreement, and completed PCard policy and procedure training.
The Lock Haven University Purchasing Card is the property of Lock Haven University of PA and is used only for authorized Lock Haven University of PA procurements.
The benefits of the Purchasing Card program include:
1. Use of the Card by department heads, departmental secretaries, and other authorized users expedites and simplifies the purchase of goods and supplies. It also allows departments’ greater flexibility in procuring needed items, especially from vendors which do not accept purchase orders.
2. Use of the Card improves efficiency and reduces costs involved in small dollar purchases. It eliminates the need to enter and process requisitions, purchase orders, or Direct Payment forms, as well as the processing of individual invoices and vendor checks. One monthly invoice is received by the University for all Purchasing Card charges. B. The Purchasing Card Program Administrator
1. The Purchasing Card program is administered by the Purchasing office, which will coordinate the issuance, maintenance, and cancellation of cards with the University’s processor, National City Bank (NCB). Visa cards are provided with the LHU logo and are typically issued in the name of an individual department. Individual cards are assigned a $500 per transaction dollar limit. The total value of a transaction shall not exceed a cardholder’s single purchase limit.
2. The Lock Haven University Purchasing Card Administrator will be the person responsible to administer the Purchasing Card Program. The Purchasing Card Administrator is responsible for: a. Processing all PCard user requests and issuing Pcards to new users. b. Providing PCard policy and procedure training to new PCard users prior to issuing new PCards. c. Setting all Pcard limits and business rules according to Lock Haven University policy, procedure and guidelines. d. Monitor all PCard activity for compliance with Lock Haven University policy and procedures. e. Changing or correcting PCard limits and parameters as needed. f. Providing notification to PCard Users and their supervisors of violations of PCard policy and procedures, when necessary canceling cardholder’s PCard. g. Insure PCard cancellation upon termination of employment of a PCard holder.
3. Purchasing Cards are issued to department heads and principle investigators for grants, who may further delegate use of the cards to other selected individuals in their budget areas. The cardholder whose individual department is printed on the front of the card should sign the card only if he/she will be the only individual within the department using the card. If several individuals within the department will be using the card, signing the card is NOT recommended.
4. Cards will be issued to new cardholders only after they have received appropriate instruction and have signed a Purchasing Card Agreement Form stating that they have received training and are aware of Purchasing Card policies.
C. Cardholder Liability/Responsibility
1. Department heads are responsible for any Purchasing Cards issued to their department. They may delegate use of the cards to other selected individuals within their department; however, the department head is still accountable for all charges against the card.
2. Department heads who allow subordinate employees to use cards assigned to them accept full responsibility for training their subordinates and providing them with the current policy documents.
3. Department heads and other designated cardholders are responsible for the proper use and safeguarding of the cards issued to them. They must maintain accurate records of all PCard transactions, and promptly report any lost or stolen cards (see Section H). All purchases made with the card must be within the established budgets and comply with Lock Haven University policy and procedures. Individuals will be personally liable for unauthorized charges.
4. Department heads are responsible for reconciling individual transactions against monthly account statements and forwarding a copy of all documentation to the Purchasing Office on a timely basis (see Section F).
5. Upon termination of employment of a PCard holder, it is the department head’s responsibility to obtain the PCard from the terminated employee and immediately notify the Purchasing Card Program Administrator of the termination. 6. Intentional misuse of the Purchasing Card for other than official Lock Haven University business may be considered fraud and may result in disciplinary or legal action. The employee will also be personally liable for the total amount of any unauthorized purchases made in connection with the misuse. D. Use of the Purchasing Card
1. The PCard is the primary method for making small dollar purchases according to Lock Haven University Purchasing Card Program policy, procedures and guidelines.
2. Authorized cardholders must insure that budget funds are available for all purchases made with the PCard.
3. Authorized cardholders may make purchases in person, or by phone, mail, or Internet. Any ordered items must be shipped directly to the department, not to the Central Receiving.
4. Telephone, mail order, and Internet purchases should be made only from reputable merchants. Back orders should be avoided. Merchants should be asked for the total charge including any shipping and handling. Caution: Cardholders should make prudent selection of shipping options. The cost of shipping heavier packages and/or routine packages via Federal Express or UPS overnight or 2-day express can be very expensive. Such priority handling or expediting of shipments should only be utilized when absolutely necessary. As with all expenditures of public funds, prudence must be demonstrated and expenses justified.
5. The cardholder must retain all receipts, receiving reports, delivery tickets, order forms, or other documentation supporting charges against the card (For internet purchases, the cardholder should print the online order confirmation). Vendors should be reminded to send any correspondence, receipts, etc., directly to the department. A departmental log of all Purchasing Card transactions MUST be maintained.
6. If the cardholder does not have documentation for a transaction listed on the statement, he/she shall attach a “Purchasing Card Missing Receipt Form” for each missing receipt that includes a description of the item (s) purchased, date of purchase, vendor’s name and reason for the lack of supporting documentation.
7. Lock Haven University Purchasing Cards are marked as tax exempt. When making purchases, cardholders must inform merchants that the University is not subject to any state sales tax. The cardholder may supply the vendor with the University tax-exemption certificate if it is requested. Any problems in this regard should be reported to the Purchasing Office. If upon reviewing receipts a cardholder determines that sales tax has been assessed, the cardholder should contact the vendor for credit. UNDER NO CIRCUMSTANCES CAN THE UNIVERSITY REMIT FOR TAXES CHARGED.
8. Purchasing Cards MAY BE USED for: · Purchases costing less than $500.00 may be made with the PCard within the established limits and restrictions of each individual card. · All purchases made with the PCard must be for the benefit of Lock Haven University of PA, within established budgets, and in accordance with the University Purchasing Card Policy. · If a vendor does not accept the PCard, the cardholder must follow standard University procurement practices by processing an Agency Purchase Request and seeking appropriate approvals for purchase. · Any single purchase costing $500.00 or more must be made following standard University procurement practices by processing an Agency Purchase Request and seeking appropriate approvals for purchase.
9. Examples of items which MAY NOT be purchased with the Purchasing Card include:
· Goods and supplies in excess of the cardholder transaction limits. · Equipment, furniture and furnishings. · Memberships. · Employee travel-related expenses such as hotels, car rentals, airline fares, and meals, which must be processed as per usual University travel protocol. · Services of any type, such as entertainment, consultants, honoraria, repair and maintenance services, etc. (due to contractual and tax reporting requirements). A separate “commercial card” (i.e., a travel card) is available for these type of expenses. · Cash advances. · Personal items cannot be purchased under any circumstance, even with the intent of reimbursing the University after the purchase. · Personalized business items such as portfolios and personal organizers. · Development, printing and/or distribution of any official University document or publication (with official name, seal or logo) without first securing approval of Public Relations Office, or official public advertising without the consent of the Public Relations Office. · Gifts, prizes, and flowers. · Aspirin and other non-first aid items. · Telephones and cellular phones. · The card shall not be used to authenticate your personal identity for non-University business purposes. The card is intended for official University business purposes only, i.e. it is not to be used in any manner for personal purposes. · Restricted items, such as alcohol, weapons, drugs (controlled substances) and hazardous materials.
University purchasing processes, beginning with an APR, must be used.
10. Cardholders are not required to solicit competitive bids for their purchases. However, they should seek the best value for the University and ensure that the price paid is reasonable.
11. Each card is assigned a single transaction limit. A single transaction may be comprised of multiple items, but the total amount of the transaction cannot exceed the cardholder’s assigned limit. Each card is also assigned a monthly dollar limit, which may not be exceeded.
12. The Lock Haven University Purchasing Card program includes the ability to designate where spending is allowed by utilizing merchant category code blocking. Vendors are assigned an industry-specific code, and certain codes have been blocked or restricted from PCard use. If a department experiences a card decline from a vendor which provides eligible goods or supplies, the Purchasing Office should be notified.
E. Return of Goods/Purchases
Cardholders are responsible for all returns of goods. Returns will be credited to the cardholder’s account. Cash refunds are strictly prohibited. F. Monthly Statement Reconciliation Process
1. At the end of each month, the department head will receive an informational statement from National City Bank (NCB) listing charges against the cardholder account.
2. Each cardholder will be required to keep a purchasing log to record each PCard transaction. The log must be completed in its entirety and submitted to the Purchasing Office along with the monthly credit card statement and corresponding receipts and/or other supporting documentation.
3. When a cardholder makes a purchase with the PCard, the transaction date, card user, vendor name, item (s) purchased, purpose of the purchase, and purchase amount should be immediately recorded on the Purchasing Card log.
4. Each department head is responsible for:
a. Reviewing and verifying the accuracy of all charges and reconciling between the statement, and individual transaction documentation (receipts, delivery slips, order confirmations, logs, etc.). If the cardholder does not have documentation for a transaction listed on the statement, he/she shall attach a “Purchasing Card Missing Receipt Form” (see Section D).
b. Notifying the vendor of any discrepancies or erroneous charges listed on the statement (see Section G).
c. Approving and signing the monthly statement and forwarding a copy, together with all receipts, supporting documentation, and Purchasing Card log for all charges, to the Purchasing Office by the 15th of each month. Only the cardholder’s signature will be accepted. 5. Cardholders who fail to submit their documentation to the Purchasing Office prior to the 15th of each month will be notified in writing by the Purchasing Card Administrator. More than two (2) reminders to a cardholder that an approved monthly statement is delinquent will be grounds for withdrawing the credit card from that user. If this routine is not adhered to, the credit card will be revoked at the discretion of the Purchasing Card Administrator.
6. The Purchasing Office will receive the monthly documentation from the departments and review all transactions. The documentation will then be forwarded to the Accounts Payable Office.
7. The Accounts Payable Office will pay the central invoice and post charges to the appropriate expense accounts. The expenditure posting will be only to the coding structure assigned to the card.
G. Dispute Resolution
1. If a cardholder does not agree with a charge posted on a monthly statement, he/she should attempt to resolve the problem with the vendor. If the vendor agrees that an error has been made, the vendor will issue a credit to the cardholder’s account. If the vendor does not agree, the cardholder should contact National City Bank (NCB) immediately. Cardholders should keep copies of all documentation dealing with disputed items until they are resolved.
2. If a purchase is found to be defective or incorrect, the cardholder is responsible for obtaining replacement, correction, or credit as soon as possible. If a merchant refuses to replace or correct the goods, or to offer a credit, the purchase is considered to be in dispute.
H. Lost or Stolen Cards
1. If a Purchasing Card is lost or stolen, the cardholder must immediately notify the Bank’s Customer Service Center, which is displayed on the back of the card. Access to the card will be immediately blocked. A new card will be issued.
2. The Purchasing Office should also be notified as soon as possible of any lost or stolen cards.
3. Cardholders will not be responsible for any charges after the card is reported lost or stolen.
I. Exceptions
The Vice President for Finance, Administration and Technology or his/her designee must approve any exception to this Purchasing Card policy.
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