SMALL ORDER PURCHASE VIA PURCHASING CARD

Material & Disbursement Services (MSD)

PROCEDURE 13

Effective Date: 06/15/2001

Last Modified Date:  05/25/2005

Procedure Description

Supplies required immediately may be purchased using the Purchasing Card. Purchases exceeding $2,500 are prohibited and must be ordered using a Purchase Requisition for the issuance of a formal Purchase Order.  Do not split orders to avoid the $2,500 limit.  Departments should develop internal procedures that follow the guidelines below.

Procedure Steps

Obtaining the Card

1. The department submits a card application for each card requested.
2. Additionally, for each card applicant and reconciler (who are not to be the same person), the department FACS coordinator submits a Request for Access to FRS On-Line Systems to the FRS coordinator.
3. The cardholder and reconciler attend a mandatory training session covering the use of the card and restrictions on its use.
4. The new cardholder picks up the P-card at the program coordinator's office.

Security

5. Lost or stolen cards must be immediately reported to the program coordinator and to MBNA (the issuing bank) so that the card can be cancelled.

Determine a Vendor

6. Check the storeroom catalogs or call the appropriate storeroom to determine if the item is available in one of the University storerooms.
7. Check State term contracts for the item (if it is on contract, the card may be used to purchase from the contract vendor).
8. If the item is not available from a UNC storeroom or on a State term contract, search for the best value.

Make the Purchase

9. Only the authorized cardholder may make purchases with the card.
10. Make the purchase and obtain a receipt. If ordering from an on-line source, screen print the order confirmation to use as a receipt.
11. Deliver the receipt to the reconciler.
12. Place item(s) on appropriate departmental inventory list (if applicable).

Perform Online Reconciliation

13. Match receipts to on-line records.
14. Using the online reconciliation software, assign account numbers and object codes and record tax data. Click on "Approve for Payment" to submit the changes.

Review and Reconcile the Monthly Cardholder Statement

15. Cardholders review the charges on the monthly statement from MBNA to determine that charges are correct.
16. The reconciler also reviews the cardholder statement to ensure that
    • all purchases were properly authorized and in accordance with UNC policy;
    • all purchases are supported by a receipt or other acceptable documentation,* and invoices are prepared correctly;
    • all purchases were received; and
    • all receipts are filed with the statement for possible future audit.
      *If no receipt is available, have the cardholder complete MSD Appendix 15, Missing Receipt Affidavit, and keep the affidavit with the statement.
17. The reconciler brings all discrepancies to the attention of the proper departmental/divisional officer for appropriate corrective action, and documents purchases in violation of the P-Card policy with a Purchasing Card Violation Warning Form to the cardholder.
18. Notify the bank and the card program coordinator of any error so that a correction can be made. The department may dispute an error by reporting it to MBNA (at the toll-free customer information number on the card, or by filling out the form on the back of the statement) within 30 days of the statement closing date.
19. The reconciler signs the monthly statement to verify that all charges are appropriate.

Compliance Review

20. Retain receipts and statements for five years for audit purposes.
21. About three months after card issuance, the card program coordinator will oversee a compliance review of the department to review the documentation and ensure that purchases are appropriate and charges supported.  If the card program coordinator finds that documentation is not adequate or in order, a second review will be conducted.
22. The card program compliance review verifies the following:
    • Each transaction is supported with receipts or invoices.
    • Purchases do not include gift certificates, services, or other prohibited items.
    • Internal controls are in place, and tracking high-value supply items such as cameras, computers, or printers is accomplished.

Terminating the Card

23. Immediately upon the cardholder's notice of termination or transfer, the reconciler or supervisor should cut the card into pieces and return it to the card program coordinator for cancellation.
24. The P-card program coordinator will terminate cards if any of the following occur.
    • Fraud or personal use is discovered.
    • A pattern of violations of University purchasing policies is documented, such as
      • splitting orders to avoid dollar limitations,
      • failing to use term contracts, or
      • failing to keep receipts.
    • A card is determined to be in excess of the University's needs (unused).
      • The card program coordinator uses a quarterly report of cards unused for 120 days or more to cancel excess cards.
      • When a card is identified as unused, the card program coordinator sends a letter to the cardholder, giving the cardholder 15 days to justify the card before it is cancelled.
    • Notice of card cancellation for any reason will be prepared by the card program coordinator and sent to the Program Coordinator, who makes the final determination and sends the cancellation notice to the cardholder, the department head, and MBNA.
      
      

Additional Information

See also MSD Policy 9a, Small Purchase Orders via Purchasing Card.

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