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Introduction

Welcome to the University of North Dakota's Purchasing Card Program. The Purchasing Card is meant to replace the current Voucher/Speed Order System (SOS). This manual is designed to present the framework for implementing the program. It contains the hands-on detail that UND management and individual cardholders need to know to make the program work effectively. UND's Purchasing Card Administrator will be responsible for administering the purchasing card program. UND's Purchasing Card Administrator is Janelle McGarry, Purchasing, phone 777-3881.

The purchasing card program delegates the authority and capability of purchasing low dollar items directly to designated cardholders, allowing them to purchase goods and services faster and easier than before. The program authorizes the use of a purchasing card for individual transactions up to and including $5000. Purchases cannot be artificially divided to fall under the $5000 limit.

Use of the purchasing card does not exempt UND or its employees from the purchasing/procurement requirements of the State of North Dakota and UND policy.

What is a Purchasing Card?

The purchasing card is a MasterCard issued in the name of the UND employee, to employees designated by UND management, to make purchases =<$5000 for official UND business needs. The purchasing card will enable employees to purchase goods more efficiently and eliminate the preparation of Vouchers (SOS's) to make these purchases.

The purchasing card payment system is an individual bill/central payment system. The cardholder receives a monthly account statement for information and reconciliation purposes only. UND Accounting Services obtains a consolidated electronic billing file and makes payment to GE on behalf of all cardholders. Expenditure transactions are processed and posted to the appropriate departmental fund using the default account code string assigned to each purchasing card.

Individual credit limits, including card and cycle limits, vary as determined by UND. To assure the effectiveness of the program, the policy and procedures in this manual must be followed. Failure to use the purchasing card in accordance with applicable policies and procedures may result in revocation of the purchasing card and may involve appropriate disciplinary action, up to and including termination and possible criminal prosecution.

Policy and procedure violations include, but are not limited to:

• Purchasing items with the card for personal use
• Failure to return the card when reassigned, terminated, or upon request
• Failure to submit proper transaction documentation to the appropriate person in a timely manner
• Transferring assignment of the card to another individual
• Purchases using the PayPal payment system
• Using the card on Internet Auctions sites, such as EBAY

The purchasing card should not be used for tax reportable services (1099) to prevent difficulties in reporting to the IRS (ex. fees, repairs labor, equipment rental, legal services, etc.).

A purchasing card is:

• Authority delegated by UND management to individual UND employees
• For official University of North Dakota use only
• Authorized for purchases of $5000 and under
• Authorized for use with only certain categories of merchants

• A means to avoid appropriate procurement or payment procedures
• A means to access cash or credit
• For use with interdepartmental billing (IDB)
• A right of employment
• For personal use

What are the Benefits of a Purchasing Card?

The purchasing card enables personnel to perform more effectively and focus on the value-added aspects of their jobs by:

• Eliminating purchasing delays
• Reducing the number of Vouchers/SOS Payments
• Reducing the number of invoicing problems
• Reducing the number of checks issued

Who Are Likely Cardholders?

Because the purchasing card allows the cardholder to place orders directly with the supplier, the greatest program benefits are achieved when purchasing cards are issued to end users. Therefore, in addition to the traditional buyers (purchasing staff), other staff who should be issued purchasing cards may include:

• Field staff and others in constant travel status, who may need emergency parts or supplies while on the road. The card is not intended to pay for travel expenses (ex. lodging, meals, etc.).
• Staff who routinely buy books
• Program support staff who buy supplies
• Conference/trade show planners who may need to purchase supplies in other locations
• Physical plant/maintenance staff
• Mechanics, engineers

Cardholder Credit Rating

The use of the purchasing card results in liability to UND; not a personal liability for the cardholder. The cardholder's credit rating will not be affected. However, it is important to remember that the cardholder signs an agreement prior to receiving the purchasing card and, as such, is responsible for any misuse of the purchasing card as outlined in this manual.

The GE MasterCard Program provides liability protection to UND once notification of any loss, theft or fraudulent use is made. However, the same level of liability protection does not apply to cards that are made available to multiple users. Therefore, only the person whose name appears on the card must use each purchasing card.

How to Obtain a Purchasing Card

1. Contact Janelle McGarry, Purchasing, phone 777-3881 or by submitting the Purchasing Card Application Form to Purchasing, Stop 8381.
   http://www.und.nodak.edu/dept/purchase/html/forms.html
   
2. Complete a Purchasing Card Use Agreement. Employee participation must be approved by the department head or reviewer and the Purchasing Card Administrator. The cardholder must be a University employee. Students, including graduate students and student organizations are not allowed to obtain a purchasing card.
   
3. Attend a training session (either group or individual session). The reviewer or supervisor should also attend a training session.
   
4. Submit completed paperwork to The Purchasing Office after your card has been received and you have been through a training session.

Guidelines for Purchasing Card Use

The purchasing card is to be used to purchase low dollar value items with the total amount of any purchase not to exceed $5000. Certain exceptions to use of the purchasing card apply. Examples of items that may not be purchased with the purchasing card include:

• Alcoholic beverages
• Ammunition/weapons
• Cash Advances (ATM or other)
• EBay Purchases
• Employee travel
• Entertainment/hospitality/food
• Equipment Rental
• Fees
• Flowers/Gifts
• Gasoline/Fuel
• Hazardous Materials
• Insurance
• Leases
• Legal services
• Maintenance Contracts
• Motor Vehicles
• Non-business/personal items
• On-line Auction Sites
• Pay Pal purchases
• Postage Stamps
• Printing
• Radioactive Materials
• Registrations
• Repairs Labor
• Shipping - Outbound from UND
• Software
• Tax reportable services (1099)

This is not an all-inclusive list.

Note: UND departments may request, from the Purchasing Card Administrator, a waiver to remove the restriction on the purchase of the preceding items. The waiver or exception will be specific as to item(s) and as to cardholder. The waiver or exception is to be attached to the appropriate Purchasing Card Application and Use Agreement or noted on the purchasing card record form.

Please refer to Frequently Asked Questions #10

Merchant Category Code Standards

All vendors are assigned a merchant category code (MCC) by their bank. The MCC standard for the State is the State Merchant Category Code Exclusion Standard. Attempting to buy from merchants that are excluded will cause the transaction to be denied.

Use with Contracts

State contracts should be utilized whenever possible to get the best price.  The contracts may be viewed at the following website:  http ://www.state.nd.us/csd/spo/term-contracts.html .

Purchasing Card Issuance

At the time a purchasing card is requested for an employee, the funding code string that will belong to that purchasing card must be determined. The funding code string is to be entered by the UND Purchasing Card Administrator on either the Cardholder Account Setup form or on the PVS Net home page. The funding code string, associated with each purchasing card, identifies the fund, department, account, program and project number, if applicable. This code will be used to post the purchasing card transactions to the general ledger.

Cardholder Responsibilities

Each cardholder is responsible for the following activities:

• Safeguard the purchasing card.
• Sign the purchasing card immediately upon receipt.
• Record each purchase on a Purchasing Card Record form.
• Keep original receipts from each purchase.
• Receive the cardholder statement from purchasing card company.
• Reconcile the cardholder statement with Purchasing Card Record form and receipts.
• Sign the Purchasing Card Record form to attest that all purchases are for UND business and in compliance with all applicable rules and regulations.
• Forward signed completed Purchasing Card Record form and original receipts to designated reviewer (supervisor).
• Notify the supervisor, the Purchasing Card Administrator, and GE immediately in the event of a lost or stolen purchasing card.
• Destroy and discard an expired purchasing card.
• Give the purchasing card to supervisor if employment is terminated.
• Resolve disputes in a timely manner. The Purchasing Card Administrator should be notified of any disputed items that the cardholder has not been able to resolve.

Reviewer Responsibilities

The following items may be performed by the cardholder's supervisor, the Purchasing Card Administrator, or another designated employee (other than cardholder).

• Review the information submitted by the cardholder. The amount of review will depend on a number of factors, but the reviewer should, at a minimum, periodically compare receipts to the Purchasing Card Record Form submitted by the cardholder.
• Verify purchases are for business use.
• The card must not be used for personal transactions. If personal transactions occur, the employee must repay UND, including any applicable sales tax. Even if these taxes are not charged by the vendor, UND must remit the taxes to the State Tax Commissioner.
• If it is determined that personal or other unauthorized charges are occurring on the purchasing card, appropriate steps, up to and including dismissal, and possible criminal prosecution may be taken to solve the misuse/abuse of the purchasing card.
• Sign the Purchasing Card Record Form to certify that purchases are for business purposes and are in compliance with appropriate rules and regulations to the best of the reviewer's knowledge.
• Forward the signed Purchasing Card Record form, with all original receipts, to UND Accounting Services. Departments may keep a copy of the Purchasing Card Record form on file within their department.
• Return any terminated employee's card to the Purchasing Card Administrator

Departmental Process

To maximize the benefits of using the card, some accounting processes must change. All purchasing card transactions will be paid centrally by UND Accounting Services. The transactions will be posted to the general ledger via the default fund code string assigned to each purchasing card. The default fund code string will identify transactions as to the fund, department, account, program and project number, if applicable. If reallocation of the purchasing card transaction is necessary, the UND Purchasing Card Administrator will make the reallocation or the department can make changes via a Journal Voucher form.

General Instructions for Card Use

• If item(s) purchased are greater than $5000 (including shipping & handling, and other charges), use traditional purchasing procedures and follow UND's established policies and procedures (refer to http://www.und.edu/dept/accounts/).
   
• If item(s) purchased are $5000 or less (including shipping & handling, and other charges), and the item(s) to be purchased are not a contract item, use best judgment and determine an appropriate vendor for the material desired (no competition required). Give the vendor your purchasing card number and expiration date or present the card at the point of sale. Tell the vendor that UND is exempt from sales taxes. NOTE: The University of North Dakota's tax exempt number is on each purchasing card.
   
• If the material is to be shipped or delivered, tell the vendor to enclose or mail a copy of the receipt/invoice with each shipment. Have the vendor mark it "Credit Card Order - Paid" to avoid duplicate payments. If the material is picked up, obtain the itemized receipt indicating the purchase price.
   
• Maintain a record of the purchase on the Purchasing Card Record form.
  
• Retain the original, detailed receipts/invoices for reconciliation purposes. The charge slip from the credit card system is not acceptable. Forward the monthly purchasing card statement, original receipts, and the completed Purchasing Card Record form to the appropriate reviewer (supervisor).
  

Returns, Credits, and Disputed Items

The cardholder has the responsibility for following up with the vendor or bank (GE Corporate Payment Systems) on any erroneous charges, disputed items or returns, as soon as possible. Disputed billings can result from failure to receive the goods charged, defective merchandise, incorrect amounts, duplicate charges, credit not processed, as well as fraud and misuse.

If the cardholder has a problem with a purchased item or a billing resulting from the use of the purchasing card, they should first try to reach a resolution with the vendor that provided the item. In most cases, disputes can be resolved directly between the cardholder and the vendor.

Credits : Referring to the cardholder receipt, request from the vendor to issue a credit on the purchasing card account. If the item was shipped, refer to the shipping form you received and retained with the Purchasing Card Record form.

Returns : The vendor should issue credit for any item that has been approved for return. The credit should appear on a subsequent statement. Any item purchased with the purchasing card that is returned must be returned for credit. Do not accept a refund in cash or check.

Make sure you keep documentation of credits, returns and exchanges on the Purchasing Card Record form.

Statement Verification

1. A monthly account statement will be sent directly to individual cardholder(s). UND Accounting Services obtains an electronic billing file for payment processing. The cut-off date is the 2 nd of the month.

2. The cardholder is responsible for reconciling the monthly account statement with the Purchasing Card Record form and original, detailed receipts/invoices. If inaccuracies and/or erroneous information exist, the cardholder must immediately notify the UND Purchasing Card Administrator. When reconciled, the cardholder signs the Purchasing Card Record form and forwards this, along with all original receipts to the appropriate reviewer.

Monthly Processing

The monthly billing file for all UND departments is obtained electronically by the UND Purchasing Card Administrator. UND Accounting Services will run a job on the mainframe that will transfer the billing information, including the default fund code string to the general ledger and will generate payment to the purchasing card company (GE) via direct deposit (ACH).

Audits

Purchasing card transactions will be audited on a monthly basis. The primary purpose of the audit is to ensure that the purchasing card procedures are being followed and that:

• Purchase volume appears reasonable.
• The purchasing card is being used for appropriate transactions.
• Documentation is complete.
• The department and the cardholder are following required procedures.
• Proper internal controls exist with regard to the program.

Vendor Does Not Accept Credit Cards

Not all vendors accept credit cards (MasterCard). If this happens:

• Choose another vendor who accepts MasterCard.
• Complete the transaction using traditional purchasing procedures. \
• Ask the vendor if they are interested in accepting MasterCard. If yes, refer them to their financial institution for more information.

Purchasing Card Security

The purchasing card is to be treated with the same level of care that is afforded personal credit cards.

• Do not lend the purchasing card to anyone. The only person authorized to use the card is the person whose name appears on the front of the card and who has completed the Purchasing Card Application and Use Agreement form.
• Do not post or write the purchasing card account number in any location that is accessible to others.
• Avoid sending the purchasing card account number over the Internet.
• Purchasing card can not be used on Internet Auction sites, such as EBAY.

Failure to Comply with Program Guidelines

Any misuse of the purchasing card or other failure to comply with the applicable policies and procedures will result in the following:

• Revocation of the purchasing card
• Appropriate disciplinary actions which may include termination
• Repayment of transactions resulting from personal use of the purchasing card. Repayment will include any applicable taxes.

Termination of Employment or Transfer to Other Division

If the cardholder's employment is terminated with UND or if the cardholder transfers to another department within UND, the cardholder must return the purchasing card to his/her supervisor. The supervisor is responsible for contacting the UND Purchasing Card Administrator, who will cancel the card. Returned purchasing cards are not be reissued to other employees for use. Before returning a canceled purchasing card, the card should be cut in half by the supervisor.

Key Contacts

The following resource persons are available to answer questions, solve purchasing card problems, or provide assistance in the areas listed:

UND Purchasing Card Administrator:
    Janelle McGarry 777-3881
    janellemcgarry@mail.und.nodak.edu
   

• To apply for a purchasing card
• For questions concerning policies and procedures
• To replace damaged cards
• For assistance with vendors
• For account inquiries
• For billing information
• To report a lost or stolen card

UND Purchasing Card Record Form:
    Jan Bakken 777-4565
    janbakken@mail.und.nodak.edu

GE Cardholder Customer Service:
    1-800-274-7378

• To report a lost of stolen card
• For questions concerning monthly statements
• For authorization assistance