Policy 5216 - Purchasing Card (LaCarte)
Revision Date: 8/3/2012
Responsible Office: Purchasing Officer
Reference: BJ 2010-16
Louisiana Tech University has entered into an agreement with the State of Louisiana and Bank of America that provides qualified employees with a Visa Purchasing Card to purchase low cost materials and services. Using the Purchasing Card benefits the University and its vendors through:
- Prompt payments to vendors
- Reduced processing costs and paper flow
- Controlled decentralization of Purchasing
The Purchasing Card will provide the University with a system which is efficient, flexible, and convenient for departments purchasing goods and services directly from vendors for transactions up to $5,000. The Purchasing Card simplifies the way in which departments may order small dollar goods and services from vendors that accept the Visa credit card.
The Purchasing Card program is designed to delegate the authority and capability to purchase small dollar items directly to the end user or department. Use of the Card will enable cardholders to purchase non-restricted items directly from vendors without the issuance of a requisition or a purchase order.
As a State agency, Louisiana Tech University is bound by certain State and Federal regulations and laws. To ensure compliance with these requirements, cardholders must adhere to the guidelines outlined in the application and cardholder agreement. The policies in the application and agreement, as well as any revisions by the Purchasing Department, pertaining to the program must be followed when using the Purchasing Card.
- Cycle - The period of time between billings. For example, the State of Louisiana P-Card
closing period ends at midnight the 5th of each month. Synonymous with "billing cycle".
- Cycle Limit - Maximum spending (dollar) limit a P-Card/CBA is authorized to charge
in a cycle. These limits should reflect the individual's purchasing patterns. These
are preventative controls and, as such, should be used judiciously.
- MCC Code (Merchant Category Code) - A standard code the credit card industry used
to categorize merchants based on the type of goods or services provided by the merchant.
A merchant is assigned an MCC by the acquiring bank.
- Merchant - A business or other organization that may provide goods or services to
a customer. Synonymous with "supplier" or "vendor".
- SPL (Single Purchase Limit) - The maximum spending (dollar) limit a P-Card is authorized
to charge in a single transaction. The SPL limit may be up to $5,000; however, this
limit should reflect the individual's purchasing patterns. These are preventative
controls and, as such, should be used judiciously. Purchases shall not be split with
the intent of and for the purpose of evading the P-Card single purchase limit set
- P-Card - A credit account issued in an employee's name. This account is direct liability
of the State and is paid by each agency. P-Card accounts are an alternate means of
payment for purchases of goods and services.
- Transaction - A single purchase. A credit also constitues a transaction.
- Transaction Documentation - All documents pertaining to a transaction. The documentation is also used for reconciliation at the end of the billing cycle and is to be retained with the monthly reconciliation documentation for review and audit purposes. Examples of transaction documentation include, but are not limited to: itemized purchase, receipts/invoices, receiving documents, credits, disputes, and written approvals. If travel has been approved, documentation should also contain airline exceptions, justifications, approvals, travel authorization, travel expense, etc.
PURCHASING CARD CARDHOLDER’S GUIDE
- Louisiana "LaCarte" Purchasing Card
Louisiana "LaCarte" Purchasing Card is a Visa Card used by Louisiana Tech University employees to purchase materials and services up to $5,000 per transaction (including shipping and handling). It is the preferred purchasing tool used to purchase low cost materials and services.
- How your card may be used
Your card may be used for any purchase of materials and services provided that
- the transaction does not exceed $5,000, including shipping and handling charges;
- the transaction does not fall within one of the merchant groups/spending categories excluded by cardholder request;
- the transaction does not involve a purchase of one of the types listed in Exhibit I.
- Purpose and Benefits of Using the Purchasing Card
- To simplify and reduce costs of the purchasing and payment process for material orders and services under $5,000 where applicable. The cardholder uses the card to make the purchase from suppliers without completing purchase orders or requisitions. All necessary service contract procedures must be followed; only the method of payment has changed.
- To simplify and reduce the number of invoices processed by Accounts Payable. One monthly invoice is paid to Bank of America versus handling large volumes of low dollar invoices.
- The Purchasing Card process pays the suppliers within two business days of requesting payment for merchandise provided.
- Purchasing Card Cycle
- Suppliers receive remuneration from Visa within two business days of requesting payment for merchandise provided.
- Statements are received each month. Cardholder reviews statement for appropriate charges, attaches receipts for each charge, signs statement and forwards statement to the Purchasing Office.
- Louisiana Tech University remits payment to the Bank of America by the 30th business day of each month.
- Individual charge transactions are received electronically each month and down loaded into the University’s Accounting system to allow charges to be posted to each cardholders FIS account.
- Louisiana "LaCarte" Purchasing Card
- Cardholder’s Responsibilities
- General Responsibilities
- The card is used for payment of materials and services under $5,000 (including shipping and handling charges). The transaction and credit limits on the card have been approved by the University Purchasing Department. The Purchasing Card delegates the expenditure and purchasing authority, less than $5,000, to the authorized cardholder.
- The cardholder will prepare the statement each month indicating approval of and providing general ledger coding for each transaction. Cardholder will attach to this record appropriate supporting documentation of each transaction.
- The Purchasing Card remains the property of Bank of America. It may not be transferred, assigned to, or used by anyone other than the designated cardholder. The cardholder will surrender the Purchasing Card upon request to Louisiana Tech University or any authorized agent of Bank of America.
- Louisiana Tech University retains the right to cancel a cardholder’s privileges. Cards may be revoked for misuse or non-compliance with procedures and/or the Cardholders Agreement.
- State sales tax should not be charged on card purchases. Cardholders should make every effort at the time of purchase to avoid being charged state sales tax. Please notify the vendor BEFORE the purchase is rung up that your card is tax exempt. In the event state sales tax is charged, it is the Cardholder’s responsibility to have the vendor-merchant issue a credit to the Cardholder’s account.
- Expiring Purchasing Cards will automatically be replaced/renewed prior to the expiration date by Bank of America. All replacement/renewed cards will be sent to the Agency's program administrator.
- The Cardholder is also responsible for maintaining the security of card data such as the account number, the expiration date, and the card verification code (CVV), the 3-digit security code located on the back of the card.
- Never accept cash in lieu of a credit to the purchasing card account.
- Ordering and Receiving of Materials and Services
The cardholder is responsible for ensuring receipt of materials and services, and resolving any receiving discrepancies or damaged goods issues. (For disputes or questions, see item F.)
- Ask the supplier if they will accept Visa.
- The card is used for payments under $5,000. Ask the supplier to calculate the total
value of the order, including shipping & handling charges and freight costs. If the
total charge is over $5,000 the card cannot be used.
- Do not split a transaction into two or more transactions to get below the single transaction limit.
- Exception to this policy may require cancellation of your card.
- Obtain from the supplier a sales receipt or invoice which itemizes the order. Retain this documentation for matching with your monthly statement.
- The Cardholder shall never send a copy of the P-Card if requested by a merchant. If this is required for payment, then the cardholder must use another form of payment other than the State Liability Card.
- Telephone Orders
- Provide the supplier with your complete shipping instructions including name, street address, and internal location information.
- Instruct the supplier to include in the delivery package a sales receipt, invoice, or the Purchasing Card charge slip itemizing the order.
- Instruct the supplier to send any sales receipt or invoice directly to you rather than the Accounts Payable Department. This will avoid the possibility of having the same invoice paid twice.
- If Approval is Denied
- If a supplier advises that card approval has been denied, it is most likely a violation
of one the established levels of authority checks.
- Example – the purchase exceeds the single transaction limit of $5,000
- Example – the account is over the monthly number of transactions limit and/or spending limit.
- Example – the purchase is a violation of a Merchant Group/Spending Category code or a Merchant Category Code to which access is prohibited.
- The supplier will not have information related to the reason for denial, nor does
the cardholder have the authority to obtain this information. If a transaction is
denied, the cardholder should contact the Purchasing Department for assistance.
The Purchasing Department will contact the proper persons, obtain information on the denial and coordinate resolution of the issue.
- If a supplier advises that card approval has been denied, it is most likely a violation of one the established levels of authority checks.
- Reconciliation and Approval Process
- Primary responsibility for the reconciliation and approval process rests with the cardholder of each department.
- Statements are received by each cardholder on a monthly basis.
- Compare the transactions on the statement with the actual sales receipts, invoices, credit card slips, etc. (supporting documentation).
- Verify each transaction as to date, vendor and amount by matching to the supporting documentation.
- Attach to the statement, supporting documentation for all transactions listed on the record. Also, attach Disputed Items Report(if applicable).
- Cardholder must sign statement certifying agreement with the Legitimacy and accuracy of the listed transactions. The statement must also be signed by the Department Head and Dean (if applicable). These signatures will be a certification by the signers that all charges are accurate and valid University expenditures. The cardholder should retain a copy of the statement.
- Submit statement with supporting documentation, Disputed Item Report (where applicable)
to the Purchasing Department WITHIN FIVE DAYS OF RECEIPT OF MEMO STATEMENT.
STATEMENTS NOT RECEIVED WITHIN 10 DAYS WILL RESULT IN CANCELLATION OF CARD.
- For disputed or questioned items – See item F.
- Personal expenses charge on card
- Personal usage of card is NOT ALLOWED.
- Violations may result in cancellation of your card.
- Never put the full P-Card account number in emails, fax, reports, memo, etc. If designation of an account is necessary, only use of the last four or eight digits of the account is to be allowed.
- Disputed and Questioned Items
- The cardholder is responsible for ensuring receipt of materials and services, and resolving any receiving discrepancies or damaged goods issues.
- Cardholder is responsible for settling any disputes, clearing erroneous charges and requesting credit for returned merchandise directly with the supplier.
- Cardholder should contact supplier to resolve any outstanding issues. Most billing problems can be resolved expeditiously in this manner.
- If cardholder is unable to reach agreement with supplier, the Disputed Item Form must be submitted and forwarded to the Purchasing Department. Bank of America must be notified in writing of any unresolved disputed item within sixty (60) days of the date of the statement on which the questioned item appears.
- Cardholder should indicate on statement that an item is in dispute and attach a copy of the Disputed Item Form.
- Purchasing Department will forward Disputed Item Reports to Bank of America and assist cardholder in resolving disputed and ensuring that proper credit is given on subsequent statements.
- Never make a payment directly to the bank in the event that an unauthorized charge is placed on the individual's state corporate liability P-Card. If the payment is made directly to the bank, it will cause the monthly statement billing file to be out of balance and agency will have to determine the cause. Ultimately, it will be determined that a personal payment was made; therefore, report any unauthorized changes to your program administrator immediately.
- Lost or Stolen Cards
- Report any lost or stolen cards immediately to the Bank first and then the Purchasing Department. The bank will immediately cancel the card and forward a replacement card within three to five business days.
- To report lost or stolen cards:
- Termination of Employment or Extended Leave Employees must notify the Purchasing Department in writing upon termination of employment or extended leave from the university. Please give the Purchasing Department ample notice so that your card may be cancelled. Please cut up your purchasing card and include it with your letter. PLEASE DO NOT SEND THE LETTER AND CARD IN THE CAMPUS MAIL.
- Card Misuse
- Fraud Purchases - any use of the P-Card which is determined to be an intentional attempt to defraud the state for personal gain or for the personal gain of others. An employee suspected of having misused the P-Card with the intent to defraud the state will be subjected to an investigation. Should the investigation result in findings which show that the actions of the employee have caused an impairment to the state service, and should those findings be sufficient to support such action, the employee will be subject to disciplinary action. The nature of the disciplinary action will be the prerogative of the appointing authority and will be based on the investigation findings and the record of the employee. Any such investigation and ensuing action shall be reported to the Legislative Auditor and the Director of the Office of State Purchasing and Travel.
- Non-Approved Purchase - a purchase made by a State Cardholder for which payment by the state is unapproved. A non-approved purchase differs from a fraud purchase in that it is a non-intentional misuse of the P-Card with no intent to deceive that agency for personal gain or for the personal gain of others. A non-approved purchase is generally the result of a miscommunication between a supervisor and the Cardholder. A non-approved purchase could occur when the Cardholder mistakenly uses the P-Card rather than a personal card. When a non-approved purchase occurs, the Cardholder should be counseled to use more care in handling of the P-Card. The counseling should be in writing and maintained in the employee's file for no longer than one year unless another incident occurs. The employee should be made to pay for the item purchased inappropriately. Should another incident of a non-approved purchase occur within a 12-month period, the appointing authority should consider revocation of the P-Card.
- Merchant Forced Transactions - Commercial cards are accepted by a variety of merchants
that process transactions only if approved by the issuing bank thereby abiding by
the card controls in place. Processing transactions are administered as follows: Merchants
processing transactions is typically a two step process:
- Merchant authorizes transactions against card controls (MCC, limits, exp date, etc.) and if approved receives an authorization number.
- Merchant submits the transactions for payment from the bank.
- In rare instances, merchants will circumvent the authorization process and only perform step 2. This means that the merchant didn't authorize the transaction against the card controls and therefore did not receive an authorization number.
- If this does happen, the merchant has forfeited all dispute rights and the transaction can be disputed and unless the merchant can provide a valid authorization number, the dispute will be resolved in the cardholder's favor.
- Card security - Each Cardholder is responsible for the security of their card, and
- Never display their Card Account Number around their work area.
- Never give his or her Card Account Number to someone else without his or her Program Administrator's permission.
- Never email full account numbers under any circumstances.
- General Responsibilities
LOUISIANA TECH UNIVERSITY
RESTRICTIONS ON CARD USE
The Purchasing card MAY NOT BE USED for the following purchases:
- Alcoholic beverages
- Cash advanced, cash instruments, cash refunds
- Computer purchases (such as netbooks, computers, iPads or other computing devices)
- Consultants and speakers fees/honorariums
- Controlled substances (prescription drugs, narcotics, etc.)
- Entertainment costs – ski tickets, tours, etc.
- Food & meals
- Personal purchases
- Travel (gas stations, lodging, restaurants, airline tickets, conference registrations, etc)
- Gift Cards/Gift Certificates
The Cardholder shall:
- Assure that Purchasing Card transactions are not artificially split in order to circumvent the single purchase limit.
- Assure that the items purchased are required for bona fide University purposes (no personal expenses).
- Assure that the prices paid are fair and reasonable.
- Notify the merchant that the purchase if being made in the name of the University which is exempt from state and local taxes.
- Obtain transaction receipts from the merchant or vendor each time the Purchasing Card is used.
- Assure that all items are received (no back orders are allowed)
- Assume personal responsibility for all purchases made with the card.
- Assure that the information provided is correct in all respects.
STEPS IN OBTAINING A PURCHASING VISA CARD
- Visa applications can be picked up in the Purchasing Department or obtained on our website.
- Complete application and return to Purchasing.
- Application will be sent to Bank of America.
- Visa card will be sent directly to the Purchasing Office in approximately 3 - 5 days (if the card is sent directly to the department, please inform Purchasing immediately).
- The Cardholder will be trained prior to receipt of card.
- The Cardholder will be required to pick up their card and sign a Purchasing Cardholder’s Agreement.
- Cardholder should sign the Purchasing Card immediately upon receipt.