Procurement Cards: an e-Business Partnership with U.S. Bank
The University of Arkansas Purchasing Card Program has been established to provide a expeditious way to make small dollar commodity purchases while reducing the costs associated with requisitioning and payment. The procurement card should reduce the need for blanket purchase orders, personal reimbursements and invoice attached requisitions, which are now being used.
University employees are entrusted and empowered with the ability to make small dollar purchases on behalf of their department. Along with this empowerment comes responsibility. Cardholders are expected to make sound business decisions in the best interest of the University and always comply with University and State polices and procedures.
The University Procurement Department is responsible for managing the program, and each Academic or Administrative department is responsible for managing its cardholder accounts.
PERSONAL CHARGES ARE STRICTLY FORBIDDEN. The adherence to policy allows continued process savings, accountability, and audibility of purchases.
Billing Cycle - The monthly billing period, ending on the 15th of each month.
Cardholder - A person whose name is on a Procurement Card and given authority to make purchases within preset limits on behalf of the University of Arkansas.
Cardholder Agreement - The agreement signed by the person whose name appears on the procurement card. This agreement outlines the policies regarding using a procurement card and must be signed by all persons receiving a procurement card. This signed agreement will be imaged by the Office of Business Affairs.
Cut-Off Date - The last day in which charges can be approved and costs redistributed prior to payment being made to the e-Business partner.
Default Account - The University account code assigned to an individual Cardholder's Purchasing Card. Only one Default Account can be assigned to any one Purchasing Card and all charges made with the Purchasing Card will be initially posted into that Default Account with the option of redistributing to other cost center numbers in the reconciliation process.
MCC - Merchant Category Code assigned to a merchant by VISA, which identifies the primary goods or services provided by the merchant.
MCCG - A grouping of merchants by MCC.
Monthly Spending Limit - A dollar limitation of purchasing authority assigned to the Cardholder for the total of all charges made during each monthly billing cycle. This amount may not exceed $25,000.00. Departments may establish lower limits on a per Cardholder basis.
Procurement Card - A credit card issued to an employee
of the University of Arkansas for the purpose of making authorized purchases
on the University's behalf. The University will issue payment for charges
made with the Procurement Card.
Procurement Card Administrator – The University Procurement Department
employee responsible for administering the Procurement Card Program for
the University and acting as the main contact between the University and
the Bank. This individual is Connie Oberg, Office of Business Affairs,
Phone: 479/575-6279, email: coberg@uark.edu.
Receipt/Documentation - A merchant produced or non-University
document that records the relevant details for each item purchased including
quantities, amounts, a description of what was purchased, the total charge
amount and the merchant's name and address (e.g. sales receipt, original
invoice, packing slip, credit receipt, etc.).
Transaction - A charge or credit associated with an e-Business partner
account.
Transaction/Charge Limit - A dollar limitation of purchasing authority assigned to the Cardholder for each total charge made with the Purchasing Card. This amount must not exceed $2,500.00. Departments may establish lower limits on a per Cardholder basis. A single transaction/charge may include multiple items but cannot exceed $2,500.00.
The Procurement Card is a special VISA credit card. It works similarly to your personal credit cards, except the charges are billed directly to the University and payment made by the University Business Office. Procurement Cards are for business use only!
The Procurement Card will display the cardholder's name along with the words: STATE OF ARKANSAS.
A statement of activity can be printed from the UPS System at your convenience within the JOB function at UPJPCSTM. This statement will assist in keeping track of all purchases made using the Pcard and to ensure all receipts and packing slips are sent to Accounts Payable. Should it be necessary to return any supplies or resolve billing disputes, this information is also needed to document University expenditures and also available for review by internal and external auditors.
More information related to retention of receipts may be found under “Receipts/Documentation.” (please link to this section)
Improper use of the Procurement Card will result in consequences ranging from suspension of card to termination of employment and criminal prosecution.
Any employee for whom a Procurement Card is going to be requested must first complete an online Procurement Authorization within the BASIS system. Once this Procurement Authorization has been submitted and approved by the Cost Center managers for the default cost center entered via TARGET, information will be given to U.S. Bank to set up a cardholder account.
For a Step by Step of how to enter a Procurement Authorization please see How to Submit a Procurement Authorization.
After an Authorization has been approved, the individual will be assigned a unique identification and will be sent an e-mail notification with details for required training, receipt and activation of card.
It is important to note that regardless of whether or not a department approves the charges the employee(s) have made, the invoice will be paid. Those charges that have not been approved will be flagged and subject to audit review and possible suspension of privileges.
Prospective Cardholders MUST attend a training session and sign a Cardholder Agreement Form before receiving their Procurement Card.
Procurement Cards are not transferable. If someone's card use is discontinued, the Procurement Card MUST be sent to the 'administrator' of the Procurement Card program and the Procurement Authorization in BASIS must be canceled.
Maximum Spending Limits on Procurement Cards
The following limits are the maximum amounts assigned and allowable for a Procurement Card. When the Procurement Authorization is requested, these amounts may be lowered, but not increased.
Single Transaction Limit: $ 2,500
Monthly Transaction Limit: $25,000
Cardholder Transfer Within The University
Cardholders who transfer to a new position within the same department and require the use of a Purchasing Card as part of their new duties should continue to use the same card. Cardholders who transfer to another department should update their default budgetary unit and cost center number on their Procurement Authorization and update (add/delete) their cost centers used for reconciling in PAPC(pre-approved cost centers).
Cardholder Separation From The University
Prior to separation from the University, Cardholders must surrender their Procurement Card to the Procurement Card Administrator and send any outstanding documentation for charges to their Department Administrative person who does their reconciliation's.
Your Procurement Card CANNOT be used for the purchase of certain established items which can be viewed at PCard website.
Unauthorized and/or Inappropriate Card Use
The Procurement Card MUST never be used to purchase items for personal use or for non- University purposes even if the cardholder intends to reimburse the University.
Charges for an item CANNOT BE SPLIT into separate payments to exceed a card's single transaction dollar limit. Nor can part of the cost of an item be placed on the pcard and the cardholder seek reimbursement for the remaining balance.
A cardholder who makes an unauthorized purchase with a Procurement Card, or uses the Procurement Card in an inappropriate manner, will be subject to loss of any authority to retain or use the Procurement Card; disciplinary action up to and including termination; and possible criminal prosecution and restitution.
Consequences of Unauthorized and/or Inappropriate Card Use
The Procurement Card (PCard) must never be used to purchase items for
personal use or for non-University purposes. A cardholder who makes an
unauthorized purchase with the PCard, or uses the card in an inappropriate
manner will be subject to disciplinary action including possible card cancellation,
termination of employment at the University of Arkansas and criminal prosecution.
The Procurement Card may be used to purchase goods in person at the supplier site, over the phone, over secure Internet sites, or by mail. When placing your order in person you will simply give the supplier your Procurement Card as you would any credit card.
If you are ordering over the phone you should
provide:
Account Number
Card Expiration
Date
Provide complete
delivery address
Confirm that the total order, including tax and freight does not exceed $2500, or the maximum amount allowable per transaction on your card.
NEVER give your Pcard number to someone where the call was not initiated by you!!! Beware of scams!!!
Merchandise Returns and Exchanges
When necessary, items should be returned according to vendor specifications. The cardholder is responsible for ensuring that proper credit is posted for any returned items.
If merchandise is returned in person, the cardholder is responsible for obtaining a credit receipt from the merchant and retaining that receipt with other receipts to document the purchase and return. These receipts will then be imaged.
Receiving cash or checks to resolve a credit is prohibited.
No exchanges are allowed – the item must be returned for credit and the replacement item purchased separately.
Whether a purchase is made in person or via telephone, Internet, fax, or mail, the Cardholder is responsible for obtaining purchase documentation from the merchant, such as:
These documents MUST be given to the administrative person in your
department who is responsible for approving the electronic charges sent
from US Bank. If your 16 digit account number is printed on the receipt
it must be blacked out before being given to the department approver.
When charges are approved and reconciled, the document number should be written on the receipt and sent to Accounts Payable where it will be imaged.
If a cardholder does not submit the required documentation in the monthly requested time allocation, they will receive a written warning for the first offense. Habitual failure to submit documentation will result in the suspension of the card; user and their TARGET approver will be notified by e-mail. To reinstate privileges, a memo from a user's TARGET approver giving adequate justification will be required and all Pcard supporting documentation submitted to bring the cardholder’s reconciliation's up to date. Upon receipt and approval of that justification, the Business Office will establish a time for the user to attend Procurement Card training again.
Documentation MUST be sent to Accounts Payable to support ALL Pcard transactions!!!!! No Exceptions!!!!
If the cardholder and the supplier cannot resolve the issue, a Cardholder
Dispute Form must be completed and mailed or faxed to the PCard Administrator,
Connie Oberg, at Office of Business Affairs, ADMN 321, or fax 575-4158.
She will forward this request to US Bank for action.
Lost, Stolen, or Damaged Procurement Card
Cardholders are required to immediately report any lost or stolen Procurement Card to US Bank toll-free at 1-800-344-5696 (24 hours a day, 365 days a year). The Cardholder MUST also immediately notify the U of A Procurement Card Administrator at the first opportunity during normal U of A business hours at 479-575-6279.
What happens when audit staff feels a receipt needs further
review:
Lost/Unobtainable Receipt forms
PCA enters information into PAA. If it appears to be a recurring event with a particular cardholder, PCA may send warning to cardholder about excessive use of form.
Charges without an image
PCA will periodically run a JOB (UPJPCWOI) to find charges without an image in FYI. Audit staff will contact the appropriate person in the BU and request these receipts. After notifying the person, a notation will be made in ECRD that the department has been notified.
If receipts are not received within a reasonable period of time after audit staff has made the request, a warning email will be sent to cardholder with copy to department approver. This warning will indicate that if receipts are not sent within one week, PCard may be suspended.
Higher Level Post Auditing
Financial analyst will periodically pull data from either the UA Warehouse or Access OnLine to review a period of transactions by:
Habitual Inappropriate Use: This will have to be determined
by audit staff based on circumstance and previous card holder history.
Excellent notes documented in a cardholder's file (PAA) are essential.
Splitting transaction to avoid single transaction limit of $2500
Making personal purchase or purchase which is inappropriate on
State funding with card
Possible fraudulent use:
In all cases of inappropriate card use, personal purchases, splitting
transactions, etc. PCA will document circumstances in PAA function.
This provides a continuous history of cardholder activity.
Audit staff keeps statistics on results of post audit activities. Spreadsheets are maintained and are attached to statement by PCA when review is completed each month.
Each month's post audit report is viewed as complete if the initial
review of transactions is done within 30 days of deadline for receipts
to be in Business Affairs. Any transaction not completely resolved
within 90 days of report from bank will be forwarded to Business Manager
for action.
Rev 10/04/05
03/26/08
