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Purchasing Card Policy and Procedures


Table of Contents  
Policy Prohibited Transactions
Purchasing Card Guidelines Authorization to Obtain a Purchasing Card
Spending Limits Reconciliation Process
Cardholder Responsibilities Correction of Errors
Merchant Restrictions Reporting Lost, Stolen or Misused Cards
Guidelines for Making Purchases  

 

Extra Resources    
Purchasing Card Forms  BAML Works Guidelines Bank of America Works Website 

 POLICY

The purpose of the university purchasing card program is to give direction to the administration of purchasing cards to help departments for the acquisition of approved goods and services.

The card is designed to eliminate the formal purchase order and invoice processing associated with low-dollar value transactions and to provide flexibility and convenience in making business purchases.

  • Purchasing Cards are generally issued to a specific individual, and each cardholder is responsible for a monthly review of each transaction involving his or her card. 
  • Each card has an approver who is responsible to review each transaction, compare it to the detailed receipt provided by the cardholder, and approve or dispute the transaction in accordance with university policies and procedures. .  When a cardholder terminates employment or retires, his/her card will be canceled. When Purchasing becomes aware of a change in cardholder responsibility, the card will be inactivated or closed. The usage of the card will be blocked for selected categories of businesses and uses where use of the purchasing card is not authorized.

PURCHASING CARD GUIDELINES

Purchasing cards are a bank card issued to BYU-Hawaii to acquire goods and services for low value purchases.  Where possible, purchasing cards should be used in place of petty cash, checks requests and purchase orders under $1,000. The university pays all charges made on all cards. Each card is individually authorized and most cards will come with a single and monthly transaction limit set by the purchasing card administrator. 

SPENDING LIMITS

Single transaction limits will normally be $2,500 unless an exception has been given. Each card also has an associated monthly dollar limit set by the Purchasing Card Administrator. The total of outstanding credit purchases made during a month cannot exceed the pre-established limit of $10,000. Some cards may have higher limits and exceptions will be granted on a case-by-case basis.   Some cards may have higher limits and exceptions will be granted on a case-by-case basis

The following types of spending limit exceptions may be granted if needed:

  • One-time temporary adjustments: The Cardholder Supervisor/Manager reviews the spending limit adjustment request with the cardholder and submits a request to the Purchasing Department Card Program Manager.
  • Permanent adjustments - The Department Supervisor/Manager completes a Purchasing Card Exception Request form and forwards the completed form to Purchasing. Purchasing will then forward this request to the Church Purchasing Card Group who will present the request to the Committee for approval.

CARDHOLDER RESPONSIBILITIES

Purchasing Cardholder. A university employee who:

  • Is issued a purchasing card in his/her name and is authorized to make purchases of goods and services for his/her assigned area of responsibility in accordance with the policies and procedures defined in the program
  • Retain proper documentation for purchases made which specifically identifies the goods purchased. - Typically, a store receipt or purchasing card charge receipt is provided to the card holder at the point of sale. If this documentation is not provided, the cardholder should prepare and sign a missing receipt afadavit form describing the purchase including the merchant name and address, items or services purchased and their purpose, date, location, amount (including sales tax).
  • Reconciles receipts to online transaction data on a monthly (more frequently as high volumes requires) basis through the Bank of America Works system. This system provides cardholders and managers with the data needed to reconcile and approve individual transactions, allocate costs to the appropriate account category, and monitor monthly spending activity in real time. Cardholders should review and approve any charge made by clicking the box nest to each transaction. The cardholder should correct any incorrect charges with the vendor and dispute unresolvable charges.
  • Adheres to single transaction and monthly dollar limits.
  • Maintain the security of the purchasing card by being vigilant to ensure that purchasing cards and purchasing card account numbers are protected and cared for properly. Purchasing cards should be kept in a secure location. Account numbers should never be posted or written down. Employees must do all that they can to prevent the cards from being lost, stolen, or misused.  Reviews and verifies each transaction on the monthly statement and provides the Cardholder Supervisor/Manager, for review and approval, receipts and explanations of all transactions appearing on the monthly statement Misuse of the card may result in disciplinary action which may include termination of employment.
  • Scan all receipts in Works.

MERCHANT RESTRICTIONS

Certain types of suppliers are excluded from the purchasing card program. These types of suppliers have been “blocked” based on merchant category codes (MCC) and any attempt to use the card at these suppliers will be declined by the Purchasing Card System. Department/organization needs and compelling business reasons might require an exception to the restricted items. Exceptions must be approved by the Purchasing Department Card Administrator.

GUIDELINES FOR MAKING PURCHASES

When a cardholder determines there is a need to purchase goods or services and fall within the established use of a pcard, the cardholder will do the following:

  • Ensure there is adequate budget to cover the transaction and purchase the goods or service within the approved limits
  • Where possible, use vendors the University has contracts with, as established by the Purchasing Department, for the type of item to be bought.
  • Make purchases by telephone, via the Internet, through the mail, or in person. (Appropriate measures should be taken to prevent disclosure of the purchasing card account number to unauthorized individuals.
  • Orders goods providing the card or card number to the vendor and obtain documentation (VISA receipts, sales receipts, packing slip, etc.) from the vendor that clearly shows what goods or services were purchased.
  • The cardholder may make authorized acquisitions for other employees. However, responsibility to verify receipt, correction, and authorization for the transaction remains with the cardholder and the cardholder's supervisor.

PROHIBITED TRANSACTIONS

The purchasing card may be used to purchase items or services that are for the use and benefit of the university only. The following are prohibited uses of the card unless specifically approved by Purchasing. Violations of these prohibitions may result in disciplinary action which may include termination.

  • Securing cash advances from a bank or automatic teller machine (ATM) unless cash advances have been approved by Purchasing Department Card Administrator.
  • Allowing anyone but the cardholder to use the card.
  • The card may not be used to make personal purchases.
  • The card may not be manipulated or used to split a transaction to make purchases that fall outside the guidelines. This will constituent misuse of the card.
  • Travel related expenses.
  • Gas Station purchases while using a personal vehicle for business purposes.

Before the card is used for Federal Withholding (1099) transactions, coordinate with the Financial Services controller to ensure that the correct information is gathered for government reporting. Transaction that require the university to issue 1099 statements are those where payment goes either to individuals for rent, medical, or non-employee compensation or the payment goes to unincorporated businesses.

AUTHORIZATION TO OBTAIN A PCARD

Managers and Directors of departments determine the need for purchasing cards in his/her area and who will be issued a card.

Each Purchasing Cardholder will complete and sign a Purchasing Card Application and Cardholder Agreement. The signature on these forms indicates that the employee understands: the intent of the purchasing card program, how to use the purchasing card, agrees to adhere to the policies and procedures and guidelines established for the program, and understands the disciplinary actions that may be applied if the card is misused.

The Cardholder Supervisor/Manager also signs the Purchasing Card Application and the Cardholder Agreement. The supervisor/manager’s signature on the Purchasing Card Application and the Cardholder Agreement indicates that the supervisor/manager understands his/her responsibilities under the purchasing card program.  The Supervisor/Manager will recommend the transaction and monthly dollar limits. Typically, the maximum amount that can be purchased with one transaction is $1,000 and the maximum monthly spend limit is $5,000. This amount should be consistent with the acquisition assignment of the employee to cover unusual months without being high enough to expose the university to excessive risk.   Manager will discuss the application with the cardholder and make a copy of the application and agreement on file and forward the original to the University Controller

The university Controller also signs the Purchasing Card Application. The controller’s signature provides controller sign-off on those aspects of the purchasing card program that can be approved prior to a purchasing card purchase, such as: 1) The authorized requestor’s (cardholder) authority to approve purchases and the expenditure of funds against budget, 2) availability of budget and consideration of budget implications, 3) Appropriateness of the assigned account codes.

A cardholder who leaves university employment or whose assignment changes will immediately surrender his/her purchasing cards and any outstanding transaction information to his/her supervisor/manager.

RECONCILIATION PROCESS

Cardholder

At least monthly (more frequently if high volume requires) cardholders and/or their supervisor/manager should go on line to review and approve any charges that may have posted by clicking on the box next to each transaction.  The cardholder is required to reconcile (i.e. review and approve) all transactions made using the purchasing card with the documentation(e.g. receipts) throughout the month. The internet on-line system provides cardholders and their managers with data to reconcile and approve individual transactions, provides a means to allocate account codes prior to mapping to the general ledger and recording sales tax, and allows cardholders to monitor monthly spending activity as it happens and dispute purchases on-line.

Each month the Purchasing Card provider sends to the cardholder a statement which includes a listing of purchases made and credits received during the monthly billing cycle. The monthly statement is a reference document. It is not a bill. The cardholder is responsible to perform an online verification of all activity listed on the statement for accuracy. Cardholder ensures that any debits or credits expected as the result of returned or exchanged goods or credits from disputed charges from the previous month are accurately reflected on the account.

It is critical that the cardholder reconcile the transactions to the statement and the cardholder's supervisor approves the reconciliation.  The online reconciliation must be completed by the last day of the month. An electronic copy of the receipt must be attached to the online system.  

All receipts are to be scanned in the Bank of America Works system. Original receipts are to be kept in the department for 3 (three) years.

Purchasing Cardholder's Supervisor/Manager

Goes into the on-line system at least monthly (more frequently if high volume requires) to review each transaction. The supervisor/manager determines to his/her satisfaction that:

1. The Charge is appropriate
2. Evidence of receipt of the goods or services has been acknowledged by the cardholder
3. Accounts indicated are correct, if the default account is not to be charged, and budget is available for the purchase
4. Cardholder has complied with all other aspects of this procedure 

If supervisor/manager has been given approval authority by Purchasing the “signed off” box must have a notation indicating that all transactions are approved. Failure to reconcile will result in the suspension of card privileges.

 CORRECTION OF ERRORS

The cardholder is responsible for initiating action promptly, upon review of the transactions in the on-line system or the monthly statement, to correct errors and questionable charges. The cardholder should first contact the supplier directly to notify them of a dispute. Most errors and questionable charges can be corrected by contacting the supplier directly. If the supplier agrees that an error has been made, the supplier will adjust the cardholder’s account. This should be noted in the reconciliation to ensure that the appropriate credit is received and is reflected on the next monthly statement. A cardholder should always have the merchant post a credit to the Purchasing card account to which the purchase was originally made. The cardholder should never accept cash.

Errors that cannot be corrected with a supplier are resolved by calling the Purchasing Card System Customer Service at (888) 449-2273 to report the dispute. The disputed transaction should also be indicated in the on-line system. All disputes must be submitted to the Purchasing Card System either on-line or by phone call within 60 days of the transaction posting date. 

All purchases made with a given purchasing card will be charged against a predetermined general ledger account code.

REPORTING LOST, STOLEN OR MISUSED CARDS 

Purchasing Card Holder

Immediately notifies Purchasing Card System Customer Service at (888) 449-2273 if the card is lost, stolen, or is being misused. 

  • The cardholder’s account will be immediately closed and a replacement card will be delivered within 7 business days.
  • Also notifies the supervisor/manager and the Site/Department Administrator who will notify Purchasing.
  • Documents how the card was lost, stolen, or is being misused. Documents when and who was notified.