City of Lee s Summit Purchasing Card Training

Transcription

1 City of Lee s Summit Purchasing Card Training

2 About This Training Session In this training session the following information will be provided to you. How the City obtained the Purchasing Card. The intended use of the card. The responsibilities of the Cardholder, Departmental P- card Administrators, Departmental Managers/Supervisors and Program Administrator. Items authorized for purchase with the P-card. Penalties for misuse or fraud. Monthly reconciliation with the Accounts Payable Dept.

3 About This Training Session (cont) All information contained in this presentation is in the Purchasing Card Manual as well as more detailed information. The manual is located on the City s Intranet and is available to you at any time. If you have a question that is not addressed in the manual please contact the Purchasing Department for clarification. This is a self pace training program, however it is expected that you will have the test sheet back to Purchasing within 5 working days of receipt.

4 What About the Purchasing Card? Your Name Your Department

5 Brief History of the Purchasing Card (P-card) Program at the City of Lee s Summit The City has had a P-card Program for ten years. Its daily operation and control was resident in the Accounts Payable Department. The program was in a pilot state for an extended period of time. It was the recommendation of the 2005 Finance Accounts Payable Audit and the 2007 Purchasing Audit that the program be moved to Purchasing. In July of 2008 Purchasing Division took charge of the daily administrative control of the P-card Program. Accounts Payable retained the accounting and reconciliation aspects of the program. Today all 21 departments of the City use the card and have purchased more than $1.2 million dollars this fiscal year in goods and services they need to keep operational.

6 P-card Program Introduction The City is participating in the State of Missouri Cooperative Contract with UMB for a Visa Purchasing Card Program Services. The intended purpose of the P-card program is to improve the efficiency in processing small dollar purchases from any vendor who accepts the Visa Purchasing Card. This program allows the cardholder to purchase approved commodities and services directly from the vendor.

7 P-card Program Introduction The City s P-card Program is not intended to: Avoid or bypass appropriate procurement or payment procedures. Rather, the P-card complements our existing purchasing program by reducing the use of check requests, petty cash, and small dollar purchase orders. Replace the requirements for the travel advance form as per current travel regulations. For personal use. Misuse of card will result in immediate reimbursement and disciplinary action.

8 Obtaining a P-Card Cards are issued at the request of the Department Director/Division Manager via the Visa P-Card Cardholder Account Action Request. They will establish the daily, monthly, dollar spend and transactional limits for the cardholder based on need within their department. They will sign the form and provide it to the Purchasing Division where the P-card Administrator will forward it electronically to UMB for action. UMB sends the card to P-card Administrator Card who will notify the employee via to set up training. The employee is required to successfully pass a written test with a score of 70 or higher and then sign the P-Cardholder Agreement Form indicating that they understand the rules and requirements of P-card usage. The P-card is then issued to the employee for use by the Purchasing Division.

9 Cancelling, Renewal and Lost P-cards Cancelling a P-card A card is cancelled when the Cardholder is: 1) transferred from their department; 2) terminates employment with the City or 3) changes in duties that no longer require procurement to be accomplished. Card Renewal Each card will be automatically renewed annually by UMB based on the month of issue. The Card arrive about 3 weeks prior to the card expiration date. P-cards are sent directly to the Purchasing Division. Cardholders are notified when their card has arrived and they will be required to turn in their old card to Purchasing and sign for the new one.

10 Cancelling, Renewal and Lost P-cards (cont) Lost or Stolen Cards Immediately notify UMB Bank Security at to deactivate the card. Next notify the Departmental Manager/Supervisor, Departmental Administrator and Program Administrator. Tip -you may consider programming the Banks number into your cell phone. Departmental Manager/Supervisor will advise the Program Administrator to order another P-card.

11 P-card Security Only the authorized cardholder may use the card. Cards and card numbers must be safeguarded against use by unauthorized individuals in the same manner you would protect your personal credit card. Never give your card number over the telephone, unless dealing with a company you know is legitimate. Never provide your card number over the internet, to a business posing as a bank/financial institution, a representative/agent of UMB requesting to update your card or personal information. Historically, these have been SCAMS to obtain your card information. Forward all of these types of requests to the P-card Program Administrator. Department Heads may require the P-card to be secured in the department until it is ready to be used and returned immediate after use.

12 P-Card Program Roles, Rules & Responsibilities Cardholder Department / Division-Administrator Department Director / Division Manager P-card Program Administrator (Purchasing Division) Finance Department, Accounts Payable Division UMB

13 Cardholder Holds card and makes purchases; Receives the goods or services; Make certain sales tax is NOT charged; Collect and receive itemized sales receipts; Handle disputed items; Match receipts to P-card transaction log; Process all Transaction Logs within dates assigned; Submits receipts, along with signed P-card transaction log to the Department/Division Administrator; Ensure no one else is using the card; Return P-card to Department upon separation from City or transferred to another city department; Signs P-card Transaction Logs.

14 Department / Division - Administrator Timely collection of all Transaction Logs; Review monthly statement of each cardholder to ensure inclusion of necessary itemized receipts; Check to make certain sales tax is charged only when appropriate; Ensure availability of funds in proper account codes; Verify appropriateness of account codes; Process all cardholder Transaction Logs; Handle disputed items that cardholder is unable to resolve; Notify the P-card Program Administrator (Purchasing Division) of terminated or transferred employees and return cancelled cards to the P-card Program Administrator; Notify the Program Administrator of lost or stolen cards; Arrange cardholder training for cardholders with the P-card Program Administrator.

15 Department Director / Division Manager Request purchasing cards for designated employees; Set departmental spending limits within established guidelines; Designate representatives responsible for authorizing charges; Evaluate the need to cancel or reissue cards when employees transfer within the city; Review each cardholder s Transaction Log; Sign P-card transaction logs and forward to Department Administrator; Ensure transaction logs and all P-card documents are forwarded to Finance within the prescribed time; Comply with all purchasing and P-card policies and procedures.

16 P-card Program Administrator (Purchasing Division) Coordinate program policy issues; Create dollar transaction limits for cardholders and oversee any necessary and required modifications; Process properly authorized card requests and card strategy changes; Assign merchant codes to particular card strategies; Block merchant/commodity codes when appropriate; Administer training program for all cardholders; Coordinate issuance and cancellation of cards; Maintain policy and cardholder guides/manuals; Evaluate P-card feedback from suppliers and from departments; Coordinate and maintain internal controls.

17 Finance Division Receive Transaction Log and original receipts; Balance Transaction Log with UMB Bank statement for the same time period; Journal entries as required; File and store statements, receipts, etc.; Monitor missing documentation and notify the P- card Program Administrator; Notify the P-card Program Administrator of any violations or discrepancies; Provide training for all cardholders on Reconciliation Audit as required; Coordinate payment to Bank; Process into Financial system.

18 UMB BANK Responsibilities include all activities related to the underwriting, promotion, issuance and servicing of the card; Provide the data processing services necessary to support authorization, posting, settlement, billing, mailing, and card embossing; The on-line account maintenance tool, UMB Commercial Card tool.

19 Dollar Limits Department Director/Division Manager and by the P-card Program Administrator approve dollar limits; Multiple items may be purchased, but may not exceed maximum purchase limits; Payment for purchases must not be split to stay within the single purchase limit. Deliberately splitting a purchase to circumvent these procedures may result in suspension or revocation of your P-card.

20 ALLOWABLE PURCHASES ON P-CARD The following is a list of most common items for P-card use: Building/landscaping materials ; Catering and food for business use itemized receipts must indicate what the food was used for and who attended the meeting or function ; Miscellaneous maintenance and repair requirements; Office supplies ; Uniform and clothing purchases ; Education, such as local registration for local (KC Metro) classes, conference, seminars, etc.; Subscriptions, books, videos ; Memberships ; P-Card can be used for meals related to local travel as approved by the supervisor and in accordance with published guidelines. (Local travel is considered no overnight stay or air travel.)

21 Declined Transactions (Purchases) If the card transaction is declined contact the P- card Program Administrator as soon as possible for an explanation for the decline and action to resolve the situation. Transactions that exceed the singular occurrence, daily or monthly spending limit amount the Program Administrator may approve to complete the purchase. If the amount is substantially above the cardholder s limit the Program Administrator will contact the Department Head for authorization to proceed with the purchase.

22 Declined Transactions (Purchases) Typically P-cards transactions are declined for the following: Cardholder failure to activate the card. Cardholder has exceeded spend or transaction limits. Vendor/supplier is classified under a Merchant Category Code (MCC) that is blocked from use by the City. Vendor/supplier has asked for the billing address and or other information provided by the cardholder that does not exactly match that on file with the bank. On telephone or internet orders the Vendor or Cardholder has incorrectly entered the card number, expiration date or security CVV number. The transmission between the Vendor/supplier and the bank is not working.

23 Placing Order On and Off the Net When making a P-card purchase, be prepared to provide the following: Your name; Your card number; Card expiration date; Tax exempt certificate form; Ask the vendor to provide a detailed itemized receipt/packing list that includes product description, price, sales tax (when applicable), and freight/delivery charges.

24 Placing Order On the Net (cont) Read the online vendor s refund/return and customer privacy policies. Learn the terms of business practiced by a particular online vendor; Always print off the confirmation of the order; Look for the security alert and the lock icon when making online purchases; Make sure that you are fully informed as to all of the charges associated with making a particular online purchase.

25 Receiving Goods & Services Every purchase must be documented with an itemized receipt which will typically be a standard store receipt; Check pricing on receipt before leaving and no sales tax has been charged; If you are having a purchase shipped to you, request an invoice (marked paid) in addition to the packing slip in order to have an adequate receipt that includes total costs; You should keep the charge slip attached to the receipt for each transaction. Keep all receipts for the Reconciliation Process to be provided to AP.

26 Returns, Credits and Rejected Items Cardholder is responsible for making all arrangements associated with P-card returns; Follow up until the appropriate credit is issued; Notify supplier you are returning items that were purchased with the P-card; Ask for return authorization; Credit receipt will need to be turned in to AP; Remember the Vendor has already been PAID!

27 Sales Tax Exemption Cardholder must inform vendors that city is tax exempt before order is processed; Tax exempt certificate located on the Intranet under online Forms located under 1)Purchasing Division Forms & 2) Policies, Purchasing Division, P-card Policy and Procedures Manual; The city s tax-exempt number is printed on the face of the P-card.

28 Unauthorized Items Alcoholic beverages; Ammunition; Cash advances, cash refunds, cash in addition to purchase, cash in lieu of credit for the return or exchange of a purchase; Various computer hardware or software items; Controlled substances; Gasoline; Personal or non-business purchases i.e. phone calls; Any service involving prevailing wage.

29 Blocked Merchant Codes 5598 SNOWMOBILE DEALERS ; 5681 FURRIERS AND FUR SHOPS 7230 BARBER/BEAUTY SHOPS; 7261 FUNERALSERVICE/CREMATORIES ; 7273 DATING & ESCORT SERVICES ; 7278 BUYING/SHOPPING SERVICES ; 7295 BABYSITTING SERVICES ; 7297 MASSAGE PARLORS ; 7911 DANCE HALLS/STUDIOS/SCHOOLS ; 7932 BILLIARD/POOL ESTABLISHMENT ; 7995 BETTING/TRACK/CASINO/LOTTO ; 7996 AMUSEMENT PARKS/CIRCUS ; 8351 CHILD CARE SERVICES ; 9223 BAIL AND BOND PAYMENTS.

30 Conflict of Interest Purchases Purchases from vendors that create conflicts of interest, such as companies owned by the city employee or relatives, or where the employee has or will gain or benefit directly or indirectly from the purchase is strictly prohibited. Refer to City Personnel Policy Section 411.

31 Lost of Receipt If for some reason the Cardholder does not have documentation of the transaction to send with the transaction log, the Cardholder must use the Lost Receipt Form (located on the Intranet under online Forms, Purchasing Forms or under P-card Manual) which will provide all pertinent information regarding that purchase. Continued incidents of missing documentation may result in the cancellation of the employee s P-card; Form must be signed by Department Director.

32 Penalties When policy violations by a particular cardholder are identified by the Administrator or Department Director/Division Manager they will: Notify P-card Program Administrator (Purchasing Division) and Accounts Payable Division of the violation. First offense written letter of warning; Second occurrence P-card suspended 3 billing cycles (90 days); Third occurrence P-card withdrawn; The P-card may be withdrawn at anytime by written notification from Departmental / Division Manager.

33 Penalties (cont) Departments are responsible to ensure that all P- card accounting documents are submitted to the Accounts Payable Division. They will advise the P- card Administrator of those departments that fail to provide do so. Departments will be subject to: First occurrence, a warning will be issued to the Department Director; Second occurrence, entire department P-cards suspended for at least two (2) billing cycles; Third occurrence, entire department P-cards suspended for at least one (1) year.

34 Documentation Cardholders must retain: Sales slips, cash register itemized receipts, void receipts, for cardholder transaction log/statement; Order forms packing slips and receiving documents can be helpful to retain if you are planning to return the purchase.

35 Purchasing Card Forms P-card Action Request Form; Dispute Form; Lost Receipt Form; Sales Tax Exempt Form; Cardholder Agreement Form.

36 Reconciliation Process The Finance Department will electronically forward your transaction log to you or a department representative each month; Transactions charged to your P-card account must be reconciled and submitted to Department Administrator; Finance will indicate the date on which the signed paper transaction logs, itemized receipts, and electronic logs need to be returned to Finance.

37 Reconciliation Duties The assigned personnel will review Transaction Logs considering the following: Signatures; Correct general ledger account number coding; Description field has been completed; Itemized receipts are attached documenting the detail of items purchased.

38 Reconciliation Duties (cont) Determine that purchases are only for items that are for the use of the city; Review the statement for possible split transactions. Investigate transactions to determine if the cardholder was attempting to circumvent their established limits.

39 Reconciliation Duties (cont) Review the transaction logs for single transactions that are over the authorized limit of the cardholder, investigate circumstances; Determine that amounts are reasonable for items purchased and contract pricing was given when applicable; Determine that the City s tax exemption was honored. If a receipt is discovered to have tax, make sure a credit is being processed and note on the receipt.

40 Reconciliation Duties (cont) Ensure that errors and disputes from the prior month have been corrected and included on the monthly transaction log; Ensure that the completed electronic Transaction Logs have been forwarded to Finance by the due date; If you have a receipt or credit that does not appear on your monthly Transaction Logs, please hold it until you receive your next Transaction Logs.

41 Sample Transaction Log Merchant Name City State Trant Type Amount Account Numbers Description HY VEE 1380 LEE'S SUMMIT MO SALE $ HY VEE 1380 LEE'S SUMMIT MO SALE $ HY VEE 1380 LEE'S SUMMIT MO SALE $ HY VEE 1380 LEE'S SUMMIT MO SALE $ HY VEE 1380 LEE'S SUMMIT MO SALE $ Breakfast for Chamber for Commerce Meeting Breakfast for Chamber for Commerce Meeting Breakfast for Chamber for Commerce Meeting Breakfast for Chamber for Commerce Meeting Breakfast for Chamber for Commerce Meeting

42 End of P-card Training About your test. 1) You will received an with your twenty (20) question P-card Test and Answer Sheet. 2) You have 5 working days from the date of receipt to return the answer sheet to the Purchasing Card Administrator (Bill Ward). 3) A passing score of 70 or better is required to retain or have your new card issued. 4) You will be notified via of your score. Please make arrangements with Des when you will sign for your new card and return to old one.