A Guide To The: Government Procurement Card

Transcription

1 A Guide To The: Government Procurement Card Januar y 2009

2 Contents Government Procurement Card Good Practice Guidelines... 3 General The Government Procurement Card... 4 When to Use Your Card... 5 How to Use Your Card... 6 Internal Procedures... 7 VAT Evidence... 8 Dealing With Your Monthly Government Procurement Card Statement/Cardholder Responsibility... 9 Dealing with Problems with the Supply of Goods Card Security/Cardholder Responsibility Card Administration Insurance/Risk Management Loss/Theft of Card Appendix A Safe Internet Shopping

3 Government Procurement Card Good Practice Guidelines This document is a procedural guideline relating to the use of the Government Procurement Card available from a number of high street banks including: Royal Bank of Scotland (RBS, NatWest & Ulster Bank) Barclays Lloyds TSB Cooperative This document contains a number of recommendations made by Rotherham MBC Internal Audit and Rotherham LA. It is envisaged that this document be used as induction training in the use of Government Procurement Cards

4 General The Government Procurement Card These guidelines relate to the use of the Government Procurement Card offered by The Royal Bank of Scotland although the principles are the same for cards offered by other financial institutions. The scheme offers the same purchasing opportunities as a credit card but the LA does not allow cash withdrawals. The card comes with a range of control features such as: Single Transaction Limit - The ability to set a limit on how much can be spent on the card at any one time. Monthly Transaction Limit - The ability to set a limit on how much can be spent on the card in any one month. MCG Blocking - Suppliers who can accept card payments are called merchants. Merchants when set-up are put into 1 of 34 merchant category groups. On a card by card basis merchant category groups can be blocked for usage. Chip & PIN - Purchasing cards will be issued with a PIN number that will be verified at all PIN capable outlets. Corporate Liability Waiver million pounds per scheme or 50,000 per cardholder to protect against cardholder misuse meaning you will not be liable for fraudulent expenditure. The card looks like any other credit card, embossed on the card is the following: Name of the school Cardholders name Expiry date Card number An approved cardholder will not be allowed to breach the rules regarding the use of the card contained within this guide. Each approved cardholder will be notified of the credit limits applicable to the card(s) under their responsibility. Adherence to these procedures will be subject to monitoring by normal line managers and review by Internal Audit. Each card will have a maximum transaction limit (the maximum value of any single transaction) and a monthly credit limit. Both these limits are inclusive of VAT and carriage charges

5 When to Use Your Card If the purchase is within your single transaction & monthly limit If the value is outside your limit, then you must follow existing purchase ordering procedures If you feel your limits need reviewing contact your Head Teacher If the value of the purchase is within your transaction limit your Government Procurement Card can be used to purchase a product or service. The delivery address should always be the school and not home addresses etc. The card should never be used for making personal or unofficial purchases Exceptions The following cannot be obtained using any card: - ATM or counter cash withdrawals - 5 -

6 How to Use Your Card The card can be used for any type of business expenditure. To place an order using the card: Determine whether the supplier can accept card payment Ensure your purchase is within your single transaction limit (including VAT and carriage charges) and that your monthly limit has not been reached Order goods/services from the supplier quoting your Government Procurement Card number and expiry date and confirm total amount of transaction with your supplier Ask the suppler to send the VAT invoice/goods advice note (where applicable) directly to your work address Inform the supplier to mark the invoice/goods advice note Paid by VISA. If the supplier does not do this ensure that the wording is entered upon the invoice upon receipt of the invoice - 6 -

7 Internal Procedures Schools should comply with the following procedures when ordering and authorising goods. 1. The cardholder(s) must have a clearly defined segregation of duties from the officer(s) involved with checking and payment of statements / invoices. 2. The cardholder who makes the purchase must notify the School Bursar, who records the information on a transaction log and creates a purchase order on the schools accounting system. A sequential transaction reference number must be used which must be given to the cardholder to record with details of the purchase. 3. When goods /services arrive, the cardholder will notify the busar and ensure ALL receipts, delivery notes and invoices are forwarded to school. Delivery details will then be recorded on the transaction log and, if necessary, on the schools accounting system. 4. When the monthly statement is received from the Card Provider, the cardholder will reconcile the statement to the transaction log held in school. 5. Once reconciliation is complete, the bursar will verify the transaction log and submit the statement to an authorised signatory for authorisation (signatory according to bank mandate). The statement once verified can be entered on to the schools accounting system

8 VAT Evidence RBS provide VAT reports that are accredited by HM Customs & Excise. These can be picked up using their Cards Online website or can be posted to the school

9 Dealing With Your Monthly Government Procurement Card Statement/Cardholder Responsibility As a cardholder it is up to you to ensure that all relevant documentation is received from suppliers. Remember the maintenance of adequate tax records is a statutory requirement on the LA/school. You will have access to a monthly statement. Statement dates can be for any dates between 3 rd and 28 th and can be accessed online. The day after your statement date, your scheme administrator will receive and notifying them that your statements are ready for collection via the internet. The total for each billing unit will then be settled by Direct Debit. On receipt of the statement, check that the details of each transaction correspond to adequate supporting documentation, i.e. requisition, order, delivery or receipts. It is the school responsibility to ensure that the details on each monthly statement are correct and that any discrepancies are rectified with the supplier. When you have reconciled your monthly statement to your supporting records: Attach, or ensure there is a full audit trail to all supporting documentation Sign and date the statement Ensure the nominated independent person also signs and dates the statement. Ideally this should be the Head Teacher, but this could also be a person in an adequate financial position. It is critical that someone of sufficient financial status, independent to the card holder, confirms the statement as being adequate. Retain the statement and all supporting documentation in accordance with the LAs formal Retention of Data Guidelines. This is basically 6 years

10 Dealing with Problems with the Supply of Goods Read the Guide to Internet Shopping in Appendix A If there is a problem with the goods/services supplied, you must contact the supplier immediately to request a refund or send missing/replacement goods. When the supplier has agreed to issue a refund, you should update your records with the credit, ensuring VAT is dealt with accordingly. You must also ensure that the credit appears on your next statement. In the unlikely event that agreement cannot be reached with the supplier you must contact the relevant RBS contact giving full details of the dispute so that a refund can be pursued via RBS. Clearly this avenue of addressing exceptional problems will require all corresponding events to be recorded fully. When ordering via the Internet take care to ensure that the full purchase cost is known i.e. in addition to VAT and delivery costs some suppliers have introduced a charge for payment by business/credit VISA cards

11 Card Security/Cardholder Responsibility On receipt of your card, you will be required to sign an acceptance form to confirm receipt of the card. It is your responsibility as an approved card holder that the card is kept in a safe place at all times. When ordering: Ensure that the card details are not observable to third parties when ordering via the Internet Ensure that telephone ordering is performed in a confidential manner Do not enter the card number on a fax or other paper transmission system Do not enter the card number on a fax or other paper transmission system Do not enter the card number on an when ordering, or at any other time File the monthly statements confidentially. The card number is printed on the statement. This applies to any documentation containing the card number The card must only be used to purchase goods or services required by your school The card must only be used by yourself, the approved cardholder Any misuse of cards will be treated as gross misconduct and subject to normal disciplinary procedures

12 Card Administration Details of the following must be reported to, and approved by, the Head Teacher, School Governors and the LA: New cards/cardholders Changes in cardholder details e.g. changes to names Cancellation of cards Changes to credit limits. The school should ensure that the cardholder s job description contains a reference to the cardholder s responsibilities

13 Insurance/Risk Management A number of internal controls exist within the scheme. However, as in most procedures/systems one cannot eliminate all forms of risk. Therefore, the school should formally address the residual risks and consider whether to insure them. The 3 main types of fraud to consider are: Fraud by a named cardholder 3 rd party fraud Faulty/non-delivery of goods The school needs to check with both the RMBC Risk Management & Insurance section and the bank in order to ensure that adequate insurance arrangements exist

14 Loss/Theft of Card In the event of loss or theft of your Government Procurement Card you must inform the bank immediately by telephone. You must promptly inform your Head Teacher and provide him/her with the full details of the loss of the Government Procurement Card

15 Appendix A Safe Internet Shopping Buying your supplies, equipment, stationary etc. from a website can be an attractive proposition. You can view, select and pay for your purchases from the comfort of your desk. However, before you hand over your card details you must ensure they are safe. Find out who you are dealing with 1. Check for phone, fax and contact details. Be wary of sites which do not have these 2. Check for a secure payment option. It will normally appear as a padlock in your browsers window status bar. It encrypts** order details before transmitting them, thereby protecting your card and personal information in transit 3. Security of payment details. You will be able to see on the screen whether the page you are on is secure: - Often it will flash up as a warning as you enter a secure page and/or - You might see a closed-padlock symbol in the status bar at the bottom of your screen if a padlock is not there, and there are no other guarantees, you should think twice about buying, and/or - When you see in the web address, and/or when you see a locked padlock symbol at the bottom right hand corner of the browser window. **Encryption converts your data into an encoded form before it is sent to the internet, stopping unauthorised users from reading the information. 4. Make a note of the trading name which will appear on your card statement. Find out where the supplier is located 1. Find out what currency the goods are priced in, and what the shipping costs will be. Estimate the total cost in sterling before buying. Foreign purchases will be billed in sterling on your credit card statement, which will also show the exchange rate and the foreign currency amount. 2. Check the store will supply goods in the UK and, if in any doubt, check shipping costs before ordering. Note, HM Customs may

16 3. What is the returns policy? Returning goods to overseas locations may be expensive and some sites may not accept them. Check the store policy before ordering. Taking care when shopping 1. Always read the sites terms and conditions before ordering, particularly if the site is overseas or the trading name is unfamiliar. Be particularly wary of buying any form of membership or subscription service. 2. Keep records of transactions. We recommend that you save and print all confirmation pages and receipts, and that you bookmark the site that you purchased from. 3. Always use secure websites. is not a safe way to send card and personal details, as privacy cannot be guaranteed. 4. Never quote information at the outset that is irrelevant to your order. For example do not divulge to the retailer such information as your: - Date of birth - Credit limit - Passport details - Mothers maiden name Some retailers are occasionally requested by the card issuer to provide this information for security reasons, however, this will always be after the order has been placed. If you are contacted after your order has been placed and asked for this type of information, contact your card issuer before replying to ensure the request is genuine. Online shopping internet scams It is impossible to list all the different types of scam you might come across on the internet but this page should give you a rough guide of what to look out for. Phishing

17 Phishing is where unsolicited commercial is used to direct internet users to websites controlled by thieves but designed to look like legitimate e-commerce sites. Users are prompted to provide sensitive information such as usernames and passwords, bank account or credit card details, often under the guise of updating account information. The number of reported Phishing incidents increased to 1,100 in April 2007, and increase of 178% from March according to figures from the Anti-Phishing working group. Several Rotherham schools have already been targeted by fraudsters using this technique. Hidden Addresses Beware of traders who try to sell goods or services using an anonymous address or a post office box number and make it hard for you to find their actual location. Hidden Expenses Be wary of advertisement promising no start up costs and then asking for a one off fee. What to do if you have problems 1. If goods do not arrive, or if changes are incorrect, phone, fax or the site and explain the problem to them. Also, keep printed records of all correspondence. 2. Most disputes can be resolved by contacting the retailer, but if you have a dispute over a transaction which you cannot resolve write to your card issuer enclosing copies of all correspondence. This is intended as a basic guide only. Visit the Office of Fair Trading website for a more comprehensive guide: