AUCKLAND COUNCIL PURCHASE CARD (P-CARD) POLICY

Transcription

1 AUCKLAND COUNCIL PURCHASE CARD (P-CARD) POLICY The purpose is to provide guidance on the use of Council purchase cards (P-Card) as a method of payment for council expenditure. CONTENTS 1. Policy Statement 2. Background 3. Purpose and Scope 4. Principles and Strategic Alignment 5. Limits and Applications 6. Responsibilities 7. Compliance and Monitoring 8. Excluded/Limited Purchases 9. Exemptions and Exceptions 10. Policy Definitions 11. Acceptable Use Guidelines 11.1 Cancellation of P-Card 11.2 Security and Lost or Stolen P-Cards 11.3 Disputed transactions 11.4 P-card Amendments 11.5 Application for New P-Cards 11.6 Cardholders exiting Council or taking extended Leave of Absence 12. Breach of Policy 13. Misuse of P-Card 14. Related Legislation or Regulations 15. Roles and Responsibilities Appendix 1 - Pin selection and protecting Pins Appendix 2- Auckland Council Terms and Conditions of P-Card Use

2 1. POLICY STATEMENT Auckland Council's P-Card programme has been established to provide a convenient means to support the business's purchasing requirements. It provides a low cost and efficient alternative to traditional purchasing methods. The programme utilises Flexipurchase to provide an effective and transparent tool for reporting, approving and monitoring P-card transactions and compliance with Auckland Council's policies. 2. BACKGROUND This policy applies to Auckland Council and Council Controlled Organisations (CCO s) excluding Watercare Services and Auckland Transport. Auckland Council made a decision to implement a P-card solution across the council that will form an additional payment channel for typically low value on one off operational expenditure. 3. PURPOSE AND SCOPE The purpose is to set out the policy and procedures relating to the use of the Council P-cards by Auckland Council staff and the Mayor as a method of payment for council expenditure. This enables efficient processing of low value and one off transactions and avoids employees having to use their own money while incurring expenses on behalf of the Council. The primary purpose of the P-card is to enable a convenient means to support the business purchasing requirements where normal purchasing policy practices are not viable. This Policy covers all Auckland Council P-Cards for Auckland Council employees and the Mayor. It describes the standards that all cardholders and Approvers must follow in relation to the use of Auckland Council's P-Cards. This policy, related policies and associated business rules apply to all purchasing on Auckland Council's P-Cards and should be read in conjunction with the Acceptable Use Guidelines (section 11 of this document) which are meant to outline best practice. Note: P-Cards are never to be used for non business related or personal expenditure. 4. PRINCIPLES AND STRATEGIC ALIGNMENT This Policy is designed to align with the key principles in the Office of the Controller and Auditor-General's (OAG) good practice guide, "Controlling sensitive expenditure: Guidelines for public entities". The key principles in the OAG guidance include: Public money principle - public money is not the property of Council staff to do with as staff please. The expenditure must be subject to standards of probity and financial prudence that are to be expected of a public entity and able to withstand public scrutiny, including audit scrutiny. Expenditure decisions should: have a justifiable business purpose preserve impartiality be made with integrity

3 be moderate and conservative, having regard to the circumstances be made transparently and be appropriate in all respects. The above principles should be applied as a set, none should be treated as more important than another. The issuance of a Council P-Card is an act of trust by the Council. This needs to be reflected in the way in which a P-Cardholder uses the P-Card. The general terms and conditions of the P-Card must be complied with. The highest standards of ethics and probity are expected from every P-Cardholder. The availability of P-Cards is restricted to those who have a genuine "business" need for one. They are neither a status symbol nor a "perk". 5. LIMITS AND APPLICATIONS This policy applies to all cardholders and Approvers of cardholder expenditure for Auckland Council. Credit be set limits will depending on the business requirements. Credit limits should be kept at a minimum level normally between $500-$2,500. eg departmental administrators processing low value items for a team should be set at $500. All P-Cardholders and associated credit limits shall be approved by a Tier 3 manager, Tier 2 Manager, Chief Executive or the Mayor in line with the Delegated Authority Policy. Council P-Cards will not be issued to non employees, contractors, casuals and councillors. In exceptional circumstances where there is a need for higher limits a Tier 2 managers approval must be obtained. 6. RESPONSIBILITIES Cardholder's are the individuals to whom the P-Card has been issued and whose name appears on the P-Card. Cardholder's and Approvers are responsible for ensuring they fully understand and comply with the P-Card Policy and related policies and business rules. Acceptance of the P-Card Application Form and the Employee Declaration within the Flexipurchase system indicates that you understand the intent of the P-Card programme and agree to adhere to the policy and business rules established for the programme. Cardholders: Are responsible for the security and usage of their P-Card at all times and must not allow the card to be used by any other person Are responsible for setting and maintaining a card PIN that is unique to all other PIN's used by the cardholder. This PIN must not be shared in any circumstances Must report lost, stolen or compromised cards immediately to the BNZ and the P-Card Administrator as soon as possible. The cardholder will not be personally responsible for charges incurred if this process is followed Must endeavour to use Auckland Council's preferred suppliers or existing supply agreements wherever possible prior to using their P-Card Are responsible for ensuring that the P-Card is only used for justifiable business expenditure incurred in relation to conducting Auckland Council's business

4 Where a transaction is genuinely charged in error, cardholders must immediately either cancel the transaction or reimburse the amount charged to the P-card and notify their Tier 3 manager and P-Card administrator Must provide clearly itemised receipts for every transaction No cash withdrawals will be permitted, an exception will be made for Koha contributions on specified cards. Cardholders will be held personally liable until transactions are properly coded and supported by the relevant receipts Must surrender the card to their manager and account for all expenditure in advance of changing role or leaving the company. The cardholder is responsible for: Keeping receipts and tax invoices for all charges and loading these as attachments into the Flexipurchase system Complying with all the Council's policies associated with the P-Card and other relevant policies Ensuring all transactions are coded by the end of the month. Cardholders who have not coded all transactions for the previous month will have their credit limit reduced to $1 until coding is completed. Cardholders who fail on three occasions to comply with the P-card policy requirements, will have their P-Card cancelled. This "three strike" policy is to ensure P-card policy compliance. Receipts and supporting documentation must be scanned into Flexipurchase and attached to the credit card transaction at the time of coding the transactions Ensuring all transactions are coded in the Flexipurchase system using the correct GL, Business unit, GST status and the appropriate description which outlines the purpose of the expenditure. Good description:water provided to volunteers at Blue Beach clean up event, after closure of motorway stopped pre-approved refreshments arriving. Bad description:drinks. Approvers a r e the individuals or managers to whom cardholder transactions are sent for approval within the Flexipurchase system. Approvers are one up managers and must have appropriate DFA. When a cardholder incurs expenditure which solely or directly is for the benefit of a more senior manager within the department or unit, then the approval of the expenditure must be made by a manager one up from the person receiving the benefit, either directly within Flexipurchase or on an attachment. eg P-Card holder pays for their Managers conference fee; approval would be required by their Managers one up Manager. Approvers must review transactions ensure all transactions have the correct GL code, Business unit (cost centre), GST status and appropriate description, (and Project and Asset code if applicable) ensure cardholders follow the appropriate policies and procedures advise the P-Card Administrator in writing of changes in employees, cost centre or address Must complete forms for any termination/transfers of cardholders, ensure all expenditure is accounted for in advance of the cardholder changing role or leaving Council and destroy P- Card. Ensure receipts are attached for all spend Are responsible for reviewing all receipts and ensuring that they are satisfied that the

5 expenditure is justifiable business expenditure prior to approving Are responsible for investigating suspected breaches of this policy or related policies as a result of P-Card use Must ensure approvals are completed by the end of the month reporting period notified with Flexipurchase Key responsibility is to protect the cardholder by ensuring their spend is appropriate. The P-Card administrator is responsible for: Being the point of contact between the Council and BNZ Issuing new and replacement Council P-Cards Monitoring exception reporting on exceeded P-Card limits and escalating non compliance to their manager Increasing/decreasing P-Card limits as authorised by a tier 3 manager Informing BNZ of any P-Cardholder problems with vendors/merchants Investigating any charges disputed or unknown transactions as notified by Council P- Cardholder Resolving statement enquires raised by P-Cardholders. Mayor Review and approve the CEO's P-Card expenditure on a monthly basis In the absence of the Mayor the CEs P-card will not be approved until the Mayor returns. Chief Executive Review and approve the Mayors P-Card expenditure on a monthly basis Review and approve Tier 2 P-Card expenditure on a monthly basis In the absence of both the CE and CFO, P-cards for Tier 2 staff will not be approved until the return of either the CE or CFO In the absence of the CE the Mayors P-card will not be approved until the CE returns. Chief Finance Officer Review and approve any other tier 2 manager's P-Card expenditure on a monthly basis if requested by the CE Review and approve any updates to this policy In the absence of both the CE and CFO, P-cards for Tier 2 staff will not be approved until the return of either the CE or CFO Delegation of coding and approval duties If the P-Cardholder is away, coding duties can be delegated to another staff member If the approver is away, approval duties can be delegated to the staff member on the same tier or higher than the current approver Management of the P-Card spend is the budget holders responsibility. 7. COMPLIANCE AND MONITORING P-Card usage is subject to regular audit and monitoring P-Cardholders who fail to meet the standards required by this Policy may incur temporary or permanent loss of access to the P-Card without notice

6 P-Cardholders will be held personally liable for any transactions that do not meet the standards detailed in this Policy Uncoded transactions will be treated as non-compliance P-Cardholders and Approvers who fail to meet the standards required by this Policy or associated business policies may find themselves the subject of disciplinary action Unapproved transactions will be treated as non-compliance Council operates a three strike approach for non- coding and/or non-approval of P- card spend. See misuse of P-cards Section 13 Independent Reviews: The Bank of New Zealand and Auckland Council Internal Audit monitor P-Card spending trends and alert P-Card Administration of any potential misuse and fraudulent activity. P-Card expenditure will be subject to review by Risk and Assurance and the Council's external auditors. Policy Review: This P-Card Policy will be reviewed annually or earlier as required. 8. EXCLUDED/LIMITED PURCHASES All travel purchases should be directed to the travel officer in the first instance. However there will be instances when the P-Cards may be used e.g. emergency travel/error in travel booking. An exhaustive list of purchases included or excluded from P-Card use is unrealistic given the broad scope of business operations. Therefore, P-Cardholders and approvers are accountable for being fully satisfied that expenditure is appropriate to conducting Auckland Council's business. Purchases in the following categories are not to be made using a council P-Card: Any expense prohibited or controlled by another policy Consultancy Contract Labour Fuel for motor vehicles (other than rental cars) Insurance Personal Expenditure of any kind Capital expense items e.g. phones, laptops, computers and office furniture All expenditure charged to the P-Card must be supported by a detailed tax invoice/receipt P-cardholders are not permitted to exceed their Council P-Card limit (daily and overall monthly limit) Taxicharge card and taxi vouchers (Waiheke Island only) when available, is the required payment method for the Councils preferred taxi provider and its partners in New Zealand. The P-Card should only be used for non-new Zealand taxi journeys or where the preferred supplier is unavailable or where other means of transport (public) are not deemed appropriate ( re safety concerns) Alcohol for external staff functions must have prior approval of a Tier 3 Manager Entertainment expenditure must have prior approval of a Manager in accordance with delegated financial authority Spend for entertainment purposes must be in conjunction with the Entertainment and Hospitality Policy

7 Alcohol for internal staff functions must be purchased through "Catering" from Strata P-Cards must not be used to purchase fixed assets or capital expenditure items these must be procured through normal standard purchase processes. P-Cards must not be used to meet the costs of tipping staff in NZ. Tips should only be paid for during international travel where tipping is local practice e.g United States Personal Expenditure No personal expenditure is to be charged to a Council P-Card under any circumstances. Personal expenditure on council P-Cards is considered misconduct. Where personal expenditure is incurred, the employee will be subject to disciplinary procedures Where a transaction is genuinely charged in error, P-Cardholders must immediately either cancel the transaction or reimburse the amount charged to the card and notify their Tier 3 manager and P-Card administrator. Cash Advances Cash advances are not available on Council P-Cards. An exception will be made for Koha contributions on specified cards. If cash is required for overseas travel, this should be pre-arranged with the Travel coordinator. Internet purchases using P-Card Purchasing over the internet using a Council P-card is discouraged, but there may be instances where this is warranted. All P-Card payments over the internet need to reflect good security practice Purchases must be only from established reputable companies known to the Council which use a safe and secure site The P-Cardholder needs to keep a copy of any online order forms completed when purchasing Any purchases using the P-Card over the internet must be consistent with the Council's normal purchasing practices P-Cards that are required to be used over the internet should have low credit limits to minimise the risk to the Council over fraudulent activities. 9. EXEMPTIONS AND EXCEPTIONS In the event of activation of the Civil Defence Emergency Management (CDEM), provisions of this policy relating to and associated guidelines may be suspended at the request of the CDEM, CFO, CE, Manager. Any suspension must be appropriate to the circumstances of the emergency event while remaining consistent with the broad principles of the P-Card programme Where the P-Card is to be used on an ongoing basis for business operations outside of the limits and scope of this policy, that use must be documented in a policy by the business unit, linked to the P-Card Policy, and appropriate DFA obtained for the cardholders. 10. POLICY DEFINITIONS BNZ - Bank of New Zealand PIN - Personal Identification Number

8 P-Cardholder- means the Council employee issued with a Council P-Card. P-Card Approver- means the manager of the P-Cardholder P-Card Administrator - means the person who manages all administration tasks associated with the P-Card transactions. 11. ACCEPTABLE USE GUIDELINES Council P-Cards should not be used as a matter of course, but only when the normal purchasing procedures are not available or viable, eg immediate payment/services are required. As much as possible, P-Cardholders should attempt to purchase through the normal purchasing system. The nature of expenditure incurred on the P-Card should still comply with the Council's other discretionary expenditure policies (e.g. Travel and Accommodation Policy, Entertainment and Hospitality Policy, Staff Functions Policy, etc). All employees must ensure that expenditure is business related and that this Policy, other discretionary expenditure policies and Council's Fraud Policy are adhered to at all times. Approval/authorisation is on a one-up basis except for the Chief Executive and the Mayor's expenditure. The Mayor's expenditure will be reviewed and approved by the Chief Executive. The Chief Executives expenditure will be reviewed and approved by the Mayor. The Approver must hold a delegated financial authority (DFA) in line with purchasing approvals. All expenditure will be within budget. The Council has an agreement with BNZ to provide P-Cards. Council P-Cards will only be issued to operational staff to facilitate payment of business expenses. Employees that are responsible for administering the P-Cards will not be eligible for a card. Prior to the P-Card being issued, the recipient must be given a copy of this Policy and be required to sign it to signify that they have read and understood it. All P-Cardholders are required to sign a Terms and Conditions of Use form before being issued with the P-Card Cancellation of P-Cards Council operates a three strike approach for a breach of the policy - the result could be the immediate withdrawal of P-Card and possibly disciplinary action The P-Card Administrator has the right to cancel a P-Card at any time. Cancellation will occur where a P-Cardholder has breached the terms of this policy in relation to the three strike policy The P-Card must be destroyed by the P-Card holder on termination of their employment or changing roles with the Council. All appropriate forms completed and sent to Accounting Services Department, and all coding and approvals completed. The P-Card cancellation will be processed by the Accounting Services Department immediately once the expenditure approved. The P- Cardholders Manager must sign off the "Termination of Employment Checklist" certifying that the expenditure has been reviewed and approved All final wage/salary payments will be subject to completion of the Termination of Employment Checklist.

9 11.2 Security and Lost or Stolen cards It is the P-Cardholders responsibility to keep the P-Card secure When selecting and managing a P-Card PIN, cardholders must comply with the BNZ policy on PIN's. The selected PIN must be designed to reduce the chance of anyone guessing the numbers you choose. The PIN must be kept confidential at all times P-Cardholders are not permitted to share their P-Card and associated PIN. A signed declaration will be required by the BNZ and outlines the non sharing of P- Cards rule. Failure to comply with this will result in the P-Cardholder being held personally liable for the transactions incurred If the P-Card is lost or stolen, the P-Cardholder must notify the BNZ directly on domestically or internationally, then contact the P- Card Administrator accountspayablequeries@aucklandcouncil.govt.nz and the Police immediately. The P-Card "Lost or Stolen form" must be completed and sent to the P-Card Administrator to request a replacement the P-Card lost or stolen form to accountspayablequeries@aucklandcouncil.govt.nz and in the subject line type Flexipurchase The form can be found on the intranet Lost, stolen or damaged P-cards Disputed Transactions Any transactions of unknown origin or disputed transactions must be referred to the P-Card Administrator immediately P-Card Amendments P-Card limit increase requests must be recommended by a tier 3 manager or higher. Tier 3 managers or higher must provide a recommendation and rationale of any limit increases. The signed Credit limit increase request form is to be sent to Accounting Services by to accountspayablequeries@aucklandcouncil.govt.nz Subject line: Flexipurchase for final approval before the limit is increased Applications for new cards Staff wanting to obtain a P-Card must complete 'Auckland Council's P-Card application form', must sign 'Auckland Council's terms and conditions of Credit Card use', have their application endorsed by their manager, and approved by the appropriate tier 3 manager, Tier 2, CFO, Mayor, or CEO In case of an application by a Tier 2 manager the application must have the endorsement of the CFO. The CFO must obtain approval from the Mayor or CEO P-Cardholders exiting or leaving council or taking extended leave of absence. P-Cardholders are required to surrender their P-Card prior to leaving their role and Approvers are responsible for ensuring that this is done and all transactions properly accounted for. It is recommended that Approvers retrieve the P-Card at the time that it is first known that a P-Cardholder will be changing roles or exiting Council Where a P-Cardholder is on an extended leave of absence from the business for any reason,, it is recommended that the P-Cardholder completes the Extended Leave form and the Approver contacts the P-Card Administrator and requests that all spend limits be set to zero. Previous limits can be restored once the P- Cardholder returns to Council.

10 12. BREACH OF POLICY A breach of this Policy may be considered to be serious misconduct and may lead to withdrawal of the P-Card, disciplinary action including possible dismissal and, for serious and wilful misuse, police action. In all cases of misuse, the Council will endeavour to recover any monies from the P-Cardholder, including by appropriate legal means if required Approvers are responsible for investigating all suspected breaches of this policy or related policies by P-Cardholders. Investigations should be conducted in accordance with Auckland Council's Disciplinary Policy. 13. MISUSE OF P-CARD The issuance of a Auckland Council P-Card represents Auckland Council's trust in you as a responsible employee that actively safeguards and protects Auckland Council's interests when using your P-Card. The following outlines misuse of the P-card but is not an exhaustive list. Non-approved expenditure, including purchases for the personal benefit of the P- Cardholder or the personal benefit of any other person allowing another person to use your P-Card splitting a large purchase into 2 or more transactions to overcome the transaction limits on your P-Card purchasing similar items from different suppliers to overcome the transaction limits on your P-Card purchase of inappropriate items or services lack of proper or timely coding and reconciliation of a P-Cardholder's transactions on Flexipurchase failure to provide other supporting documentation where required failure of managers to approve their direct reports spending within a timely fashion Auckland Council reserves the right to cancel or suspend P-Card privileges in instances of misuse Council operates a three strike approach for breach of this policy, the effect could be immediate withdrawal of the P-Card and possibly disciplinary action Personal Expenditure of any kind eg coffee for P-cardholder or another staff member. Some examples of when and how P-Card privileges will be suspended are detailed below: 1. Outstanding P-Cardholder Coding If a P-Cardholder has not sufficiently coded all transactions for the previous month the limit of that P-Cardholder's P-Card is reduced to $1.00 until coding and approval is completed. A letter informing the P-Cardholder of the reduction is sent to the P- Cardholder, and a copy of the letter is sent to the P-Cardholder's manager A warning letter is sent to P-Cardholders and approvers who have not sufficiently coded all transactions.

11 2. Managerial Approvals If a manager has not approved all of the P-card transactions of their reports the limit of that P-Card is reduced to $1.00 until approval is completed. A letter informing the manager of the reduction, because of non-compliance with his/her responsibilities, is sent to the manager, and a copy of the letter is sent to the manager's manager A warning letter is sent to the manager if they have not approved all P-Card transactions for their reports. 3. Three Strike Process Summary For those P-Cardholders or managers who fail, on three separate occasions, to adhere to the P-Card coding and approving processes will have their P-Cards cancelled. Strikes are issued for Not completing the coding and/or approving in Flexipurchase within the agreed timeframes (last working day of current month) The employee holding the P-Card and the approving manager must both comply with coding and approving processes to avoid a strike being applied Non-compliance of the P-Card Policy will result in losing the P-Card. Accidental Personal Use of P-Card It is unlikely that you will confuse your P-Card and your own personal credit cards; due to the Council logo on the P-card, however, if your P-Card is accidentally used for personal use, please advise a P-Card Administrator immediately (or by close of next business day at the very latest). You will then be advised of the appropriate action to take. In all instances, your manager must also be notified. 14. RELATED LEGISLATION OR REGULATIONS Code of Conduct Procurement Policy Travel and Accommodation Policy Entertainment and Hospitality Policy Fraud Policy Flexipurchase Approver User Guide

12 15. ROLES AND RESPONSIBILITIES Policy User All managers and senior officers Policy Owner Signed: Adherence and compliance with this policy and guidelines Promote the principles of this policy Notify applicable staff of the requirements of the policy and guidelines eg Manager Accounting Services Develop, consult, seek approval of and implement policy for the Auckland Council Communicate and support policy to all relevant stakeholders Administer requirements of policy Monitoring and updating of this policy, procedure, guidelines and rules. Position: Date: Signed: Position: Date: Policy Renewal Date: 1 July 2014

13 Appendix 1 PIN selection: The Council P-Cards will be the new chip technology and will require a PIN to be selected. Your selected PIN must be one designed to reduce the chance of anybody guessing the numbers you choose. You must avoid unsuitable PINs such as: birth dates, months or years in any form or combination sequential numbers (such as 3456) and easily identifiable number combinations (such as 1111) any of the blocks of numbers on your P-Card other easily accessible personal figures such as parts of personal telephone numbers or personal data; PIN changes may be made at any of the BNZ branches. Means of protecting a PIN: You are responsible for keeping your PIN secure. In particular you must: not keep a written record of your PIN not keep your PIN in a form that can be readily identified as a PIN not disclose your PIN to any other person (including persons in apparent authority, family members or spouse) not negligently or recklessly disclose your PIN notify BNZ immediately if you become aware that your PIN has become known to someone else and ensure any other P-Cardholders who are able to access any of your Card Accounts by a PIN keep their PIN secure as set out above.

14 Appendix 2 AUCKLAND COUNCIL Terms and Conditions of Purchase card (P-Card) use Employee Name:.... I hereby confirm that on receipt of my Council Purchase Card (the "P-Card") issued in my name, I will abide by the following conditions: The P-Card will be used only by me and only after I have signed the reverse of the card in the space provided I undertake to comply in all respects with BNZ Terms and Conditions in relation to the P-Card and understand as a BNZ cardholder that I am jointly and severally liable along with the Council for all transactions on this P-Card I will not charge personal expenditure to the Card. The P-Card will only be used for Council business related expenses in accordance with the Council's policies and procedures, and I agree that it is my responsibility to always keep myself informed of such policies and procedures I have read the Council's P-card Policy and related procedures Should I use the P-Card for personal expenditure or expenses which are subsequently not approved as valid Council business related expenses, then I authorise the Council to deduct from any sum it owes to me at any time the amount of unapproved expenditure and I agree that should amounts still be outstanding, I will pay these immediately in full to the Council. The Council may also recover any such amount as a debt. I also agree that personal transactions on council P-Cards constitute gross misconduct and will be dealt with accordingly I will not use the P-Card to guarantee the payment of a cheque to a third party If the P-Card is lost or stolen, then I understand that I must notify BNZ and the Police immediately, and request a replacement P-Card. In the event that BNZ is not notified, the liability of all expenses incurred by an unauthorised person will be with the Council as the P- Card owner I undertake to code and submit my expenditure as per the policy and scan tax invoices, receipts and vouchers into the Flexipurchase system within the required timeframes I will immediately surrender my P-Card upon the request of an authorised representative of the Council, if for any reason I cease to be employed by the Council I understand and accept that the P-Card can be withdrawn or cancelled by the Council at any time, entirely at its discretion I understand and agree that any failure to comply with any of the above conditions of use, or any of the Council's policies and procedures referred to above, will result in the P-Card being withdrawn or cancelled by the Council. P- CARDHOLDER'S NAME:... POSITION:.... P- CARDHOLDER'S SIGNATURE:.... DATE:... Send this form to: P-Card Administrator, Accounting Services Or accou ntspayablequeries@aucklandcouncil.govt.nz and put the word Flexipurchase in the Subject Line.