632 Purchasing Card (P-Card) Program
Approved by President
Effective Date: February 10, 2020
Responsible Division: Business and Finance
Responsible Office: Business and Finance
Responsible Officer: Associate Vice President, Business and Finance
I. Purpose and Scope
This policy provides parameters in the areas of program administration, file management, proper purchasing card (P-Card) usage, with the intent to promote compliance with Middle Tennessee State University (MTSU or 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.
II. Policy Statement
MTSU administers a P-Card program to provide employees with the means to procure small dollar goods and services with a defined University business purpose and use. Employee participation in this program is considered a privilege and may be revoked at any time for abuse, fraud, non-compliant purchases, or for program mismanagement.
III. Program Administration
The P-Card program is administered by Procurement Logistic Services, Office of Business and Finance, and the P-Card Compliance Office to ensure segregation of duties. Procurement Logistic Services is responsible for issuing cards, initial and refresher trainings, cancelling cards, and the daily administration of the program. The Office of Business and Finance orders cards for new cardholders and maintains card delegation and approver information. The P-Card Compliance Office reviews transactions for compliance and monitors cardholders for account status changes.
The Office of Audit and Consulting Services reserves the right to conduct an official audit of the University’s P-Card program or departmental P-Card programs at any time as deemed appropriate.
When significant deficiencies are discovered during a review conducted by the P-Card Compliance Office, the file may be forwarded to the Office of Audit and Consulting Services for further review. If warranted, 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
P-Cards are corporate liability charge cards issued by the University’s contracted commercial card provider (the issuing bank). 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 are recorded in this application. In addition, purchases are coded to the correct Banner Finance index(es) and account(s), explained/justified, and then approved using this application. Purchases are extracted from this bank application and recorded to Banner Finance at the close of the billing cycle.
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, employees must complete the P-Card Application and satisfy all steps of the application process before their card will be issued.
Please refer to Steps for Obtaining a P-Card for 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:
Cardholders, approvers, and support staff are required to attend initial training prior to the activation of their P-Card. Cardholders are required to attend a refresher training session with each reissuance of their P-Card according to the expiration date printed on the card. Reissued cards are sent directly to Procurement Services by the issuing bank and then delivered to the cardholder at the completion of the prescribed refresher training.
2. Notification of Changes in Cardholder Employment Status
There are four (4) changes in the cardholder’s employment status when the cardholder is required to notify the P-Card Compliance Office. In each circumstance (listed below in a-d), the Change in Cardholder Status Form must be completed by the cardholder, properly approved, and submitted to the P-Card Compliance Office.
In addition to the completion of the Change in Cardholder Status Form, the cardholder and approver are responsible for ensuring all outstanding purchases are coded to the correct Banner Finance indexes and approved. The approver must know the physical location of the P-Card files.
a. Cardholder Terminating Employment
Cardholders are expected to stop use of the P-Card and notify both their approver and the P-Card Compliance Office at least two (2) weeks prior to their termination date to allow for outstanding transactions to be processed and any reviews to be completed. Notification is completed by submitting the Change in Cardholder Status Form and delivering the physical P-Card to the P-Card Compliance Office. A final review may be conducted 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 physical P-Card and contacting the P-Card Compliance Office.
b. Cardholder Departmental Transfer
When a cardholder transfers to another position within the University, the cardholder must complete the Change in Cardholder Status Form and submit the form to the P-Card Compliance Office. If the P-Card will not be required in the new position, the cardholder must deliver the physical P-card to the P-Card Compliance Office.
c. Cardholder Leave of Absence Extending Two (2) Weeks or More
When a cardholder's leave from work (annual leave, sick leave, FMLA) will extend past two (2) weeks, the cardholder must complete the Change in Cardholder Status Form and submit the form to the P-Card Compliance Office. The P-Card will be suspended during the cardholder’s leave and reactivated upon the employee's return to work.
d. Cardholder Voluntary Termination of Card Privileges
When a cardholder voluntarily terminates his/her card privileges, the cardholder must submit the Change in Cardholder Status Form and deliver the physical P-card to the P-Card Compliance Office.
3. Disputing Fraudulent Charge(s)
It is mandatory that the cardholder notify the issuing bank, Procurement Logistic Services, and his/her approver when fraudulent activity is suspected. The cardholder must contact the issuing bank and follow the instructions provided, which may include completing a dispute form. If a dispute form is filed and a case number is assigned, then a copy should be forwarded to the P-Card Compliance Office.
4. Lost or Stolen P-Card
Cardholders must report a lost or stolen card within twenty-four (24) hours by telephone to the issuing bank and Procurement Logistic Services. The cardholder’s reporting efforts must be documented and retained in their P-Card file for review purposes.
D. File Management Requirements
Maintaining complete P-Card file documentation is a requirement of the program. Required documentation may be requested at any time for review by the P-Card Compliance Office to ensure policies and procedures are followed. The University will only be responsible for business purchases supported by original itemized receipts, invoices, and/or supporting documentation directly from a vendor. Cardholders and approvers can be held personally liable for undocumented purchases and any purchases where the legitimate business purpose is not properly supported. P-Card privileges may be revoked for file mismanagement. The required file management responsibilities of the cardholder and approver are listed below.
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 on a consistent and routine basis. In addition, the approver must determine a method for documenting which receipts were spot checked for review purposes.
3. If a receipt is lost, 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 a P-Card Replacement Receipt Form.
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, i.e., full card number, expiration date, and security code, must be redacted from all documentation.
6. Supporting documentation, such as required policy approval forms, policy exception memos, and cashier receipts due to a reimbursement, and any compliance reviews must be kept on file with the original purchase receipt.
7. Cardholders must retain their monthly bank statements, original receipts, invoices, and other supporting documentation for five (5) years not including the current fiscal year according to Policy 129 Records Retention and Disposal of Records.
8. Monthly bank statements must be reconciled each month against receipts. 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 Section IV.C.3. Disputing Fraudulent Charges for details.
9. Cardholders and approvers are responsible for coding purchases to the correct Banner Finance budget index(es) and expense account codes. If purchases within the current fiscal year were coded incorrectly and have been posted to Banner, the cardholder must email the Office of Business and Finance at firstname.lastname@example.org to have these charges moved to the correct index and/or account codes.
10. Approvers must approve cardholder purchases no later than ten (10) calendar days after the end of the billing cycle and address any issues or fraudulent charges if discovered. Disputed fraudulent charges may be left unapproved until the credit is posted.
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 policies as well as state and federal laws and regulations. Card purchases must have a clearly defined business purpose in which the purpose and the intended business use of the item(s) purchased is identifiable by the itemized receipt and, if warranted, further explained by supporting documentation.
1. Cardholders should utilize MT$ource, the University’s official eProcurement system, whenever possible. This allows for better tracking of the University’s purchasing trends.
2. Purchases are limited to a single transaction limit of four thousand, nine hundred ninety-nine dollars and ninety-nine cents ($4,999.99) for goods and services. The transaction limit is enforced regardless of whether the University or the State of Tennessee has an established contract with the vendor.
3. Items purchased on the P-Card may be paid with institutional or grant/restricted funding.
4. It is the cardholder’s responsibility to ensure that the University is not charged sales and/or use tax when purchasing goods and services. If tax is charged, 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. Upon request, Accounting Services will provide the sales tax exemption certificate to the vendor.
5. Gift cards, store credits, cash refunds, or other types of vendor refunds may not be taken in place of a credit issued back to the actual card account.
6. Cardholders should implement these basic security measures to prevent unauthorized use and limit the potential for fraud:
a. Keep the P-Card and account numbers in a secure place.
b. Safeguard the P-Card in the same manner as a personal credit card.
c. Do not share a P-Card or P-Card number with anyone.
d. Monitor P-Card activity in Enterprise Spend Platform.
e. Call the phone number on the card immediately if suspicious activity is detected.
7. A list of allowable P-Card purchases is located on the Allowable/Unallowable Purchase Guidelines.
F. Guidelines for Specialized Purchase Categories
Advertising purchases to recruit students and promote the University must be reviewed prior to the purchase by the Division of Marketing and Communications, and documentation of this review should be retained with the purchase receipt for review. Advertising may include, but is not limited to, newspapers, magazines, social media, emerging media, as well as advertising or support for community events, trade and industry shows, and professional conferences according to Policy 151 Expenditure of State Funds for Paid Advertising.
Employment advertising purchases must be part of the Office of Human Resources approved recruitment plan and documentation of the approved plan is to be retained with the purchase receipt for review.
2. Computers and Computer Related Items
All computer hardware, software, and maintenance purchases should be entered in MT$ource and the University contracted vendors should be utilized whenever possible. If MT$ource is not utilized for computer and computer related items, and the cost is over $1,000.00, ITD approval must be obtained prior to the purchase and the approval documentation retained with the receipt.
3. Meals and Refreshments
Meals and refreshments purchased using the P-Card must be made in accordance with Policy 661 Food and Beverages. The business purpose of each event must be clearly defined and documented based on Policy 661 Food and Beverages. Requests to purchase food and beverage items which do not meet policy requirements will not be approved.
Food and beverage purchases, including meals and refreshments, are required to meet the following conditions:
a. The total food and beverage purchase for the entire event is less than $500.00.
b. Approval for the purchase is required at least five (5) days prior to the date of food purchase by completing the Food Purchase Authorization.
c. The Food Purchase Authorization is routed to the Department Head and P-Card Compliance Office, allowing sufficient time for the card to be opened for the food vendor purchase. Forms not received in the P-Card Compliance Office at least five (5) days prior to the date of food purchase may not be approved for P-Card use. The form must include the following items:
(1) An estimate of the total payment to be spent for food and beverages per event.
(2) Details to clearly define and substantiate the business purpose according to IRS rules of business meals substantiation.
(3) A breakdown of the number of guests expected to attend and a general attendee description.
(4) A list of vendors to be utilized for event. Vendors may include, but are not limited to, grocery stores, retail stores, wholesale clubs, restaurants, fast food vendors, and off-campus caterers.
d. Upon approval of the Food Purchase Authorization, the cardholder is notified and the card is opened for purchases on the date of food purchase identified on the form.
e. If, upon review, the food and drink actual purchase amount exceeds $500.00, a violation exception will be issued.
f. Once the event is completed, a list of actual participants, including employees, must be maintained on file with the purchase receipt for review.
(1) Groups that have an official roster or registration list on file with the University do not need to attach a list of individual attendees.
(2) Open House events that are open to the general public do not need an attached list of outside guests. However, Open House events must include a list of MTSU employee attendees.
(3) Events open to the general MTSU student population do not need an attached student guest list.
4. Travel Expenses
Travel related purchases are limited to basic conference registrations and coach airfare for employees in individual travel status. Student conference registrations are also allowable. Cardholders must have an approved Travel Authorization or an email approval from the traveling employee’s approving authority on file prior to completing the travel-related card purchases. Airline early check-in fees, upgrade fees, companion/guest tickets, food, or other travel related expenses are not allowed on the P-Card even with the intent to reimburse the University. Cardholders in official group or athletic travel status can use their P-Card for additional travel expenses. Refer to Policy 658 Travel for all comprehensive travel restrictions and procedures.
All University printing jobs will be produced by University Printing Services unless they are unable to produce the job. See Policy 154 Publications.
G. Unallowable P-Card Purchases and Practices
1. Personal 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 even if the intent is to reimburse the University for the purchase. Personal purchases include, but are not limited to, goods for personal use, goods given as gifts to employees, gift cards, family/guest tickets to events, or companion travel purchases.
2. Foundation and Agency Purchases
P-Cards cannot be used for purchases from a Foundation account or with funding held in an Agency (08XXXX) account.
3. Splitting Purchases
The practice of splitting purchases of goods or services for the purpose of evading purchasing requirements is a direct violation of University purchasing policy, 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 and departments purchasing goods or services costing more than nine thousand, nine hundred ninety-nine dollars and ninety-nine cents ($9,999.99) during a fiscal year with a non-contracted vendor should contact Procurement Logistic Services for possible contract options. See Policy 631 Procurement and Contract Standards for details.
4. P-Card Sharing and Security
Cardholders are not permitted to share their cards or card information with another University employee regardless of the circumstances. Faxing, scanning, or emailing P-Card numbers is also prohibited. Orders may be submitted by fax or email when the P-Card number is omitted. The vendor may then be contacted by phone with the card number.
5. Purchasing with Non-Contracted Vendors
University departments and employees must utilize State of Tennessee, MTSU, State 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 Logistic Services webpage.
If the goods or services desired can be procured at a lower price or is unavailable on current contracts, the department or employee may purchase with another vendor when written documentation is retained with the receipt verifying the pricing comparison or low inventory to support the purchase with non-contracted vendors.
6. A list of unallowable P-Card purchases may be found on the Allowable/Unallowable Purchase Guidelines.
H. Compliance Reviews and Notification of Non-Compliance
1. Compliance Reviews
Each P-Card transaction is held to a standard of compliance based on MTSU policies and guidelines and state and federal laws. Card transactions are reviewed consistently by the P-Card Compliance Office. Other specific cardholder, approver, and departmental reviews are utilized to ensure that purchases comply with MTSU policies and procedures. Audit and Consulting Services may conduct reviews or audits at any given time as deemed necessary.
Cardholders are required to submit receipts and documentation to the P-Card Compliance Office and any reviewing authority immediately upon request. Advance notice for P-Card records may not be possible but submission of the requested documents to the reviewing office must be timely. Receipts and supporting documentation should be kept current and maintained as each purchase is completed.
The appropriateness of each expenditure and whether such payments are allowable or reimbursements deemed necessary are based on the information provided in the course of a compliance review. P-Card accounts may be temporarily suspended while any compliance review is open or ongoing due to missing documents or irregularities.
2. Notification of Non-Compliance
Any cardholder and/or approver mismanaging their P-Card or procuring goods or services outside the parameters of this policy or other University policies will result in a Non-Compliant Review Receipt.
Upon the review of an unallowable purchase by the P-Card Compliance Office, a Non-Compliant Review Receipt will be issued to the cardholder for the purchase. Depending on the category and/or severity of the non-compliant purchase, a review may require that a Violation Exception be approved by the Vice President of Business and Finance. All non-compliant records are maintained by the P-Card Compliance Office and will be reviewed for recurring non-compliant purchasing patterns among cardholders and departments. Cardholders who continue to accumulate Non-Compliant Review Receipts from the P-Card Compliance Office could be subject to having their card suspended or revoked, or face disciplinary consequences up to and including termination of employment.
3. Action Items, Consequences, and Reimbursements
Non-compliant receipts and violation exceptions that are issued by the P-Card Compliance Office may include action items to be taken by the cardholder or department to bring the purchase back into compliance. These consequences may vary based on the frequency of unallowable purchases, severity, and dollar value of the purchase. A possible consequence for an unallowable purchase is holding cardholders and approvers personally liable, requiring reimbursement to the University.
When a reimbursement is required, cardholders will follow the instructions on the P-Card Reimbursement Form. Sales tax will be included in the total amount to be reimbursed for any personal purchases or non-business-related purchase made with the card. If attempts to obtain reimbursement are unsuccessful, the University may pursue additional methods for collection including, but not limited to, payroll deductions. P-Card accounts may be temporarily suspended while any P-Card compliance review action item or reimbursement payment is outstanding.
4. Other Disciplinary Actions
a. Temporary P-Card Suspension
P-Card privileges may be temporarily suspended for any cardholder who does not comply with all policies and procedures 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. Revocation of the P-Card
The use and benefits of a University assigned P-Card is a privilege. Therefore, non-compliance could result in the permanent revocation of P-Card privileges, personal reimbursement, and/or termination of employment.
I. 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 Policy 10 Ethics and Code of Conduct. Policy 71 Preventing and Reporting Fraud, Waste, and Abuse provides the process for reporting these concerns.
Revisions: June 5, 2017 (original); February 10, 2020.
Last Reviewed: February 2020.
References: Policies 10 Ethics and Code of Conduct; 71 Preventing and Reporting Fraud, Waste, and Abuse; 129 Records Retention and Disposal of Records; 151 Expenditure of State Funds for Paid Advertising; 154 Publications; 631 Procurement and Contract Standards; 658 Travel; 661 Food and Beverages.