PURCHASING CARD PROGRAM

POLICIES AND PROCEDURES

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PURCHASING CARD PROGRAM
POLICIES AND PROCEDURES
MANUAL

June 2007

INTRODUCTION

Welcome to The State of South Carolina/University of South Carolina Purchasing Card Program. As an agency of the State of South Carolina, the University of South Carolina is participating in the program designed to help you better manage low-dollar supply purchases and bring many benefits to you, the University, and our vendors.

The success of the Purchasing Card Program and its continuing use depends on your participation and cooperation. Please be sure to read and follow the program guidelines as specified within this manual.

What is the Purchasing Card?

The Purchasing Card is a Visa credit card issued by Bank of America. It is a fast, flexible new purchasing tool which offers an alternative to the existing purchasing processes and provides an extremely efficient and effective method for purchasing and paying for supplies with a total value of $2,500 or less. The card is to be used only for official University of South Carolina purchases.

The Purchasing Card will enable you to purchase non-restricted commodities, by telephone or in person, directly from the vendors. It will eventually eliminate the need for issuing low dollar purchase orders, many blanket purchase orders, the use of Small Purchase Vouchers and the use of many Direct Expenditure Vouchers.

The Purchasing Card will be issued in the employee's name with the State of South Carolina emblem, the wording "For Official Use Only" and the "University of South Carolina" clearly indicated on the card.

The Purchasing Card program brings many benefits to...

Cardholders - You will be able to obtain supplies directly from your vendors without using a purchase order. This streamlines the purchasing process and can help improve turnaround time on receipt of your order. It significantly reduces the workload and processing costs related to the purchase and payment of supplies.

University of South Carolina- The Purchasing Card program provides a cost-efficient, alternative method for purchasing low-dollar supplies. Built-in card features make the program easy to control and manage and reduces processing costs at all levels by reducing the number of requisitions, purchase orders, invoices and checks. The Purchasing Card enables all departments to focus on higher yield value added activities.

Vendors - The Purchasing Card will be welcomed by vendors who accept VISA. When they accept the card for business purchases, vendors must send invoices, receipts, etc. directly to the departments of the University of South Carolina.

GENERAL POLICIES AND PROCEDURES

• Purchasing cards will only be issued to individuals, in the individual's name, (there will be no department cards).
• Cardholder must be an employee of the University of South Carolina.
• Purchasing cards will be available to employees on all campuses.
• Only one purchasing card may be issued to an individual.
• Purchasing cards will not be transferable between individuals.
• A default account and object code will be assigned to each purchasing card.
• Each department may have up to two department liaisons.
• Cardholders will be linked to their department by their default account code.
• Department liaisons will be responsible for all cardholders listed in their department.
• Department liaison may be a liaison for him/herself.
• The Purchasing Card Coordinator resides in the Purchasing Department .
• Employee's department head must approve the request for a card, assign the default account and object code, assign department liaisons and submit information to the Purchasing Card Coordinator.
• Employee's department head must provide notification to the Purchasing Card Coordinator when a change in department liaisons occur.
• Department head approval delegates transaction authority to the cardholder.
• Bank of America is to be paid once a month from prepaid expense account.
• Department liaisons will have the capability of and will be responsible for:
  • reallocating default account and object codes for payment
  • identifying transactions subject to use tax and assure that use tax has been charged properly
  • approving bills
  • reallocating cost share information if required
• Departments will be responsible for assuring the accuracy of credit card charges.

PARTIES INVOLVED

• Agency - the University of South Carolina who arranges with the card issuer, Bank of America for the issuance of purchasing cards to approved employees and agrees to accept liability for the employees' use of the cards.

• Cardholder - an employee of the University of South Carolina who is approved by his/her department head to use the purchasing card to execute purchase transactions on behalf of their department.

• Card Issuer - Bank of America's services were contracted for/by the State of South Carolina, to issue Visa Purchasing Cards to University of South Carolina employees, to bill the University of South Carolina for all purchases made on the cards, and to collect payment from the University of South Carolina on behalf of the vendors.

• Department Head - University of South Carolina official who must approve employee's request for a purchasing card, assign department liaisons, designate default account and object codes for purchases on the purchasing card, and submit applications to the purchasing card coordinator. Department head approval delegates transaction authority to the cardholder.

• Department Liaison - An employee in each department/college responsible for proper use of the purchasing card within their assigned department containers. Each cardholder will be assigned to department liaison(s) by means of their department container and the liaison will be responsible for reviewing transactions of individual cardholders to make sure the transactions are classified as an appropriate expense.

• Purchasing Card Coordinator - the central coordinator located in the purchasing department who coordinates the purchasing card program and acts as an intermediary in correspondence with the card issuer.

• Vendor - the merchant from whom a cardholder is making a purchase.

CARDHOLDER RESPONSIBILITIES

The Cardholder must only use the Purchasing Card for legitimate business purposes. The Purchasing Card may not be used for travel, registration fees, entertainment, cash and other categories as included in the Blocked Merchant Category Code list included in these polices and procedures. Misuse of the card will subject the Cardholder to disciplinary action in accordance with University of South Carolina Policies and Procedures relating to disciplinary action and termination for cause. The Cardholder must:

• ENSURE THE PURCHASING CARD IS USED ONLY FOR LEGITIMATE BUSINESS PURPOSES.
• MAINTAIN THE PURCHASING CARD IN A SECURE LOCATION AT ALL TIMES.
• THE PURCHASING CARD IS NOT TRANSFERABLE.
• Ensure that the Purchasing Card is only used by the approved cardholder. Use by anyone other than the cardholder is strictly prohibited.
• Adhere to the purchase limits and restrictions of the Purchasing Card and ensure the total transaction amount of any single transaction does not exceed $2,500.
• Obtain all sales slips, register receipts, and/or Purchasing Cards slips and provide to Department Liaison reconciliation , approval and allocation of transactions.
• Notify Department Liaison if the default account and/or object code should be changed on a transaction.
• Attempt to resolve disputes or billing errors directly with the vendor and notify Bank of America if the dispute or billing error is not satisfactorily resolved.
• Ensure that an appropriate credit for the reported disputed items(s) or billing error appears on a subsequent Cardholder's Statement.
• Not accept cash in lieu of a credit to the Purchasing Card account.
• Immediately report a lost or stolen card to Bank of America at 1-888-449-2273 (24 hours a day, 365 days a year).
• Immediately notify Department Liaison and/or Purchasing Card Coordinator of a lost or stolen Purchasing Card at the first opportunity during business hours.
• Return the Purchasing Card to Department Liaison upon terminating employment with the University of South Carolina.
• If changing departments within the University of South Carolina, please contact the Purchasing Card Coordinator to coordinate the change.

DEPARTMENT LIAISON RESPONSIBILITIES

Each Department Head must designate a maximum of two Department Liaisons for each department. A Department Liaison may also be liaison for his/her own card. However, if the department liaison(s) is also a purchasing card holder, it will be the responsibility of the liaison to have the monthly charges incurred on the liaison's purchasing card reviewed and signed by their department head. The department liaison must attend all required training sessions and will be notified of these by means of a listserver to which they must be subscribed. Responsibilities include:

• Collecting vendor receipts and purchasing card receipts from Cardholders and reconciling to Bank of America billing statements.
• Retaining all charge slips and receipts for audit by internal and external auditors.
• Approving and/or updating account and/or object codes and cost-sharing information on electronic billing distribution of individual Cardholder account within 45 days of the transaction posting date using EAGLS web-based application.
• Identifying and updating transactions that require the submission of use tax and/or account changes within 45 days of the transaction posting date using EAGLS web-based application.
• If a change in account and/or object code, cost share, use tax needs to be made after the 45 day period, the department liaison is responsible for creating a journal entry to correct the necessary charges.
• Note, because of year end processing charges for the month of June may not have the 45 day period, department liaisons will be notified by means of the listserver on how charges for the month of June are to be handled.
• Attempting to resolve any disputes with vendor and/or Bank of America not resolved by Cardholder. Note: there is a 60 day period for resolution of disputes.
• Changing the default account and/or object code for individual cards as needed in EAGLS application.
• Notifying Purchasing Card Coordinator of lost or stolen cards.
• Requesting Purchasing Card Coordinator to cancel a Cardholder's card e.g.(terminated employees, loss of purchasing card privileges) as approved by Department Head.
• Collecting canceled cards from Cardholders and forwarding to Purchasing Card Coordinator.
• Department liaisons are responsible for making sure that they are receiving messages from the credit card listserver.

PURCHASING CARD COORDINATOR RESPONSIBILITIES

The Purchasing Office will assign a coordinator to be responsible for the over-all Purchasing Card program. Responsibilities include:

• University of South Carolina's contact with Bank of America.
• Utilizing EAGLS application from Bank of America.
• Reviewing Department approved applications for completeness of required information.
• Submitting completed application to Bank of America and receiving Purchasing Card from Bank of America.
• Training Department Liaisons before releasing Purchasing Cards.
• Training Cardholders before releasing Purchasing Card.
• Having Cardholder sign Cardholder agreement, signifying agreement with the terms of the Purchasing Card program.
• Handling disputed charges/discrepancies not resolved by Cardholder or Department Liaison.
• Initiating change of Purchasing Card default account and/or object code upon request of Department Liaison.
• Securing revoked Purchasing Cards and submitting information to Bank of America.
• Processing upload of bill to accounting for charging individual departments.
• Reviewing Bank of America's invoice, preparing for payment and submitting to Accounting for EFT payment.
• Reconciling accounting statements as to payments to Bank of America and charges to individual departments.
• Reviewing usage of Purchasing Card data for appropriateness.

CARDHOLDER ELIGIBILITY

Criteria to receive a Purchasing Card is as follows:

• Applicant must be an employee of the University of South Carolina.
• Applicant's request for a Purchasing Card must be approved by his/her Department Head.
• Employee must attend a training session before he/she may be issued a Purchasing Card.
• Each individual Cardholder must sign a Cardholder agreement in the presence of the Purchasing Card Coordinator.

CARDHOLDER LIABILITY

The Purchasing Card is a corporate purchasing VISA charge card, which will not affect the Cardholder's personal credit. However, it is the Cardholder's responsibility to ensure that the card is used within stated guidelines of the Purchasing Card Cardholder Manual as well as University of South Carolina Policies and Procedures relating to the expenditure of University of South Carolina funds. Failure to comply with program guidelines may result in permanent revocation of the card, notification of the situation to management, and further disciplinary measures that may include termination.

CARDHOLDER TERMINATION

The Purchasing Card Coordinator is required to close an account if a Cardholder:

1. moves to a new job in which a Purchasing Card is not required
2. terminates University of South Carolina employment
3. for any of the following reasons which will also subject Cardholder to disciplinary action in accordance with University of South Carolina Policies and Procedures relating to disciplinary action and termination for cause.
   • The Purchasing Card is used for personal or unauthorized purposes.
   • The Purchasing Card is used to purchase alcoholic beverages or any substance, material, or service which violates policy, law or regulation pertaining to the University of South Carolina.
   • The Cardholder allows the card to be used by another individual.
   • The Cardholder splits a purchase to circumvent the limitations of the South Carolina Consolidated Procurement Code.
   • The Cardholder uses another Cardholder's card to circumvent the purchase limit assigned to either Cardholder or the limitations of the South Carolina Consolidated Procurement Code.
   • The Cardholder fails to provide Department Liaison with required receipts.
   • The Cardholder fails to provide, when requested, information about any specific purchase.
   • The Cardholder does not adhere to all of the Purchasing Card policies and procedures.

LOST, MISPLACED OR STOLEN PURCHASING CARDS

Cardholders are required to immediately report any lost or stolen Purchasing Card to Bank of America toll-free at 1-888-449-2273 (24 hours a day, 365 days a year). The Cardholder must also immediately notify his/her Department Liaison and/or the Purchasing Card Coordinator about the lost or stolen card at the first opportunity during normal business hours.

SPENDING CONTROLS

The Purchasing Card is to be used only for the purchase of supplies. University of South Carolina spending parameters for each Visa purchasing card issued is set at $2,500 per transaction with a maximum of $5,000 per month per card. The University of South Carolina, through the Purchasing Department, will adjust limits as determined by demonstrated need. All such requests will be reviewed and approved by the Director of Purchasing.

DECLINES

Should the Purchasing Card be declined by a vendor, the Cardholder should immediately contact the Purchasing Card Coordinator for assistance. If purchase is being made outside normal business hours, the employee must find an alternate payment method or terminate the purchase and contact the Purchasing Card Coordinator during normal business hours.

EMERGENCY TRANSACTIONS

Emergency transactions over $2,500 may not be handled with the Purchasing Card due to State procurement regulations. For any transaction, which does not meet the spending controls assigned to the card, the Cardholder must contact the Purchasing Office for assistance.

CREDITS / REBATES

Vendors will issue all credits to the individual Purchasing Card account for any item they have agreed to accept for return. This credit will appear on a subsequent statement. Under no circumstances should a Cardholder accept cash in lieu of a credit to the Purchasing Card account.

Rebates for University purchased supplies are the property of the University and must be deposited back to the appropriate University account.

UNRESOLVED DISPUTES AND BILLING ERRORS

The Cardholder is responsible for contacting the vendor to resolve any disputed charges or billing errors. If the matter is not resolved with the vendor, the Cardholder/Department Liaison should:

• Contact Bank of America at 1-888-449-2273 directly for assistance.
• Mail or fax to Bank of America at 1-800-253-5846 a signed Dispute Form to document the reason for the dispute if form is requested by Bank of America
• Contact the Purchasing Card Coordinator for assistance if an acceptable resolution is not obtained.

Note: The total amount billed by Bank of America will be charged to the individual department accounts and credits for disputed transactions will be posted to department accounts when the credit appears on the Bank of America billing.

SECURITY AND STORAGE

• Purchasing Cards - Cardholders should always treat the Purchasing Card with at least the same level of care as one does with their own personal credit cards. The card should be maintained in a secure location and the card account number should be carefully guarded. The only person entitled to use the card is the person whose name appears on the face of the card. The card may not be lent to another person for any reason.

• Program Documentation - The Department Liaison assigned to each department container will maintain the Cardholder's vendor receipts/packing slips/charge slips. All other documentation concerning the Purchasing Card program will be maintained by the Purchasing Card Coordinator located in the Purchasing Department. This documentation includes, but is not limited to, applications, Cardholder agreements, agency billing statements, reconciliation of accounting statements, EAGLS programs and documentation, and copies of transmittals and correspondence with Bank of America.

SALES AND USE TAX

Purchases From Vendors Located in South Carolina - The vendor is responsible for collecting retail sales tax at the point of sale. The amount of sales tax should be indicated on the receipt provided by the vendor.

Purchases From Vendors Located outside South Carolina - If sales tax is paid in another state, a use tax credit is allowed for the University, therefore, no South Carolina tax is due. The individual receipt provided by the vendor should indicate whether any out-of-state sales tax has been collected at the point of sale.

Should no tax be charged or the amount of tax charged is less than the amount required by the State of South Carolina, the Departmental Liaison must notify the University Purchasing Card Coordinator in order for the proper amount to be submitted to the SC Department of Revenue.

MERCHANT CATEGORY CODE (MCC) BLOCKING

The University of South Carolina has adopted the State of South Carolina's Blocked Merchant Category Code List with some allowable adjustments. Transactions will be blocked at the point-of-sale level at the types of vendors on the Blocked Merchant Category Code List attached to these procedures.

PURCHASING CARD SET UP, MAINTENANCE, AND CLOSURE

All contact with Bank of America for card set up, maintenance and closure (except for reporting lost or stolen cards) will be handled by the Purchasing Card Coordinator who is located in the Purchasing Department (777-4115).

• Card Set Up
  • University of South Carolina employee completes a Purchasing Card application and submits to his/her Department Head for completion and approval.
  • Department Head completes the application by indicating the account and object code to be assigned to the card.
  • Department Head signature approval delegates transaction authority to the Cardholder.
  • Approved application is to be sent to the Purchasing Card Coordinator.
  • Purchasing Card Coordinator reviews application for completeness and submits application to Bank of America in an approved format.
  • Upon receipt of the Purchasing Card from Bank of America, the Purchasing Card Coordinator will conduct a training session with the Cardholder prior to issuing the card.
  • Cardholder signs Cardholder Agreement signifying agreement with the terms of the Purchasing Card program.

   

• Card Maintenance
  • Purchasing Card Coordinator will use all available tools of Bank of America's software for the maintenance of cards.

   

• Closure
  • Lost or Stolen Cards - Cardholder must immediately report the lost/stolen card to Bank of America at 1-888-449-2273. Cardholder must also notify the Purchasing Card Coordinator who will follow up with Bank of America.
  • Terminated Employees - Department Liaison is to secure Purchasing Cards from terminated employees. The Department Liaison will immediately notify the Purchasing Card Coordinator by phone of the termination. A request for closing the Cardholder account will be submitted to Bank of America by the Purchasing Card Coordinator within 2 days of receiving the notification. All Purchasing Cards are to be returned to the Purchasing Card Coordinator for disposal.
  • Other Card Revokes/Closures - Purchasing Card Coordinator will notify Bank of America immediately of all revokes and closures.

RECONCILIATION, APPROVAL AND ALLOCATION OF BILLING

Receipt and Payment of Bank of America Billing

• Bank of America will electronically bill the University of South Carolina within seven (7) days after the close of the billing cycle on the 27th of each month.
• Purchasing Card Coordinator will review bill for any obvious errors in charges or unposted payments. If none noted, payment in full will be made to Bank of America.
• Purchasing Card Coordinator will prepare payment voucher against prepay object code and submit to accounting for an EFT to be issued to Bank of America. Voucher will be prepared within 5 days after receipt of the Bank of America bill and processed so that payment will reach Bank of America no later than 25 calendar days after the close of the billing cycle of the previous month.
• EFT will be transmitted in accordance with Bank of America's instructions.

Allocation of Purchasing Card Charges to Departments

A default account and object code will be assigned to each Purchasing Card issued. Bank of America will submit monthly an electronic billing statement to the University of South Carolina and all Purchasing Card transactions will be charged to the default account number unless adjustments are made as follows:

• Department Liaisons will change account and/or object codes as necessary.
• Department Liaisons will add analytical information for cost sharing, if necessary.
• Department Liaisons will identify transactions requiring payment of use tax.
• Department Liaisons will assemble and retain Cardholders statements, charge slips and receipts for audit by internal and external auditors. Receipts for purchases made from Federal funds must be maintained for 7 years and all other receipts for 3 years.
• Purchasing Card Coordinator will process upload of the department charges to accounting for charging individual departments.
• The total amount billed by Bank of America will be charged to the individual department accounts and credits for disputed transactions will be posted to department accounts when credit appears on the Bank of America billing.
• Purchasing Card Coordinator will reconcile the detailed electronic billing statement to amount paid Bank of America.

AUDIT

The University of South Carolina's internal control policies and procedures are as follows:

Cardholder will:

• Submit vendor receipt/packing slip and charge slip to Department Liaison if order is by telephone/fax, the Cardholder should supply a copy of the order blank or a description of order to Department Liaison.
• Indicate alternate account , object, and/or cost share account code for purchases to be charged if different than the default assigned to the Purchasing Card.

Department Liaison will:

• Match Cardholder receipts to electronic billing.
• Enter alternate account , object, and/or cost share account code when applicable.
• Enter analytical for cost sharing to grants when applicable.
• Identify transactions requiring the payment of use tax.
• Retain all receipts and vouchers for audit by internal and external auditors. Receipts for purchases paid from Federal funds are to be maintained for 7 years. All other receipts to be maintained for 3 years.

Purchasing Card Coordinator will:

• Process upload of department charges to accounting for charging individual departments. Upload to individual account codes is to be for the total amount of the electronic billing.
• Reconcile USC monthly accounting statement for payments to Bank of America and charges to individual departments.
• Make periodic audits of card use and charges for appropriateness through the use of EAGLS' on-line reporting system. Areas to be monitored include, but not limited to, compliance with SC Consolidated Procurement Code, compliance with Purchasing Card regulations, compliance with University of South Carolina regulations, and sales and use tax charges. Nonuse of card by cardholders will also be monitored.

BLOCKED MERCHANT CATEGORY CODES LISTING