Purchase Card Program

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1 Purchase Card Program POLICIES AND PROCEDURES South Puget South Community College has established a Purchase Card Program in accordance with the Office of Financial Management and the Department of Enterprise Services policies and procedures. The source of the purchase cards is JP Morgan. The college is responsible for any use of the purchase cards, and any employee using the card agrees that he or she is personally liable for any unauthorized or unapproved purchases. The college reserves the right to cancel any card when there is clear evidence of abuse, e.g., unapproved purchases. The college purchase card is used to procure small dollar amount goods and services. The intent of the purchase card is to promote purchasing efficiency, flexibility and convenience. Acceptable Use of Purchase Cards The purchase card can only be used to purchase goods and services (i.e., registrations, subscriptions, office supplies) for South Puget Sound Community College. Each employee using a purchase card must ensure that purchases made comply with all applicable state laws, rules, and regulations. Purchases must be within the spending limits established on the individual card, and within the predetermined college aggregate limit. Each card will have a predefined daily and monthly spending limit, as well as a daily and monthly total transaction limit. The use of the purchase card to pay for a purchase does not exempt an agency from the purchasing requirements set by the Department of Enterprise Services. Purchasing requirements, such as the direct buy limit of $10,000 and prepayments, are still applicable. Unacceptable Use of Purchase Cards Cash advances Personal purchases Purchases in excess of the limits authorized per card Service Contract, Performance Agreement, Maintenance Agreement, and Insurance payments Purchase of materials or services from any member of the card user s immediate family Purchase of equipment, materials, or supplies restricted by South Puget Sound Community College policies, guidelines or contractual agreements Gifts of any kind, including gifts for employees, donors or volunteers Tips and gratuity Meals and taxis while on travel status Any computer equipment/software and peripheral equipment, internet software and subscriptions without the approval of Information Technology (IT) Services Splitting purchases 1 Page

2 Equipment over $1, (on Small and Attractive Asset List) and any furnishings and equipment over $ Small and Attractive Asset List Assets to be tracked as Small and Attractive items ITEMS Items at any cost Weapons, Firearms, Signal Guns, and Accessories COMMODITY CODE 10XX $300 and above per item (this includes shipping, taxes, installation and warranties if applicable). Laptops and Notebook Computers 7013 Tablets and Smart Phones 7014 Desktop Computers (PCs) 7012 $1000 and above per item (this includes shipping, taxes, installation and warranties if applicable). Optical Devices, Binoculars, Telescopes, Infrared Viewers, and Rangefinders 6651 Cameras and Photographic Projection Equipment Television Sets, DVD Players, Blu-Ray Players, and Video Cameras (home type) 7730 Agency Roles and Responsibilities Agency Program Administrator The Purchasing Manager as the assigned Agency Program Administrator is responsible for Managing the purchase card program and ensuring compliance with Purchase Card Program requirements, Developing policies and procedures to insure that college meets all state and federal requirements, Reviewing purchase card applications and ordering cards from the purchase card provider, Maintaining a list of authorized Approving Officials, Card Custodians and Designated Card Users, Establishing authorization controls for each Designated Card User. This includes limits on the types of purchases, dollar limit per transaction, billing cycle purchase limits, etc., Training Approving Officials, Card Custodians and Designated Card Users by providing advice, direction, consultation and assistance, Establishing procedures for maintaining security of the purchase card and account numbers, Designating individuals to have on-line access to purchase card transaction detail, Establishing card renewal procedures, Performing periodic audits of the Purchase Card Program. 2 Page

3 Approving Official The Department Head as Approving Official is responsible for Designating Card Users, Using the purchase card strictly for South Puget Sound Community College business, in accordance with the college policies and procedures, Ensuring timely reconciliation of department card statements, Reviewing and approving the Purchase Card Transaction Log and submitting it to the Business Office once logs are reconciled to the monthly statement by the Card Custodian, Taking appropriate disciplinary measures with Designated Card Users who misuse the department s purchase cards. Card Custodian The Card Custodian is responsible for Maintaining the Purchase Card Transaction Log, Tracking and verifying all Designated Card User transactions, Ensuring that Designated Card Users obtain and submit valid supporting documentation for each purchase made, Recording each purchase on the Purchase Card Transaction Log, Budget Coding each transaction, including designating the appropriate sub objects, Ensuring that any disputes with merchant are resolved, and arranging for credits, etc., Reconciling the card statement and corresponding receipts to the Purchase Card Transaction Log at least monthly and submitting statement and log to the Approving Official for approval, Safeguarding card security at all times. Designated Card User The Designated Card User is responsible for Using the purchase card strictly for South Puget Sound Community College business in accordance with college policies and procedures, Not splitting transactions in order to remain within the established maximum dollar limit per transaction, Submitting all receipts, invoices and other backup documentation to the Card Custodian once purchase made, Keeping the card in a secure place at all times, Notifying the Agency Program Administrator promptly of any inappropriate use of the purchase card and employees are personally liable for any unauthorized or unapproved purchases, Reporting lost or stolen cards immediately. Fiscal Staff The Fiscal Staff is responsible for Receiving approved card statements, Purchase Card Transaction Logs and corresponding receipts for review and payment, Posting purchase card transactions to the accounting system, Verifying that all goods or services on the Purchase Card Transaction Log are received prior to payment of the card billing, Submission of payments to the purchase card contractor within the required contractual obligation period. 3 Page

4 Issuing Purchase Cards The authorized employee will complete the application form and submit it to the Agency Program Administrator in the Purchasing Office. The Purchasing Office will contact the employee when the card is received from the bank and when all necessary controls are in place, including employee training. Internal Control Procedures The Vice President for Administrative Services of South Puget Sound Community College or the designee will designate the Purchasing Manager to be the Agency Program Administrator. The Agency Program Administrator s management of the program will include training on the use of the card. The Agency Program Administrator will review purchase card applications and will order the cards from the contract provider, completing all necessary contractor provided implementation forms in order to establish electronic controls. The Agency Program Administrator will maintain a master list of all purchase cards assigned to South Puget Sound Community College as well as a list of all Approving Officials, Card Custodians and Designated Card Users. The Approving Official s will designate Card Custodians who will implement the program. This will include authorizing employees to use the purchase card and establishing authorization controls for each Designated Card User. Purchase cards will be retained by the Card Custodian in a secure location, and the security of the purchase cards and the account number shall be maintained. In order to minimize liability for unauthorized purchases, the Designated Card User must report lost or stolen cards immediately by calling the Purchasing Office. Periodic program reviews will be conducted to determine if proper and effective use and controls of purchase cards are being exercised. When the Card Custodian transfers laterally or leaves South Puget Sound Community College, the Purchasing Office will be notified. If required, the Card Custodian shall return purchase cards to the Purchasing Office. All transactions using the purchase card will comply with all applicable federal and state accounting and reporting requirements including: 1. Requirements of the Internal Revenue Service, such as annual U.S. Information Returns (1099 s); 2. Reporting requirements established by the Office of Minority and Women s Business Enterprises; 3. Requirements of the Department of Revenue related to use tax, and; 4. Expenditure coding requirements as established by the Office of Financial Management. Purchase Card Misuse The Approving Official, in consultation with the Vice President for Administrative Services, is responsible for taking appropriate disciplinary actions, consistent with applicable personnel policies, for the misuse of the purchase card. 4 Page

5 Purchase Card Transaction Log South Puget Sound Community College will maintain Purchase Card Transaction Log forms to record each purchase made and any items returned to the supplier. All supporting documents (packing slips, sales receipts, credit slips, cash register receipts, order forms, receiving reports, meeting announcements, etc.) will be attached to the Purchase Card Transaction Log and submitted to the Business Office monthly along with the reconciled monthly card statements. It is mandatory for Designated Card Users and/or Card Custodians to record each purchase on the Purchase Card Transaction Log. The transaction log contains all of the information necessary to reconcile bank statements and it identifies the accounting codes to be used for payment. For each purchase made with a purchase card, a signed supplier sales receipt or purchase slip that clearly describes the items purchased, the price, and any applicable sales tax will be attached to the transaction log. Designated Card Users will return sales receipts and purchase slips to the Card Custodian within twenty-four hours of the purchase so that transactions can be logged in. Complete files of the purchase card transactions will be submitted to the Business Office monthly with the reconciled monthly statement. These files are subject to audit and review and must be complete and accurate. The retention schedule for payables documents will be followed for the Purchase Card Transaction Logs, monthly card statements and their corresponding payments. Web Purchase Guidelines The purchase card can facilitate the purchase of goods and services via the web. Purchases made on the web are subject to the same policies as any other purchase card transaction. Employees will follow these guidelines when using purchase cards on the web: Purchase only from known and trusted vendors. If a vendor is unknown to the user, contact the Purchasing Office before a charge is made so that the vendor s legitimacy can be verified. Make sure the site is secure. Use caution when providing college or personal information. The following are some of the issues employees should be aware of when using the purchase card on the web: Reputable Vendors Employees must be sure that the vendor is legitimate. Employees should avoid on-line auction sites and should do business only with companies that are known and trusted outside of the web. Sites should fully disclose warranties and additional costs (e.g., shipping) before asking for any payment information. All sites used for purchase online should provide a safe shopping guarantee. Secure Communications When employees switch from browsing to buying, the vendor should issue a prompt that says the transaction is being switched to a secure system. A safe site will display a symbol of an unbroken key or a closed padlock icon in the upper or lower status bar. In addition, the web address should begin with when a site is secure. 5 Page

6 Privacy Protection Look for a clearly stated privacy policy on the vendor s website. If there is not one, reconsider divulging college or personal information. Always logoff when finished with a web purchase session. Receiving All shipments for delivery should go through the Receiving Office, and the department will notify Receiving via (receiving @spscc.edu) when a delivery is expected. Receiving will open and inspect the shipments for damage; the shipment will then be delivered to the originator of the order where the items will be checked in to verify that all items ordered were received. If shipment to another college location is preferred, contact the Receiving Office. Payment of the Purchase Card When processing purchase card payments, the college will utilize the single payment method. Under this method, a consolidated statement of all card user transactions is sent to Accounts Payable for payment. Payment terms are net thirty days. Accounts Payable will pay within fourteen days in order to avoid late fees and finance charges as well as in order to take advantage of rebate incentives. Purchase card rebates for prompt payment will be deposited into a centralized college account. Late payments can result in late payment fees of 1% per month on the amount overdue or a minimum of $1.00 under FCW Any finance charges or late fees incurred by the department will be paid for at the expense of the department. The college will pay the purchase card provider by warrant or by electronic funds transfer. Handling Credits and/or Disputed Items The department will immediately notify the purchase card provider or the merchant, as appropriate, of any items in dispute. Disputed items will be documented in writing on a Transaction Dispute Form, investigated, and resolved within 60 days from discovery of the charge or from the first statement on which the disputed charge appears. In the event that items are returned for credit, the Approving Official will secure and retain documentation supporting any items returned to the supplier, together with the accompanying credit slips. Reconciliation, Documentation and Records Retention On a monthly basis the Department will download the card statement that displays detailed transactions made during the current billing cycle; the Approving Official and the Card Custodian will receive a copy. It is the responsibility of the Approving Official or designee to reconcile each transaction on the card statement to the Purchase Card Transaction Log. 6 Page

7 The Approving Official will review and sign the reconciliation before sending it to the Business Office for payment. A copy of the card statement and the Purchase Card Transaction Log will be kept with the department and the reconciled statement and original Purchase Card Transaction Log with back up documentation will be submitted to the Business Office no more than ten days after the close of the billing cycle. Failure to submit the signed statement and logs in a timely manner may result in withdrawal of the privilege of using the Purchase card. Periodically, the Agency Program Administrator will review purchases to ensure compliance with the state mandated purchasing procedures and requirements. Lost or Stolen Cards If a purchase card is lost or stolen, the Designated Card User or Card Custodian should notify the issuing bank and the Agency Program Administrator immediately. Failure to notify the issuing bank may result in agency responsibility for all charges. Audits and Administration Approving Officials are encouraged to review reports and bank statements to determine if alternate acquisition methods should be developed. In many instances the establishment of recurring or blanket orders may be more financially beneficial to the college than the use of the purchase card. Periodic program reviews will be conducted to determine if proper and effective controls and use of purchase cards are being exercised. Approving Officials will review and analyze account billings and management reports to monitor purchases and the Purchase Card Program. The Agency Program Administrator or designee will audit compliance with the terms and conditions of the JP Morgan Chase Purchase Card Services, as well as compliance with the college policies and procedures. 7 Page