IV:04:22 University Purchasing Card (P-Card) Program

I. POLICY STATEMENT

Middle Tennessee State University administers a Purchasing Card (P-Card) program to provide employees with the means to procure small dollar goods and services. Employee participation in this program is considered a privilege and may be revoked at any time for abuse, inappropriate/fraudulent use, or for program mismanagement.

II. PURPOSE AND SCOPE

The purpose of this policy is to provide parameters in the areas of program administration, file management, proper P-Card usage, and to promote compliance with University policies.

The scope of this policy applies to all University personnel who have been issued a P-Card, as well as those responsible for file management, monthly reconciliation, transaction approvals, and policy compliance.

III. PROGRAM ADMINISTRATION

A. Procurement Services

The P-Card program is administered within Procurement Services. Their responsibilities include the application process, issuing and canceling cards, initial training, and managing the daily operations of the program.

B. Business and Finance

The Office of Business and Finance is responsible for directing program compliance by utilizing various review methods. These methods include annual compliance reviews, transaction reviews, introductory reviews for new cardholders, and other reviews as deemed appropriate and necessary.

Other areas of responsibility include training, distribution of educational materials, initial set up of general ledger accounts, set up of user account credentials for the University's web based P-Card software, and amendments to this policy and attachments based on changes in TBR and University policies.

C. Audit and Consulting Services

The Office of Audit and Consulting Services, whose mission is to assist in consulting and auditing at all levels of the University, reserves the right to conduct an official audit of the University's purchasing card program or departmental card programs.

When significant deficiencies are found in any area of a review conducted by the Office of Business and Finance the file may be forwarded to the Office of Audit and Consulting Services. After review of the file, the Office of Audit and Consulting Services may decide to conduct an official audit of an individual P-Card and/or a department's P-Card program.

IV. PURCHASING CARD PROGRAM

A. Card Provider

MTSU P-Cards are corporate-liability credit cards issued by the University's contracted commercial card provider. Charges incurred by cardholders on behalf of the University are paid directly to the issuing bank monthly.

The issuing bank provides the University with an online software application to help manage the program. All transactions made by cardholders will be recorded through this online bank application. In addition, purchases are noted, coded to the correct Banner Finance index(s) and account(s), and approved using this application. Monthly purchases are extracted from this bank application and recorded to Banner Finance.

B. P-Card Application Process

The University P-Card program is reserved for full-time and part-time benefited personnel. Regular part-time employees, temporary employees, adjunct faculty, contract employees, graduate assistants, and student workers are not permitted to participate in the program.

To obtain a P-Card, an employee must complete the P-Card Application Form and satisfy all steps of the application process before their card will be issued. The form is located on the Business and Finance website.

Please refer to Appendix A for application instructions.

C. Program Requirements

To remain eligible for participation in the P-Card program, University cardholders, approvers, and support staff must adhere to the following requirements:

1. Training

Cardholders, approvers, and support staff are required to attend initial training prior to the activation of their P-Card. Cardholders and approvers are expected to attend at least one (1) refresher training session every three (3) years. This session will correspond with the reissuance of their P-Card according to the expiration date printed on the card.

2. Change in Cardholder Employment Status

There are four (4) circumstances where a change in the cardholder's employment status requires immediate action by the cardholder and approver. Under all circumstances, the Change in Cardholder Status Form must be completed by the approver and submitted to the Office of Business and Finance. The Change in Cardholder Status Form is located on the Business and Finance website.

In addition to the completion of the Change in Cardholder Status Form, the cardholder and approver are responsible for ensuing all outstanding purchases are approved, monthly reconciliations are completed, and the files are turned in to the approver for retention.

a. Terminating Employment

Cardholders are expected to notify their approver at least two to four weeks prior to termination date. Upon receiving notice of the cardholder's termination, the cardholder and approver must complete the Change in Cardholder Status Form and submit it to the Office of Business and Finance. The cardholder must return the P-Card to Procurement Services. A review will be conducted by the Office of Business and Finance prior to the employee's departure.

In instances where the cardholder is immediately terminated, the approver or designee is responsible for collecting the cardholder's files and contacting Procurement Services and the Office of Business and Finance immediately.

b. Departmental Transfer

When a cardholder transfers to another position, the cardholder and approver must complete the Change in Cardholder Status Form and submit the form to the Office of Business and Finance. The cardholder's new approver must set a date for activation and sign the form prior to submission. The P-Card will be temporarily suspended until the date of activation.

c. Leave of Absence

When a leave of absence has been granted, the cardholder and approver must complete the Change in Cardholder Status Form and submit the form to the Office of Business and Finance. The P-Card will be suspended during the cardholder's leave of absence. Procurement Services will reactivate the P-Card upon the cardholder's return, and will notify the Office of Business and Finance once the P-Card has been reactivated.

d. Voluntary Termination of Card Privileges

When a cardholder voluntarily terminates their card privileges, the cardholder and approver must complete the Change in Cardholder Status Form and submit the form to the Office of Business and Finance. The approver must return the P-Card to Procurement Services.

3. Disputing Fraudulent Charge(s)

It is mandatory that the cardholder notify the University card provider, Procurement Services, and their approver when fraudulent activity is suspected or verified. The cardholder must complete a P-Card Dispute Form, located on the Business and Finance website, and submit the completed form to the bank for processing.

4. Lost or Stolen P-Card

Cardholders must report a lost or stolen card within 24 hours by telephone to the issuing bank and Procurement Services. The cardholder's reporting efforts must be documented for review purposes.

D. File Management Requirements

Maintaining complete P-Card file documentation is a requirement of the program. The University will only be responsible for business purchases supported by original receipts, invoices, and/or supporting documentation directly from a vendor. Cardholders and approvers could be held personally liable for undocumented purchases. P-Card privileges may be revoked for file mismanagement.

1. All purchases, including online vendors, must have an original itemized receipt identifying the goods or services purchased. Receipts are the primary method used by the University to support business related purchases. Packaging slips, invoices, or equivalent documentation should be maintained for all purchases when available.

2. Approvers are required to spot check receipts and monthly reconciliations on a routine basis. In addition, the approver must be able to document which receipts and monthly reconciliations were spot checked for review purposes.

3. If a receipt is misplaced, the cardholder must contact the vendor to request a copy of the original receipt. If the vendor cannot replace the receipt, the cardholder must complete the Receipt Replacement Form located on the Business and Finance website.

4. Original receipts printed on receipt tape should be copied (to prevent ink fading) and retained in the file with the original copy.

5. Sensitive card information, e.g. card number, expiration date, and security code, must be redacted from monthly bank statements and supporting documents.

6. Supporting documentation, such as required policy approval forms, policy exception memos, and cashier receipts due to reimbursement must be kept on file with the original purchase receipt.

7. Monthly bank statements, original receipts, invoices, and other supporting documentation must be retained in date order for three (3) years not including the current fiscal year.

8. Monthly bank statements must be reconciled each month against receipts and signed by the cardholder. Cardholders and/or support staff are responsible for reviewing and resolving all back orders, unfilled orders, sales tax charges, credits refunded by vendors, and fraudulent charges. See Disputing Fraudulent Charges for details.

9. Cardholders and approvers are responsible for coding purchases to the correct Banner Finance budget index(s) and expense account(s). If purchases within the current fiscal year were coded incorrectly, the cardholder must email the Office of Business and Finance at mailto:boffice@mtsu.edu to have these charges moved to the correct index and/or account codes.

10. Designated Approvers must approve cardholder purchases no later than 10 calendar days after the end of the billing cycle and address any issues or fraudulent charges if discovered.

11. Card purchases must be shipped to an MTSU office, department or to University central receiving.

E. Guidelines for Proper P-Card Usage

Cardholders must use discretion and be good stewards when making purchases and/or incurring expenses on behalf of the University. Card purchases must be in accordance with applicable University and Tennessee Board of Regents (TBR) policies, as well as state and/or federal regulations.

Card purchases should be made through MT$ource, the University's official eProcurement system, whenever possible in making purchases with their P-Card. This allows for better tracking of the University's purchasing trends.

Purchases are limited to a single transaction limit of $4,999.99 for goods and services. The transaction limit is enforced regardless of whether the University, TBR, or the State of Tennessee has an established contract with the vendor. Monthly credit limits are set at either $5,000 or $25,000, based on the needs of the department.

Items purchased on the P-Card may be paid with institutional or grant/restricted funding. Frequently purchased items are listed below. Refer to the Office of Business and Finance website for a general list of allowable goods and services.

1. Computers and Computer Related Items

All computer and computer related purchases should be made through University contracted vendors. If other vendors are utilized, the cardholder must document the reason for purchasing outside of contracted vendors. Refer to section 4.3 of MTSU Policy IV:06:01 Procurement Procedures, for details.

2. Meals and Refreshments

Meals and Refreshments are allowable as long as purchases are made in accordance with the two University food policies. Purchases must be business in nature and reasonable in cost and occurrence.

Cardholders must complete the Authorization for Purchase of Meals and Refreshments Form, located on the Business and Finance website, for ALL events where food is purchased. Cardholders must be able to document the business purpose, location, amount, and attendees in accordance with IRS requirements.

Cardholder's must utilize the University's contracted food service provider for all on campus catered events. The Application to Bring Food on Campus Form must be completed in accordance with MTSU Policy IV:04:20 Food Service - Self-Catered or Off-Campus Vendor, and approved by the appropriate VP or Dean. This form is located on the Business and Finance website.

P-Cards cannot be used for business meals at restaurants or fast food venues.

3. Memberships and Subscriptions

MTSU Policy IV:04:19 Subscriptions and Memberships addresses when memberships and subscriptions may be purchased with University funds. The initial Membership and Subscriptions Application Form and payment must be processed through Accounting Services. The application is available on the Business and Finance website.

Memberships and subscriptions may be renewed using the P-Card. Cardholders must retain a copy of the original application to file with subsequent receipts.

4. Travel Expenses

Travel related purchases are limited to basic conference registrations and coach airfare for employees in individual travel status. Cardholders in official group or athletic travel status can use their P-Card for additional travel expenses as addressed in MTSU Policy IV:04:09 Comprehensive Travel Regulations.

a. Unallowable Purchases

The P-Card is to be used to purchase business goods and services only. The use of the P-Card for personal expenditures is strictly prohibited. (Section G. Non-Compliance & Consequences)

Cards may NOT be used for purchases from a Foundation account or with funding held in an Agency (08XXXX) account.

Cardholders and approvers could be held personally liable for all unallowable purchases identified during a review from the Office of Business and Finance, Audit and Consulting Services, or other review agencies. Consequences will be enforced for all purchases not in compliance with this policy and all other policies/rules governing the University P-Card program.

Refer to the Office of Business and Finance website for a general list of unallowable goods and services.

b. Sales and Use Tax

It is the cardholder's responsibility to ensure the University is not charged sales and/or use tax when purchasing goods and services.
Upon request, Accounting Services will provide the sales tax exemption certificate to the vendor. Reasonable measures must be pursued by the cardholder to recover taxes paid on the P-Card and efforts documented.

If a vendor will not honor the University's tax exemption status, the cardholder must provide written explanation and documentation to support the charge.

F. Unallowable P-Card Practices

1. Splitting Purchases

The practice of splitting purchases of goods or services for evading purchasing requirements is a direct violation of purchasing policies, and may result in revocation of P-Card privileges. Splitting purchases includes, but is not limited to:

a. Splitting a purchase with one vendor into multiple orders.

b. Using two (2) or more cards for purchases from the same vendor.

c. Multiple purchases with the same vendor over the span of a few days.

Cardholders purchasing more than $9,999.99 during a fiscal year with a non-contracted vendor should contact Procurement Services for possible contract options. See Section 4.8 of MTSU Policy IV:06:01 Procurement Procedures for details.

2. P-Card Sharing and Card Number Distribution

Cardholders are not permitted to share their cards or card information with other University personnel regardless of the circumstances. Examples of card sharing may include, but is not limited to, the following:

a. Giving your physical card or card number to another employee to make purchases.

b. Storing card information in an online or other electronic payment profile. The University's e-Procurement system is excluded from this statement.

c. Any other method used by a cardholder to distribute card information.

3. Purchasing Goods and Services with Non-Contracted Vendors

University departments and employees must utilize State of Tennessee, University, TBR (including all TBR Institutions) and University of Tennessee contracts as primary sources for purchases. A list of current contracts is available on the Procurement Services webpage.

If the good or service desired can be procured at a lower price or is unavailable on current contracts, the department or employee may purchase with another vendor; however, all P-Card purchases shall be made utilizing "best bid practices" and documentation must be maintained to support the purchase.

G. Non-Compliance and Consequences

1. Violations and Reimbursements

Under certain circumstances, cardholders and/or approvers would be required to reimburse the University for unallowable purchases. Cardholders must complete the P-Card Reimbursement Form, located on the Business and Finance website, for all reimbursements.

Reimbursements must be made at the cashier windows with a copy of the cashiers receipt and reimbursement form retained in the cardholder's file.

If attempts to obtain reimbursement are unsuccessful, the University may pursue additional methods for collection including, but not limited to, payroll deductions. Also, P-Card privileges will be suspended until the University has been reimbursed.

Examples of reasons which may require reimbursement include but are not limited to the following:

a. Cardholder uses the card for personal purchases.

b. Charges incurred outside of applicable policies.

c. The inability to document purchases with receipts and/or other supporting documentation.

d. The continued purchase of unallowable goods and/or services where the cardholder has received previous notice(s) of non-compliance.

e. Any occurrence where University or grant funds are subject to substantial waste and/or abuse by the cardholder and/or approver.

2. Notification of Non-Compliance

Any cardholder and/or approver mismanaging their P-Card or procuring goods and services outside the parameters of this policy or other University policies will result in a notice of non-compliance. Consequences will depend on the severity of the violations identified.

3. Consequences for Non-Compliance

a. Temporary Suspension

P-Card privileges may be temporarily suspended for any cardholder who does not comply with all policies and regulations pertaining to the use of P-Cards. The decision to suspend a cardholder's privileges and the duration of suspensions will be determined based upon the severity of the violation(s), the number of offenses, and the department's ability to take corrective action.

b. Other Corrective Action

In some instances, non-compliance could result in the permanent revocation of P-Card privileges, personal reimbursement, and/or termination of employment.

H. Reporting Fraud, Fiscal Misconduct, or Violation of University Financial Policies

Administrators, faculty and staff who know or suspect that other employees are engaged in theft, fraud, embezzlement, fiscal misconduct or violation of University financial policies have a responsibility to report their concerns in accordance with MTSU Policy I:01:25 Ethics and Code of Conduct.

APPENDIX A - Obtaining Your P-Card

Revisions: New Policy November 1, 2013.

Cross-References: MTSU Policy IV: 04:20 Food Service-Self Catered or Off-Campus Vendor; MTSU Policy IV: 04:19 Subscriptions and Memberships; MTSU Policy IV:04:09 Comprehensive Travel Regulations; MTSU Policy IV:06:01 Procurement Procedures; MTSU Policy I:01:25 Ethics and Code of Conduct.