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Section 7 - Purchasing

Section 7.6 – The A.S. P-Card

Date:  12/4/06, 10/11/07 (revised), editorial changes 12/12/07

Approved: Finance Board 

The Associated Students Procurement Card, referred to as the P-Card (MasterCard™) simplifies purchase and payment for certain items costing $10,000 or less. The advantage of the P-Card is that the bank pays the vendors directly for purchases within a few days, and the AS pays a single monthly payment to the bank for all AS charges. The P-Card should be used by programs whenever possible for purchases of supplies and small equipment, in accordance with applicable purchasing procedures, from any vendor that accepts MasterCard™.

P-Card purchases must be in compliance with all procurement, allowable expenditure and funding, payroll, and tax-related policies.

P-CARD ADMINISTRATION

AS P-Card Administrator

The AS accounting office is responsible for the management of the AS’s P-Card Program. The AS Associate Executive Director designates the Controller as the AS P-Card Administrator, who is responsible for overall management of the AS's P-Card Program, AS-wide, including development and administration of policies and procedures for the program.

The cardholder is responsible for compliance with AS policies.

Under the direction of the AS P-Card Administrator, the System Administrator is responsible for day-to-day operational activities of the program, AS-wide. The System Administrator accepts all applications from the Program Directors and submits them to the bank. Additionally, the System Administrator sets up the P-Card cardholders and authorizers role in SAM™ (Strategic Account Management), which is the software used to manage P-Card transactions.

Program Directors

The Program Director has overall budgetary responsibility for their program's P-Card program and is responsible for following sound business practices. The Program Director assigns P-Card roles to employees within the department, balancing control and operating convenience in those designations. The size and organization of the department influences how this separation is accomplished. If a department is small, the Program Director might designate the same employee to perform two P-Card roles. However, to ensure maximum separation of duties, no one employee may function in all three roles (see below for explanation of each P-Card role). The Program Director retains final responsibility for control of the program in his/her department. An essential part of this control is the Program Director's responsibility, or delegation of responsibility, for review and reconciliation of monthly financial reports and statements.

Review of Purchases

Sound business practices require that an individual other than the cardholder review all purchases made by the cardholder. To expedite operations, this review may be made after the purchase, but a review at some time is a critical part of maintaining internal control.

Review of purchases in departments is made by the “approver”. Financial reports and statements contain a record of each P-Card purchase made during the month. Optimum control is achieved when both types of reviews are performed. Program Directors must ensure that the employees who review transactions are familiar with business policies and procedures, so their review of P-Card expenditures is thorough and they are sufficiently informed to make determinations regarding appropriate P-Card expenditures. Employees performing the reviewing function are expected to make inquiries regarding P-Card transactions regardless of their position in the department relative to that of the P-Card holder.

P-CARD ROLES AND RESPONSIBILITIES

The AS’s P-Card program has three defined roles: (1) System Administrator (SA), (2) Cardholder, and (3) Approver. These roles and corresponding responsibilities are outlined as follows:

1. System Administrator (SA)

The SA is responsible for general supervision of the program and is also the principal contact person for information related to the P-Card program, including relevant AS policies. The SA is also responsible for elevating and reporting any questionable or non-compliant P-Card activity to the A.S. P-Card Administrator and the appropriate Program Director.

SA responsibilities include:

• Supervising and monitoring the P-Card program;
• Requesting new cards as needed;
• Making necessary changes to existing cards;
• Setting limits for each cardholder based on a review of actual purchasing needs and responsibilities as follows:
  • Dollar limit per transaction (maximum $10,000), and
  • Dollar limit in a billing period (maximum $10,000)
• Determining which employees need access to the software;
• Ensuring that the Corporate Procurement Card / Employment Use Agreement form is completed, signed and submitted by the cardholder, and approved by the Executive Director;
• Ensuring that the original form is retained by the department and a copy is forwarded to the SA;
• Ensuring that cardholders and approvers perform their duties in an accurate and timely manner; and
• Collecting P-Cards and handling related termination procedures of P-Card privileges for AS employees who are terminating employment with A.S., or who no longer need P-Card privileges in the department.

2. Cardholder

The Program Director determines which employees in their program may have P-Cards. Cardholders must be employees who have responsibilities for purchasing goods or services for their departments.

Training in the use of the P-Card software, policies, and procedures is mandatory for all cardholders.  The Program Directors are responsible for ensuring that employees in their departments with a P-Card role receive appropriate training.

The P-Card may be used only for AS purchases, and the cardholder is personally responsible for all charges made on his or her P-Card. A P-Card may be used only by the person to whom it is issued. It may not be loaned to others, including employees in the same department. Additionally, establishing an account with a vendor using an employee's P-Card as the default payment method and then providing access to that vendor account to any other person, including other employees, is also considered "loaning" or "sharing" of a P-Card and is strictly prohibited. A cardholder who misuses or fraudulently uses the P-Card will be subject to investigation, disciplinary action, and/or termination of employment by the A.S., and may be subject to criminal prosecution.

To obtain a P-Card, an employee must complete the Corporate Procurement Card / Employment Use Agreement form and have it approved by the Executive Director.

Cardholder Responsibilities

By accepting and using a P-Card, a Cardholder agrees to:

• Notify the bank issuing the P-Card, the P-Card SA, and their Program Director immediately if the P-Card is lost or stolen. (The cardholder’s department may be liable for all charges incurred until the P-Card is reported lost or stolen to the bank.)
• Make purchases competitively where practical.
• Consider performance, quality, suitability, delivery, and service when choosing vendors.
• Understand and comply with the list of prohibited and restricted purchases in this policy.
• Give complete shipping instructions when placing orders to vendors, and ask vendors to include receipts with the shipment. (Receipts should include the vendor’s name, amount of order, date, and an itemized description of the item(s) purchased.)
• Provide the A.S. Accounting Department with original receipts for all P-Card transactions. If the purchase is for a business meal or refreshment, the receipt must contain the names of all attendees and their business affiliation
• Not engage in stringing or making successive purchases to avoid circumventing the P-Card's assigned single transaction limit regardless of whether the purchase is with one or several vendors.
• Verify that items purchased with his/her P-Card are received and follow up with the vendor on any delivery problems, discrepancies, or damaged goods.
• Handle any returns of purchases made on the P-Card as credits to the P-Card.
• Log on to the SAM™ software and approve their purchases and ensure the accounting code is correct.

3. Approver

The “Approver” for each “Cardholder” is their immediate supervisor or designee. The “Approvers” main responsibility is to verify that the charge made is a proper expenditure of AS funds and to verify that the accounting code used is correct.

Training in the use of the P-Card software, policies, and procedures is mandatory for all “Approvers”.  The Program Directors are responsible for ensuring that employees in their departments with a P-Card role receive appropriate training.

Approver responsibilities include the following:

• Check SAM™ for items to be approved at least once each month;
• Initiate corrective action if the charge is inappropriate or inconsistent with A.S. policies and procedures;
• Ensure that the correct accounting code has been used for the purchase; and
• Authorize the reconciled transaction in SAM™.

PURCHASE GUIDELINES

Due to AS policies, administrative controls and/or legal requirements, limitations apply to the use of the P-Card.

Prohibited Purchases

P-Cards may not be used for the purchase of the following items.

• Purchases from AS employees, their spouses, parents, or children.
• Purchases from business concerns of which an employee (or an employee’s spouse, parent(s) or children) is a sole or principal owner, major officer, or primary employee.
• Purchases when the vendor requires an agreement or any contract to be signed by an authorized AS representative.
• Specific items as follows:
  • Attorney Fees
  • Cash advances
  • Charter bus and charter air services
  • Consultant Fees
  • Health Care Provider Fees
  • Imported goods that must go through customs
  • Independent Contractor Fees
  • Maintenance Contracts
  • Weapons, ammunition, or detonating equipment or material

Restricted Purchases

P-Cards may be used for the following items when corresponding requirements are met (or when exceptions are approved by the AS P-Card Administrator).

• Business meals may only be purchased under certain circumstances and with specific restrictions.
• Computer software may be purchased if the vendor does not require a signed license agreement or contract.
• Flowers/floral arrangements may only be purchased under certain circumstances.
• Rentals or leases from corporations may be made using a P-Card if they will not result in multiple payments or if a contract or agreement is not required.

Division P-cards

In addition to cards being issued to authorized individuals (“Cardholders”), each AS Division will be allowed to establish a generic division P-card(s) that will be requested by each Division Director and approved by the AS Controller or designee.  This card(s) can then be used to make authorized purchases by individuals who do not have a P-card issued to them.  The Division Director must assign a full time employee(s) “Division P-card coordinator(s)” who is responsible for the custody of the card(s).  The division’s P-card(s) coordinator(s) or designee will be required to maintain a log, check out/in the division’s P-card, ensure original receipts are returned and a “received by” signature is placed on all receipts for “goods” purchased, print the appropriate “expense log” report and forward to the Division Director or designee for review and forwarding to the A.S. accounting department for final processing. 

AUDITING DEPARTMENT P-CARD PROGRAMS

The SA, and internal and external auditors may conduct periodic reviews of P-Card use. P-Card violations that will result in a review of cardholder privileges include but are not limited to:

• Use of the card for unallowable purchases;
• Lack of documentation of purchases;
• Unacceptable documentation of purchases;
• Late documentation of purchases; and/or
• Failure to reconcile charges.

Cardholders who misuse or fraudulently use the P-Card will be subject to investigation, disciplinary action and/or termination of employment, and may be subject to criminal prosecution. The AS is authorized to deduct from the cardholder’s salary any personal charges made on the P-Card.

EXCEPTIONS TO POLICIES AND PROCEDURES

The AS Associate Executive Director or AS P-Card Administrator, or delegates, are authorized to make exceptions to this policy.

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