VISA Purchasing Card Policy and Procedures

Benefits Procedures Guidelines for using the card Reconciliation

Purchasing Card Overview

The objective of the purchasing card program is to provide authorized employees a Visa purchasing card for buying low-dollar-value items.

Benefits Easy to use

The card is as easy to use as a regular Visa credit card. It is designed for buying authorized low-dollar-value items without going through the Purchasing Department. Low-dollar-value items are defined as goods or services costing $1000 or less, but may be defined differently by the Purchasing Department. The program may include items currently purchased as (a) direct orders to vendors(written or by telephone), (b) small dollars purchase orders, (c) release against blanket orders, and (d) items paid by limited purchasing drafts or petty cash.

Simplifies and reduces administrative paperwork and costs.

The card eliminates costly purchase or blanket orders and consolidates invoice payments to one monthly statement. Monthly statements are reviewed by the cardholders, reviewed and approved by the department head/ directors, then sent to Accounts Payable for payment.

Maintains adequate internal controls

The card provides a high level of protection to the university in the form of (a) point-of-sale and processing controls,(b) strict policies and procedures, (c) daily and monthly reporting, and (d) card insurance. Each card is programmed uniquely for the cardholder and is monitored at the point of sale. Point-of-sale controls include (a) limited dollar amounts per transaction, (b) limited amounts per day or month, and (c) specific vendors where the card may be used.

Enhances the power for leverage buying resulting in lower prices.

Procedures:

Obtaining a Purchasing Card

Obtain purchasing cards through the Purchasing Department. Application forms (see Appendix 1, Purchasing Card Application/ Change Form) must be approved by both the purchasing manager and the business office controller.

Application forms must include the following:

1. The maximum amount that can be purchased with one transaction (transaction dollar limit). Normally this will be $1000 or less, however, any amount may be set and approved by the department and purchasing manager.
   
2. The maximum amount is $5000 for all purchases during the month (monthly dollar credit) limit. This amount should be consistent with the acquisition assignment of the employee that will be issued the Purchasing Card. The limit should be high enough to cover unusual months but not so high as to expose the university to excessive risk.
   
3. The General Ledger default account code to be associated with the card.
   
4. The type of vendors the card will be used for and those where the card cannot be used.

Issuing the Card

Initial Review

The PCP supervisor reviews applications for (a) completeness and appropriate department head/director approval, and (b) how successful the department has been with other cards and compliance with procedures. The PCP supervisor will direct all concerns and questions to the purchasing director. The PCP supervisor review sand receives approval on each card application from the purchasing director.

Ordering the Card

The PCP supervisor will request the card from the issuing bank using the first link system. New cards may take 72 hours to issue after the request has been received and reviewed. Emergency card replacements may be issued in 24 hours. Emergency requests must be made to the PCP supervisor. Top

Guidelines for Using the Card

The Purchasing Card gives the cardholder advance authority to buy items for the benefit of and in behalf of the university. This advance authority applies only to Purchasing Card transactions. Approval authority of all other types of transactions remains unchanged. Purchasing Cards can be used to buy goods and 1099 services in place of any of the existing methods of purchasing.

The Purchasing Card may be used for:
1. PC Accessories (This does not include any PC hardware such as memory chips, hard-drives, memory boards etc. which need prior-approval of Information Technology Services (ITS.)
2. Industrial Supplies.
3. Plumbing, Heating, Hardware, Electrical Equipment.
4. Laboratory Equipment & Testing Labs.
5. Misc. Repair Shops & Services.
6. Courier Services.
7. Books.
8. Seminars/Training.
9. Recurring expenses to facilitate payment (must be clearly defined.)
10. Office Supplies.
11. Restaurants (Hosting BYU-H guests.)

The following restrictions apply:

1. The card may not be used to make personal purchases.
   
2. The card is not accepted in Automatic Teller Machines.
   
3. The card may not be used for travel expenses. Use the existing American Express Travel card for travel expenses.
   
4. The card's dollar, monthly, and transaction limits may not be exceeded. The card may not be used at vendors outside the approved control criteria established by Purchasing.
   
5. The card may not be manipulated or used to split a transaction to make purchases that fall outside the guidelines. This will constituent misuse of the card.
   
6. The card may not be used on campus to obtain supplies, food or services.
   
7. Before the card is used for Federal Withholding (1099) transactions, correlate with the business office controller to ensure that the correct information is gathered for government reporting. Transaction that require the university to issue 1099 statements are those where payment goes either to individuals for rent, medical, or non-employee compensation or the payment goes to unincorporated businesses. (See Appendix 3).
   
8. The cardholder may make authorized acquisitions for other employees. However, responsibility to verify receipt, correction, and authorization for the transaction remains with the cardholder and the cardholder's supervisor.
   
9. The cardholder may not loan his Purchasing Card to anyone. Misuse of the card may result in disciplinary action or the cardholder's termination from employment. Contact Purchasing or the business office controller with questions about using the Purchasing Card.
10. Computers, printers, scanners, facsimile machines, monitors, Personal Digital Assistants (PDAs) and related items over $1000. (A purchase requisition is required to be processed for these type of items unless prior approval is made with ITS and Purchasing to purchase using the Purchasing Card.)
11. Software over $1000. All software purchases must meet the University codes, standards and "business purpose" requirements. Software purchases over $1000 needs prior approval from Information Technology Services.
12. Cameras, televisions, electronic and video equipment over $1000.

Using the Card Before the Purchase

1. Determine there is a need, within your area of responsibility, to buy an item.
   
2. Determine there is sufficient budget allocated to cover the cost of the item.
   
3. Determine if the item can be purchased within the Purchasing Card guidelines.
   
4. Determine the vendor to be used.

Use the following guidelines to help select a vendor:

1. Where possible, use vendors the university has contracts with.
   
2. Use vendors recommended by the Purchasing Department for the type of item to be bought.
   
3. Use vendors you are familiar with and you know will provide the university with quality products at a fair price.
   
4. If you are not familiar with a vendor for a particular item, call the Purchasing Department for suggestions, or use a well-established vendor.
   
5. Contact the Purchasing Department with any vendor questions, concerns, or suggestions.

Making the Purchase

Purchasing cards may be used in person, by mail, or by telephone.

1. Contact the vendor, agree to a price if one has not already been established.
   
2. Arrange to pick up the goods or have them delivered.
   
3. Offer to pay for the goods with a Purchasing Card. If the vendor does not accept bank cards, consider another vendor or method of making the purchase. If you plan to use this vendor regularly, ask the Purchasing Department to contact the vendor and ask the vendor to begin accepting bank cards. First Bank will help with vendor setup through the Purchasing Department.
   
4. Obtain documentation (VISA customer receipt, the sales receipt, packing slip, etc.) from the vendor that clearly show what goods are being purchased.
   
5. Pick up the goods or receive the goods as agreed upon with the vendor. Make sure proper documentation accompanies the goods. If the goods are being shipped to the university, have the vendor print Purchasing Card Purchase and the name of the cardholder on the label.
   
6. The cardholder may place a phone order for another employee. When that employee receives the item, they will write Phone Order on the credit card receipt and sign it. The cardholder must also sign the receipt to show his approval.

Recording Purchases

1. File documentation for all purchases in a Purchasing Card reconciliation file you establish.
   
2. An optional Purchasing Card Transactions Log (see Appendix 4) may be kept for all acquisitions as desired.
   
3. When a receipt or packing slip, etc., is not available, the cardholder should prepare and sign a memo or add the item to a purchasing card transaction log and include a log copy to document the purchase. Put the memo or log in there conciliation file. The memo or log should show the purpose, date, location, sales tax if applicable, and amount of the purchase.

Reconciling and Approving Monthly Statements

On the 25th of each month, each cardholder must reconcile their transactions. We have established a grace period of the 15th of the following month to complete all transactions. Cardholders must go on-line to Paymentnet.com to review their transactions. Each month an individual statement will also be sent to the Purchasing Card holder. It is critical that the cardholder reconcile the statement and the cardholder's supervisor approves the reconciliation. Failure to reconcile the statement will result in the suspension of card privileges.

Reconciliation Process The Cardholder

1. Compare each transaction on the statement to documentation (receipts, receiving slips, memos etc) in the Purchasing Card reconciliation file to verify each transaction and amount. All transactions should be supported by some form of documentation.
   
2. If a transaction should be charged to an account code different than the default account code associated with the Purchase Card, the account number should be typed in on the first eleven (11) spaces of the first line in the Transaction Note Box.
   
3. An explanation of the transaction must be noted in the Transaction Note Box.
   
4. Check the Review Box after completing your review.