UCR

UCR Policies and Procedures

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Policy Title:                      Procurement Card Program

 

Policy Number:                750-70

 

Responsible Officer:

Associate Vice Chancellor of Business and Financial Services and Controller

Responsible Office:

Business and Financial Services-Procurement Services

Origination Date:

12/01/2004

Date of Revision:

01/19/2019

Date of Last Review:

12/04/2018

Scope:

Guidance Concerning Procurement Card Program

    I.  Introduction

This document outlines the policy and procedures governing use of procurement cards as an alternate method of making low value purchases on behalf of the University of California, Riverside (UC Riverside). The Procurement Card Program provides benefit through an efficient, cost-effective method of purchasing and paying for small dollar value transactions within established procurement limits. This Low Value Purchasing Authorization (LVPA) is designed to supplement other purchasing options and reduce the need for incidental/petty cash transactions. Other benefits of the program include:  1) prompt payment to suppliers, thereby reducing supplier inquiries to Accounting and Procurement Services; 2) elimination of purchase orders and invoices; 3) reduction of personal out-of-pocket expenses, thereby reducing reimbursement requests; 4) built-in controls to restrict inappropriate purchases and; 5) universal acceptance by suppliers.

The procurement card is a Visa purchasing card issued through US Bank to designated UC Riverside career employees for the purpose of granting them LVPA in accordance with applicable campus policies and procedures. Although the procurement card resembles and essentially functions like a personal credit card, there are significant differences. Full liability for payment of transactions made using the procurement card to US Bank rests with the University. Even though US Bank the procurement card is generated by US Bank to a specified UC Riverside career employee, but is issued in the name of and on behalf of the University.

 

The procurement card is NOT intended:

·         To bypass relevant procurement or accounting policies

·         For entertainment purchases

·         For travel/travel-related expenses

·         For personal use 

 

The Procurement Card Program is administered by Procurement Services. To speak to a department representative about the program, individuals may contact 951.827.3008.

 

  II.  Cardholder Overview

The issuance of a procurement card indicates an employee has been granted the authority to use the card for making low value purchases on behalf of UC Riverside. Requests for a UC Riverside career employee to be a cardholder and granted LVPA are submitted through the Departmental Business/Financial Officer. The granting of this authority is conditioned upon the employee agreeing to first successfully complete Procurement Services and Procurement Card specific trainings and assessments. Upon successful completion of the requisite training and assessments, the employee to be granted this authority is required to sign an Employee Agreement form prior to being issued the procurement card. The signed form indicates that the employee agrees, as a cardholder, to use the procurement card in accordance with applicable campus policies and procedures. 

 

 

A cardholder's use of the procurement card in accordance with campus policies and procedures will be routinely monitored. In order to minimize the risk or threat to the financial resources of the University, it may be necessary to immediately suspend a cardholder's authority if irregularities are detected. The Procurement Services Card Program Administrator, in consultation with other appropriate parties, may temporarily suspend cardholder authority based upon perceived irregularities and reinstate it upon reasonable explanation. The authority can be denied, suspended, or permanently revoked if it is determined that a cardholder is incapable of complying with, disregards, or intentionally circumvents campus policies and procedures. Any violation of local, state, or federal laws by a cardholder may also carry the consequence of prosecution under the law in which judicial action may result in one or more of the following:  specific fines; imprisonment; litigation costs; and payment of damages.

 

 III.  Requirements for Becoming a Cardholder

               A.  Selection

The selecting of employees to be granted the authority to become cardholders will be done at the departmental level, in consultation with Procurement Services. Individuals must be current UC Riverside career employees and have been delegated purchasing authority. For additional guidance, refer to UC Riverside Policy and Procedures 750-39; Low Value Purchase Authorization (LVPA) Program.

 

               B.  Training

Employees applying to be cardholders must successfully complete required online Procurement Card Program and Procurement Services training, with a passing score of 80% or higher. The training is available in UC Learning Management System (LMS). Furthermore, all cardholders must successfully complete online refresher training annually, and receive a refresher review with renewal card pick-up. Failure to complete refresher training will suspend or terminate the authority of a cardholder to use the procurement card.

 

             C.  Application

Employees selected to be cardholders must complete and submit a Cardholder Application form.

                          1.         Cardholder Application forms are processed in the order received (generally twice monthly). Existing cardholder and procurement card matters (renewal and replacement actions) take precedence. 

                          2.         Cardholder Application forms are processed only after the employee successfully completes all required trainings and assessments.

                          3.       Employees approved as cardholders will receive email notification for procurement card pick-up scheduling.

 

  IV.  Departmental Responsibilities

              A.  Business/Financial Officer Responsibilities

                                1.   Monitor Selection

                                             a.  Ensure the selection of cardholders is done in accordance with UC Riverside Policy & Procedures 750-39; Low Value Purchase Authorization (LVPA) Program.

                                             b.  Approve employees selected to be cardholders.

                                2.  Monitor Use

                                             a.  Monitor purchasing activity to ensure the procurement card is being used only for allowable purchases as outlined in UC Riverside Policy and Procedures 750-39; Low Value Purchase Authorization (LVPA) Program.

                                             b.  Maintain a list of all cardholders within the department.

                                3.  Training

                                             a.  Successfully complete the required Procurement Services and Procurement Card training and assessments.

                                             b.  Ensure each cardholder, as well as each Departmental Card Administrator (DCA), is trained in the proper use of the procurement card and successfully completes required Procurement Card training and assessments.

                                4.  Cardholder Application/Employee Agreement Form

                                   a.  Ensure all appropriate signatures and accounting information are in place before submitting the form to Procurement Services.

                                   b.  Ensure the assigned dollar limits do not exceed the defined LVPA limits.

                                5.  Separation of Duties

                                             a.  Ensure no employee, including any manager, is in a position to request or initiate an unauthorized action or make an error and then attempt to permanently conceal it.

                                             b.  Ensure there is a clear separation of duties among all departmental personnel involved in the Procurement Card Program.

                                             c.  Ensure all procurement card transactions can be independently reviewed and reconciled by someone other than the individual requesting or conducting the transaction.

                                            d.  Ensure the reviewer is not a subordinate of the cardholder.

                                            e.  Ensure the Departmental Card Administrator cannot review or approve any procurement card transactions they initiate.

                                6.  Departmental Card Administrator (DCA)

 Assign a departmental or organizational employee the responsibility of managing the Procurement Card Program.

 

              B.  Departmental Card Administrator (DCA) Responsibilities

                             1.  Training

Ensure cardholders and Departmental Business/Financial Officers successfully complete the required trainings, understand the associated Procurement Card Program policy and procedures, and are current with having successfully completed Annual/Refresher Training online courses.

                            2.  Reconciliation

                                         a.  Ensure required supporting documents are retained for a period of five years, preferably as eBuy electronic files.

                                        b.  Ensure timely review and accurate reconciliation of cardholder supporting documentation of bank charges identified on the Procurement Card Aging Report with information on the Financial Transaction Detail Report. 

                           This reconciliation must be completed within 30 days of receipt of the associated Financial Transaction Detail Report.

                                        c.  Ensure all cardholders submit the required documentation within 10 days of the transaction purchase date.

                                        d.  Ensure all items purchased with a procurement card are inspected within 10 days of receipt.

                            3.  Purchasing Policy

Ensure compliance with UC Riverside Policy and Procedures 750-39; Low Value Purchase Authorization (LVPA) Program.

                           4.  Accounting Issues

                                         a.  After receipt of the Post Audit Notification (PAN), ensure redistributions of procurement card transactions from the Procurement Card Aging Report to the appropriate Full Accounting Unit (FAU) are made within 60 days. 

                                         b.  Ensure all procurement card transactions are cleared from the Procurement Card Aging Report by the end of the fiscal year. 

                                         c.  Ensure use of the procurement card and redistribution of the transactions follow all current campus Accounting policies and procedures.

                           5.  Separation of Duties

                                          a.  Ensure the department is using a Procurement Card Transaction Log and all procurement card transactions are independently reviewed by an individual other than the cardholder. 

                                          b.  If the departmental unit is too small to provide an independent confirmation, identify an employee within the organization or from an outside campus unit to conduct the review.

                                          c.  Ensure the reviewer is not a subordinate of the cardholder.

                                         d.  Ensure the DCA, cardholder, and Business/Financial Officer do not review and approve their own procurement card transactions.

                           6.  Procurement Card Transaction Log

                                          a.  In those instances in which the supplier does not provide a document with a record of the purchase, ensure the Procurement Card Transaction Log is used to record the transaction, to include all relevant details. 

                                         b.  Ensure the department uses the eBuy P-Card selection to record procurement card transactions, which can be exported into a Microsoft Excel file format for reporting purposes.

                                         c.  Implement internal practices to create departmental Sub-Requestor and Requestor roles, and establish approval processes within the unit.

                          7.  Credit Log

                                          a.  Ensure the department maintains a credit log for cardholders to track, monitor, and follow up on requests for credit.

    Requests for credit must be resolved within 60 days of posting of the transaction to the credit log, with credits monitored until received.

                                         b.  Because credits do not automatically clear the Procurement Card Aging Report, ensure debits and credits are moved via procurement card transactions.

    These should be moved to an FAU selected by the department in order to zero out the transactions.

                         8.  Termination, Changes, Deletions, and Additions

Immediately notify the Procurement Card Program Administrator in writing of any modifications, deletions, or additions to a procurement card, including amending the default FAU, adjusting transaction limits, and revising information displayed on the card.

 

C.  Cardholder Responsibilities

                                1.  Compliance

When using the procurement card to conduct business on behalf of the University, cardholders must adhere to all applicable campus and system-wide policies and procedures, as well as federal and state regulations.

                                2.  Restrictions

Cardholders may not use procurement cards for the following transactions:

                                 a.  Travel

                                 b.  Entertainment

                                                        c.  Personal use

                                                       d.  Inventorial equipment

                                                       e.  Cash advances

                                                        f.  Goods in excess of the departmental LVPA limits or $5,000 (including applicable sales taxes), whichever is less.

                           3.  General Guidance

                                                a.  Items Procurement Services Does Not Purchase

As detailed in UC Riverside Policy and Procedures 750-63; Purchasing Authority, Procurement Services is the sole campus entity authorized to commit funds on behalf of UC Riverside through the execution of procurement contracts or purchase orders. Each procurement card has preset default spending limits, which are identified in UC Riverside Policy and Procedures 750-39; Low Value Purchase Authorization (LVPA) Program. The Business/Financial Officer, responsible for monitoring cardholder use, can establish lower limits than those defined in the above campus policies. Pre-set limits have a maximum:

·         Dollar amount per Transaction;

·         Number of Transactions Per Day; and

·         Total Maximum Dollar Amount of Spend per Billing Cycle (30 days).

     b.  The pre-determined Merchant Category Code (MCC) suppliers from which a cardholder may purchase must be adhere to the aforementioned restrictions or the procurement card will be declined at the point of sale.

                                4.  Ownership of the Procurement Card

Following current low value purchasing authority, the named cardholder may make allowable/non-restricted purchases for their department. The cardholder must identify and use the authorized method of procurement.

The Procurement Card may not be transferred to, assigned to, or used by anyone other than the Cardholder to whom it was issued. During the absence of a cardholder, the department may request to coordinate the purchase with an existing organization cardholder, request assistance from the Campus Storehouse to purchase, or requisition items using other authorized procurement methods.

                   5.  Delegation of Authority

The Director of Procurement or the Procurement Card Program Administrator delegates limited authority to departments to permit the use of authorized procurement methods in accordance with UC Riverside Policy and Procedures 750-63; Purchasing Authority. US Bank or UC Riverside may suspend or cancel the privileges of a cardholder. The Director of Procurement or Procurement Card Program Administrator may terminate the delegation of the use of a procurement card for any violation of applicable Purchasing policies and procedures related to the procurement card.

                               6.  Unauthorized Use

Misuse of the Procurement Card is to be reported in accordance with applicable University policies. For additional information, visit the Whistleblower and Whistleblower Protection websites found in the Reference section of this policy.

 

         Use of the procurement card or procurement card account number, after notice of cancellation, will result in revocation of low value delegation authority and may result in disciplinary action.

         Violations will be investigated and may result in the following actions:

·         Email warning reminder/verbal reprimand

·         Written reprimand to cardholder, DCA, and Departmental Business/Financial Officer

·         Suspension or termination of procurement card authority

·         Termination of employment

·         Criminal prosecution

                                7.  Security & Protection

                                                 a.  Department and cardholders must ensure procurement cards are kept secure.

  In some areas it may be appropriate for a cardholder to carry the card. If not, the card must be stored in a secure place, such as a locked cabinet.

                                                 b.  The employee whose name appears on the procurement card is responsible for protecting the account number.

                                                 c.  Account numbers provided to suppliers for use on a standing or blanket basis are approved case-by-case and will be at the department’s discretion. Procurement cards are typically used for single transactions only.

                                                 d.  Lost or Stolen Cards

     If a Procurement Card is lost or stolen, the cardholder or DCA must notify US Bank immediately. The 24-hour phone number is (800) 344-5696.

     Notification must also be made to their department head (or designee) and to the Procurement Card Program Administrator.

                               8.  Disputed Transactions, Returns, and Credits

It is the responsibility of the cardholder and DCA to follow up on any erroneous charges, returns, or adjustments and to ensure proper credit is given.

 

                                                   a.  Disputed Transactions

   US Bank must be notified within 60 days of the last day of the billing-cycle during which a transaction is charged if that transaction is or will be disputed.

   A Dispute Form may be downloaded from Purchasing's website. The last day of the billing-cycle for UC Riverside is the 25th of each month.

           b.  Returns and Credits

      If a resolution cannot be reached between the supplier and cardholder, contact US Bank Customer Service at (800) 344-5696 or the Procurement Card Program Administrator at (951) 827-3008.

      Disputes are to be fully resolved within 60 days of the transaction posting.

                                 9.  Source Documentation

Source documentation (receipts) from the supplier must provide sufficient information to permit validation by an individual other than the cardholder. This documentation can be itemized receipts or itemized packing slips. A cardholder must submit documents to their respective DCA as soon as possible following purchase.

 

Documentation/Receipts must be reviewed by each department to verify that all transactions follow low value purchasing authority and Procurement Card policy and procedures. Persons performing the department's reconciliation function have specific review responsibilities including: reviewing and verifying receipts, invoices, or packing slips against financial journal entries.

 

                                                   a.  Purchases Made in Person

To document purchases made in person, a credit card slip (customer copy) or a cash register tape, signed by the cardholder normally is acceptable. If the merchandise purchased is not itemized on the signed document, the purchaser must request and obtain a cash register tape or a manual itemized receipt from the supplier. This must be done at the time of purchase. Additional documentation must be provided if the cash register tape or other receipt provided by the supplier does not provide sufficient detail to permit verification by a person other than the cardholder of the items purchased.

 

                                                    b.  Mail, Telephone or Internet Orders 

To document purchases made via mail, telephone, or Internet, departments must obtain a copy of the suppliers’ order confirmation/acknowledgement, packing slip or supplier invoice. These documents must contain sufficient information to permit proper reconciliation of charges.

 

When using the Procurement Card for Internet purchases, a cardholder must use a secure site.

 

   V.  Auditing

  Purchasing shall conduct random audits to ensure appropriate policies and procedures are being followed, including:  appropriateness of purchase; separation of duties; and source documentation records.

 

  It is the responsibility of Audit and Advisory Services to perform sample audits of departmental records to ensure that appropriate policies and procedures are being followed.

 

   VI.  Use and Sales Tax Guidelines

  A.  Use Tax

Use tax on procurement card transactions from out-of-state suppliers will be automatically calculated and added to the amount of the sale via UCRFS. Some out-of-state suppliers will collect such tax. Every DCA must ensure that they notify Accounts Payable (ucrAP@ucr.edu) of all out-of-state suppliers who have already collected tax on a receipt. When notified, the appropriate Procurement Services buyer will add these suppliers to a table, which will override the use tax accrual in the future. Ensure all copies of out-of-state receipts, where sales tax has been collected, are sent to Accounting in order to correct the duplicate tax.

 

 B.  Sales Tax

Sales tax Is due and payable at the time of purchase of tangible goods. The State of California requires payment of state sales tax on all purchases, except those which are tax-exempt. The following types of services are generally not taxable:  labor; advertisements; online downloads; and freight.

 

At times, a transaction may require a combination of goods and services that are both taxable and nontaxable. In such cases, obtain a specific breakdown of the supplier’s charges in each category and the appropriate tax.

 

  VII.  Contacts

   For further information, contact the UC Riverside Procurement Card Program Administrator at (951) 827-3008.

 

VIII.  References

·         UC Riverside Procurement Card Guidebook or email Dana Allen or Gae Purvis.

·         UC Riverside Policy and Procedure Manual, Section 750, Purchasing & Management of Supplies and Equipment

·        UC Business & Finance Bulletin Bus-43, Business and Finance, Procurement Services

·        UC Riverside Policy and Procedure Manual, Section 200 - Business and Financial Services, Accounting & Financial Management

·        UC Policy and Procedure Manual, Whistleblower Policy

·       UC Policy and Procedure Manual, Whistleblower Protection Policy

·        UC Riverside Learning System – On Line Training

·       UC Riverside Policy and Procedures 750-39; Low Value Purchase Authorization (LVPA) Program

·       UC Riverside Policy and Procedures 750-63; Purchasing Authority

  IX.  Revision History

  It is recommended that this policy and associated procedures be reviewed, at a minimum every three years, by a representative of the policy owner.

  The Chief Compliance Office will notify the policy owner of any updates to associated policies and procedures that may impact this policy.