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System Management -Travel

C.E.S.P. 10-8: - Purchasing Card (P-Card)

New: 1-1-2016

 

 The University of Arkansas Cooperative Extension Service (UACES) has established the Purchasing Card (P-Card) Program to provide a more efficient and cost-effective method of purchasing and paying for low dollar transactions.  The program will replace, eliminate, or reduce the number of low dollar orders, specific purchase orders, blanket orders, and requests for personal reimbursements due to the expenditure of personal funds for items.  The P-Card program is intended to enhance Extension’s effectiveness and economy of operations.  P-Cards are implemented through US Bank Visa. Cardholders may use the P-Card at any merchant/vendor that accepts the card, except as noted in this policy.

The P-Card is a fast, flexible purchasing tool offering an enhancement to the existing purchasing processes and provides an extremely efficient and effective method for purchasing and paying for supplies with a total maximum per cycle limit that will be determined on an individual basis. 

UACES employees are expected to make sound business decisions in the best interest of UACES and always comply with the UACES and State policies and procedures. 

The P-Card does not affect the Cardholder’s personal credit.  The Agency is responsible for all charges made.  However, it is the Cardholder’s responsibility to ensure that the card is used within all stated guidelines of the Purchasing Card Program.

The P-Card is to be used only for business purchases for UACES.  PERSONAL CHARGES ARE STRICTLY FORBIDDEN. 

The P-Card Program Benefits

Cardholders will be able to obtain various supplies directly from vendors without using a purchase order.  This streamlines the purchasing process and can help improve turnaround time on receipt of orders.  It significantly reduces the workload and processing costs related to the purchase and payment of supplies.  In addition, it expands purchasing options by utilizing many businesses that do not accept purchase orders but take a VISA credit card.

The P-Card is accepted by most vendors.  The vendors do not send invoices to UACES and they will receive payment from VISA within 72 hours of the purchase.

Definitions in relation to the Purchasing Card (P-Card)

Billing Cycle - The monthly billing period, ends 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 UACES. UACES employees on regular appointment, as authorized by their immediate supervisor, are eligible to hold a UACES P-Card.  Temporary employees are not eligible for the program.

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.

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.  The monthly spending limit resets on the 16th of each month.

Procurement Card -A credit card issued to an employee of UACES for the purpose of making authorized purchases on UACES's behalf. UACES will issue payment for charges made with the Procurement Card.

Receipt/Documentation - A merchant produced or non-UACES document that records the relevant details for each item purchased including quantities, amounts, 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/Charge Limit - A dollar limitation of purchasing authority assigned to the Cardholder for each total charge made with the Purchasing Card.

How Does the Procurement Card Work?

The Procurement Card is a special VISA credit card. It works similarly to a personal credit card, except the charges are billed directly to UACES and payment is made by the UACES Financial Services Office.  Procurement Cards are for business use only!

The P-Card is issued in the cardholder’s name and any purchases made with the card will be his/her responsibility.

US Bank (USB) will bill UACES each month.  The current USB Visa billing statement will be available on the U.S. Bank website for each billing cycle following the last day of the billing cycle.  These periods from the 16th of the month to the 15th of the following month will be known as “billing cycles”.  If there are no purchases during a particular billing cycle, no forms need to be completed.  After each billing period, the Cardholder must verify and correct any fund or organization numbers that are incorrect on their monthly billing. 

Within 5 calendar days after the USB Visa billing statement is available on the U. S. Bank website, the Cardholder must reconcile the Monthly Activity Log and receipts with the statement and obtain the appropriate supervisor approval.  The Cardholder should forward the approved monthly activity log and the original receipts to Financial Services by the end of the month.  All purchases for the billing cycle will be charged to the default fund/org unless the information is revised on the US Bank website.  The Cardholder or designee is responsible for reallocating the fund/org# on the U.S. Bank website.  The cardholder must notify the Accounts Payable Manager if the default fund/organization coding string is to be changed on any purchases.

If the expense funding/org reallocation is not completed by the deadline, the default fund/org coding will be used for the distribution of charges.  It is imperative that the Cardholder complete the billing distribution by the stipulated deadline.  Payment transfers from the default coding will be monitored to determine if there is a consistent pattern of noncompliance.

Cardholder Responsibilities

The Cardholder is responsible for knowing and applying all of the rules related to the P-Card Program. 

  1. Cardholders must complete a mandatory on-line training and sign and return the Cardholder Agreement Form PRIOR to issuance of a Procurement Card.
  2. Cardholders must keep their Procurement Card and Card Account Number confidential.
  3. Cardholders should only use the Procurement Card for UACES business.
  4. Cardholders should understand that intentional misuse or abuse of the Procurement Card will result in the immediate revocation of charging privileges and possible disciplinary and criminal prosecution.
  5. Cardholders should not split transactions to avoid maximum per transaction dollar limits.
  6. Cardholders should report a lost or stolen Procurement Card immediately to US Bank at 1-800-344-5696.
  7. Cardholder should report suspected fraudulent P-Card charges immediately to US Bank at 1-800-344-5696.
  8. Cardholder should not accept cash in lieu of a credit to the Procurement Card account when returns are made.
  9. Cardholder is accountable for all charges made with their Procurement Cards and responsible for checking all transactions against the corresponding support documentation to verify accuracy and propriety.  
  10. Cardholder is the only person authorized to use the card.
  11. Cardholder should sign the back of the card immediately and always keep it in a secure place.
  12.  Cardholder should attempt to resolve disputes and billing errors directly with the vendor or bank and notify the Accounts Payable Manager if the dispute or billing error is not satisfactorily resolved.
  13.  Cardholder is responsible for submitting the U.S. Bank Monthly Activity Report along with original receipts and documents to support charge transactions.  The reports should be submitted by stated deadlines. 

Card Security

  • The Cardholders is the only person authorized to use the card issued in their name.
  • Cardholders must safeguard their P-Card and card number against use by unauthorized individuals in the same matter as a personal credit card.
  • The individual whose name appears on the card is responsible for purchases recorded on the card.

 Obtaining a Procurement Card

All P-Cards are issued at the request of the department or county offices and by the approval of Financial Services

  • Each card applicant must complete a Purchasing Card Application Form – PURCH-400 and forward through their supervisor for approval.  After the supervisor’s approval, the approved form is sent to Financial Services. 

  • Each card must have a complete funding/coding string (fund/organization) assigned to it.  This funding string will be the default coding for purchases.

  • Prior to being issued a P-Card, the applicant must complete a mandatory training session provided by Financial Services staff (training will be completed electronically). 

  • Upon completion of the training session, the cardholder will indicate they understand the intent of the Program and agree to adhere to the established guidelines by signing the Purchasing Cardholder Agreement.

  • Financial Services will maintain originals of the Purchasing Cardholder Agreement.

  • The applicant may begin using the P-Card immediately upon receipt.  Before purchasing with the P-Card, it must be activated.  It is recommended the activation be done in a secure location to protect the security and integrity of the P-Card. 

Allowable and Non-Allowable Charges

Many items may be charged with the P-Card. 

Examples of Allowable P-Card Charges

  • Books
  • Lab supplies
  • Non-contract office equipment and products
  • Postage
  • Subscriptions
  • UPS and FED EX expenses 

Examples of Unallowable P-Card Charges 

Some items vendors offer cannot be purchased with the P-Card.  This list is NOT all inclusive and is subject to change with little or no notice. 

  • Alcoholic Beverages
  • Ammunition
  • Any type of Travel Expense, includes Airfare, Lodging, Car Rental
  • Birthday/Holiday/Greeting Cards of any kind for any reason
  • Car Rental
  • Cash Advances
  • Cell phones
  • Computers, laptops, tablets, and work stations
  • Construction or Remodeling
  • Contracted services
  • Decorations for Parties/Holidays/Celebrations
  • Donations/Contributions/Sponsorships
  • Equipment purchases $2,500 and above (includes taxes and freight)
  • Flowers/Plants for gifts or personal office décor
  • Fuel
  • Gift Certificates/Gift Cards
  • Gifts of any kind for any reason
  • Items for Non-UACES Purposes
  • Letterhead and Printed Envelopes
  • Lodging
  • Narcotics/Prescriptions and other over the counter medications for human use
  • Office supplies -  on mandatory state contract
  • Paper Towels & Toilet Tissue
  • Personal Items
  • Personal Purchases
  • Printing and Copier Paper
  • Purchases involving a trade-in
  • Supplies and Food for birthdays, promotions, department transfers and other celebrations
  • Tires – Must have approval from UACES Purchasing Manager
  • Vehicles of any kind

Additional Information for Purchases

  • Before purchasing computer hardware and related peripheral equipment or software, contact the Purchasing Manager in Financial Services at (501) 671-2041.
  • For printing services, contact UACES Print Media Services at printshop@uada.edu or (501) 671-2249.  If the Print Shop is unable to complete the printing order, contact the Purchasing Department for more information on how to proceed.
  • UACES P-Cards will not be used to purchase gasoline or diesel fuel.  Drivers of UACES vehicles will continue to use the Wright Express Fleet Card for such purchases. 
  • The P-Card may be used for emergency services, such as towing, batteries, and repair of tires.  Maintenance invoices must indicate fleet vehicle number, type vehicle and license number. Any scheduled maintenance for a vehicle should be requested using regular purchasing procedures.
  • The use of contract and/or minority vendors is strongly recommended.
  • All purchases that require a contract must follow the procedures outlined in Extension Policy CESP 3-42. 

 Unauthorized and/or Inappropriate Card Use

The Procurement Card MUST never be used to purchase items for personal use or for non- UACES purposes even if the cardholder intends to reimburse the UACES.

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 P-Card and the cardholder seeks 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 authority to retain or use the Procurement Card. This could also result in disciplinary action up to and including termination and possible criminal prosecution and restitution.

Consequences of Unauthorized and/or Inappropriate Card Use

The Procurement Card (P-Card) must never be used to purchase items for personal use or for non-UACES purposes. A cardholder who makes an unauthorized purchase with the P-Card, or uses the card in an inappropriate manner will be subject to disciplinary action including possible card cancellation, termination of employment and criminal prosecution.

In cases of inappropriate card use, personal purchases, splitting transactions, purchasing non-allowable items or purchasing items that should be purchased via a requisition the Cardholder will received disciplinary action as noted per offense: 

  1. First Offense-   If a charge is found to be inappropriate/non-allowable (i.e. should have been purchased via a requisition) a written warning from Financial Services will be given to the cardholder and additional training will be offered.
  2. Second Offense- A second offense charge will result in the Cardholder being suspended from making purchases up to 120 days.  The cardholder and their immediate supervisor will be notified by e-mail of the offense.  To reinstate privileges, a memo from the Cardholder’s immediate supervisor giving adequate justification will be required. Upon receipt and approval of that justification, Financial Services will require the cardholder to complete an on-line training session on the procedures and regulations on use of the P-Card.

If a cardholder has habitual inappropriate use of the P-Card, they will be suspended from use of the card.  The cardholder and their supervisor will be notified by e-mail. To reinstate privileges, a memo from cardholder’s supervisor giving adequate justification will be required. Upon receipt and approval of that justification, Financial Services will establish a time for the cardholder to complete Procurement Card on-line training again.

If a cardholder is suspected of making fraudulent purchases the cardholder’s card will be immediately suspended and their supervisor will be notified by email. A further investigation will be conducted and possible criminal prosecution and termination of employment may occur.

Standard Spending Limits on Procurement Cards

Each P-Card will be assigned a maximum per-transaction and per cycle limits, based on the Cardholder’s need as approved by their supervisor.

Making a Purchase Process

When making a P-Card purchase, the Cardholder should check as many sources as reasonable to assure the best price, quality, service and delivery that are in the best interest of UACES.  There are several methods of procuring with the P-Card.  All purchases must comply with extension policies and regulations.

  • In Person (Point of Sale) – The Cardholder takes the P-Card to the merchant and verifies the merchant accepts the Visa card.  The Cardholder shall retain all P-Card transaction documentation and submit it along with the US Bank Monthly Cardholder Activity Log to Financial Services.
  • Phone Orders/ Fax Orders–The Cardholder may telephone an order to a supplier.  The supplier shall request the Cardholder’s P-Card number and expiration date.  For security reasons, ensure others do not overhear or view this information.  The Cardholder shall ensure the supplier includes a P-Card authorization slip, cash register tape or paid invoice with the delivery of the order.  The Cardholder shall retain all transaction documentation for backup and submit it along with the US Bank Monthly Cardholder Activity Log to Financial Services.
  • Internet Orders/Mail orders – Cardholders may use electronic mail or regular mail to submit an order to a supplier.  However, before engaging in an internet purchase, the Cardholder should be familiar with the procedures the vendors use to handle P-Card transactions.  Once the Cardholder has completed the transaction, he/she shall ensure the supplier includes a cash register tape, paid invoice, other documentation with the purchase information on it, and/or a delivery slip with the order.  If the supplier intends to mail the P-Card transaction documentation as a separate item, the Cardholder shall ensure this documentation is sent the agency’s official address.  The Cardholder shall retain all transaction documentation and submit it along with the US Bank Monthly Cardholder Activity Log to Financial Services.  Internet orders may be subject to State Sales & Use Tax.

Restrictions on Purchases

No individual transaction may exceed the card’s pre-set per transaction limit (including freight/handling services and taxes where applicable).

Purchases are not allowed from debarred or suspended vendors.    Failure to observe this requirement may result in revocation of purchasing card privileges.  If Cardholder needs more information on debarred or suspended vendors they should contact the Accounts Payable Manager.

The State of Arkansas has had U.S. Bank block certain types of merchants (financial institutions, insurance carriers, etc) for purchases under the Purchasing Card.

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.  This credit will appear on a subsequent statement. 

If merchandise is returned, the Cardholder should attempt to obtain a credit receipt from the vendor and retaining the receipt with other receipts to document the purchase and return. 

Under no circumstances should a Cardholder accept cash or a gift card in lieu of a refund or credit to the P-Card account.

No exchanges are allowed – the item must be returned for credit and the replacement item purchased separately.

Monthly Billing Cycle

The monthly billing cycle for P-Cards will be the 15th of the month.  After each transaction or within five days following the end of the cycle, the Cardholder should log into the US Bank Monthly Activity Log to verify the correct Fund and Org codes are assigned to each transaction. 

Sales and Use Tax

UACES is a state agency and is not exempt from sales taxes.  If an out-of-state vendor is not registered in Arkansas to collect sales taxes, UACES will pay the state of Arkansas a use tax.  Sales tax should be listed as a separate line item on all purchases and not included in a single total price. Financial Services will remit to the State of Arkansas the appropriate use tax and the department, grant, or county budget will be charged the appropriate use tax due.

All tangible property purchased out-of-state is subject to Use Tax (i.e. books ordered from Amazon, Uline products, Ebay purchase).

Receipts/Documentation of Expenditures

The Cardholder must provide valid documentation of each transaction once a month to the Accounts Payable Manager.  All documentation should be securely attached to the approved Monthly Activity Log and remitted to the Accounts Payable Manager by the end of each month.  The Accounts Payable Manager will review documentation submitted and determine if the documentation is valid and complete. 

Valid documentation may be:

  • Detailed cash or sales receipts (must be itemized)
  • A signed packaging slip from the delivery
  • Any other detailed document which shows the cost, items purchased, and the vendor name

All documentation should include the following minimum information (Cardholder must hand write if not originally printed on the form):

  • Vendor name
  • Date of purchase
  • Description and quantity of each item purchased
  • Per item cost, if available from the merchant
  • Total cost of the transaction
  • Cardholder name and card number.
  • Where purchase is shipped

Original Documentation should be provided in a timely matter. 

Cardholders or designated staff members should maintain copies of the US Bank Monthly Cardholder Activity Log for future reference.

Disputing a Charge

The Cardholder is responsible for contacting the vendor to resolve any disputed charges or billing errors.  If the cardholder and the supplier cannot resolve the issue contact US Bank at 1-800-344-5696 for more instructions and assistance. 

Regardless of the status of a dispute, payment will be made to the US Bank.  Adjustments will be made upon resolution.

The Cardholder will ensure that an appropriate credit for the reported disputed item (s) or billing errors appears on a subsequent Cardholder’s Statement.

Rebates, Refunds, Rewards, ETC.

Any manufacturer rebates received by the Cardholder as a result of a P-Card transaction shall be credited to the P-Card and documentation reflecting the transaction shall be attached to the P-Card US Bank Activity Log to report such credit.

The Cardholder is not to use any reward cards to accrue points or coupons from state purchases.  Any rebates, coupons, rewards, gifts, points, frequent flier miles, cash cards, etc. must accrue to UACES and utilized only for official UACES business.  No personal gain by making purchases with the P-Card is permitted.  Misuse of this section could result in disciplinary action.

Unauthorized Purchases

Any UACES employee that makes a purchase that is not permitted or unauthorized will be personally financially responsible for payment of the charges associated with that purchase and will be subject to disciplinary action including possible card termination, termination of employment and criminal prosecution.

Splitting transactions to avoid single transaction limits is not allowed and is subject to disciplinary action.

Card Declines

If a purchase has been declined and the Cardholder feels that it should not have occurred, contact the USB Visa Customer Service listed on the back of the card.  Customer Service will to tell the Cardholder if the vendor was blocked or if the Cardholder may have exceeded the monthly credit limit or single transaction dollar limit on the card.

Cancellation of the Purchasing Card

On or before the cardholder leaves the department or county, the P-Card must be deactivated.  Purchasing Cards may not be transferred from one employee to another.  The Cardholder or their immediate supervisor must notify the Accounts Payable Manager in Financial Services they are leaving UACES.  The P-Card should then be cut in half in front of a supervisor.   

If Cardholder fraudulent activity surfaces, the Accounts Payable Manager shall notify US Bank to cancel the Cardholder’s card within two (2) days of the documentation and verification of Cardholder misuse. 

 Changing Purchasing Card Information

The name on the purchasing card cannot be changed to another person.  A new purchasing card must be requested under the name of the new cardholder by completing a Purchasing Card Application form – PURCH 400.

Card Renewal

Renewal purchasing cards will be issued every two (2) years.  USB will mail renewal purchasing cards directly to Financial Services.  Cardholders will be required to complete a mandatory on-line training on the P-Card and to sign a new Cardholder Agreement form before the new card will be issued to them.

Upon receipt of the new P-Card, Cardholder should immediately sign the back of the new purchasing card and cut the outdated card in half and discard.

Record/Log Procedures

  • The Cardholder or designated staff member will complete and submit the US Bank Monthly Cardholder Activity Log with attached original receipts, packaging slips, credit receipts, etc. Receipts should be taped or glued securely to a sheet of paper before submitting. The Cardholder should sign the US Bank Monthly Activity Log before giving the Monthly Activity Log to their immediate supervisor for review.
  • The Cardholder’s immediate supervisor will review the Cardholder’s US Bank Monthly Cardholder Activity Log and compare the receipts, packaging slips, credit receipts, etc. to the US Bank Monthly Cardholder Activity Log. 
  • After the immediate supervisor has verified the US Bank Monthly Cardholder Activity Log, the immediate supervisor will sign the log and forward it to Accounts Payable Manager in Financial Services.
  • A copy of the US Bank Monthly Cardholder Activity Log should be retained by the cardholder or designated staff member for future reference.

Record Retention Requirements

  • Records shall include credit slips, cash register receipts, packaging slips, service slips, the US Bank Monthly Cardholder Activity Log, etc.
  • Official documents are to be kept five (5) years plus the current year by Financial Services. 

Internal Controls & Compliance Reviews

The State of Arkansas encourages agencies using the P-Card to have in place an internal control procedure to review the P-Card transactions each month.  The review procedures are to verify Cardholders are using the P-Card appropriately and the agencies are maintaining adequate records.  The Accounts Payable Manager will review the US Bank Monthly Cardholder Activity Logs once a month to examine for appropriateness of transactions and record keeping procedures.

Auditing of Purchasing Card Activity

To assure appropriate institutional control of the P-Card Program, the Accounts Payable Manager will randomly select purchasing card transactions to audit.  Each month, a sample of the Monthly Cardholder Activity Log forms will be selected for review.  The review should consist of the following:

  • Documentation (cash register receipt, credit slip, packing slip) should be reconciled to the Purchasing Card US Bank Monthly Cardholder Activity Log form.
  1.  If the Cardholder does not provide such documentation, it should be explained on the Purchasing Card US Bank Monthly Cardholder Activity Log form.
  2. The Cardholder must dispute any unverified transactions and attach appropriate documentation.
  3. Review the extensions and additions on attached receipts, credit slips, or packing slips.
  4. Discuss with the Cardholder any disputes.
  5. If inappropriate purchases appear, the employee should be contacted to return the merchandise to the vendor, if possible.  In some situations, the employee should be directed to reimburse UACES.
  6. Update the Purchasing Card US Bank Monthly Cardholder Activity Log to include any changes from the original data entered.
  7. Ensure sales tax is charged on in-state purchases and use tax was remitted on all other purchases.

Cardholder Transfer within the UACES

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.

If the Cardholder transfers to a new position not within the same department and requires the use of a Purchasing Card, the Cardholder should contact the Accounts Payable Manager for further information.

Cardholder Separation from the UACES

Prior to separation from UACES, Cardholders must surrender their P- Card to their Supervisor.  The Supervisor should cut up the P-Card and discard.  The Cardholder should send any outstanding receipts for charges to the Accounts Payable Manager.

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