Purchasing Card Policy
Purchasing Card Policy
At Morningside College, 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
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. Morningside College will not issue a purchasing card to any individuals whose noncompliance resulted in revocation.
Your responsibilities as a cardholder include:
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:
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.
Related College Documents
Policies and Procedures
The following definitions apply to listed terms as they are used in this policy:
Purchasing Card Coordinator
Purchasing Cardholder Agreement Form
Card Default Center and Account Code
Purchasing Card Allocation System
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:
Tax Exempt Status
Morningside College 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.
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:
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 purchasing card 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.
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 form are 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:
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.
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 Agreement form 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:
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.
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 charges against the card before it has been reported lost or stolen are the responsibility of the cardholder's department, which will be appropriately charged.
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.
The following transactions are currently prohibited:
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.
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.
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.
Consequence of Misuse
When appropriate, supervisors should attempt informal resolution by bringing the misuse, and consequences of further misuse, to the employee's attention.
If informal resolution is inappropriate or ineffective, the supervisor must contact the purchasing card coordinator. The following consequences of misuse have been established. Not all consequences will be applied to every violation; there are situations that may lead to disciplinary action, including suspension or termination of employment, without following all these steps. The divisional vice president reserves the right to use discretion in applying these guidelines, depending on the type and severity of the specific violation being addressed.
In addition, in the case of personal purchases repayment of the purchase by the cardholder to the college is required following resolution of the discrepancy. Repayment may be made by cash or check. Payment for this misuse must be made within 10 days following resolution, or appropriate disciplinary measures will ensue. It is the responsibility of the cardholder to ensure that repayment is made for personal items charged to a delegated card.
Cardholders are individually responsible for monthly reconcilements of their purchasing card statement. This statement details transactions occurring in the current month, including the transaction date, supplier name, supplier address and the amount of the transaction. This information must be reviewed for accuracy and any exceptions must be noted on the transaction statement. Disputed transactions should be noted immediately.
The cardholder is responsible for all charges on his or her monthly statement, including resolution of charges in error. After final review is completed by the cardholder, all necessary original receipts and packing slips are attached to the printed reconciliation form and signed by the cardholder. Supporting documentation must always include:
Depending on the cardholder's internal department processes, reconciliation statements are either forwarded directly to the purchasing card coordinator or to the specific department supervisor for his/her review. In all cases, the original documentation and signed cardholder statement are forwarded ultimately to the purchasing card coordinator – (Accounts Payable office in Lewis Hall).
Ultimately, all original documentation must be forwarded to the purchasing card coordinator, as formal record retention is in Lewis Hall. A cardholder who loses or misplaces an original receipt should provide an explanation of why the original is missing and details about the item(s) purchased (date, vendor name, and description of item(s), quantity, unit price, total cost, and business purpose).
Each card is tied to one specific center number/account code combination. Cardholders are responsible for allocation of transactions to the appropriate centers/accounts. Detail transactions will generally be available in the Purchasing Card Allocation System (U.S. Bank AccessOnline) three days from the date of purchase. The Allocation System is used for allocation prior to the transfer of financial transactions in the general ledger. All allocations must be completed 10 days from the statement date. Once transactions appear in the general ledger, reallocations must follow the traditional journal entry process.
It is the responsibility of the cardholder to ensure that proper center number and account code designation is made according to college financial policies. Continued improper designations and/or neglect of proper card transaction allocations are considered an administrative misuse of the card. As such, appropriate action will be taken as detailed in the Misusing the Purchasing Card section of this policy.
Receipt of Materials and Services
The cardholder is responsible for ensuring receipt of materials and services and for resolving with the supplier any delivery problems, discrepancies and damaged goods.
Any packing slips, receipts, net zero invoices, along with the credit card statement, must be kept for reconciliation purposes. For telephone or catalog orders, complete shipping instructions must be given along with cardholder name and the desired delivery location (specific building name, room number, etc.). The cardholder should inform the supplier to include the sales receipt (detailing the exemption of taxes) with the package. Save the credit card receipt and shipping documentation, including packing slips, which will be needed for reconciliation
Questions concerning this policy or its intent should be directed to:
Help Using the Card
Cardholders have the following sources for help: