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OUS Fiscal Policy Manual
Procurement

Section: Procurement Number: 70.100
Title: Purchasing - Procurement Card

 

Index

POLICY

APPENDIX

POLICY

.100  POLICY STATEMENT 

This policy sets forth basic system-wide standards for the establishment and administration of a procurement card program at Oregon University System (OUS) campuses. This policy gives overarching guidelines under which each OUS campus may establish and administer a procurement card program. It is the responsibility of each campus administration that desires to establish and administer a procurement card program to develop institution-specific policies that follow the guidelines established herein.

This policy supersedes FASOM Section 13.11: Purchasing -- Procurement Cards.

.110  POLICY RATIONALE

The OUS has established a procurement card program (Program) to provide for the rapid acquisition of low dollar value items without a significant portion of the costs inherent in public purchasing. The primary purpose of the Program is to streamline operations and eliminate unnecessary administrative costs.

OUS maintains a system-wide contract with a bank to provide procurement cards to purchase goods and services for the System. The bank issues procurement cards to employee custodians in the name of institution/Chancellor’s Office departments. Authorized departmental users purchase goods and services using the procurement card.

In order to fully utilize the procurement card and realize the associated administrative efficiencies and cost savings, OUS seeks to ensure that the policies and procedures related to procurement card programs administered by OUS institutions are documented, communicated, clearly understood, and consistently applied. Establishing sound policies to guide the use of the procurement card within OUS is important to ensure compliance with state and federal laws, rules, and policies, including Federal OMB Circular A-21 and Federal Acquisition Regulations.

.120  AUTHORITY

.130  APPROVAL AND EFFECTIVE DATE OF POLICY

Approved by the Associate Vice Chancellor for Finance & Administration/Controller on 02/01/08. The effective date of this policy is 02/01/08 with full implementation based on each campus's implementation plan. 

.140  KNOWLEDGE OF THIS POLICY

All institutional and Chancellor’s Office personnel should be knowledgeable of this policy.

.150  DEFINITIONS

Budget Authority: The individual who is responsible for the budget of a department or division of an institution that has authorized one or more procurement cards for the purchase of appropriate goods and/or services.

Procurement Card Program Administrator: The individual who is responsible for the administration of the procurement card program of an OUS institution/the Chancellor’s office. The Procurement Card Program Administrator is responsible for ensuring that the institution procurement card policies are compliant with the OUS policy, that the policies established by the institution are implemented, and that the procurement card procedures are being followed.

Card Custodian: The individual who is responsible for safeguarding the procurement card of a department or division of an institution, maintaining complete and accurate records of procurement card use, and preparing reconciliations between the documents supporting charges on the procurement card and the statement of charges received from the procurement card vendor in compliance with institution and OUS policies.

Card User: An individual authorized to procure goods and/or services with a procurement card of a department or division of an institution.

.160  RESPONSIBILITIES

Responsibilities relating to the establishment and administration of a procurement card program include the following:

A.  CHANCELLOR'S OFFICE

B.  INSTITUTION

  • Developing institution-specific procurement card policies
  • Carrying out all aspects of procurement card administration set forth in this policy and campus specific policies

.200 ROLES AND RESPONSIBILITIES OF KEY INDIVIDUALS INVOLVED IN THE PROCUREMENT CARD PROGRAM

Budget Authority: The Budget Authority is responsible for reviewing all charges against department funds, including procurement card charges, to determine appropriateness and reviewing the monthly reconciliation of the card activity to the monthly statement. Additionally, the Budget Authority is responsible for requesting and authorizing the use of one or more procurement cards for use by his/her department and for authorizing a departmental employee to be the Card Custodian for the department.

Procurement Card Program Administrator (Program Administrator): The Program Administrator is authorized by the institution Vice President for Finance and Administration to implement and maintain a procurement card program at his/her institution. Responsibilities include, but are not limited to:

  • Development and maintenance of a comprehensive Program policy
  • Establishment of an institution-specific training program (if institution policy differs from the system-wide policy)
  • Maintaining a comprehensive listing of card users, card custodians, and budgetary authorities
  • Ensuring that all persons involved in the Program have completed any training required by policy (see .710 of this policy for procurement card policy knowledge test)
  • Issuance of procurement cards
  • Establishment and maintenance of a monitoring program that is designed to help ensure the following:
    • expenditures charged through the Program are appropriate and within policy
    • complete and proper documentation supporting card charges are retained
    • use of each card is by authorized card users
    • fraudulent activity is identified and minimized
    • monthly reconciliations are performed as required
    • distribution of procurement card expenditures to appropriate account codes (see .350)

Card Custodian (Custodian): The departmental representative charged with the responsibility to hold departmental procurement cards in safekeeping until needed by authorized card users. Other responsibilities include, but are not limited to:

  • Ensuring complete and proper documentation supporting card charges are obtained and retained
    • Examples include sales slips, cash register receipts, invoices, order forms, and receiving reports. Charge slips that do not itemize expenditures are inadequate documentation in and of themselves. When no other documentation exists, such as when making a telephone purchase, a purchasing log will be maintained to record transactions.
  • Ensuring that all card users have completed required training (see .710 of this policy for procurement card policy knowledge test)
  • Maintaining procurement card usage log as required for multi-user cards
  • Monitoring card transactions for appropriate use
  • Monitoring card activity for fraud
  • Reporting questionable transactions to Budget Authority and Program Administrator
  • Performing a monthly reconciliation of the detail transactions with purchase records and processing journal voucher(s) to redistribute charges or credits to the appropriate accounts

Card User: Person authorized to use a procurement card to make purchases of goods and services on behalf of a department of an institution. Responsibilities include, but are not limited to:

  • Maintaining an understanding of the policies guiding procurement of goods and services, including those specifically related to the use of the procurement card
  • Safeguarding the card and the card number(s)
  • Limiting the use of the card to purchases that are authorized by policy
  • Personal responsibility for non-business charges (see section .240 Allowable Amounts and Appropriate Account Codes)

.210 ESTABLISHMENT OF A PROCUREMENT CARD PROGRAM AT OUS INSTITUTIONS AND THE CHANCELLOR’S OFFICE

In order to implement and maintain a procurement card program at an OUS institution/the Chancellor’s Office, the institution must first establish its own policy governing the operation of the Program that conforms to this system-wide policy. Once the policy has been established, a Program Administrator must be named and trained on the administration of the program.

A Procurement Card Application and Agreement (Agreement) obtained from the Program Administrator is completed and signed by the Custodian, as well as the other employees authorized to use the card. The Budget Authority approves the Agreement and the Program Administrator requests the card from the bank. After the card is issued, additional authorized users must sign the Agreement and the Program Administrator must be notified that the new user was added. Similarly, when an authorized user is removed or terminates employment, separation procedures will be followed to ensure that their name is removed from the authorized card user list and that all parties involved in the Program, including the Budget Authority, Program Administrator, and Custodian, are notified on a timely basis.

.220 CREDIT LIMIT

Based on the amount of anticipated expenditures to be made on a particular card, the Program Administrator will place a limit on the amount of charges allowed on each card during each billing cycle.

.230 AUTHORIZED PROCUREMENT CARD USES

Purchases from vendors that accept credit card payments may be charged to a procurement card, except as prohibited by section .240. The procurement card is designed to promote purchasing efficiency, flexibility, and convenience. The following is a partial listing of typical uses:

  • Office supplies
  • Teaching and research supplies
  • Materials for minor repairs
  • Non Capitalized Furniture & Equipment
  • Conference registrations
  • Subscriptions to newspapers, journals and periodicals
  • Reference materials such as books, particularly those purchased from another country due to exchange considerations

.240 ALLOWABLE AMOUNTS AND APPROPRIATE ACCOUNT CODES

Use of a procurement card is prohibited for cash advances and personal or non-business purchases.

Use of a procurement card is generally prohibited for travel costs (39000 account codes). Institutional policy may allow for use of a procurement card for conference hotel reservations and payments and rental car reservations. Institutional policy applies regarding use of procurement card vs. ghost accounts for purchase of common carrier fares. Use of the procurement card will not provide insurance coverage that the travel/ghost cards provide.

For purchases other than library acquisitions (account code 40190), use of a procurement card is prohibited for capital outlay (40XXX account codes) due to fixed asset inventory recording requirements.

Use of a procurement card is prohibited for the following account codes due to 1099 and W-2 tax reporting requirements, unless campus policies and procedures provide for the required 1099 and W-2 reporting (e.g., Banner Procurement Card Module). These account codes are for tax reportable services that are performed by an outside vendor. These services are made up of labor cost and/or labor and materials cost.

  • Moving costs (28510)
  • Maintenance and repairs (account codes 23501, 23502, 23503, 23504, 23510, 23511, 23512, 23530, and 23531).
  • 1099 reportable services performed by others (245XX - 25199 account codes)
  • Purchases involving the following account codes:
    • 20169 Awards and Prizes - Non-Employee
    • 21008 Animal Care
    • 21070 Agricultural Services
    • 23080 Utilities and Maintenance - Non-Employee
    • 24001 Equipment - Rentals and Leases
    • 24050 Land - Rentals and Leases
    • 24051 Building - Rentals and Leases
    • 24052 Housing Rentals - Non-Employee
    • 24053 Storage Rentals/Fees - Non-Employee
    • 28540 Dependent Assistance - Tuition and Fees - Non-Employee
    • 28541 Dependent Assistance - Other - Non-Employee
    • 28542 Temporary Living and Supplemental Allowance - Non-employee
    • 28543 Settling-In Allowance Payment - Non-Employee
    • 28544 Storage of Household Goods - Non-Employee
    • 28546 Cost-of-Living/Post Allowance - Non-Employee

.250 BANK CHARGES

All bank charges, including interest and late charges, are absorbed by campus accounts.

.260 DISPUTED ITEMS

Disputes regarding charges, products or services must be resolved with the merchant or bank as appropriate. Any refund or adjustment obtained from the vendor is credited to the department.

.270 LOST OR STOLEN CARDS

If the card is lost or stolen, the Card User or Custodian, depending on who had custody of the card at the time of the loss, shall report the loss immediately to the procurement card vendor bank as instructed by bank and to the Custodian, Program Administrator, and Budget Authority.

.280 PROCUREMENT CARD ABUSE

A misused procurement card may be cancelled and returned to the bank. Department management, in consultation with Human Resources if appropriate, is responsible for taking appropriate disciplinary action consistent with applicable personnel policies.

.290 POST TRANSACTION REVIEW PROGRAM

Each campus Program Administrator will develop and implement a post transaction review program that includes periodic post transaction reviews of procurement card use and testing application of key controls.

.300 MONITORING REQUIREMENTS

Each campus and the Chancellor’s Office will establish and maintain a formal compliance monitoring program that will include the following:

  • Reviewing transaction data for compliance on a set schedule
  • Reviewing the listing of MCC codes that are blocked by institution policy (blocked MCC codes should be documented in the institution Program policy, or are codes that the campus deems susceptible to misuse)
  • Reviewing account codes used for procurement card charges for potential inappropriate purchases
  • Reviewing transaction descriptions for distributions made within the procurement card module for potential inappropriate purchases
  • Reviewing usage frequency of each card at least annually for inactive or infrequently used accounts, documenting action taken
  • Assessing procurement card provider monitoring system(s) and implementing as deemed appropriate and cost-effective
  • Reviewing card activity levels at least annually and resetting card spending levels accordingly

.310 TRAINING PROGRAM REQUIREMENTS

The System, in conjunction with the campuses, will develop and maintain a web-based training program (see .710 of this policy for procurement card policy knowledge test) that will focus on the key provisions within the System Program policy, as well as other applicable System policies. Each campus will develop and implement a training program, as needed, to focus on key provisions of campus-specific Program and related policies.

Each campus will ensure that all card users, custodians, program administrators, and budgetary authorities who authorize payments have been provided required initial training. Card users, custodians, program administrators, and budgetary authorities must complete ongoing training when changes in System or campus Program policy dictate. Failure to complete the required training will result in revocation of the authority to use the card.

.320 SEPARATION PROCEDURES

Each campus will develop and implement separation procedures that include cancellation and re-issuance of a departmental procurement card when a budgetary authority or card custodian separates from their position. In anticipation of card user turnover, campuses must also periodically cancel and reissue departmental procurement cards after a specified period of time established by the campus, not to exceed three years.

.330 INAPPROPRIATE USE

Each campus will develop and implement policy and procedures related to inappropriate use of the procurement card. At a minimum these policies and procedures will adhere to IMD 6.009 Financial Irregularities and will address:

  • card cancellation triggers, including, but not limited to, fraudulent activity
  • consequences for inappropriate use

.340 EXCEPTIONS

Exceptions to the System and campus procurement card program policies should be kept at a minimum. In the rare case where an exception to either or both of these policies is granted, the campus granting the exception will document the exception in writing, including evidence of appropriate approvals. Exceptions to this system-wide policy must be approved by the Associate Vice Chancellor for Finance & Administration/Controller. Exceptions to campus policy must be approved by the Vice President for Finance & Administration or designee.

.350 ACCOUNTING

Each campus will develop and implement policy and procedures to accomplish the distribution of procurement card expenditures to appropriate account codes at least quarterly.

.360 FORMS

Each procurement card program shall include forms that capture the following information:

  • The responsibilities of the card custodian, card users, and the budget authority (their signatures are required as an acknowledgement) and policy and procedural information, as identified by the campus.
  • Log that includes at a minimum: date of purchase, user name, vendor name, purchase description, and amount.

Sample forms for the Procurement Card Program are shown in the policy appendix, section .700 Forms. Note that these forms must not include confidential information such as social security numbers or the full procurement card number. These forms are provided as samples and not required templates. Institutions may choose to use these forms or they may create their own forms.

.690  CONTACT INFORMATION

Direct questions about this policy to the following offices:

Subject Contact
General questions from institutional personnel Procurement Card Program Administrator
General questions from institutional central administration and Chancellor's Office personnel Associate Vice Chancellor for Finance and Administration and Controller

 

.695  HISTORY

02/01/08 - Approved
04/04/08 - Updated  

Policy Last Updated: 04/09/08

APPENDIX

.700 PROCUREMENT CARD FORMS

  1. Purchasing Card Application (sample)
  2. Purchasing Card User Agreement (sample)
  3. Purchasing Card Departmental Agreement (sample)
  4. Signature Authorization Agreement (sample)
  5. Purchasing Log (sample)
  6. Dispute Form

.710 PROCUREMENT CARD POLICY KNOWLEDGE TEST

See the Procurement Card Administration - Index Page

Appendix Last Updated:  04/09/08

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