OVERVIEW

The Texas Building and Procurement Commission (TBPC) has authorized a Procurement Card (ProCard) Program through a contract with Bank One.  The ProCard program is not intended to avoid or bypass other required purchasing or payment procedures.  The purpose of the program is to establish a more efficient, cost-effective method of purchasing and paying for small dollar transactions as well as high-volume, repetitive purchases.  Bank One pays the merchants between 24-48 hours of placing an order or picking up merchandise charged to the ProCard.  

If used to its potential, the program should result in a significant reduction in the volume of purchase orders, vouchers and related work processes.

Key Points

a.        The ProCard is a Master Card issued in the cardholder’s name with the State of Texas emblem and the wording "Tax Exempt for Official Use Only".

b.       The ProCard is not to be used for any personal charges, it is for University business use only by employees having delegated purchasing authority.

c.        The ProCard does not affect the Cardholder's personal credit rating in any way.  The ProCard program carries corporate, not individual, liability.  However, misuse of the card (i.e. personal purchases, non-business related purchases) may subject the employee to reimbursement of unauthorized expenditures and/or disciplinary or criminal prosecution. 

DUTIES AND RESPONSIBILITIES

Program Administrator – Susie Motal – 361.570.4826 is responsible for:

·        Administering the day to day operations of the program

·        University liaison with Bank One

1.      Submit new cardholder applications

2.      Problem resolution (i.e. Merchant Category Code (MCC) problems, override of purchase authorizations, temporary credit increases)

3.      Receives new credit card

4.      Reissue or cancellation of credit card

·        Departmental liaison answering any ProCard related question

1.      Assist with cardholder application

2.      Perform training of all new cardholders

3.      Maintains University cardholder files

·        Audit Responsibilities

1.      Monthly audit of random cardholders

2.      Monthly verification of clearing cost center

3.      Assists Accounts Payable with any cardholder issue discovered during their audit process

·        Annual review of cardholder manual and procedures

Unit Head is responsible for:

·        Authorizing cardholder application

·        Reviewing and approving through use of a signature on the monthly transaction log

·        Ensuring departmental cardholder complies with audit findings

·        Approving any temporary credit limit increases

·        Assigning of an individual other than cardholder to prepare monthly reconciliation, transaction log and journal processing (departmental option).

Cardholder is responsible for:

·        Accountability and security of the credit card

·        Complying with Purchasing and ProCard procedures

·        Monthly reconciling of Bank One statement to receipts and transaction log (unless assigned by unit head to another individual)

·        Working with merchants to resolve any disputes

·        Promptly reporting any lost or stolen cards

·        Retaining copies of all journals, signed transaction logs and supporting documentation for three (3) years after fiscal year end (08/31) in accordance with the University Record Retention Schedule

·        Verifying vendor status for purchases over $150.

HOW TO OBTAIN A PROCARD

·        Call or e-mail the Program Administrator to request a Cardholder Application form

·        Return the completed and signed application form to the Program Administrator

·        The Program Administrator will submit the application to Bank One.  Allow two weeks to receive the card.

FRAUD/CARDHOLDER ABUSE

Bank One is liable for all fraudulent activity after the card has been reported Lost/Stolen. The University is liable up until the card is reported lost/stolen.  Coverage for "employee abuse" is up to $30,000 per card if the Monthly Spending Limit on the card is $15,000 or less.  Employee abuse is defined, as a cardholder makes a purchase with the card for which the entity receives no benefit, i.e. personal purchase.  Fraud exists when an individual not authorized to use the card makes charges to the account. 

All employees have the responsibility for accountability and ethical conduct and shall exercise the utmost good faith in all transactions, activities and behaviors related to their duties to the university and its property and resources.  In accordance with UHV Personnel Policy C-8 Employee Standards of Conduct, any report of Fraud or Cardholder abuse will be reviewed immediately to determine whether an investigation is warranted.  Every attempt will be made to resolve internal violations at the lowest level of administrative review.  However, after a determination of the seriousness of the violation has been made, other administrators may also become involved.  When criminal activity is suspect, appropriate civil authorities may become involved.  

REPORTING A LOST OR STOLEN PROCARD

The cardholder must notify Bank One immediately if the ProCard is lost or stolen by calling the Customer Service number 1-800-890-0669.  Representatives are available 24 hours per day, 7 days a week.  The cardholder must also notify the Program Administrator by email.  The cardholder must attach a copy of this email with the transaction log including the date, time and Bank One representative the cardholder reported their card lost or stolen.  Upon receipt of your telephone call, Bank One will immediately suspend your ProCard and issue a new card, with a new account number.  The bank will send the new card to the Program Administrator. 

TRAINING

The Program Administrator will schedule applicants for mandatory ProCard training.  New employees must bring a UHV photo I.D. to the training class for identification purposes.  The following items will be provided to each cardholder during the training session:

1. Cardholder Agreement
2. ProCard Manual
3. ProCard Transaction Log
4. Sales Tax Exemption Certificate
5. ProCard

CARDHOLDER AGREEMENT

Your signature on the Cardholder Agreement shows that you understand the program and agree to follow the procedures outlined in this manual.

PURCHASES FROM HISTORICALLY UNDERUTILIZED BUSINESSES

Cardholders must make a good faith effort to purchase 20% from Historically Underutilized minority and women-owned Businesses (HUBs).  Cardholders should consult with Purchasing Agent for assistance in locating HUB vendor.

EXAMPLES OF ACCEPTABLE PURCHASES ($2000 transaction limit)

• Bookstore purchases
• Business Meals (subject to University Policy, F-1)
• Catering services
• Cell phone accessories and monthly charges (subject to University Policy, A-16)
• Conference registrations
• Courier services
• Florists (subject to University Policy, A-28)
• Grant related purchases (Grants Coordinator must also sign transaction log)
• Janitorial supplies
• Lab supplies
• Non-alcoholic beverages, per UHS contract, only Coca-Cola products may be purchased for business meetings (subject to University Policy, B-9)
• Food items such as pastries and cookies for meetings (subject to University Policy, B-9)
• Office supplies
• Promotional items
• Safety supplies
• Subscriptions (term of subscription required on transaction log)
• Tools, hardware or maintenance supplies
• Training courses and seminar fees
• Videos

EXAMPLES OF UNAUTHORIZED PURCHASES

The ProCard program through the State carries some restrictions with certain merchants.  If you present your ProCard for payment to these vendors the charge will be declined, below are an example of unauthorized purchases:

• Any transaction greater than $2000
• Items for personal use
• Items for non-University purchases
• Purchases requiring a Purchase Order (contact Purchasing Agent)
• Alcoholic beverages (see Note 2 below)
• Capital or controlled equipment (see Note 3 below- Requisition through Purchasing)
• Cash advances, travelers’ checks, insurance, etc. (see Note 1 below)
• Controlled/hazardous/radioactive materials (Requisition through Purchasing)
• Consulting or other services requiring a formal contract
• Entertainment (see Note 2 below)
• Items intended to be charged to contracts/grants that are not allowed by sponsor.
• Leases (process by voucher only)
• Memberships (process by voucher; requires President’s signature)
• Other goods or services related to or arising out of Business travel, other than registration fees and seminar fees or business lunches between 2 or more people.
• Prescription drugs/controlled substances (see Note 1 below)
• Travel-related expenses other than registration fees including:
  1. Airlines (Go through Skymaster Travel – Contact Travel Coordinator in Finance Department)
  2. Hotel accommodations (Use University Travel card)
  3. Auto rentals (Use State contracted vendor, presently Enterprise)
  4. Fuel (Use fleet cards – Contact Travel Coordinator in Finance Department)
  5. Personal meals covered by per diem
• Items that are not intended to be paid from university cost centers. (i.e. employees chip in to purchase a gift with a ProCard for someone leaving, or having a birthday, or having a baby shower and then reimburse the cost center for that purchase).

Notes:

1. Charges for these types may subject the user to disciplinary actions.
2. All entertainment subject to university policy, UHV Administrative Policy and Procedure, B-9.  Voucher requires approval of supervisor.
3. Capital equipment is any equipment with a cost greater than $5,000.00 or is classified as an controlled asset.  The State of Texas Comptroller has defined "controlled assets" as facsimile machines, stereo systems, cameras, video recorders/players, televisions, projectors, microcomputers, computers, printers, cellular/portable phones costing between $500 and $2,000.  Firearms and cash registers for any amount are also controlled.  If you need further clarification regarding "controlled assets," please contact the Director of Facility Services.

STATE FUNDS (Fund Group 1)

The use of State fund cost centers is prohibited when using the ProCard, only Local fund cost centers can be used for purchases.

GRANT FUNDS (Fund Group 5)

Local funds procedures apply; however, purchases may be subject to additional grantor restrictions.  Contact the Finance, Grants Coordinator, to review grant restrictions if you are unsure.  The Grants Coordinator must also sign off on all transaction logs when grant funds are used.

TRANSACTION AND BILLING CYCLE CREDIT LIMITS

The default credit lines per card are

• $2000 per single transaction purchase.  A transaction includes the purchase price plus shipping, handling, installation costs, etc
• $5000 per monthly billing cycle

• Written request from the Cost Center signatory authority for temporary cardholder credit increases up to $15,000 may be approved through the Program Administrator. 

• Temporary cardholder credit limit adjustments exceeding $15,000 for seasonal or emergency needs may be requested by the ProCard Administrator or the Cost Center signatory authority for campus Business Contingency plan readiness or other operational needs.  Approval by the Director of Business Services or either Vice President is required.

• ProCard Administrator will make the necessary arrangements with the financial institution.  Cardholders should allow one (1) business day for change to become effective.

THE TRANSACTION LOG

The transaction log is your department's official documentation for monthly charges.  The log is used for recording a brief description of the purchase, purpose and benefit, the amount of each charge and cost center information.

The transaction log is an Excel document located on the on the web at http://www.uhv.edu/fin/forms/procardtranslog.xls

Supporting documentation for each purchase including invoices, packing slips, and related correspondence is to be kept with the transaction log.  All this information will be required later for auditing purposes.  It is important to note that the transaction log has space for multiple cost center signatures.  

RECONCILIATION

Upon receipt of the monthly credit card statement, the cardholder must reconcile the statement to the individual receipts and the transaction log.

The cardholder and the cost center signature authority must sign (for approval) the transaction log.  (If this is the same individual, sign in both places).

Discrepancies with the bank statement can be caused by a number of reasons:  

• You may have been overcharged or undercharged
• Tax may have been charged
• Shipping and handling charges may have been added
• Item may be in dispute (never delivered, damaged or other problem)
• Vendor may have failed to post the transaction or posted it twice

PAYMENT OF SALES TAX

The University, as a state institution, is exempt from the payment of sales tax.  However purchases are not automatically exempt from sales taxes.  Therefore, employees are encouraged to request an exemption or present a copy of the University's Texas Sales and Use Tax Exemption Certificate when making purchases from local fund cost centers (funds 2, 3, 4, 5, and 7).  Upon receipt of the monthly statement, if sales tax charges are indicated, the cardholder has two options:  1) contact the vendor to have the sales taxes exempted or 2) if the department will spend more time and resources in reversing the sales tax charges than the savings realized, the sales taxes can be paid (local fund purchases only).  A reason must be documented on the transaction log if sales taxes are being paid. 

The following suggestions may help in claiming a sales tax exemption:

• Verbally request the tax exemption, "This is a purchase for the University of Houston-Victoria.  The University is tax exempt"  and/or
• Present your ProCard.  The card clearly states "State of Texas Procurement Card", "Tax Exempt-For Official Use Only"
• Carry a reduced size copy of the Tax Exemption Certificate in your wallet
• If you frequently visit a business, contact their Customer Service representative and ask if they issue a tax exemption card.  For example, at Wal-Mart, stop by the Customer Service Desk to obtain a tax exempt card which you would present at the time of each purchase along with the ProCard.  Also, contact the ProCard Administrator for a copy of the special tax exempt cards issued by Office Depot and Office Max. 

JOURNAL PAYMENT PROCESS

DEPARTMENTAL AUDITS

Procurement card transactions are subject to unannounced audits by the Internal Auditing Department and the Program Administrator. The department and cardholder are responsible for responding to audit requests. All cardholders can expect to be audited once annually.

For record keeping and audit purposes, the following items must be kept with each user's transaction log:

• Invoice
• Packing slips
• Credit card slips
• Other information related to the purchase

PROCARD AUDIT PROCEDURE

1.   The ProCard Administrator will perform audits of selected ProCard users to ensure that purchases are in compliance with university policy and procedures.  The ProCard Administrator will contact selected cardholders by email to schedule a date and time.  Reviews will be based on a number of factors, including

• Conducting an initial audit of new cardholders after the first three (3) months of card issuance;

• Follow-up audits for any reviews found to be non-compliant;

• Auditing cardholders with large dollar transactions;

• Auditing cardholders with large numbers of monthly transactions;

• Auditing cardholders with a history of past problems;

• Auditing cardholders having incorrect or incomplete transaction logs.  

2.   On the day of the audit, the ProCard Administrator will visit with the cardholder and will review

• The transaction log, including supporting documentation (statement, receipts, etc.) has been properly prepared;
• Individual transactions are in compliance with delegated $2,000 limit;
• The card is being used for appropriate and allowable purchases (no personal or restricted purchases);
• Sales tax charges, if any are in compliance with university procedure and sales taxes reimbursement required, have been received or in process;
• Vendor status verification for purchases over $150 (State Comptroller requested) is on file;
• There are no intentional splitting of large orders to circumvent university rules on delegated limits;
• Cardholder submitted monthly journal by deadline (20th);
• Correcting journal entry, if any, has been completed in a timely manner;
• Credit Card disputes, if any, are resolved or working;
• Monthly review and reconciliation of transaction log with Bank One statement was completed;
• Reasonable safeguards are in place to prevent unauthorized use of card.

3.       Within ten (10) days after the review, the ProCard administrator will provide the cardholder and department head with a written report with any findings, recommendations and noteworthy observations.

4.       An unsatisfactory audit may result in one or more of the following actions, depending upon the level of non-compliance: 

• A written warning, with a copy to the department head;

• Temporary suspension of individual cardholder privileges until cardholder returns to compliance;

• Permanent revocation of cardholder privileges and card cancellation;

• Reimbursement to the University for unauthorized purchases;

• Follow-up audit to ensure compliance;

• Other disciplinary actions, in accordance with university policy for fraudulent or serious misuse of the card.

DOCUMENT RETENTION

In accordance with the University Record Retention Schedule, copies of the journal, signed transaction log, along with all supporting documentation must be retained for three (3) years after fiscal year end.  ProCard files may be stored in the central University record retention area along with other University records.

THE PROCARD CYCLE -- START TO FINISH

1. Before making a purchase, the cardholder verifies that:

·         The intended purchase is for University business

·         The purchase is acceptable

·         The vendor is in good standing with the State, which is required for purchases over $150.

2. When making a purchase, the cardholder 

·         Informs the vendor that the purchase is tax-exempt, and, if necessary, forwards a Texas Sales and Use Tax Exemption Certificate to the vendor

·         Provides cardholder name, address and shipping instructions  

·         Confirms pricing, freight and handling charges

·         Provides the ProCard number, expiration date, and name as it appears on the card

·         Requests an invoice from the vendor, faxed invoices are acceptable

·         Enters information into transaction log.

3. At the close of each monthly billing cycle, Bank One will mail a billing statement to each cardholder having any monthly activity.  The cardholder must reconcile the statement entries to receipts and the transaction log.  Any discrepancies identified should be investigated promptly.

4. After the cardholder has reconciled the bank statement to the receipts and transaction log, the cardholder or designated individual (see unit head responsibilities):

·         Signs the transaction log

·         Has each cost center signatory authority review and sign the log

·         Process PeopleSoft Journal for payment (Journals may include multiple cardholders)

·         Delivers the unsigned journal and original transaction log to Accounts Payable by the 20th of each month.  (Journal does not require signature)

·         Retains copies of journal, signed transaction log and supporting documentation for ProCard files.

5. As Accounts Payable receives the journals and original transaction logs from each department, AP will audit and verify that the total for each cardholder matches the Bank One master statement. 

6. If a properly completed journal and transaction log is not received by the deadline, which is the 20th of each month, the Program Administrator will notify the cardholder of the problem.  If cardholder fails to submit journals by deadline, cardholder privileges may be temporarily suspended. 

BILLING CYCLE DATES

5th of each month or next business day - billing cycle ends

20th of each month – deadline for submitting cardholder’s journal with original transaction log attached to Accounts Payable

RETURNS, CREDITS AND DISPUTED CHARGES

Should a problem arise, the cardholder has certain responsibilities and should first try to resolve the issue directly with the vendor.  

·        Returns:  If a cardholder needs to return an item to a supplier, the cardholder is responsible for contacting the supplier and obtaining instructions for return.  Some suppliers may charge a restocking or handling fee for returns.  All returns as well as the dollar amount of restocking charge should be noted in the transaction log by the cardholder.

·         Credits:  If the supplier accepts an item as a return, the cardholder is responsible for ensuring the credit is received. Credits should appear on the next month's statement.  All credits should be noted in the transaction log by the cardholder.

·         Disputes:  A cardholder may dispute any charge that appears on the monthly statement if it is in error.  If there is a charge that is not recognized or appears to be incorrect, it is the cardholder’s responsibility to contact the vendor and try to resolve the dispute.  If an agreement cannot be reached, the Cardholder should complete a "Disputed Item" form with supporting documentation.  The form may be submitted by fax or electronically to the address provided.  Generally, disputed items should not be paid pending resolution.

·        A disputed charge must be communicated to Bank One within 60 days from the billing close date.  Bank One will place the charge in a "State of Dispute" and the account may be given a provisional credit until receipt of adequate documentation from the vendor.  If the charge appears to be in order, the transaction will be re-posted to the account for payment and the dispute considered closed.  If the charge is suspected to be fraudulent, the card will be immediately cancelled and a new card will be re-issued to the cardholder.

·        Documentation of the dispute must be kept with the ProCard transaction log.  Review of future statements is vital to ensure the account is properly credited for returns, credits, and disputed charges.  Cardholders may call the Bank One Dispute Department at 888-297-0768 or fax 888 297-0785 or 847-931-8861 or by email B1_Disputes@bankone.com to check on the status of a dispute or with questions regarding a dispute.  

 PROCARD TERMINATION

A cardholder must relinquish the ProCard to the Program Administrator upon request or termination of employment at UHV.

Non-compliance with procedures or other improper use of the card is grounds for suspension or revocation of the card.