Office of Procurement amp Real Property Management July 24 2014 New Policy PCard Preferred Method for Small Dollar Purchases PCard will be Preferred Method of Small Dollar Purchases lt2500 ID: 380843
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Slide1
PCARD TRAINING for Cardholders
Office of Procurement & Real Property Management
July 24, 2014Slide2
New Policy –
PCard
Preferred Method for Small Dollar Purchases
PCard
will be Preferred Method of Small Dollar Purchases <$2,500
To Improve Efficiency & Effectiveness of UH’s Small-Dollar ProcurementsSlide3
New Policy –
PCard
Preferred Method for Small Dollar Purchases
Issues & Concerns:
Increased Potential for Misuse
Exposure to Financial Losses
Maintaining Control Over SpendingSlide4
New Policy – Preferred Method for Small Dollar Purchases
Justification Required for Purchases <$2,500 that are Made on PO
Enter Statement or Pull Common Reason from Justification Table
Common Reasons on Justification Table
Justification Will Not Appear on POSlide5
Preferred Method for Small Dollar Purchases
- Exceptions to New Policy
Vendor does not accept credit card or MasterCard
Purchase above Cardholder’s Limit
Vendor assesses fee for credit card purchase
Real Property Leases & Rentals
Legal Services
High Risk purchase
Vendor requests payment to a third party
Other reasons where
PCard
is not a viable option for purchase
Stipend
payments
Payments for scholarship & fellowshipSlide6
New Policy –
PCard
Preferred Method for Small Dollar
Purchases
Purpose of New Policy to
Improve Efficiency & Effectiveness of UH’s Small-Dollar Procurements
Streamline
& Improve Process While Maintaining Prudent Fiscal Control
Revise Purchasing Card Program Goals
Update Purchasing Card Policies & Procedures
Transition to More Robust Electronic ProcessesSlide7
PCard
Goals Revised
Old: Simplify & Expedite Procurement Process for Small Dollar Goods & Services
New: Provide Operational Efficiency for Purchase of Small-Dollar Goods & Services w/out Sacrificing Fiduciary Control
PCard
is a
PrivilegeSlide8
Transition to Newer & More Robust Electronic Processes -
PCDO
PCDO
New
Kuali
Module for Purchasing Cards
Facilitates
Business Workflow
Eliminates Need for Manual
Logs
Provides Electronic Routing of
PCard
Transactions for Approval
Allows
PCard
Transactions to be Reallocated Directly in UH’s Financial System
Accounts & Object Codes Validated Immediately
Charges Can Post to General Ledger Balances More PromptlySlide9
Transition to Newer & More Robust Electronic Processes -
CentreSuite
Discontinuing
PVSNet
Using
CentreSuite
to
Supplement
PCDO
Newer, Improved Card Management Tool
Real-Time Data
Higher Level of Self Service
Easy to Use
View Transactions Prior to KFS Feed
Transaction Details (Level 3 Data)
View Approvals & Declines
View StatementsSlide10
CentreSuiteSlide11
CentreSuite
Expense ModuleSlide12
CentreSuite
– Expense ModuleSlide13
New
PCard
Button on Requisition
New “Issue by
PCard
” Button on Requisition
Allows FA to use requisition to obtain pre-approval for
PCard
transaction Slide14
Built-In Controls – Card Limits
PCardholder
Limits
Maximum Transaction Limit: $2,499
Maximum Card (Billing Period) Limit: $24,999Slide15
Built-in Controls - Blocked MCCs
Merchant Category Codes (MCCs) are Assigned by Vendor’s Merchant Bank Based on Type of Goods or Services That Vendor Typically Provides
Blocking Certain MCCs Provides a Measure of Protection vs Unauthorized or Prohibited Purchases
By Policy, UH has Established that
PCard
Cannot be Used at Certain Categories of Vendors & Blocked their MCCsSlide16
Built-In Controls - Blocked MCCs
Since Cardholders Have Different Purchasing Needs, Created
New
MCC Exception (
UHDec
) Groups Categorized by
Job Duties
Basic Cardholder
Business Unit (Fiscal Support)
Interisland Traveler
Traveler
Operational Unit (relating to operations, facilities)
Research
Assignment to
UHDec
Group Based on Various Factors
Changes Require JustificationSlide17
Guidelines for
PCard
Use
No
Personal Use
Use Must be in Accordance w/ All Pertinent Policies, Procedures, Guidelines & Regulations
Understand What CAN & CANNOT be Purchased w/
PCard
Ensure Purchases Have Legitimate Business Purpose & are in Best Interest of University
Adhere to Purchase Limits & Restrictions of
PCard
Don’t
Misuse Card
Reimburse
UH for Improper Purchases
Parceling
is
ProhibitedSlide18
Guidelines for
PCard
Use
Parceling
Artificial or Intentional Division or Fragmentation of
a
Purchase of Same, Like, or Related Items of Goods, Services, or Construction into Several Purchases of Smaller Quantities, in Order to Evade Procurement Requirements or Limits of Delegated Purchasing Authority
Multiple Expenditures Shall Not be Created at Inception of a Transaction so as to Evade
PCard
LimitSlide19
Guidelines for
PCard
Use
Don’t Allow Others to Use your
PCard
Retain
Itemized Receipts for Purchases
Obtain Support Documentation (Appropriate Forms & Approvals)
Certify Receipt of Goods & Services
Ensure
Purchases
Do Not Exceed Budgeted Funds
Safeguard
PCard
Do Not Accept Cash in Lieu of Credit
Report Lost, Stolen or Compromised Cards Immediately
Notify FA or
Dept
PCard
Coordinator Prior to Transferring or Terminating EmploymentSlide20
Guidelines for
PCard
Use
Report Disputes in Timely Manner
FHB Must be Notified w/in 60 Days of Cycle in Which Item First Appears on Cardholder Statement
Ensure Appropriate Credit Appears on Account
Utilize SPO
Price/Vendor Lists & UH Requirements Contracts
Cardholders Utilizing Extramural Funds Must Comply with OMB Circular A21, Section J
Rebates, Free Gift w/
Purchase
Foreign Transaction Fee
Third Party Providers (e.g. PayPal) Slide21
Restricted Commodities - Inappropriate Use
Restricted Commodities
Items Listed in A8.225, Limitations in Purchasing
Items of Personal Nature
Contributions or Donations
Controlled Substances
Firearms & Ammunition
Payments to Individuals
Non-Business Related Goods & ServicesSlide22
Don’t Use
PCard
for Purchases That Require Contract
PCards
May
Not
be Used for Purchases that Require a Contract
PCards
May Not be Used to Pay Against Contracts or Purchase Orders
PCards
May
be
Used
in
Lieu
of
Maintenance Contract
when
1) Scope of
Work
is
Simple
and
2) Agreement
Provides
for
One-Time Payment
or
One Time ServicingSlide23
Purchasing Requirements
Purchasing Requirements for Various Types of Goods & Services
Refer to Procurement Section of APM, A8.200-A8.299
Not Allowed to Use
PCard
for Certain Goods/Services
Legal Services
Real Property Leases & Rentals
Services on Contractual Basis (UH Services Contract)
Some Goods & Services Require Authorization in Advance
Hazardous Materials (Hazardous Materials
Mgmt
Office)
Biological Commodities (Research Compliance Office)Slide24
Purchasing Requirements
Certain Goods & Services Require Approval/Authorization/Review in Advance
Insurance (must be submitted for review & processing by Office of Risk Management)
Travel Related Expenses
Business Cards
Repairs & Alterations to Buildings & Grounds (FPMO)
Keys & Lock Service (FPMO)
Leis (amt. must be determined reasonable by FA)
Telecom Equipment & Service (proposed procurement actions should be forwarded to ITS for approval)
Information Technology Hardware, Software & Services (contact ITS in advance to determine whether requirement can be fulfilled internally & whether there are internal guidelines for compatibility or support)Slide25
Purchasing Requirements
Certain
Goods & Services Have Other Requirements
Meals & Refreshments – Form 56 or 136
Construction
–
approving
&
reporting requirements
,
minimum wage
&
skilled tradesperson clauses
Organizational Membership – must benefit UH & be directly supportive of departmental function & have a reasonable & acceptable cost/benefit ratio
Car Rentals – confined to compact & subcompact vehicles unless reasons exist to justify need for larger vehicle
Ethyl Alcohol – restricted to certain UH programs,
must be obtained from Chemistry
Dept. on
Manoa
campus via IDOSlide26
Original Receipts
Original Receipts Preferred
In accordance w/ Section 40-57.6, HRS, the State Comptroller has determined the acceptability of the following documents submitted
in lieu of an original bill
for purchases made by
PCard
:
Sales slip or charge receipt
Electronic purchase confirmation (for internet purchase
Itemized packing slip
E-mail confirmation of purchase
Above Documents Must Have:
Vendor’s Name
Date of Purchase
Description
Cost of Goods PurchasedSlide27
Meals & Refreshments (A8.265)
5) Where the purchase of meals &/or refreshments utilize special, revolving &/or endowment funds (unless expressly precluded by the terms & conditions of the fund) & are for University events & activities
excluding internal staff meetings, training
sessions, and similar activities
; provided that the purchase is:
a) necessary, reasonable in cost, & appropriate to the particular University event or function; &
b) approved by the President, a Vice President, Chancellor, or their designees.Slide28
New Three Strike Violation Process for Non-Compliance
Following Will Subject Cardholder to Three Strike Violation Process:
Card used for Personal Use or Unauthorized Purposes
Purchase is Parceled
Purchase Split Among Cardholders to Circumvent Purchasing Card Limit
Failure to Approve the PCDO
eDoc
within a Reasonable Period of
Time (e.g. by next billing cycle)Slide29
New Three
Strike Violation
Process for Non-Compliance
Failure to Provide Adequate Support Documentation for Purchases
Failure to Provide, when requested, Information About a Specific Purchase
Violation of Grant Restriction or Requirement
Misuse (wide range of violations, some of which are more severe than others)Slide30
New Three
Strike Violation
Process for Non-Compliance
Three Instances of Non-Compliance May Result in Revocation of
PCard
Violation #1
Notification Sent to All Parties
Notification Placed in
Dept’s
Violations File
Notification Serves as Warning & Explains Corrective Action NecessarySlide31
New Three
Strike Violation
Process for Non-Compliance
Violation #2
Meets w/
PCard
Administrator, Director of Procurement &/or VP for Administration
Purpose of Meeting
Discuss Problem
Provide Additional Training
Documentation Placed in
Dept’s
Violations FileSlide32
New Three
Strike Violation
Process for Non-Compliance
Violation #3
May Result in Immediate Termination of
PCard
Repeated Violations w/in Department May Result in Entire Department Losing
PCard
Privileges for One YearSlide33
Serious Violations
If Cardholder’s Offense Deemed to be Deliberate, Fraudulent or Illegal Misuse, Cardholder’s Account May be Terminated Immediately & Cardholder May be Held Liable for Total Amount of Prohibited Purchase
May Subject Cardholder to Disciplinary Action, up to & Including, Termination of Employment, in Accordance w/ Applicable Collective Bargaining Agreements & UH Admin. ProceduresSlide34
Serious Violations
Matter May be Referred to UH General Counsel for Appropriate Civil Action vs Cardholder to Recover UH Funds Expended as Result of Unauthorized &/or Inappropriate Use of
PCard
Will Determine Appropriate Course of Action for Serious Violations of
PCard
PoliciesSlide35
Compromised Cards
Compromised Card
Card that is at risk of being used fraudulently
Card information may have been obtained by unauthorized individual(s)
FHB notifies Cardholder by phone that card may have been compromised
WATCH on Account
If FHB’s Fraud Unit suspects fraud, WATCH is placed on account
Once WATCH is placed on account, subsequent transactions are declined until WATCH is removedSlide36
Compromised Cards
WATCH on Account
Usually Generated by Foreign Transactions
Much of Fraud Comes from Overseas
Notify
PCard
Administrator when traveling
overseas
What to Do
Check
CentreSuite
Return FHB’s Call or Notify
PCard
Administrator
Verify Transactions
Dispute Unauthorized Transactions That Have
Posted
to AccountSlide37
FAQs from Tax Treatment Webinar
Q: Can I use
PCard
to purchase airfare on behalf of stipend recipient?
A: Do not use
PCard
to purchase airfare. This is because there is no mechanism in the bank
PCard
system to capture the data that is used to determine resident status and purpose of the trip….
Q: With the changes in
PCard
& preference to use
PCard
instead of PO, can we continue w/ small PO process for 3
rd
party payment on behalf of stipend recipient?
A: Yes. In fact, we ask you to make stipend payments using purchase order process, if possible…
Q: If we receive a WH-1 before making a hotel reservation, could we use our
PCard
to pay for the non-employee foreigner’s lodging?
A: Do not use a
PCard
to purchase non-employee foreigner’s lodging…..
Tax
Treatment Webinar
powerpoint
presentation is posted on the UH FMO website
www.fmo.hawaii.edu/fmo/Slide38
PCard
Shopping Tips
Effective Jan 2013, Vendors in US Permitted to Impose Surcharge on Consumers When They Use Credit Card
Retailer must notify customer before customer makes actual purchase, or in an online environment, on first page that references credit card brands
Retailer must disclose surcharge fee on every receipt
Retailers can offer a discount for cash & check purchases
Against MasterCard’s Regulations for Vendor to Bill Cards Prior to Shipping
Courtesy Discount for
PCards
at Bookstore
To Obtain Discount, Must Identify Yourself as
PCardholder
– Can’t Send Student to Bookstore w/ Your Card Slide39
New Cardholders
New Cardholders should visit the Purchasing Card website, hawaii.edu/
oprpm
/
pcard
/
for:
PCard
Program information
PCard
Application & Agreements
Eligibility Guidelines
Must be UH Employee
Students, Casual Hires & RCUH Employees Not Eligible
Must Attend
PCard
Training
Must Complete & Submit Application & Cardholder Agreement
Must Obtain Access to KFSSlide40
Purchasing Card Website
www.hawaii.edu/oprpm/pcard/
How
to Apply for a
PCard
Training Schedule
Usage Guidelines
Lost, Stolen or Compromised Cards
How to Dispute a Transaction
CentreSuite
User Guides
Exceptions to “
Pcard
is Preferred Method of Small Dollar Purchases” Policy
How to Cancel a
PCard
Cardholder FAQs Slide41
Purchasing Card is a Privilege
Purchasing Card is a Privilege
As De Facto Purchasing Agent for UH, Cardholder Must Have Understanding of UH Policies & Procedures
New PCDO Process Greatly Reduces the Amount of Paperwork Associated w/
PCard
, Allowing Cardholder to Focus on Purchasing Responsibly & Ethically
Cardholder
is Accountable for All Purchases Made w/
PCardSlide42
PCDO
eDocs
PCDO is Reconciliation Tool for
PCard
Transactions
PCDO
eDocs
are Routed to Four Approvers
1. Cardholder
2.
Reallocator
2. Approving Authority (Account Supervisor)
3. Fiscal Administrator
Some Roles May be Assigned to the Same Person
At Least
Two Different Individuals Must Review & Approve
PCDO
eDocs
to
Ensure Proper Separation of Duties
Slide43
Revisions to
PCard
Program Roles & Responsibilities – PCDO
Cardholder
1
st
Approver in PCDO process
Promptly reviews & takes action on PCDO
Scans & attaches receipts & documentation to PCDO
eDoc
in orderly manner
Certifies goods/services received in good order & consistent w/ what was ordered
When
purchases
are
reallocated
to
extramural accounts
, all
goods/services should
be
received before
PCDO
eDoc
is approved by FASlide44
Revisions to
PCard
Program Roles & Responsibilities – PCDO
Reallocator
Reallocates
PCard
transactions to correct account & object code
Verifies that appropriate documentation received
Approving Authority (Account Supervisor)
Certifies that purchase supports program objectives
Ensures purchase allowable under terms of sponsored program accountSlide45
Revisions to
PCard
Program Roles & Responsibilities – PCDO
Fiscal Administrator
Provides
fiscal, policy & internal control management of its
PCard
Program, ensuring validity of
PCard
transactions
Reviews transactions for compliance
Certifies availability of funds
Ensures proper accounting of charges
Verifies receipt of goods/services
Provides final approval in PCDO processSlide46
Revisions to
PCard
Program Roles & Responsibilities – PCDO
Department Coordinator
Liaison between
Dept
& Purchasing Card Admin
.
Approving
Official
Sets Card Limits
Approves
PCard
Applications
Provides
Key Point of Control to Maintain Appropriate Spending ActivitiesSlide47
Revisions to
PCard
Program
Roles & Responsibilities - PCDO
Reconciler
Ensures reliability of & maintains
PCard
financial records
Reconciles bank statement to PCDO report on monthly basis
Corrects Errors
Ensures Goods & Services Received & PCDO
eDocs
Fully Approved
Files & Retains PCDO Records in Accordance w/ E2.216
Electronic version of original paper document, once scanned, recognized by UH as official record. Original paper documents shall be retained for one year after scan date. Slide48Slide49Slide50Slide51Slide52
PCard Program Contacts
Joyce
Teraoka – ph. 956-7977,
teraoka@hawaii.edu
Cindy Flynn – ph. 956-5405,
cflynn@hawaii.edu
Matthew Chow – ph. 956-2765,
chowmatt@hawaii.edu
Contact Matthew for
PVSNet
logon problems &
CentreSuite
access