Purchasing Card Policy

MORNINGSIDECOLLEGE

Purchasing Card Policy

Policy Statement

At MorningsideCollege, authorized cardholders use purchasing cards to acquire goods and services from suppliers. Cardholders are identified within departments and must complete training and sign a cardholder agreement before a card is provided. The traditional purchasing process is followed for those purchases not included in the purchasing card process.

Cardholders are strongly encouraged to acquire goods and services from preferred suppliers whenever possible. See the remainder of this document for detailed information on acquisition and use of the purchasing card, including cardholders' rights and responsibilities.

Roles and Responsibilities

Vice President

evaluate an employee's need for a purchasing card based upon his or her job requirements;
authorize purchasing cards based on job requirements;
re-evaluate the need for a purchasing card whenever a staff member's job requirements or status changes;
collect the purchasing card and submit a request to accounts payable when an account must be closed due to termination or change of status.

Budget Officer

Approve purchases made with the purchasing card within their department.

Assure proper documentation is supplied for each transaction.

Assure charges made are within college policy.

Cardholder

An individual who is assigned a purchasing card has been granted the privilege to spend Morningside's funds for business-related expenses without a pre-transaction review. This privilege requires a signed agreement by the cardholder attesting to his/her commitment and responsibility to comply with the terms and conditions of this policy.

Caution: The purchasing card must never be used for any personal expenses. Financial Irregularities and can result in termination of employment or other disciplinary actions.

Failure to use the card in compliance with this policy, or failure to provide sufficient documentary evidence generally within 10 calendar days, can result in the suspension or revocation of the purchasing card and possible disciplinary action including, but not limited to, employee termination, expulsion from school (for students), as well as the filing of criminal charges. If a cardholder's card is revoked for non-compliance with this policy, the individual cannot apply for a subsequent card. MorningsideCollege will not issue a purchasing card to any individuals whose noncompliance resulted in revocation.

Your responsibilities as a cardholder include:

Read and understand this policy.
Keep your purchasing card number confidential; Keep your card secure.
Comply with the per-transaction and overall monthly limits
Never "split" the cost of one single item (whether good or service) into multiple payments in order to circumvent the per transaction limit.
Purchase only business-related items permitted by College policies. Do NOT purchase any good or service listed under the “Prohibited Transactions” section of this policy.
Note: If you inadvertently use your purchasing card rather than your personal credit card for a personal purchase, you must notify Accounts Payable immediately and submit a written explanation of how and why this occurred.
Inform the vendor that your purchase is exempt from Iowa sales tax. If the vendor will not grant a sales tax exemption, note the vendor's refusal on your receipt.
Submit sufficient documentary evidence including original receipts and explanation to support the business purpose of each purchase on your card.
Review & reconcile your credit card statement upon receipt and report errors.
If you authorize a regular monthly charge to your card, you are responsible for notifying the vendor in the event that your card number changes or your account is closed.

Purchasing Card Coordinator

The Accounts Payable / Business Office Analyst within the Business Office shall act as the administrator for the purchasing card program.

Caution: The coordinator cannot be a cardholder.

When an individual is appointed as the purchasing card coordinator they will assist in ensuring compliance with this policy by performing the following actions:

Read and understand this policy.
Process purchasing card requests and maintain current information on purchasing card accounts
Review each purchasing card charge to ensure that sufficient documentation has been submitted by the cardholder and that all purchases comply with college policy and other restrictions applicable to the account. Make initial contact with cardholder regarding missing receipts.
Retain the documentary evidence provided by the cardholder in support of the business purpose of the purchase in accordance with college purchasing and expense reimbursement policies.
Report immediately to the AVP / Controller any information or documentation about a personal purchase by a cardholder.
Also report to the AVP / Controller any cardholder who performs a prohibited transaction, whether for reasonable cause or otherwise.
Maintain any suspended cards in a locked drawer until the card is reactivated and may be returned to the cardholder.
Close purchasing card accounts based upon instructions provided by the cardholder's vice president. Destroy the card immediately.
Report incidences of possible abuse of purchasing card privileges, or the fraudulent use of a purchasing card the AVP / Controller or Vice President for Business and Finance.

Reason for Policy

The acquisition of goods and services must be convenient and provide the highest quality products to the end users at the most reasonable price. In allowing employees the independence of direct purchasing, however, it is necessary to establish responsibilities and to follow consistent procedures and policies. This adherence to policy allows continued process savings, accountability and audit ability of purchases.

Using a card to make purchases from suppliers provides: ease of use and best pricing for the cardholder; direct charging/payment for the supplier; and prompt delivery by suppliers directly to the person placing the order.

Definitions

The following definitions apply to listed terms as they are used in this policy:

Purchasing Card
An acquisition tool that functions similar to a credit card and for which a specific employee is assigned use and responsibility. Purchasing cards are given to specific approved individuals.

Individual Cardholder
Employee having the responsibilities for an individual purchasing card.

Division Coordinator
Divisional vice president within each division responsible for handling the division's purchasing cards, including authorizing cardholders and establishing card limits

Purchasing CardCoordinator
College employee responsible for overseeing the Morningside College Card program. This individual is currently the Accounts Payable / Business Analyst.

Purchasing Cardholder Agreement Form
Agreement, signed by a cardholder, between the college and that cardholder stipulating policy and procedural rights and responsibilities of both parties

Card Default Center and Account Code
That college general ledger cost center number and account code combination to which all transactions using a specific card will be charged in the general ledger unless reallocated to another center and/or account code.

Reconcilement
Mandatory process whereby a cardholder verifies their monthly cardholder statements have the correct charges or credits, attaching all required supporting documentation and delivering them to the purchasing card coordinator in a timely manner

Purchasing Card Allocation System
On-line allocation system which allows cardholders to view their card purchases and to allocate them to a center/account other than the card's default center and account code

Overview of the Card Program

Using the purchasing card most closely resembles using one's personal credit card, except that use is restricted to business-related purchases. Each cardholder is required to keep the card secure and is encouraged to use it for every possible college-related purchase. The college purchasing card should be used to purchase goods from suppliers that accept payment with a Visa card.

The purchasing card has been set up to encompass categories for types of suppliers, spending limits, account distribution and transaction information. Transactions on the cards are charged to a specified center number and account code. Cardholders are responsible for assuring that the transactions are charged correctly during reconcilement (see the section of this policy titled Reconcilements).

Cardholders may use the card to place an order in person at the supplier site, over the phone with the specific supplier or by fax or internet purchase. The cardholder should give the supplier the following specific information:

individual cardholder name and that he/she is a MorningsideCollege employee
individual card number
expiration date
Iowa tax-exemption status/number (printed on the card)
delivery address (e.g., building name and office number)
order information

Tax Exempt Status

MorningsideCollege is a tax-exempt organization. The college’s Iowa tax-exempt identification number has been labeled on each card. The cardholder must give this number to all suppliers at the time of any transaction to exempt payment for Iowa or reciprocal state sales tax. In the event sales tax is billed to the cardholder's account, it should be rectified directly with the supplier or disputed as outlined by the section Disputing a Charge in this policy.

Card Limits

Each divisional vice president has the ability to set dollar and/or transaction limits on each card in their division.

Card limits may be set according to:

dollars per transaction
dollars per month
commodity exclusions per card for all transactions in a category
number of transactions per day
number of transactions per month

Canceling and Renewing Cards

Individual cards are valid for a minimum of one year from the date of issuance. If, for any reason, a cardholder wishes to cancel their card, the card must be cut in half and forwarded to the purchasingcard coordinator.

If the card has not been canceled, upon expiration of the original term, a renewal card will be mailed automatically to the purchasing card coordinator.

Cardholder Termination

The suspension or termination of a cardholder must be reported directly to the purchasing card coordinator upon official notification of termination. The card should be returned to the purchasing card coordinator and use will be eliminated at the termination date. In the case of termination, the cardholder is responsible for returning the card and for final reconciliation prior to separation. Failure to do so may result in the employee's final paycheck being withheld until this occurs.

Acquiring a Purchasing Card

The division vice president is responsible for deciding who in their division will be permitted to have a purchasing card. Only employees who have completed cardholder training and signed the purchasing cardholder agreement formare authorized to use a purchasing card. Using another employee's card is not in accordance with the conditions set forth in this policy.

Purchasing cards are not transferable. If someone's card use is to be discontinued, their card number must be given immediately to the purchasing card coordinator. Immediately report name changes for a particular cardholder to the purchasing card coordinator so files may be updated and an updated card issued.

The following individuals are not permitted to have a card:

independent contractors(who do not receive a college paycheck)
employees who have had a card previously revoked.
employees not authorized as cardholders by divisional vice presidents
untrained employees or employees who have not signed and returned the cardholder agreement form.
employees on personal leave of absence or on sabbatical for more than six months. (Returning nine-month faculty members and those employees planning to return following sabbaticals of six months or less are permitted to retain and use their cards.)
suspended employees
temporary employees
terminated employees
any undergraduate students, including work-study students

Card Delegation

College cardholders, upon approval from their divisional vice president may authorize blanket use of their card to any other college employee.An authorization memo from the cardholder should accompany that staff member so that vendors will accept their signature for the charges. This is not a transfer. The card remains in the employee's name not that of the person delegated; any misuse of the card is the responsibility of the employee. However, the college reserves the right to initiate disciplinary action against a delegated cardholder in the case of misuse, as detailed in the section of this policy on Misuse of the Purchasing Card.

Delegation is strictly prohibited without prior approval. Ultimately, the employee who delegates the card is always responsible for all transactions on his or her card and must sign the monthly cardholder statement.

Purchasing Card Training

Purchasing card training must be completed prior to issuance of the card to the cardholder. The prospective cardholder must be present at the training and may not send a proxy. A purchasing cardholder agreementform must be signed by the cardholder and submitted to the purchasing card coordinator prior to card issuance. The cardholder will also receive a copy of this policy at the time of training.

Purchasing Cardholder Agreement

The cardholder agreement stipulates that the cardholder:

has attended the required purchasing card training
is aware of and understands card policies and procedures
is held accountable for all transactions made using his or her card(s), including those cards delegated to other employees
is responsible for the timely reconcilement of his or her card(s)
is responsible for returning his or her card(s) upon termination, suspension or leave of absence
may not purchase any personal items with his or her card
may not transfer his or her physical card(s) or card responsibility to any other individual.
is responsible for reporting lost or stolen cards immediately to the purchasing card coordinator (x5132)

Cardholder's Responsibilities

Card Security

Only authorized cardholders (including delegated users) may use the card. It is the responsibility of every cardholder to safeguard cards and card numbers against use by unauthorized individuals within or outside the college.

Lost/Stolen Cards

Immediately upon discovering that a card has been lost or stolen, a cardholder must report this by phone directly to US Bank (1-800-344-5696) and to the purchasing card coordinator (x5132). In addition, verbal reports of lost or stolen cards must be followed in writing to the purchasing card coordinator. The card will be replaced within 10 days, at no cost, directly to the cardholder from the bank. The college's liability per cardholder is limited to the established restrictions on that particular card. Any charge against the card before it has been reported lost or stolen are the responsibilityof the cardholder's department, which will be appropriately charged.

Liabilities of the Card

Liabilities of the card remain with the college, rather than the cardholder, for all transactions made in compliance with this purchasing procedures and policy document.

Prohibited Transactions

The following transactions are currently prohibited:

payments to individuals or partnerships
purchases of capital equipment (amounts over $3,000)
cash advances
transactions prohibited by the college’s Purchasing and Expense Reimbursement Policies.

Disputing a Charge

Within 60 days of the transaction date, a cardholder may dispute a charge that appears on his or her monthly purchasing card statement. If the cardholder does not recognize a charge or it appears to be incorrect, he or she should attempt to work directly with the supplier for resolution. In the event resolution is not made, the cardholder must submit a completed Billing Inquiry Form with a copy of all supporting documentation to US Bank. Billing Inquiry Formsare also available by calling the purchasing card coordinator (x5132)

During the investigation by US Bank, a credit will automatically be issued to the cardholder's account for the amount questioned. When US Bank has completed the investigation, the cardholder will be notified of the resolution. If the dispute is not settled in the cardholder's favor, the account will be charged for the disputed transaction amount.

Returning an Item

To return an item, the cardholder should contact the supplier of the item for information on how to do a return. Following the supplier's procedures, the item should be returned directly from the cardholder to the supplier and payment adjustment should be agreed upon at that time. Should a discrepancy in charges occur, the cardholder should note the charge as a discrepancy in the reconciliation process and follow proper procedures for disputing a charge.

Transactions Not Using the Purchasing Card

Any non-card transactions must use the normal purchase process as noted in the Purchasing Policy.

Misuse of the Purchasing Card

Individuals given purchasing card access by their departments are held accountable for all the transactions related to their card(s), including those transactions made with cards they have delegated to another. Consequences for misuse of the purchasing card are serious.

Misuse of the card can be either personal or administrative. Personal misuse includes, but is not limited to: using the purchasing card for personal (i.e., non-college-related) purchases; use of the purchasing card by a suspended or terminated employee; allowing an unauthorized person to use the card (see the section on Card Delegation for the correct procedure to allow another employee to use your card).

Administrative misuse includes, but is not limited to: lack of proper reconciliation of the cardholder account (see the section on Reconcilements below); card use in direct violation of the purchasing card policies and procedures contained in this document.

Consequences of Misuse

When appropriate, supervisors should attempt informal resolution by bringing the misuse, and consequences of further misuse, to the employee's attention.

Purchasing Card Policy

MORNINGSIDECOLLEGE