Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL

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PURCHASING
70.08
Revised 4-08
Purchasing Services
335-3541

Purchasing Card

OVERVIEW

An authorized University employee may use a purchasing card to make University purchases that do not exceed the University's direct buy limit. (See "Restrictions" below for the current limit and prohibited purchases.

Purchasing Services issues cards to individuals who are approved for card use by the department chair or equivalent administrator.

Program Participants

Program Administration

Purchasing Services administers the purchasing card program for the University; telephone 335-3541.

Accounts Payable

Accounts Payable coordinates transaction review activities and processes payments to the purchasing card company.

Approving Official

The approving official has supervisory or managerial responsibility for accounting functions in a department or college. He or she reviews and approves monthly reconciliations of purchasing card transactions and signs the monthly log sheet.

The approving official must have signature authority for each of the budgets recorded on the monthly log sheet.

NOTE: The approving official cannot be a cardholder or card reconciler on accounts for which he or she acts as approving official.

Responsibilities

The approving official is responsible for the following:

• Providing direction for departmental purchasing card use.


• Reviewing the monthly bankstatement, purchasing card monthly log sheet, and supporting itemized documentation for each cardholder.


• Having signature authority for all of the budgets used for department purchasing card transactions which he or she is approving.


• Approving the purchasing card monthly log sheets as the expenditure authority.


• Ensuring that the bank statement and supporting itemized documentation are attached to the purchasing card monthly log sheet and retained as a complete record set.


• Ensuring that the department retains all purchasing card records for six years after the end of the fiscal year in which the transactions were made. (See 90.01 for more information regarding records retention requirements.)


• Knowing the physical location of purchasing card records which the department is maintaining for the required retention period.

Card Reconciler

The card reconciler performs the first level of review for cardholders after each cardholder in the department makes a transaction.

Responsibilities

The card reconciler:

• Ensures the security of card information,


• Reviews and approves purchasing card transactions online,


• Maintains the monthly log sheet,


• Maintains itemized documentation for each purchasing card transaction,


• Reviews transactions against the monthly statement from the issuing bank, and


• Reconciles transactions against the online Account Balances/Detail Application (also referred to as BALANCES) or the hard-copy Budget Statement. See 30.06, 30.07, and 85.33.

Cardholder

The cardholder is issued a purchasing card bearing his or her name and Washington State University. He or she uses the card to make purchases in accordance with University policies.

Responsibilities

The cardholder is responsible for:

• Proper card usage,


• Adherence to WSU policies and procedures governing purchasing cards, as published in the Business Policies and Procedures Manual BPPM) (70.08), and


• Training alternate users.

Training

Purchasing Services provides the following training on the following topics to cardholders, card reconcilers, and approving officials:

• Appropriate use of purchasing cards, including restrictions and compliance requirements;


• Documentation requirements; and


• Use of the online transaction reconciliation system provided by the issuing bank.

Restrictions

Users of purchasing cards are subject to the following restrictions:

The total cost of a single purchase may not exceed the direct buy limit. The current single purchase direct buy limit is $3000. University personnel may not string transactions to circumvent the $3000 limit, i.e., divide an order into several small purchases from the same vendor.

The purchasing card is a method of payment. Compliance with all University policies related to the purchase of goods or services is required. (See Chapter 70.)

Specific Items

University personnel are not to acquire the following items with purchasing cards unless a specific exception allowing purchase is granted by Purchasing Services:

• Alcoholic beverages
• Controlled substances
• Entertainment
• Gasoline/diesel
• Gifts (except as allowable under 17A funds; see 70.33)
• Leases, rentals
• Meals (travel- or business-related)
• Moving expenses
• Personal items (items for personal use)
• Printing and copying (unless allowable under provisions of 80.05)
• Radioactive materials
• Tax-exempt research equipment (see 70.42)
• Telephone calls, calling cards, prepaid calling cards, employee-owned cellular telephone expenses
• Travel-related expenses, e.g., transportation, lodging, hotel reservations, meals
  (NOTE: conference registration fees are allowable; see 95.05)
• Weapons and ammunition

Transaction Types

University personnel are not to use purchasing cards for the following types of transactions:

• Cash advances
• Contract payments requiring the signature of a delegated approving authority (see 10.10)
• Donations
• Faculty, Student, and Alumni account purchases (see 70.18)
• Payments to individuals, employees, students
• Purchases involving trade-ins
• Purchases from WSU departments (use Interdepartmental Requisition and Invoice (IRI); see 70.05)

OBTAINING CARDS

The department completes a Purchasing Card Application for each card requested.

Make a copy from the master on 70.08.11 to obtain an application form. After the department chair or equivalent administrator approves the application, the department routes the form to Purchasing Services, mail code 1020.

When completing the form, the requesting department enters the following:

• A default University account which supports most purchasing card expenditures.


• Any departmental restrictions, i.e., maximum dollar limit on single purchase, monthly dollar limits on purchases.

NOTE: Departmental restrictions must be enforced at the departmental level. The central administration does not enforce restrictions other than University-wide restrictions shown above.

• Names of the cardholder, card reconciler, and approving official.

The cardholder, card reconciler, and approving official must read and sign agreement to the roles and responsibilities discussed in the application and above.

Purchasing Services processes the request and orders the purchasing card.

Purchasing Card Agreement

The cardholder receives the card after completing training and signing the Purchasing Card Agreement. See below for agreement conditions.

USING THE CARD

A cardholder is responsible and accountable for purchases made.

Procedures

Give the purchasing card or purchasing card number to the vendor when the order is placed. Request that the vendor include any applicable discounts.

Shipping

Encourage the vendor to ship the material in accordance with University shipping procedures and discount contracts. See 80.28.

To WSU Pullman

For orders shipped or mailed to a WSU Pullman department, instruct the vendor to include a departmental attention name, the name of the department, and a notation that the transaction is a purchasing card transaction. See the label template below for WSU Pullman:

Label

WSU/ (Department Name)/(Room Number, Building)
(Name of Recipient)
100 DAIRY ROAD
PULLMAN, WA 99164-1120

NOTE: Instruct the vendor to not display the purchasing card number on the outside of the package.

When departmental delivery information is not on the shipping label, Central Receiving attempts to determine the identity of the recipient. If the identity is not determined, Central Receiving may return the package to the vendor.

Receipt/Invoice/Packing Slip

Each purchase must be supported by itemized documentation of purchase, e.g., receipt, invoice, packing slip from the vendor, or web/e-mail confirmation.

The itemized documentation of purchase must include each of the following:

• Vendor's name,
• Unit prices,
• Itemized description of items purchased,
• Total amount of purchase, and
• Date of purchase.

If the receipt includes the total purchase amount only, attach a detailed packing slip or detailed invoice to the receipt. 

NOTE:Instruct the vendor to send the itemized documentation of purchase directly to the department and not to Accounts Payable.

Log the Purchase 

The card reconciler immediately records the transaction on the Departmental Monthly Log Sheet. Go to 70.08.12 to obtain a log form.

Review the Purchase

The issuing bank notifies the card reconciler by e-mail of each charge as it posts to the purchasing card account. The card reconciler then promptly:

• Locates the itemized documentation for the charge.


• Verifies that the charge is authorized.


• Determines whether or not the merchandise is received.


• Enters budget/project coding, object/subobject, tax amount, shipping amount, description, and transaction notes in the online reconciliation system provided by the bank.


• Marks the transaction as Reviewed in the online reconciliation system if the merchandise is received, in order to authorize Accounts Payable to expense the charge; OR

Saves the transaction detail information entered into the online reconciliation system; and

Marks the transaction as Reviewed at a later time, after receipt of merchandise is confirmed.

• Completes the transaction's entry on the purchasing card monthly log sheet, including the transaction ID number, delivery date, and online review date.

Equipment Purchases

The card reconciler is to code as object 03 those equipment items costing less than $5,000 each using the object/subobject dropdown screen. EXCEPTION: The card reconciler uses object 16 for laptop computers, weapons, and vehicles costing less than $5,000. The card reconciler uses the split coding function if the transaction includes purchases from more than one object, e.g., objects 03 and 16.

See 20.50 for inventory procedures.

Tax

When reviewing a transaction, the card reconciler determines whether or not tax has been charged. If sales tax and/or shipping and handling are specifically itemized on the vendor's itemized documentation of purchase, the card reconciler adds them online. If the purchase is tax exempt, the card reconciler marks the "Tax Exempt" box and adds an explanation. NOTE: Do not delete data in the tax location field, even if the expenditure is tax exempt.

Processing the Charge

After the card reconciler marks the charge as Reviewed, Accounts Payable downloads the transaction and expenses the purchase in the WSU online AIS Balances application (see 85.33).

Charges Not Reviewed

On the fifth business day of each month, the card reconciler is expected to have reviewed all of the previous month's charges or to have provided transaction notes explaining any delay in online review. NOTE: Accounts Payable may expense unreviewed charges to the default account (budget/project).

RECEIPT OF MATERIALS

The cardholder or other department staff receive and inspect the goods purchased with the purchasing card. See below for information regarding disputes/discrepancies. See 70.14 for information regarding damaged shipments and returning merchandise.

EQUIPMENT

Property Inventory contacts the department's equipment coordinator when equipment meeting inventory guidelines is purchased with a purchasing card. See 20.50 for inventory procedures.

RECONCILIATION

The purchasing card issuing bank prepares a monthly statement of expenditures for each card. The responsible card reconciler compares the statement with the itemized documentation of purchase indicated on the Departmental Monthly Log Sheet. The card reconciler is responsible for reconciling this statement within ten working days of receipt of the monthly statement.

The card reconciler is also responsible for reconciling the monthly log sheet entries against the online Account Balances/Detail Application (BALANCES) or hard-copy Budget Statement. See 30.06, 30.07, and 85.33. Discrepencies should be investigated and documented.

Disputes/Discrepancies

The card reconciler is responsible for interacting with the vendor and the purchasing card issuing bank to resolve disputes and discrepancies between the statement and departmental records. Disputed items are noted in the online purchasing card reconciliation system and entered onto the Departmental Monthly Log Sheet and remain pending until processed by the purchasing card issuing bank.

Approval

After the card reconciler completes the reconciliation, he or she routes the Departmental Monthly Log Sheet, the monthly statement, and receipts to the department's approving official. (The approving official has supervisory or managerial responsibility for departmental accounting and has expenditure authority for all accounts supporting the listed purchases.)

The approving official reviews the reconciliation. He or she signs the Departmental Monthly Log Sheet if the reconciliation is correct and the purchases are appropriate and allowable.

If the approving official does not have expenditure authority for all listed accounts, additional applicable expenditure authority signatures must be obtained.

Records Retention

Attach the itemized transaction documentation to the Departmental Monthly Log Sheet, and the monthly statement. These documents are the University's official record of the transactions and are to be retained in the department for six years after the end of the current fiscal year. See 90.01 for retention procedures and schedules. NOTE: Failure to properly retain all documentation is a policy violation subject to one or more of the consequences listed below.

CARD MAINTENANCE

Lock Cards

The department is responsible for keeping cards in a locked drawer or security box when not in use.

Temporary Card Assignment

The cardholder may temporarily allow another departmental employee to use the purchasing card for an individual transaction by completing the steps below:

• Train the designee in the appropriate use of the purchasing card.


• Complete a Purchasing Card Temporary Delegation form. See the form master on 70.08.14. Both the cardholder and the designee must sign the delegation form.

The designee presents the signed delegation form to the vendor at the time of purchase. The cardholder retains the a copy of the signed delegation form with the itemized documentation of the transaction.

• Log the checkout and return of the purchasing card on the Purchasing Card Checkout Log Sheet. Print the form master on 70.08.15 to obtain copies of the check-out sheet.

Either the cardholder or card reconciler keeps the checkout log for each card and records the following information:

The date and time of card checkout,

The name of the designee,

The card number, and

The date and time of card return.

Lost, Stolen, Misplaced

The cardholder immediately reports lost, stolen, or misplaced cards to Purchasing Services; telephone 335-3541. Purchasing Services cancels the card with the card-issuing bank.

The card reconciler monitors charges from the missing card using the online transaction reconciliation system provided by the issuing bank. The cardholder identifies any unauthorized charges and certifies that the charges are fraudulent.

POLICY VIOLATIONS

The following actions violate University policy.

• Purchasing prohibited items with the card or making purchases from prohibited classes of vendors. (See lists above.)


• Purchasing items for personal use.


• Failure to review purchases online timely, as required.


• Failure to reconcile the monthly statement and approve the Departmental Monthly Log Sheet within ten working days of receiving the monthly statement.


• Failure to maintain complete documentation, including statements, logs, and itemized documentation of purchase for the required retention period.


• Failure to safeguard and properly monitor the locations of departmental purchasing cards.

Consequences

The University may take any or all of the following actions for violations of University purchasing card policies:

• Purchasing Services may issue a written warning to the cardholder with copies to the responsible department chair and card reconciler.


• Purchasing Services may suspend or cancel the card.


• Purchasing Services may require that the cardholder receive additional training before a card is reinstated or reissued.


• The central administration or responsible department may report the violation to the appropriate vice president and/or the Office of Internal Audit.


• The University may pursue employee termination or criminal prosecution. Additionally, the University may take appropriate recovery actions permitted by law.

CARD CHANGES

If the departmental administrator determines that changes are required regarding the card, department personnel complete a Purchasing Card Change Request. The form is available at 70.08.13. Process the following changes with the Purchasing Card Change Request:

• Cancelling or temporarily suspending card.
• Increasing number of daily transactions or monthly limits.
• Changing cardholder's last name.
• Changing e-mail notifications or statement mailing address.
• Changing the default object/subobject or account.

Card Cancellation

Purchasing Services notifies the department when the account/card has been cancelled. The department is responsible for collecting and destroying the cancelled card.

Transfer or separation of a card-holding employee requires card cancellation. (See 60.74.)

REVIEW/AUDIT

All transaction records are subject to review by University officials and auditors, including:

• The card reconciler;
• The departmental approving official;
• Accounts Payable personnel;
• Purchasing Services personnel;
• Staff of the Office of Internal Audit;
• State of Washington Auditors.

CARD AGREEMENT

When the card is issued, the cardholder or card reconciler signs a Purchasing Card Agreement. The Agreement includes the following conditions:

• I understand that by using the Purchasing Card, I will be making financial commitments on behalf of Washington State University and that the University will be liable for all charges made with the Purchasing Card.


• I will strive to obtain the best value for the University when purchasing merchandise with the Purchasing Card.


• I agree to use the Purchasing Card only for authorized purchases and in an appropriate manner as defined in the Purchasing Card Handbook and the Business Policies and Procedures Manual. I understand the section entitled "Prohibited Transactions."


• I understand that should I make an unauthorized purchase with the Purchasing Card or use the Card in an inappropriate manner, I may be subject to disciplinary action including card cancellation, termination of employment at Washington State University, and criminal prosecution.


• I understand that the University will monitor and audit my use of the Purchasing Card.


• I understand that the Purchasing Card remains the property of the issuing bank and that I am accountable for activity on the Card. I agree to return the Purchasing Card immediately upon transfer to a different department, termination of employment at Washington State University, or at the request of the Purchasing Card Administrator.


• I understand that it is my responsibility as a cardholder to: make purchases, collect detailed receipts, and follow up on disputed charges with merchants and/or the issuing bank.


• If my responsibility also includes the role of a card reconciler, I understand that it is my responsibility to: collect and retain detailed receipts, maintain a monthly log sheet, approve charges online according to the time schedule set by the University, follow up on disputes and suspected fraud with merchants and/or the issuing bank, and reconcile the monthly account statement and expenses in BALANCES.


• I agree to abide by the ethics guidelines set forth in the Business Policies and Procedures Manual. See 10.21, 10.22, 20.37, and 70.15.

See the PDF forms:
70.08.11: Purchasing Card Application,
70.08.12: Departmental Monthly Log Sheet
70.08.13: Purchasing Card Change Request,
70.08.14: Purchasing Card Temporary Delegation, and
70.08.15: Purchasing Card Checkout Log Sheet
Complete and/or print as needed.