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II-3: Purchasing Card Policy
Policy Number: II-3
Effective Date: June 30, 2013
Last Reviewed: June 30, 2013
Responsible Dept.: Financial Services
A signed copy of this policy is available in the President's Office.
Purchasing Cards (P-Cards) offers VWCC the opportunity to streamline their procedures for procuring and paying for small dollar goods and services. The Purchasing Card program is intended as an alternative to the use of requisitions for procuring goods and services and simplifying the payment process. The program reduces the volume of accounts payable transactions and the associated administrative costs by eliminating vendor invoices and consolidating multiple invoices into one monthly invoice and benefits the vendor by providing them payment within as little as three business days. Bank of America's online program management system "WORKS" provides a variety of management information reports to assist in maintaining control over purchases and payments.
Cardholders may directly contact vendors that accept the P-Card to purchase goods and services up to their established card limit and order through eVA or make an over the counter purchase. The card limit transaction ceiling should not be circumvented by "splitting" orders.
Only the cardholder to whom the card is issued shall purchase authorized goods and services required for college operations, maintenance and repairs within a pre-established dollar limit. A listing of goods and services, which may NOT be purchased by use of the P-Card, is attached.
All new cardholders must attend a training session on use and administration of the card prior to issuance to the cardholder. Cardholders are then required to participate in annual training through the Knowledge Center on proper card usage, security, and procurement guidelines.
The full amount of the purchasing card monthly invoice must be paid "as rendered" by the due date. Credits obtained from any successfully disputed amounts will appear on subsequent invoices. Monthly invoices may not be reduced by unapplied credits.
This card is not interrelated with the Travel Charge Card. Therefore, personal charges, cash advances, and business travel, or entertainment expenses are not permitted with the Purchasing Card.
This policy is applicable to all faculty and staff at Virginia Western Community College, including those at off-campus facilities.
All college employees shall comply with Commonwealth of Virginia Policy as outlined by the Department of Accounts (DOA), CAAP Manual Topic 20355, entitled Purchasing Charge Card and purchasing policies as published by the Department of General Services, Division of Purchases and Supply in the Agency Purchasing and Surplus Property Manual (APSPM). In addition, policies promulgated by the Virginia Community College System in the VCCS Policy Manual Section 4, Administration and Finance, will also apply.
Applying for a Card:
- Program Administrators must ensure that purchasing cards are issued to only those individuals who have appropriate purchasing authority. The applicant's supervisor must provide the Program Administrator with documentation supporting the issuance of the card, including, potential type and level of activity, transaction limits, and monthly limit. Typically, cardholders will be individuals who perform departmental ordering on a frequent basis. The employee will provide his demographic information on the Purchasing Card Request (Attachment 1) and submit to his Supervisor for signature.
- Cards are issued with the name of the cardholder and the cardholder's agency name embossed on the front. Cardholders must receive training and sign a Purchasing Card Employee Agreement Form (Attachment 2) prior to obtaining the purchasing card.
Security of the Card
- Authorized use of the purchasing card is limited to the person in whose name the card is issued. The P-Card should not be loaned to another person. If a cardholder knowingly allows another person to use the P-card, the named cardholder's privileges will be revoked for a minimum of three months. This does not preclude a cardholder from placing an order with a vendor by telephone or electronically then sending a representative to claim the items ordered. P-Card numbers cannot be faxed to vendors. Any email correspondence on orders should never contain the entire card number. This includes correspondence with Bank of America Visa and the Department of Accounts. Provide only the cardholder's name and the last six (6) digits of the card number. In the event the cardholder is absent from work for an extended period, a new card may be issued to another person for the duration of the absence.
- The purchasing card should be kept in an accessible but secure location, such as a locked desk or cabinet. Access to the desk or cabinet should be limited to the cardholder and as a minimum their immediate supervisor. The account number on the purchasing card should not be posted or left in a conspicuous place.
- If the cardholder's card is lost or stolen, the cardholder must immediately notify the Bank of America Visa and the Program Administrator. The department is ultimately responsible for a lost or stolen P-card until it has been properly reported.
- Upon termination of employment, retirement, or change of job duties, the P-Card must be cancelled as it is no longer needed. The cardholder must surrender the purchasing card to his or her supervisor immediately upon request by the Program Administrator in the Financial Services department.
Ordering Merchandise Using the P-Card
- Once the cardholder has their card, they may use it to purchase authorized goods and services.
- Mandatory Sources (such as: Virginia Correctional Enterprises, Virginia Industries for the Blind and established State Contracts) must continue to be utilized as the only source of supply for those items (or items similar in function to those items) which they are responsible. If those sources do not accept the P-Card, as a method of payment, then an order shall be placed in eVA and sent to the Financial Services department for payment.
- If the item(s) required for purchase are not carried by any of the mandatory sources and you choose to make the purchase via the P-Card; the cardholder may proceed with the intended purchase as follows:
- Virginia Western Community College must make every effort to utilize Department of Minority Business Enterprises (DMBE) qualified small women-owned and minority-owned businesses when making purchases less than $5,000, including those made with small purchase credit cards. State agencies are now required to document when purchases by P-Card are not made to DMBE qualified small business. A qualified list of small business may be found on the DMBE website at: http://egov1.virginia.gov/swam_reports/dbe_listing.htm.gz.
- Log into eVA or go to the supplier's place of business and place an order.
- Electronic Orders through eVA will automatically give the supplier the cardholder's card account number and the expiration date of the P-Card setup in eVA. The supplier will verify the account number with the P-Card contractor and the cardholder's P-Card will be checked electronically for compliance with applicable purchase limits.
- Cardholders must advise the supplier that they are making a tax-exempt purchase on behalf of the college. If requested, the supplier should be provided with the Tax Exempt number at the time of purchase. The college's Tax Exempt number will be furnished to the cardholder when the card is issued.
- Cardholders shall retain all documentation pertaining to the purchase (such as a sales receipt or packing slip, which should accompany the order). This documentation must be kept on file for reconciliation with the monthly P-Card Statement.
- Cardholders are required to maintain their own purchase log throughout the month. These logs may be hand-written, but are designed to assist the cardholder in keeping track of card usage throughout the month in order to make P-Card reconciliation easier at month-end. Keeping a manual log throughout the month also assists the cardholder in identifying unusual or unauthorized charges and charges that exceed the actual amount authorized by the cardholder throughout the month being reconciled.
Tax Exempt Purchases
- Small purchase charge cardholders and Gold cardholders should not pay Virginia sales tax on goods and services. This does not apply to prepared foods (e.g., catering, meals). Cardholders are responsible for informing suppliers of the tax-exempt status when making telephone purchases. The phrase, Tax Exempt, is printed on each purchasing card. Sales and Use Tax Certificate of Exemption should be provided to the vendor to help ensure Virginia sales tax is not paid on tax exempt purchases and goods. These forms are available in Financial Services and on VW Connect under Financial and Administrative Services/Purchasing.
Reconciliation of Monthly Statements
- Bank of America Visa will mail each cardholder a monthly statement, which lists all new purchases made during that monthly billing cycle. Each cardholder will also receive an email stating it is time to reconcile your Bank America Visa Statement in AIS. Cardholders may not reconcile until the email is received.
- By the end of the month after receipt of the monthly P-Card e-mail, the information contained on your statement and in your delivery documentation file must be reconciled with your P-Card AIS statement and submitted to the Financial Services department. Purchases, returns, and billings should be accurately documented to support the statement. Reconciliations are due by the last day of the month in which the statement is received. If the reconciliation is not received by the Financial Services department by the end of the month, an email will be forwarded to the cardholder and cardholder's supervisor stating that the reconciliation is due. A second notice will be sent seven (7) days later. If the reconciliation is not received before the 15th of the following month, the P-Card will be suspended and remain suspended until documentation is received. Repeat violations by cardholders are subject to disciplinary action under the Standards of Conduct for failure to follow college policy.
- Cardholders may go to http://payment2.works.com to access P-Card statements and other P-Card information.
Returns, Credits and Disputed Items
- The Financial Services department must pay the total amount listed on the billing statement each month. Problems with the billed amount must be coordinated directly with the vendor and/or Bank of America Visa and any corrections made through credit entries on subsequent P-Card statements.
- Cardholders are responsible for follow up and resolution of any discrepancies or disputes. In most cases, discrepancies or disputes can be resolved directly between the cardholder and the supplier of the goods and/or services.
- If an item needs to be returned for any reason, the cardholder should send the item back to the vendor in the manner agreed upon.
- The vendor should issue a credit for the items that are returned. This credit will appear on a subsequent P-Card statement.
- Documentation of the return (such as a credit receipt) should be issued by the vendor. All documentation pertaining to returns must be kept on file for reconciliation to the monthly P-Card statement.
- If the cardholder and the vendor cannot resolve an issue, the cardholder should contact Bank of America Visa using WORKS who will investigate the dispute on the cardholder's behalf and assist in the resolution.
Distribution of Charges to AIS Budgets
- Once the Bank of America Visa statement has been reconciled, cardholders must determine how the statement charges are to be distributed to their respective budget by AIS account code and department code. This information is entered into the AIS P-Card System.
- Once the AIS P-Card has been reconciled, the cardholder should sign and date the printed report of transactions and the Bank of America Visa statement and obtain his or her supervisor's signature and date on both the printed report of transactions and the Bank of America Visa statement and attach documentation for the month's purchases. These signatures indicate review and approval of purchases made by the cardholder during that billing cycle.
Documents to be Forwarded to Financial Services
- The original AIS P-Card report signed and dated by the cardholder and supervisor, the original Bank of America Visa paper statement, and all original documentation, must be submitted to Financial Services department prior to the end of the month.
- P-Card documentation retained in the Financial Services department is maintained on file as outlined in the Library of Virginia Records Retention Schedule and then disposed of in accordance with acceptable disposal methods.
Documents Retained at the Ordering Department
- A photocopy of any shipping/delivery documentation, invoices accompanying the purchased items, the monthly Bank of America Visa paper statement and the AIS P-Card report must be retained by the ordering department for a period of five years after the end of the fiscal year in which the purchase was made.
Program Administrator Responsibilities
- The agency will have a person who is familiar with procurement regulations as the program administrator. The Program Administrator (PA) is responsible for the following:
- Entering in cardholder data, reviewing, and approving card applications online;
- Setting appropriate transaction and credit limits on each card based on the cardholder's buying needs;
- Issuing cards;
- Ensure that an annual analysis of all cardholder's card usage and card limits is performed and documented. An "Annual Purchase Card Review" (Attachment3) will be performed on each cardholder, documenting when the assessment was performed, the spending activity (such as the largest single purchase amount), and the largest monthly purchase amount, limits, and restrictions. The annual analysis can be performed any time during the year as long as a continual twelve (12) month period is being reviewed. The reviews must be kept on file for audit purposes. Upon completion of the review the PA must send an Annual Cardholder Certification Form to DOA certifying that all cardholders have been reviewed and any necessary changes have been made.
- Promptly canceling cards as appropriate;
- Monitoring and canceling inactive cards. The PA must periodically review inactive cards and cancel those that are no longer needed;
- Removing, either permanently or temporarily, the Industry Restrictions on individual accounts on a case-by-case basis ensuring adequate documentation supporting the change is kept on file;
- Training cardholders annually in proper card usage, security, and procurement guidelines through the Knowledge Center.
- Take Annual PA Training as well as Supervisor and/or cardholder training, if the PA also serves in one of these roles at the agency;
- Ensuring the supervisors of cardholders are trained annually in their roles using the Supervisor training which is available in the Knowledge Center;
- Monitoring on a regular basis, at least monthly, the transactional data for the SPCC and GOLD cards to ensure compliance to the policy;
- Educating cardholders, supervisors/reviewers, fiscal staff and others of the cycle and due dates for the Bank of America VISA program annually;
- Ensuring agency and cardholder compliance with all SPCC policies and procedures presented in this manual, in updates, on the DOA web page, in the Knowledge Center, or in mandatory training sessions, including proper processing of monthly payments;
- Communicating with DOA's Charge Card Administration Team on such matters as who is to receive access to monthly billings, additional statements, and management reports.
- Ensuring that if the paper bill from Bank of America is not received by the designated staff member within 8 days after the cycle closes, the fiscal office downloads a copy of the monthly bill from WORKS;
- Promptly notifying Bank of America of any potential or confirmed fraudulent use of the purchasing card and steps that are being taken to address the issues (e.g., card cancellation, communication with the vendor and/or Bank of America, notification of law enforcement officials as appropriate.);
- Managing vendor issues pertaining to not receiving ordered goods/services or incorrect charges. If resolution cannot be made at the PA level, notify Bank of America through WORKS, providing necessary information referenced on the back of the monthly bill;
- Ensure past due invoices are not being paid on the Card unless approval by DOA's Charge Card Administration Team is received in advance;
- Ensure that if a card ordered is not received in 7 business days, it is cancelled for security reasons, and new one is requested to protect against possible mail theft;
- Ensuring appropriate restrictions are placed on all cards by auditing the industry (MCC) restrictions placed on all cards at a minimum of monthly; and
- Providing the Bank of America corporate account number to any staff members who will be processing batches and therefore require the number.
- Employee personal expenses
- Cash advances
- Business travel expenses
- Gift Card/certificates (with the exception of Human Resources)
- Holiday decorations
- Alcoholic beverages
- Charitable contributions
- Gifts and flowers
- Past due invoices