UM Purchasing Card's User Guide

PREFACE

1. OVERVIEW OF PURCHASING CARD PROGRAM 1.1 PURPOSE
1.2 BENEFITS
1.3 THE CREDIT CARD COMPANY

2. WHERE TO GET HELP

2.1 USBANK (FCNB)
2.2 UM DEPARTMENT OF PROCUREMENT AND SUPPLY
2.3 OFFICE OF THE COMPTROLLER

3. CARDHOLDER POLICIES AND PROCEDURES

3.1 OBTAINING PURCHASING CARDS
3.2 KEEPING PURCHASING CARDS SECURE
3.3 SALES TAX EXEMPTION
3.4 STATE OF MARYLAND RESTRICTIONS ON ALL CARDS
3.5 PROCUREMENT REGULATIONS
3.6 RENEWAL
3.7 SURRENDER OF CARD
3.8 CHANGING CARD LIMITS & UPDATING CARDHOLDER INFORMATION

4. HOW TO USE THE PURCHASING CARD

4.1 PURCHASES IN PERSON
4.2 PURCHASES BY TELEPHONE, FAX OR MAIL
4.3 RETURNS, DAMAGED GOODS, CREDITS

5. GENERAL RECONCILIATION INSTRUCTIONS

5.1 PURCHASING CARD STATEMENT GENERATED BY BANK OF AMERICA
5.2 PURCHASING CARD MANAGEMENT SYSTEM
5.3 RETENTION OF STATEMENTS & RECEIPTS
5.4 REVIEWS

6. DISPUTED TRANSACTIONS

6.1 DISPUTE WITH VENDOR
6.2 STATEMENT OF DISPUTED ITEM
6.3 RESOLUTION
6.4 REPORTING LOST/STOLEN CARDS

7. HELPFUL INFORMATION

7.1 FREQUENTLY ASKED QUESTIONS
7.2 QUICK REFERENCE

APPENDICES

A   Cardholder Agreement/ Cardholder Information Form
B   State of Maryland Tax Exempt Certificate
C   District of Columbia Tax Exemption Notice
D   Guidelines for UM Consultant Agreements
E   Guidelines for Small Dollar Furniture Purchases
F   Definition of Furniture
G   Account Maintenance Request Form
H   Sample Transaction Log
I     Sample Visa Statement
J    Instructions for Using Purchasing Card Management System (PCMS)
K   Requesting Access for Account Updaters Form
L    Statement of Disputed Item Form
M   Frequently Asked Questions
N   Reviewer Access
O   Quick Reference

UM PURCHASING CARD PROGRAM
USER’S GUIDE
PREFACE

By implementing the UM Purchasing Card, the University of Maryland is taking another step to provide departments more flexibility in making small dollar purchases up to $5,000 and to significantly reduce the paperwork and processing time.

The State of Maryland has directed that all State agency purchasing card programs are modeled after their program. Thus, this User's Guide sets forth policies and procedures consistent with the State's program. The State's policies and procedures are located on the Comptroller of Maryland's website at www.comp.state.md.us

The Purchasing Card is the University's primary tool for making small dollar purchases. Implemented campus-wide in 1998, this program has proven effective and efficient in making purchases within delegated purchasing authority. We welcome your feedback to ensure that the program meets the campus' needs.

1. OVERVIEW OF PURCHASING CARD PROGRAM back to top

1.1 PURPOSE

Most goods and services that researchers and educators require for their ongoing duties are within the $5,000 small purchase level. Such expenditures currently average only about $400. Given this fact, it makes sense that the University create streamlined small order procedures. The process must include fiduciary safeguards that enhance public trust. The UM Purchasing Card Program accomplishes that goal while significantly reducing necessary paperwork and processing time.

To take advantage of these benefits requires only that previously existing guidelines for purchases continue to be followed and that the purchases are made from vendors that accept VISA. As with all purchases it is appropriate to consider first those sources available under existing State of Maryland and UM contracts, however, the use of the card is by no means restricted to these contracts. The few exceptions are addressed in Section 3.4 and 3.5 of this guide. Otherwise, cardholders are encouraged to use the Purchasing Card for items appropriate to the legitimate needs of the University, within their Departmental guidelines.

REMINDER: THIS CARD IS NOT TO BE USED FOR PERSONAL PURCHASES OR AS PERSONAL IDENTIFICATION, UNDER ANY CIRCUMSTANCES.

1.2 BENEFITS back to top

The use of the Card will:

Allow employees to obtain many goods and services much faster and easier;
Significantly reduce paperwork and processing time in the employee’s department, as well as in Accounts Payable and Purchasing;
Provide cost savings through consolidated payment (one monthly payment to the State of Maryland covering All University of Maryland, College Park, purchasing card transactions versus individual vendor invoices).

Important benefits for vendors include:

Receiving payment in three business days.
Elimination of after-sale invoicing and collection activities.
No additional applications or paperwork necessary if they are already VISA merchants

1.3 THE CREDIT CARD COMPANY back to top

The program that UM has chosen is offered through a State of Maryland Contract with US Bank using the VISA card. The program is governed by the terms and conditions of a Master Agreement between the State of Maryland and US Bank. In most situations individual cardholders and departments will deal with the University's Purchasing Card Program Administrators (PCPA) in the Office of Procurement and Supply. Lost/stolen cards are reported to the PCPA and directly to US Bank.

2. WHERE TO GET HELP

2.1 US BANK (FCNB) back to top

To report a lost/stolen card call 1-800-344-5696 immediately.

The cardholder must call US Bank immediately upon discovering that the card has been lost or stolen. Help is available 24 hours a day. Also call the University's PCPA on the first available business day during normal business hours at (301) 405-5834.

2.2 UM Department of Procurement and Supply back to top Purchasing Card Program Administrator (PCPA):

Marty Newman
2113R Chesapeake Building, College Park, MD 20742
Phone: (301) 405-5834
FAX: (310) 314-9565 E-mail: menewman@purchase.umd.edu

The PCPA is responsible for the overall planning and administration of the purchasing card program, including assisting departments in determining how to use the purchasing card to fit their needs, planning and coordinating training, customer service, and post-audit review.

Please share suggestions for improving the UM Purchasing Card program including suggestions for training, this guide, and procedures with the PCPA.

Contact the PCPA for assistance in customizing the purchasing card program to best suit a department’s needs.

Assistant Purchasing Card Program Administrator (APCPA):

Kristina Libby
2113R Chesapeake Building, College Park, MD 20742
Phone: (301) 405-5839
FAX: (301) 314-9565
E-mail:klibby@purchase.umd.edu

The APCPA provides assistance to cardholders and handles the paperwork related new card applications, changes in cardholder information (name, mailing address, increase or decrease in limits, etc.), and disputed transactions. The APCPA also conducts post-audit review of transactions for compliance with purchasing card policies and procedures.

Contact the PCPA or APCPA for any problem with the card, such as rejected or disputed transactions.

Training and Credit Card Applications

Phone: (301) 405-5839
FAX: (301) 314-9565

Call Procurement and Supply at (301) 405-5839 to sign up for Department Purchasing Card Orientations or Cardholder Training. Most training sessions are held in 2104 Chesapeake Building. Arrangements may be made for training large groups at other locations.

Call this number for assistance regarding the paperwork for new card applications and changes in cardholder information (name, mailing address, increase or decrease in limits, etc.).

2.3 Office of the Comptroller back to top

Accounts Payable
4100 Chesapeake Building
Phone: (301) 405-2640
FAX: (301) 405-7544

Accounts Payable assists in resolving sales tax issues and any discrepancies where the VISA statement does not reconcile with the FRS statement.

3. CARDHOLDER POLICIES AND PROCEDURES

3.1 OBTAINING PURCHASING CARDS back to top

Cards are available to University employees after approval by their Department Head.

The Requester should complete the Cardholder Agreement and Cardholder Information Form (Appendix A), have it approved by the Department Head, and submit it to the APCPA. The APCPA will then obtain the required UM signatures and forward the application to the State of Maryland and US Bank. Each cardholder is required to activate the card by calling the Bank at the 1-800 number printed on the back of the card.

3.2 KEEPING PURCHASING CARDS SECURE
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Always keep purchasing cards and account numbers in a secure place. Just as personal credit cards need to be secure, treat University Purchasing Cards as if they were cash. Each cardholder is directly responsible for the physical security of their card and account information. No one other than the designated cardholder is authorized to use it for any purpose.

3.3 SALES TAX EXEMPTION
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The Purchasing Card states that UM is exempt from Maryland sales tax and lists the exemption number. All in-state and many out-of-state vendors honor this exemption. If required by the vendor a copy of the University's tax exempt certificate (Appendix B) may be provided. UM is also exempt from District of Columbia sales tax. The tax exempt number is 97411-001. A copy of the exemption notice is included in this guide as Appendix C). Please contact Accounts Payable at (301) 405-2640 if you need additional help regarding sales taxes.

3.4 STATE OF MARYLAND RESTRICTIONS ON ALL CARDS
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3.4.1 All Purchasing Cards have a $5,000 Single Purchase Limit unless a lower limit has been established by the cardholder’s Department Head.

3.4.2 Certain Merchant Category Code (MCC) Groups are prohibited from Purchasing Card use. This State restriction will be automatically invoked if applicable during the purchase authorization process.

These restrictions are:

Airlines and all transportation services (railroads, taxicabs, limousines, bus lines, boat rentals)

Amusement and Entertainment (Motion Picture Theaters, Bowling Alleys, Betting, Golf, Recreational Services, etc.)

Contracted Services (Unincorporated 1099 service providers)

Liquor & Restaurants Note that the State has removed food as a restricted purchase;* however, liquor stores and restaurants remain restricted.

Lodging (Hotels, Motels, etc.) is no longer restricted at the State level but is restricted at the University level. Hotels may be charged on the purchasing card if used to hold a meeting space, but shall not be used for lodging.

Personal Service Providers (Financial Institutions, Securities Brokers, Timeshares, laundry, photographic studios, etc.)

3.4.3 *Food purchases (from grocery stores and caterers, but not restaurants) are allowed within the delegated purchasing authority ($5,000) without approval from the Department of Dining Services. Documentation must be retained with the transaction log for all food purchases that identifies the name and purpose of the function and who attended it, by name or affiliation. Costs for alcoholic beverages are not to be included under any circumstance. University funds shall not be used to reimburse employees for meals during the course of normal working hours or to obtain food for such meals, office parties, retirement receptions, etc., except with the written approval of the President or his designee.

3.4.4 Cash Advances are strictly prohibited

3.4.5 Although the University of Maryland has set no additional restrictions beyond the State's limits, the program includes the flexibility to personalize individual cardholder authorizations in the areas of credit limit and single purchase limit. Any additional authorization controls are to be indicated on the Cardholder Information Form. Please call the PCPA for assistance.

3.5 PROCUREMENT REGULATIONS back to top 3.5.1 All purchases must be made in accordance with applicable laws and regulations, including, but not limited to the University System of Maryland and University of Maryland policies and procedures which are found in summary form on the Procurement & Supply's website located at www.purchase.umd.edu.

3.5.2 As with current Maryland purchasing laws and regulations, "stringing" or splitting purchases to avoid the single transaction limit is prohibited.

3.5.3 No vendor contract documents are to be signed by campus department representatives. Such documents must be reviewed and signed by authorized Procurement and Supply officials.

3.5.4 Consultant agreements may be issued at the department level and payment may be processed using the UM purchasing card. Refer to Appendix D for guidelines to UM consultant agreements.

3.5.5 To the extent campus internal auxiliary units cannot meet the needs, the State of Maryland purchasing regulations require the University to support State socioeconomic preference programs such as using State Use Industries (SUI for furniture and printing), Blind Industries, Sheltered Workshops, State certified minority and small vendors. If in a particular circumstance, the department deems it necessary to purchase from a vendor outside the Maryland preference programs, proper documentation should be submitted to Procurement & Supply on a long form requisition or retained with the transaction log as cited in Appendix E. Cardholders may purchase office furniture from vendors other than SUI under certain circumstances. Please refer to Appendix E for specifics.

For cardholders' convenience, a definition of furniture, defined by what furniture items are available from State Use Industries, is included in this guide (Appendix F).

3.6 RENEWAL
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The PCPA will insure that all cards are re-issued prior to their scheduled expiration dates. The Department is encouraged to review the previous year's card usage prior to this time. Additional records regarding usage can be made available by the PCPA. The Department may terminate card usage at any time. The PCPA is authorized to terminate individual purchasing cards for just cause.

3.7 SURRENDER OF CARD
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Cards remain the property of US Bank and must be surrendered immediately upon termination of employment, or upon request for any reason by an authorized person (such as your supervisor or the PCPA). The surrendered card must be cut into a minimum of four pieces when surrendering it. Surrendered cards are to be forwarded to the APCPA (a completed maintenance form may be sent with the surrendered card, see Appendix G).

3.8 CHANGING CARD LIMITS & UPDATING CARDHOLDER INFORMATION
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Card limits and other information such as name change, address, phone may be changed by the appropriate departmentally authorized person by forwarding a Maintenance Request Form to the APCPA with the new information (Appendix G).

4. HOW TO USE THE PURCHASING CARD
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Please note that the cardholder is the only person authorized to make purchases using his/her card. Giving a card or card number to another person to make a purchase, using someone else's card, or making unauthorized purchases may result in disciplinary action (including, but not limited to, revocation of the card and/or termination of employment). The Cardholder is liable to the University and the State of Maryland for the proper use of the card.

If a frequently selected vendor does not accept VISA, please notify the APCPA so that the vendor may be offered the opportunity to do so. All VISA merchants are required to offer the same pricing for VISA card purchases as for any other means. Cardholders should ask for University of Maryland discounts.

4.1 PURCHASES IN PERSON

Follow the same UM and departmental internal procedures as in the past to obtain authorization to make a purchase.
Determine whether the Purchasing Card is the most appropriate tool for use for that purchase (check the list to be sure it’s not a restricted item, and determine whether a State or University contract is available).
Be certain that the total amount (including all shipping, handling, postage, freight, etc.) will not exceed your card’s single purchase limit or any other limits that your department may have set.
Request any University or educational discounts.
Advise vendor that UM is tax exempt.
Obtain a detailed receipt at the time of purchase clearly identifying each item purchased.
Follow internal departmental instructions regarding recording the purchase, including use of Appendix H, Cardholder Transaction Log, and keep all receipts with the Log in a secure place.

When receiving the goods, whether via direct delivery or in person, always retain all boxes, containers, special packaging, packing slips, etc. until you are certain you are going to keep the goods. The Cardholder or designee is responsible for verifying quantity and condition of the goods upon arrival. Refer to Section 4.3 for instructions about returning an item.

4.2 PURCHASES BY TELEPHONE, FAX OR MAIL

4.2.1 TELEPHONE

A written record must be made when placing a telephone order. The Cardholder Transaction Log (Appendix H) may be used to record this information or a separate record may be kept. You do not have to use the exact format provided, but all indicated information must be recorded. Store this record in the same manner that receipts are stored. This information will be invaluable during the account’s reconciliation process and must be available for audits.

ONLY the cardholder is authorized to place a phone order. You may, when necessary, have someone else pick up the goods (the person picking up the items should only sign shipping or receiving papers, not the credit card slip).

PROCEDURE

Follow the applicable instructions for making purchases in person, including shipping/delivery. In addition:

When you call, state that you are calling from UM and that you will be making your purchase on a VISA Card.
Emphasize that the University is exempt from sales tax (See Section 3.3 and Appendix B and C)
Request any University of Maryland or educational discount.
Record the name of the person taking the order, place the order, and give the vendor your Purchasing Card number and expiration date.
To Ship Items: Remember to give the vendor your name, department name, phone number, and complete delivery instructions if you are not picking up the goods. It is recommended that you have the goods shipped directly to your campus address by mail or parcel services such as UPS or Federal Express.
Request that an itemized receipt and/or packing slip with itemized pricing be sent with the purchase. Retain this receipt/packing slip with your record of the purchase. Advise the vendor not to send an invoice to Accounts Payable.

4.2.2 INTERNET FAX AND MAIL

Follow the applicable steps in Section 4.1 and 4.2 above. For Internet purchases make sure you are in a secure Internet site prior to submitting your card information. Retain a copy of the order as faxed or mailed and the fax confirmation (if available) for your records.

4.3 RETURNS, DAMAGED GOODS, CREDITS
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If goods purchased with the Purchasing Card need to be returned the cardholder should work directly with the vendor. Here are some tips:

Always retain boxes, containers, special packaging, etc. until you are certain you are going to keep the goods. Some items, such as software or fragile pieces, cannot be returned without the original packaging materials.

Read all enclosed instructions carefully. Often a phone number and other instructions are included on the packing slip and/or receipt.

Many vendors require you to obtain a "Return Authorization Number" before they will accept a return. If you neglect to get this number when it is required the package may be refused and/or no credit issued to your account.

In some cases there may be a restocking fee (usually a percentage of the purchase price). If the vendor is completely responsible for the error or problem you should not have to pay this, or any other fee. However, if they are not fully responsible you may have to pay it. You may use the Purchasing Card to pay this fee as long as it does not exceed any of the limits.

Make sure in reviewing your monthly statement that a credit was issued for the returned item(s).

If return is not authorized or if it is not properly credited, refer to Section 6, Disputed Transactions, for instructions for resolving the problem.

5. GENERAL RECONCILIATION INSTRUCTIONS
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5.1 PURCHASING CARD STATEMENT GENERATED BY BANK OF AMERICA

A monthly VISA statement will be mailed to the cardholder directly (Appendix I).

This statement MUST be reconciled by the cardholder using the Cardholder Transaction Log (Appendix H), order forms, receipts, transaction slips, and packing slips. The reconciled statement must be reviewed, approved, and countersigned by the individual designated by the Department Head. See Section 6 for information on handling incorrect (disputed) items.

The cardholder statement you receive is for your information and audit purposes only. Payment is the responsibility of UM and the State of Maryland. Use of the purchasing card will in no way affect or change your personal credit history.

5.2 PURCHASING CARD MANAGEMENT SYSTEM

The Purchasing Card Management System (PCMS) is a web-based software application that allows authorized users to perform the following actions through ARES (University Web page) or through the Procurement & Supply website. This online reallocation is in lieu of performing manual journal vouchers and transaction logs. Transaction data is downloaded into PCMS daily. To access the PCMS through ARES, activate Netscape, type in URL: http://www.ares.umd.edu, login, choose Procurement from the menu located on the left side of the page, then choose Purchasing Card Management System. To access the PCMS through the Procurement & Supply website, activate Netscape, type in URL: http://www.purchase.umd.edu, choose Purchasing Card Management System from the menu located on the right side of the page, then login from the PCMS homepage. Step-by-step instructions on using PCMS may be accessed by clicking on PCMS web help.

Reallocate purchasing card charges from the default FRS number and subcode assigned to the card to one or more valid FRS numbers and subcodes.
Record descriptive comments in two fields associated with each charge.
Display reports on current and prior billing periods that can be downloaded and used as the transaction log required by State regulations.

Step-by-step instructions for navigating through PCMS are included in this guide (Appendix J).

All charges that were received by UM during the billing cycle will be charged to an agreed upon departmental account and will appear on the Financial Records System ("FRS") statement(s) each month.

These transactions should be reviewed against the reconciled US Bank VISA statement and any discrepancies resolved with the Office of the Comptroller.

Who is responsible for what?

Cardholders are responsible for the charges on their card, for obtaining a detailed receipt for each charge, for reconciling the Visa statement, and for completing the description of purchase on the transaction log.

Reviewers are responsible for reviewing the appropriateness of charges, for ensuring that a receipt is attached for each charge, that a reconciled Visa statement is attached, and that a description of each charge is completed on the transaction log for the cardholders they have been assigned to review. A reviewer may not review his/her own transactions.

Updaters are responsible for assuring the charges are posted to correct accounts by either allowing the charges to remain on the default FRS or subcode or reallocating the charges and/or subcodes. All updaters must fill out the "Access for Account Updaters" form (Appendix K). These forms are also available by clicking on "applying for access" on the PCMS home page.

Who has access to this system?

Cardholders automatically have access to all portions of the system applicable to their card. Other access to the system can be granted based on card default FRS number (or range of numbers) or FRS department code (or range of codes). Updaters have access to all accounts in which he/she has been assigned responsibility.

Accounting

Transactions are charged to a default FRS assigned to each card with a 3952 subcode. Transactions may be reallocated to other account(s) before posting to FRS on the Purchasing Card Management System Web. This online reallocation is in lieu of performing manual journal vouchers and transaction logs.

Transaction Logs

The State requires each cardholder to complete a transaction log for each month that purchases are made with the UM purchasing card. The transaction log may be completed by hand on hard copy, completed electronically in Excel '97 or later version, or completed on-line through the Purchasing Card Management System.

5.3 RETENTION OF STATEMENTS & RECEIPTS

Receipts, transaction logs and statements are to be retained for five (5) years after fiscal year end, either in the Cardholder's department or in Departmental Archives which can be readily accessed.

5.4 REVIEWS

Monthly review and approval of purchasing card transactions are required at the department level. Unless prior approval has been obtained by the PCPA, the Reviewer shall be the cardholder's immediate supervisor or someone in the chain of command above the cardholder. Reviewers are responsible for reviewing all transactions to ensure appropriateness of purchases, completeness of documentation (reconciled statement and detailed receipts), and signing the transaction log.

In addition to the above, periodic reviews of each cardholder's records (i.e. Cardholder Transaction Log, receipts, reconciled statements) will be performed by members of either or both the Department of Procurement and Supply and the Office of the Comptroller. Additional reviews may be conducted by any or all of the entities that currently perform such functions on behalf of UM, UMS, State of Maryland, and the Federal Government.

The purpose of these reviews is to ensure compliance with all of the guidelines, policies, and procedures governing this program. These guidelines are derived from State of Maryland, UM, and US Bank requirements.

6. DISPUTED TRANSACTIONS
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Disputed transactions fall into two broad categories - those resulting from a vendor's refusal to take back a defective or mis-shipped item and those related to discrepancies between the cardholder's records and the monthly VISA statement. All disputes can be covered by the nine items listed on the Cardholder Statement of Disputed Item Form (Appendix L).

6.1 DISPUTE WITH VENDOR

If you have a problem involving a dispute with a vendor (such as defective items or you are claiming that an item was not ordered and the vendor claiming that it was), every effort should be made to resolve the problem directly with the vendor. If you are unable to obtain satisfaction from the vendor, complete the Statement of Disputed Item Form (Appendix L) and forward it to the APCPA. Be sure to describe the problem and the efforts you have made in attempting to resolve it. The APCPA will review the form and submit it to US Bank.

6.2 STATEMENT OF DISPUTED ITEM

Any item that appears on the monthly VISA statement from US Bank may be disputed, provided the disputed transaction is reported to US Bank using the Statement of Disputed Item Form within 30 days of the disputed statement's closing date (typically the 25th of the month). It is recommended that such items be reported immediately upon receipt of the statement in question. Complete the form and forward it to the APCPA.

6.3 RESOLUTION
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During US Bank's investigation they will issue a credit to the Purchasing Card account in question for the disputed amount. When the investigation is complete you will be notified of the resolution. If you are not satisfied with this resolution, please contact the APCPA immediately.

6.4 LOST OR STOLEN CARDS

To report a lost/stolen card call US Bank at 1-800-344-5696 immediately. If the card is lost your account will automatically be closed and a new account will be opened.

If the card is stolen, or your account number is compromised (purchases made by someone other than the cardholder) perform the following:

Procedures for stolen cards or compromised account numbers:

Report the stolen card to the bank at 1-800-344-5696
Report the stolen card to the PCPA
Contact the local police department and complete a police report. If the cardholder is a College Park Campus employee, report the theft to the UM Police Department at X53555.
Complete the Statement of Disputed Item Form and submit it to the PCPA.
Your account will automatically be closed and a new account will be opened. Every effort will be made to open a new account and issue a new card within 3 business days.

7. HELPFUL INFORMATION

A list of frequently asked questions (FAQs) and the answers to those questions is included in this guide (Appendix M).

7.2 QUICK REFERENCE

An overview of this users guide, highlighting the topics most frequently viewed, is provided as a Quick Reference sheet. (Appendix N).

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