Miami University Purchasing Card Policy & Procedure MAY 22, 2015 1
Table of Contents Program Purpose... 3 Overview... 3 Advantages... 4 Getting Started- Card Application & Activation... 4 Capabilities, Limitations, Restrictions & Violations... 5 Capabilities... 5 Limitations... 5 Restrictions... 6 Travel Expenses... 7 Violations (Prohibited Transactions)... 7 Personal Purchases... 7 Unauthorized Purchases... 7 Cash or Cash-Type Transactions... 7 Split Purchases... 8 Tracking Violations... 8 Record Keeping... 8 Reconciliation... 9 Responsibility... 11 Tax Information... 11 Disputed Charges... 12 Lost or Stolen Card... 12 Contacts... 13 Appendices... 14 Appendix A: Cardholder Application Form... 14 Appendix B: Certificate of Sales & Use Tax Exemption Form... 15 Appendix C: Missing Receipt Affidavit... 16 Appendix D: P-Card Increase Form... 17 MAY 22, 2015 2
Program Purpose Miami s Purchasing Card (P-Card) Program is designed to create a more efficient and cost effective procurement process for limited dollar purchases (generally less than $1500) from vendors that accept MasterCard. This program is the preferred form of payment for such transactions and will allow the cardholder and authorized users to purchase approved commodities and services directly from vendors. Each P-Card is issued to a University employee who will be responsible for its proper use, including compliance with the Purchasing & Payment Handbook. The P-Card is not tied to your personal credit records: it can neither hurt nor help your personal credit. Overview The Miami P-Card is a JPMorgan Chase MasterCard credit card to be used for making individual small dollar purchases in accordance with policy guidelines as described herein. The P-card program is the primary method for conducting most routine purchases for departmental use, including travel. The primary goal in offering the program is as follows: It is a convenient and efficient way to purchase goods and services under $1,500 per transaction. It can be used to purchase goods and services in person, by phone, fax, mail, and via the internet. The P-Card should be used to pay for most purchases under $1500 that are otherwise paid by purchase order or direct pay request. The P-card should be used to process payment for travel excluding meals, for University business. As a tax exempt organization, Miami is not required to pay sales tax in Ohio and certain other states. Its assigned tax exemption number is clearly marked on the P-Card. You can go to the Accounts Payable web site miamioh.edu/accountspayable for a list of other states that we are tax exempt in. The P-Card is not to be used for on campus purchases, i.e. Bookstore, Dining, Ticket Office, etc... These purchases should be charged (via a journal entry) directly to the department by the cashier at the point of sale. MAY 22, 2015 3
No personal purchases may be made with the card. In using the card, individuals are authorizing the commitment of University funds and are accountable for the legitimacy of the transaction. Advantages The advantages of using the Miami P-Card are: The time spent by all parties processing purchase orders and direct pay requests is greatly reduced. Most transactions are insured. Postage and mailing costs are reduced. Card users have the opportunity for discounts on internet orders. Payments to vendors are expedited. The processing of paperwork is substantially reduced. Orders can be placed, filled and shipped in a timely manner. Reduces the need to use personal funds for rush orders. Ability to view and monitor transactions electronically daily, weekly, or monthly. There is a financial benefit to the University. Getting Started- Card Application & Activation When the need for a P-Card is identified, the potential cardholder should obtain a Cardholder Application and Cardholder Agreement form (Appendix A & B). These forms are located on the Accounts Payable web page www.miamioh.edu/accountspayable. After the application is completed and all appropriate signatures have been obtained, it should be returned to the Accounts Payable Department (107 Roudebush) for processing. Once the requested card is received from the bank by Accounts Payable, the applicant will be contacted to establish a mandatory online training session for the cardholder and the cardholder will receive their P- Card after their training is completed. Upon pickup of the P-Card, the cardholder will be given instruction on activation. The training will provide step by step instructions for recording (scanning) receipts, reconciling monthly statements and general purchasing training. Procedures are subject to change. MAY 22, 2015 4
During this training, individuals will learn about: Card information Card capabilities, limitations, restrictions and violations Recordkeeping, scanning receipts and statement reconciliation Sales tax exemption Disputed charges Card activation Lost or stolen cards Forms Customer support contacts After prospective cardholders and their respective card manager attend a onehour mandatory training session, departments can begin enjoying the advantages of the P-Card. Please refer to the Accounts Payable website for further information. Capabilities, Limitations, Restrictions & Violations Capabilities P-Cards are issued in the name of a University employee and are to be used for departmental purchases or for University approved travel only, excluding meals. The P-Card can be used to purchase most of the same goods and services that can be obtained using a direct pay or purchase order, provided the purchase total, including shipping, is under $1,500 and not controlled or regulated by a government entity, such as the purchase of volatile or hazardous chemicals. Purchases over the $1,500 threshold, controlled and/or regulated by a governmental entity, or not permitted per University policy, must be made using an on-line requisition. Cardholders may use the card to make purchases in person at a merchant site, to place orders over the phone, and to place mail, fax, and internet orders. Limitations The P-Card may be used for single transactions up to $1,500 for a monthly total of up to $10,000 (default). If cardholder exceeds any of these limits, the transaction will be denied. MAY 22, 2015 5
If an individual s usage experience indicates that limits other than the defaults listed above should be set, Accounts Payable should be contacted at 9-9200 or you may access An Increase P-card form from the Accounts Payable Website www.miamioh.edu/accountspayable. Accounts Payable will work with the department to determine the necessity of a limit adjustment. Restrictions Cash advances are NOT permitted on the P-Card. Furthermore, cardholders cannot benefit through any type of rewards program associated with the P- Card (i.e., frequent flyer miles, Kroger Points, etc.). Gifts are not permitted on the P-Card. Gifts are considered a personal purchase and must be paid with an employee s own personal funds. Other items that are not permitted on the P-Card are: Capital Equipment (Capitalized exceeding $5,000.00) Furniture, Furnishings, Carpet, Window Treatments Desktop computers, laptops, servers, monitors/displays, printers, and network equipment. Refer to Purchases and Payments Handbook Section 4.05 Telecommunications Equipment and Devices Business Cards, Letterheads, Envelopes Items available in University Stores or Office Supply Room Building Repair, Paintings, Renovation/Remodeling Payment of Consultants, Speakers, etc. Contracting for Temporary Employment Services Reimbursements to or Purchases from University Employees Meals during travel status which must be reimbursed via travel expense reporting, with the exception only for hosting The Director of Purchasing may authorize one or more of the above restrictions for certain cardholders/departments/ whose duties include specifying and procuring that commodity for the University. Any such authorization must be in writing and made in advance of the transaction. If a cardholder has a legitimate transaction which cannot be made due to the restrictions, contact Accounts Payable and a determination will be made on how to proceed. MAY 22, 2015 6
Travel Expenses The P-Card is the recommended and preferred method to pay for authorized travel expenses. The following rules apply: Each person should put their travel expenses on their own P-Card. Airline tickets for University employees must be purchased on a P-Card. Any personal charges on the hotel bill (e.g. meals, personal calls, in-room movies, spouse or accompanying guest charges) should be paid on a personal credit card or out-of-pocket at checkout. Other related expenses that must be purchased on a P-Card, are conference registration fees(unless travel only card), hotel/lodging/meeting rooms for official University travel/business, car rental and refueling the rental car. Reporting of travel expenses charged on a P-card must be included on the individual s Travel Expense Report as a non-reimbursable item. Violations (Prohibited Transactions) The following are examples of violations of the P-Card program: Personal Purchases Defined as anything that is not purchased for use and ownership by the University. It is a violation of the University P-Card program to affect ANY personal purchase or personal transaction with a University P-Card, regardless of whether the cardholder intends to reimburse the University for the purchase. Fraudulent use or abuse of the P-Card will result in immediate suspension of privileges and may result in corrective action up to and including termination and/or criminal action. In addition, the University will seek restitution for any inappropriate charges. Unauthorized Purchases Defined as purchases of goods or services with State funds that may not be used to further the legitimate government purpose of the buying entity. This is clearly a violation of State purchasing law and the violator s card will be revoked. Cash or Cash-Type Transactions Defined as cash, cash in addition to purchase, and cash in lieu of credit for return or exchange of a purchase. It is a violation of the University P- Card program to obtain cash or conduct cash-type transactions using the University P-Card. MAY 22, 2015 7
Split Purchases Split purchases occur when single purchases costing more than $1,500, or your particular transaction limit, are split into multiple P-Card transactions to circumvent the $1,500 maximum. It is a violation of the University P-Card program to split purchases. Tracking Violations The violations listed previously are tracked on a monthly basis and regularly reviewed. When needed, follow-ups are conducted with cardholders and/or card managers. Please see the chart below for the steps taken for violations. Keep in mind that after repeated violations cards will be subject to termination. Violation 1 st Occurrence 2 nd Occurrence 3 rd Occurrence 4 th Occurrence 5 th Occurrence Failure to Reconcile Notification email sent to cardholder and reconciler Notification email sent to cardholder, reconciler, & cardholders manager Notification email sent to cardholder, reconciler, cardholders manager, and the managers manager Card is suspended, approval required for future use, mandatory process review P-Card privileges are permanently suspended Failure to Approve Notification email sent to approver Notification email sent to approver and approvers manager Notification email sent to approver, approvers manager, and manager of approvers manager Card is suspended, approval required for future use, mandatory process review P-Card privileges are suspended Record Keeping Issuance and use of a P-Card requires the cardholder to maintain card purchase records and individual receipts for each transaction. Records should be kept on a monthly basis coinciding with the individual card billing cycle. Individual itemized receipts must be obtained from the supplier for each purchase, and kept for reconciliation. If the expense is for hosting, please complete a hosting form to identify who was hosted and the business purpose or topic of discussion. MAY 22, 2015 8
As public employees under the laws of the state of Ohio it is extremely important that the department cardholders obtain an itemized record of the transaction, from charge slips, cash register tapes, itemized invoice or other receipts for all purchases. In some instances, the vendor receipt does not itemize the transaction, and in such instances a more complete receipt is required. In the event that an individual charge slip and/or cash register receipt is lost, a MasterCard Purchasing Card Missing Receipt Affidavit (Appendix D) shall be completed and certified by the purchaser and approved by the department head. For large purchases, the department may be required to obtain duplicate copies, with the costs of obtaining such paid for by the department. Repetitive incidents of lost sales slips may result in revocation of card privileges for the individual. Reconciliation Each month at the end of the billing cycle, Accounts Payable will receive a consolidated electronic invoice for all monthly credit card purchases from JP Morgan Chase. Cardholders will receive an email notifying you of the date ranges for this month s statement. Upon receipt of the email, the cardholder reconciles the statement online. The cardholder must ensure that each charge is valid and accounted for, and should also check that no tax is charged. Each P-Card is assigned a default Banner index number, normally the department s main account. If the charge is to be made to the account, no further entry is required. If the charge is to be made to other than the default account, the proper Banner Index/Account number must be entered. It is the policy of the University to carefully document all purchase transactions. In addition to any specific requirements for initiating a requisition, it is the responsibility of the requesting department and subsequent approvers to disclose the following business details on any and all purchase documents (use the transaction description field). Who: The party who is the ultimate end user What: A reasonable item description of items or services purchased MAY 22, 2015 9
When: The date in which the item is purchased or the service is rendered. (I.e. conference date, or project start date) Where: The campus location where the item purchased is delivered or the service is performed Why: A reasonable description of the business purpose and reason for the item to be purchased or the services acquired. Invoice/Policy #: Include if applicable Once monthly, the memo billing and individual receipts must be scanned into a file that matches to the card holder, the department and the month and year of the billing period. If the monthly reconciliation is prepared by someone other than the cardholder the monthly statement must be signed and dated by the cardholder before scanning. In doing so, the cardholder certifies that the charges incurred are in compliance with University policies and procedures. The policy does not permit the signing of authorized individuals names by other individuals (see section 1.03 of the Purchasing and Payments Handbook). All department charges are consolidated into a summary bill that must be paid to JP Morgan Bank in a timely fashion, under our contract, or the university is subject to significant interest fees. The summary will be electronically routed for approval by your departmental supervisor. In the event that a department fails to submit their purchasing card charges in a timely manner, to allow payment of the bill, all charges against the individual s card will be processed and posted to their cards default index, and the department will be responsible for initiating any journal voucher entries to correct the charges. All monthly charges to an account for the JPMorgan Chase P-Card purchases will be reflected in a single entry on your Banner reports as JPMorgan Chase P- Card Purchases. MAY 22, 2015 10
Individual cardholders are required to keep original receipts of their transactions for up to five (5) years. Responsibility The department chair/director and cardholder are responsible for the security and the appropriate use of their assigned card. The card is issued in the employee s name and it will be assumed that any purchases made against the card have been properly authorized unless the card is reported lost or stolen prior to use. Use of the card not in accordance with University policies and procedures, or failure of the cardholder or his/her designee to properly account for purchases and reconcile the statement in a timely manner each month, may result in card revocation, personal liability to the University, and/or disciplinary action. Should a cardholder terminate employment with the University or transfer between departments, the user department has the specific obligation to reclaim the credit card and return it to Accounts Payable prior to the employee s termination date. Tax Information Ohio Sales Tax Miami is a tax-exempt State supported university. In Ohio, no sales tax should be charged on the P-Card, with the exception of Federal Excise Tax. Merchants should be informed of our tax-exempt status at the time of transaction. Merchants may request a copy of Miami s Tax Exemption Certificate for their files. A copy of this certificate is included in this document (Appendix C) and may be reproduced, faxed, mailed or e-mailed as needed. Miami is not always considered tax-exempt in other states. Certain taxes assessed by cities (tourist assessments) are legitimate and will be paid by the University. If there is uncertainty about a specific tax charges contact Accounts Payable, or refer to www.miamioh.edu/accountspayable. If sales tax is inadvertently charged to the P-Card, it is the cardholder s responsibility to contact the vendor and have them issue a credit for the tax amount. MAY 22, 2015 11
Disputed Charges If any questionable transactions appear on the cardholder s account for which there is no information, or if the amount does not match receipts, contact the merchant listed regarding the disputed transaction. If the merchant agrees that an error was made, the merchant will make an adjustment which will post as a credit to the account. The cardholder must review and approve the adjustment received (credit) on the website in the same Index and account code of which it was originally charged. If the merchant does not agree to make an adjustment, the transactions should be disputed in PaymentNet within 60 days of the post date. JPMorganChase will then investigate the transaction. Be aware that they may contact the cardholder for further information. If a dispute needs to be made after 60 days, the cardholder will need to contact JP Morgan Chase at 1-800-622-7747. Transactions must be disputed within 110 days of the post date. It is the responsibility of the cardholder to dispute erroneous transactions in accordance with the process described above. Lost or Stolen Card The P-Card is the property of Miami University and should be protected and secured just like any other credit card. If the individual transfers to a different department or has any changes in the information supplied on the original card application, they should notify Accounts Payable immediately. In most instances a new card will be required. Departments are also responsible for notifying Accounts Payable regarding the transfer or termination of employees who are cardholders. If a card is lost or stolen, it is the responsibility of the cardholder to contact JPMorgan Chase to report the card lost or stolen. If unauthorized purchases are made as a result of the card being lost or stolen, the cardholder will not be held responsible if the situation is reported in a timely manner. If a card is believed to be misplaced, the cardholder should notify JP Morgan Chase Bank Card Services at 1-800-270-7760. A temporary hold can be placed on the card to prevent further transactions until the status of the card is MAY 22, 2015 12
determined. If the card is later found and a report of transactions shows that it has not been used fraudulently, the hold can easily be removed by notifying Accounts Payable If the card is not found, Accounts Payable will cancel the card and issue a new one. If the card is stolen in the evening or on the weekend, please contact JPMorgan Chase Bank Card Services at 1-800-270-7760 to cancel the card and request a new card. The cardholder will be contacted when the new card arrives. It will be the responsibility of the cardholder to pick up the card in person in the Accounts Payable Office, 107 Roudebush Hall. Contacts JPMorgan Chase Lost or stolen cards...1-800-270-7760 Transaction disputes. 1-800-622-7747 All other inquiries should be directed to Customer Support: Customer Support: AccountsPayable@miamioh.edu Phone Number: (513) 529-9200 MAY 22, 2015 13
Appendices Appendix A: Cardholder Application Form MAY 22, 2015 14
Appendix B: Certificate of Sales & Use Tax Exemption Form MAY 22, 2015 15
Appendix C: Missing Receipt Affidavit MAY 22, 2015 16
Appendix D: P-Card Increase Form MAY 22, 2015 17