Purchasing Card Policy

Process Owner

Vice President of Contracts, Pricing, and Procurement

Purpose

To describe the American Express Purchasing Card Program (P-CARD) and to establish guidelines for the use of the P-CARD.

Policy

The Purchasing Card (P-CARD) is a tool for acquiring goods and services. Cardholders are authorized to buy directly from suppliers, eliminating the need for Purchase Requisitions (PR), Purchase Orders (PO), and Receiving Reports (RR).

The P-CARD is issued in an employee’s name and is not to be confused with the Travel Credit Card that may also have been issued to the employee for business travel purposes. These programs are completely separate and distinct. Travel and related incidental expenses must not be charged to the P-CARD, e.g., lodging, restaurant/food expenses, airfare, car rental, gasoline or oil.

The P-CARD works like an individual personal credit card. The cardholder purchases materials directly from suppliers, the supplier invoices and receives payment from the P-Card administrator and then sends consolidated monthly invoices to GovC.

The use of the P-CARD is intended to help reduce overhead costs as well as improve delivery cycle time of materials. Utilizing the P-CARD allows the requester to interface directly with the supplier without procurement department intervention, and reduces the volume of purchase requisitions, purchase orders and receiving reports.

Use of the P-CARD will also result in lower costs by reducing the number of supplier invoices to be processed.

The P-CARD is a charge card for employees to purchase low dollar, non-complex, i.e., off-the-shelf or standard, goods and services. Cards are embossed with the employee’s name but financial responsibility for charges to the P-CARD rests with the company. Examples of items that may be procured using the P-CARD are:

Acceptable Purchases

• Computer hardware, accessories and off the shelf PC software. • Machinery and equipment • Factory/facility supplies • Auto repair/parts • Medical supplies • Subscriptions and technical books • Uniforms • Graphic services • Tooling • Office supplies • Training/seminars

Not Acceptable Purchases

Supplies and/or services that may not be procured using the P-CARD are: • Travel and travel-related expense • Entertainment • Business Meals • Items requiring inspection at time of receipt • Capital assets • Contractor acquired property • Hazardous materials • Subcontractor or consultant effort • Telecommunications • Long term, leased items such as fax machines, copiers, pagers, cell phones, and telephones. • Items for personal use

This policy establishes P-CARD limits, for both per-transaction and monthly use. These limits may not be exceeded however, under special circumstances, monthly limits may be increased, on an individual basis, for certain P-CARD holders.

Issuance of P-CARDs is authorized by the business unit’s Vice President of Contracts, Pricing, and Procurement who is empowered, to delegate signature authority within the business unit for all binding commitments. The BU's P-CARD Administrator will coordinate with the BU VP/Director of Contracts, Pricing and Procurement to ensure procurement authority has been formally delegated and documented prior to the issuance of P-CARDS.

P-CARD holders are authorized to make commitments on behalf of the company only through the P-CARD and within the limits of the P-CARD's established individual transaction and monthly dollar limits. All procurement personnel having signature authority, including P-CARD holders, are bound by company Standards of Business Conduct and all applicable policies and procedures. All authorized cardholders shall be included in the business unit’s Delegation of Signature Authority.

Standard per-transaction expenditure limits are established as follows:

a) $5000 for indirect purchases – to meet capitalize asset requirements

b) $2500 for direct purchases – to meet FAR requirements; FAR 2.101, FAR 13.201, FAR 13.303-1

Note: A transaction is defined as a purchase from a single supplier and may consist of one or more items. Per-transaction limits may not be circumvented by splitting orders. P-CARD holders who violate this restriction may be subject to P-CARD forfeiture

The established standard monthly limit is $10,000. The monthly limit is the maximum dollar amount authorized for a cardholder within a 30-day period. This limit is reset automatically the day after the billing date, which occurs on the 29th of each month.

Note: P-CARD holders who find, through experience, that this monthly expenditure limit is too restrictive may request from their managers.

P-CARD holders must immediately notify the PC issuer, and their managers in the event of unauthorized use, loss, theft, or damage to a card.

Responsibilities

Business Operations/P-CARD Manager is responsible for the primary interface with PC issuer and is responsible for the issuance/cancellation of P-CARDS and management of the various control accounts. The P-CARD Manager works with the BUAs to ensure all charges are cleared on a monthly basis and that necessary backup documentation is one file for audit purposes. The P-CARD Manager is responsible for:

• Management and accountability of the Purchasing Card program.
• Coordinating issuance of new and cancellation of old cards. Immediately notifies the P-Card issuer in the event of unauthorized use, loss, theft or damage to a card.
• Maintaining list of employees issued a P-CARD.
• Assisting cardholders in resolving billing disputes with suppliers, if requested.
• Establishing procedures for employee use and conducting random audits to ensure compliance with established controls, policies and procedures.
• Submitting a monthly, consolidated transaction log to the Accounts Payable.
• Developing and administering cardholder training program.

Each P-CARD Holder is responsible for ensuring compliance with this policy. Each P-CARD card holder is responsible for:

• Logging each AMEX transaction in accordance with the IT sector’s Procurement Shared Services Policy. • Submitting monthly AMEX log to IT sector’s Procurement Shared Services. • Provide correct distribution for account charging. • Notifying IT sector’s Procurement Shared Services in the event of transfer or termination • Notifying IT sector’s Procurement Shared Services of any misused, lost, or stolen cards

The IT sector’s Accounts Payable Shared Services is responsible for:

• Receipt and payment of Amex invoices • System interface with applicable IT sector financial systems.

The Sector VP Finance ensures that both sector and business units have adequate procedures in place to run the P-CARD program efficiently and protect the financial integrity of the program.

The Sector Director of Finance is responsible for protecting the financial integrity of the program by monitoring balance sheet accounts and working with the business unit managers to ensure unreconciled balances are not accumulating.

The Business Unit Administrator (BUA) is responsible for ensuring this policy is properly implemented at the BU and that adequate qualified staff is in place to support the P-CARD program. The BUA is also responsible for:

• Receiving and processing P-CARD applications
• P-CARD cancellations
• Monitoring control accounts for unreconciled charges
• Obtaining BU VP/Director of Contracts, Pricing, and Procurement's approval of P-CARD limit increases and ensuring that all P-CARD holders have received this individual's formal delegation of authority prior to P-CARD issuance.
• Interfacing with P-CARD holders delinquent in their monthly reporting
• Providing documentation/support for P-CARD audits