PCARD TRAINING for Cardholders Office of

slide1. PCARD TRAINING for Cardholders Office of Procurement & Real Property Management
July 24, 2014<br>
slide2. 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 Procurements<br>
slide3. New Policy – PCard Preferred Method for Small Dollar Purchases Issues & Concerns:
Increased Potential for Misuse
Exposure to Financial Losses
Maintaining Control Over Spending<br>
slide4. 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 PO<br>
slide5. 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 & fellowship<br>
slide6. 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 Processes<br>
slide7. 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 Privilege<br>
slide8. 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 Promptly<br>
slide9. 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 Statements<br>
slide10. CentreSuite<br>
slide11. CentreSuite Expense Module<br>
slide12. CentreSuite – Expense Module<br>
slide13. New PCard Button on Requisition New “Issue by PCard” Button on Requisition
Allows FA to use requisition to obtain pre-approval for PCard transaction<br>
slide14. Built-In Controls – Card Limits PCardholder Limits
Maximum Transaction Limit: $2,499
Maximum Card (Billing Period) Limit: $24,999<br>
slide15. 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 MCCs<br>
slide16. 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 Justification<br>
slide17. 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 Prohibited<br>
slide18. 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 Limit<br>
slide19. 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 Employment<br>
slide20. 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)<br>
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 & Services<br>
slide22. 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 Servicing<br>
slide23. 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)<br>
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)<br>
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 IDO<br>
slide26. 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 Purchased<br>
slide27. 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.<br>
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)<br>
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)<br>
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 Necessary<br>
slide31. 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 File<br>
slide32. 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 Year<br>
slide33. 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. Procedures<br>
slide34. 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 Policies<br>
slide35. 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 removed<br>
slide36. 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 Account<br>
slide37. 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 3rd 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/<br>
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<br>
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 KFS<br>
slide40. Purchasing Card Websitewww.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<br>
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/ PCard<br>
slide42. 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<br>
slide43. Revisions to PCard Program Roles & Responsibilities – PCDO Cardholder
1st 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 FA<br>
slide44. 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 account<br>
slide45. 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 process<br>
slide46. 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 Activities<br>
slide47. 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.<br>
slide52. 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<br>