Procurement Card Program Guidelines

 

 

  

 

January 2004

Procurement Card Program

 

 

Introduction

 

The procurement card program has been established to allow state employees to use a state credit card (MasterCard) to make small dollar purchases for College business.  Cardholders are to use the procurement cards to pay vendors for the procurement of authorized Goods and Services within the guidelines of the Cardholder Agreement, User’s Manual, Procurement Code, Personnel Rules, and Fiscal Rules.  Procurement card purchases are governed by the same statutes, and procurement and fiscal rules that apply to all other purchases and paid by state warrant.

 

Cardholders play a critical role in ensuring the success of Community College of Aurora’s procurement card program.  The goal of the program is to make it easier for state employees to acquire goods and services while providing more timely payment to vendors and reducing the number of small dollar payments.  Cardholders have primary accountability for the card’s security and use. The Procurement Card Program Administrator and your Cost Center Administrator are involved both to help the Cardholders to monitor card usage and to ensure the accuracy of expense allocation.  The College is responsible for the use of, and payment for, the procurement cards issued. 

 

Cardholders are responsible for the security and use of their cards at all times.  A misused or abused procurement card will be cancelled. Employees are subject to disciplinary action for unauthorized purchases, including personal liability.  Cardholder purchases will be monitored at the department, division, and state levels.

 

Bank One will issue cards to designated college employees.  The cards have the agency name, the name of the employee, and tax exempt number. Each card will have multiple controls, including spending limits and a specified number of transactions per time period.

 

 

Key Contacts

 Bank One

Customer Service                               1-800-316-6056

To report a lost or stolen card                        1-800-848-2813

 

Community College of Aurora

Program Administrator                       Linda Arman

                                    303-360-4764

                                                            linda.arman@ccaurora.edu

 

Accounts Payable                               Kathy Bodemann

                                    303-360-4758

                                                            kathy.bodemann@ccaurora.edu

 

 Card Custody and Use

The Procurement Card program provides users in departments with a MasterCard credit card to use in making allowable, small dollar purchases for College business. All charges are the liability of the College. This credit card is used basically the same way you use a personal credit card.  The Cardholder is responsible and accountable to CCA for the use of the PCARD at all times.  The College is responsible for payment of every transaction unless those transactions are successfully disputed.  All cardholders are required to attend training on the use of the procurement card and sign Cardholder agreements before a card is issued.  Procurement cards will distributed upon completion of training.  Cardholders should sign and activate the card immediately.  Cards should be kept in a safe and secure location.  Instructions for card activation can be found on the card itself.

 

Cardholder Responsibilities

·         Use the card ONLY for official State business following applicable statues, rules, policies and procedures.

·         When possible, use vendors who participate in the State Price Agreement program.

·         Ensure that sales tax is not charged at the time of purchase.

·         NEVER use the card to obtain Prohibited Purchases.

·         Immediately report the loss or theft of card to BANK ONE at 1-800-848-2813.

·         Obtain purchase documentation to support each purchase made with the card. Prepare alternative documentation for missing (lost/not received) purchase documentation.

·         Maintain a cardholder monthly log of all card purchases, promptly reconcile the monthly cardholder statement.

·         File timely dispute forms with BANK ONE for unresolved disputes.

·         Upon request, promptly return procurement card to Cost Center Administrator or Program Administrator.

·         Custody and use of the card.

 

Lost or Stolen Cards

Since this is a commercial procurement card under contract with the State of Colorado and not an individual, the Community College of Aurora (the Cardholder’s cost center) is responsible for all of the charges until the card is reported lost or stolen.   The Cardholder must immediately report a loss or theft to BANK ONE through the following toll‑free number (available 7 days a week, 24 hours a day):                                                                     1 800-848-2813

 

The Cardholder must also notify the CCA Program Administrator of the loss or theft, (303)360-4764.  After the loss or theft of a card has been confirmed a replacement card will be issued.

 

Cost Center Administrator Responsibilities

• Review and sign-off the monthly account statement for each cardholder
• Ensure that all statement reconciliation documentation is received and retained in accordance with department practices and procedures
• Verify that all expenditures are assigned to the correct cost centers
• Monitor cardholder activity for unusual patterns of use
• Document and report cardholder violations
• Notify Program Administrator of changes in employment status such as transfer and termination

Purchasing Limitations

Procurement cards may be used to acquire authorized goods and services up to the per transaction limit set for each card by the cost center administrator.  Your cost center administrator will let you know what you are authorized to purchase with and without prior approval.  In no case may the card be used for transactions greater than $3,000. If this dollar threshold is exceeded, then the purchase is in violation of Fiscal Rules.  Each procurement card is encoded with the following information:

·         Credit Limit (Dollar Amount per Cycle)

·         Single Purchase Limit (Dollar Amount per Transaction)

·         Dollar Amount per Day

·         Transactions per Cycle

·         Authorizations per Day

·         Merchant Category Code Group (MCCG)

 

 Purchasing Procedures

      1.      Placing the Order

You may place an order in person, by phone, fax or mail.  If the order is faxed do not include your card number on the order form; telephone the vendor with your card number.  If you place an order over the internet, be sure it is a secure site.

 Inform the merchant of the following information:

·         This purchase is tax exempt.

·         The purchase is subject to all applicable discounts for the State of Colorado, any government discounts or price agreement pricing, if applicable.

See “Permissive/Mandatory Price Agreements” for additional information.

·         Give your name as it appears on the card.

·         Give accurate delivery information.

·         Request documentation showing description and cost of each item.

 

2.      Purchase Documentation

·         Date of the transaction

·         Vendor name, address and phone number (if telephone purchase)

·         Itemized description of goods or services purchased or returned

·         Quantity purchased or returned including unit of measure and price per unit

·         Shipping/handling charges

·         Total dollar amount of purchase or credit

 

Charge slips alone are not adequate support except when they also serve as detailed cash register receipts. If the vendor documentation does not adequately describe each item purchased, the cardholder must attach a written description of the items. If the purchase is made by mail or fax, the order form or order letter should contain the required information and will serve as documentation of the purchase.

 

3.      Transaction Log

            All Cardholders are required to maintain a log of all transactions.  All purchase documentation should be attached to the monthly log. The log will be used to assist in reconciling the monthly statement.

Permissive/Mandatory Price Agreements

The State of Colorado, Division of Purchasing has negotiated agreements with certain vendors to enable the State to receive the best possible pricing on various commodities and services.  Most of these agreements are permissive, which simply means you have the option to use these agreements or choose another vendor as long as the purchase does not violate any fiscal or purchasing rules.  When the agreement is mandatory, we do not have the option to select other vendors.  To view permissive and mandatory price agreements you can access the State of Colorado, Division of Purchasing web page at www.gssa.state.co.us/purchasi.nsf.  Select the following links to view the agreements:

State Price Agreements (for Commodities/Services)

List of State Price Agreements (for Commodities/Services)

At this point you can select the type of commodity you are purchasing and view any permissive or mandatory price agreements available to the State.

 

E-Mail Communications

Upon receipt of each transaction into the PCARD System, the Cardholder will receive an email verifying the transaction, the dollar amount, the merchant name and a system assigned Transaction ID Number.  The Cardholder should review each transaction listed to confirm it is correct.

 

Reallocation

Certain transactions will need to be reallocated to cost centers other than the one assigned to the card.  Each department will have one person assigned to reallocate transactions for their department.  The reallocator will also receive email notification of all cardholder transactions within their department.

 

Reconciliation of Bank Statement

At the close of each billing cycle, each Cardholder will receive an individual bank statement listing purchases made with the procurement card.  Purchases made at the end of the billing cycle may not appear before the closing date.  The closing date for CCA is the 27^th of each month.  Upon receipt of this statement the Cardholder shall:

 

·         Review the statement and verify that each listed charge matches the monthly log

·         Identify any disputed charge.  Note on the monthly statement the item disputed and contact the vendor to resolve the dispute.

·         Attach the monthly log to the statement

·         Sign the bank statement and forward it with the log attached by the close of the next business day after receipt of the statement, to the cost center administrator or his/her designee.

·         If the Cardholder will not be available to complete the reconciliation, (i.e., on leave, other business duties), the Cardholder must forward his/her log to the cost center administrator or designee, who will complete the reconciliation and sign the statement to acknowledge purchases.

·         The Cardholder should retain a copy of the statement and log for future reference. Cardholder shall also retain a copy of the paperwork of disputed transactions until the dispute is resolved.  The Cardholder should notify the accounts payable office of any disputed charges or errors on the monthly statement.

 

 

Source Document Filing

Each Statement of Account, with supporting documentation for every transaction listed on the Statement is to be filed in the department.  These files may be audited periodically by personnel from CCA Administrative Services or outside sources.

Disputed Transactions

A "dispute" exists when a Cardholder or Cost Center Administrator determines that a charge on the Cardholder's statement is improper and that the College should not pay for it.  A dispute may exist due to an overcharge, a double billing, an error in a refund, etc.  Failure to formally dispute a charge within 60-days constitutes acknowledgment that the charge is legitimate.

Cardholder will actively pursue resolution with the vendor, maintaining documentation of his/her efforts and verbal responses.  If the dispute has not been resolved by receipt of the next monthly statement, the original receipt, copy of the monthly statement and any documentation of vendor contact are to be sent directly to the Program Administration along with a completed Cardholder Statement of Questioned Item form.  The Program Administrator will pursue resolution with BANK ONE. 

 

Excluded Merchant Category Codes

The procurement card will be declined by the Bank at the time of the transaction, if the procurement card is used with merchants or vendors who are registered under these types of merchant category codes:

·         Finance related merchants – Banks, ATM’s, Financial Institutions

·         Travel related merchants – Airlines, Car Rental, Lodging, Travel Agencies

·         Automotive and transportation related merchants

·         Entertainment related merchants – arcades, amusement parks, sports clubs, theaters, country clubs, golf courses, tourist attractions

·         Wager type merchants – betting, lottery

·         Dating & escort services, counseling, massage parlors, health and beauty spas, computer dating

·         Eating establishments – restaurants, bars, cocktail lounges, nightclubs, fast food

·         Food and Beverages for official functions

 

Prohibited Purchases

The following Prohibited Purchases and are Cardholder violations:

·         Purchase of goods and services for personal use or for the personal benefit of another individual

·         Splitting a purchase to circumvent the small dollar limitations (a purchase order is required for all single purchase needs over $5,000)

·         Furniture

·         Alcohol for research or consumption

·         Long distance and pay phone calls

·         Contracts requiring an authorized signature

·         Equipment to include Computer hardware, peripherals and software

·         Advertising for personnel positions

·         Drug Enforcement Agency licensed substances

·         Printing (including certain reproduction services)

 

Personal Services

Use of the procurement to purchase personal services is prohibited at CCA.  There are numerous reporting requirements that apply to service-related transactions.  Because of reporting requirements and liability issues, purchase orders must be used.

Definitions

 

Authorized Purchases – The purchases made in compliance with applicable law and rule, program parameters, purchasing policies and procedures and within approved budget spending authority.

 

Cardholder ‑ The person whose name appears on the procurement card and is authorized to make purchases of goods and services on behalf of the College.

 

Cost Center Administrator – A departmental employee designated to monitor Cardholder use of a card, and to approve incurring an obligation or making an expenditure payable from public funds.  The Cost Center Administrator is responsible for reviewing and approving purchases of designated Cardholders, and verifying that those purchases are in compliance with purchasing and program requirements.

 

Credit Limit – The maximum dollar spending limit a cardholder may charge during a monthly billing cycle.

 

Cycle Date – The cycle date is Bank One’s cutoff date for all monthly transactions (27^th of every month).

 

MCC  -Merchant Category Code.  A four-digit number that describes the type of business that a vendor provides to MasterCard from a predefined list.  Transactions at vendors with certain MCC codes may be prohibited and will be declined.  See MCC Exclusions list.

 

PCARD – Procurement Card.  A MasterCard credit card designed to make allowable, small dollar purchasing more effective.

 

Program Administrator – The departmental employee is responsible for overall administration of the Program, preparation of materials, training, problem resolution, monitoring account information, acting as principal contact with BANK ONE for changes in program operations and/or services. 

 

Prohibited Purchase – Purchases that are not made in compliance with applicable law, program parameters, purchasing policies and procedures and within approved budgetary authority.

 

Single Purchase Limit – The maximum spending (dollar) limit a cardholder is authorized to charge in a single transaction.

 

Transactions Per Cycle – The number of individual purchases authorized per day for each cardholder.

VIOLATIONS AND CONSEQUENCES

 

Below are various types of Cardholder violations and possible consequences for a specific violation.  All violations are to be documented and appropriate action taken.  The department, purchasing office or fiscal affairs does have the authority to cancel a card at anytime, regardless of the consequences listed.

 

VIOLATIONS

·         Personal purchases

·         Cash or cash type transactions

·         Split purchases

·         Inappropriate purchases

·         Lack of original documentation

 

PERSONAL PURCHASES AND CASH OR CASH TYPE TRANSACTIONS

It is a violation to make ANY purchases or transactions with the PCARD for personal purchases or cash or cash type transactions.  It is against the law to use government funds, state or federal, to purchase items for personal use.  Even though the Cardholder may have reimbursed CCA , or intends to reimburse the amount of the purchase.

 

Consequence:                        CCA must be reimbursed immediately for the total amount of any personal purchases or cash or cash type transactions.  The Card will be cancelled.  Any violation of this policy may be investigated and could result in termination and/or criminal prosecution.  In the event of willful or negligent default of these obligations, CCA shall take any recovery action that is permitted by law that is deemed appropriate.

 

SPLIT PURCHASES

Split purchases are defined as a single purchase split between multiple transactions to circumvent the maximum dollar amount per transaction limit on the card or the $3,000 small dollar purchase limit defined by State Fiscal Rules.

 

Consequence:                        Card will be revoked and the Cardholder will be required to obtain further training before the card is reinstated.

 

INAPPROPRIATE PURCHASES

Inappropriate purchases are defined under “Prohibited Transactions” and “Excluded Merchant Types.”

 

Consequence:                        A written warning is to be given to the Cardholder and the Cardholder will be required to obtain additional training on use of the card.  Continued misuse will result in the cancellation of the card.

 

FAILURE TO PROVIDE ORIGINAL DOCUMENTATION

Lack of original merchant documentation for a transaction is a violation.  Transactions where the merchant does not provide original documentation is not considered a violation; however, this must be substantiated with a written description of the goods purchased.

 

Consequence:                        Cardholder will receive a written warning from their cost center administrator.  Subsequent violations may be result in additional training.  Patterns of chronic abuse may result in cancellation of the card and will be investigated as a personal purchase.