Purchasing Card Procedure
|Approved by||Vice-Chancellor, March 2013|
|Date Procedure Took Effect||1 January 2013|
|Last Approved Revision||11 March 2013|
|Sponsor||Director, Financial Services|
|Responsible Officer||Senior Financial Accountant|
|Review Date||1 January 2015|
1. Issue of Purchase Cards
To be eligible for a Purchase Card, an employee must meet one or more of the following criteria:
- Travel frequently in the course of their duties
- Travel overseas in the course of their duties
- Purchase significant volumes of minor goods and services on behalf of the University
- Incur regular expenses of a kind appropriately paid for by a purchase card
Applicants must complete all relevant forms. The forms will require the following information:
- Contact details
- Default account code
- Reason for the Purchase Card to be issued
The application for the Purchase Card must be signed by the applicant, their Cost Centre Head/Head of Department, their Divisional Head (or their nominated representative) and the Director of Financial Services.
Note that in signing an application for the issue of a Purchase Card, the Cost Centre Head is deemed to have given financial delegation/authority for expenditure approval to the cardholder.
2. Distribution of Purchase Cards
The Bank will forward the Purchase Card directly to Financial Services Division. The Purchase Card Administrator in Financial Services will contact the employee, who will be required to collect the card in person (photo ID is required).
At the collection point, the Purchase Card must be signed by the employee. The employee will also receive a copy of the Purchase Card Policy document.
The Purchase Card can be used from the commencement date printed on the face of the card. A PIN (4 digit number) will need to be applied to the card by going to a branch of the issuing bank with photo identification. The PIN selected should be unique to this Purchase Card i.e: should not be the same number as other cards. PINs should be unique and kept confidential to the holder. They should never be disclosed to anyone, or written down.
3. Purchase Card Limits
Each Purchase Card will be issued with a monthly credit limit of $5,000. Approval of a higher limit may be made on application to the Purchase Card Administrator. Applications will be considered on a case by case basis, and should state clearly the reasons for the higher limit.
The final approval for any higher credit limit resides with the Director of Financial Services.
Credit limits will be reviewed on a regular basis, and where a Purchase Card is being operated well below the assigned limit, that limit may be reduced at the discretion of the Director of Financial Services.
Temporary limit increases may be applied for as and when required.
4. Use of the Purchase Card
The Purchase Card can be used at any location displaying the VISA brand.
The Purchase Card must only be used by the individual staff member to whom it was issued. Under no circumstances should the details of a Purchase Card be shared with another person or the Purchase Card be used by another person on the holder’s behalf.
Purchase Cards should not be used as departmental cards by several members of staff.
Expenditure charged to Purchase Cards must be business-related. It must be reasonable, appropriate and in accordance with the University’s policies and procedures related to expenditure. In particular, cardholders should be familiar with the Travel and Related Costs Policy.
Where expenditure is incurred on behalf of a number of cardholders, and one of the cardholders is the supervisor of the other card holders, then the expenditure must be charged to the Purchase Card of the supervisor.
A Purchase Card may be used to make purchases over the internet. To reflect good security practices, such purchases should only be from established reputable companies known to the University. Purchase Card details should only be entered on an identified secure web site.
A Purchase Card may be used to make purchases via the phone or fax. The cardholder should ensure that they are dealing with reputable suppliers and that the security of the Purchase Card details is maintained at all times.
A Purchase Card should not be used where the University has established specific procurement arrangements for certain goods and services with preferred or mandatory suppliers that do not anticipate the use of Purchase Cards. Examples of this include the purchase of stationery via Marketsite and the purchase of international air travel (other than trans-tasman) via the University’s mandatory travel agents.
5. Disputed Transactions
Disputed transactions must be resolved with the supplier and issuing bank. The cardholder must complete a Dispute Transactions form (accessed by logging onto Finance One Ou MyPcard) and fax it to the bank immediately the disputed transaction is identified. The transaction must be coded as “in dispute” within the Finance One PCard Module and remain so until the issue has been resolved.
6. Cash Advances
Purchase Cards will only be issued with a cash advance facility if the cardholder has indicated the intention to travel overseas, although such a facility may be provided to other cardholders on request to Financial Services Division. Each request should state fully the reasons for needing to access cash advances.
Where a cash advance facility is provided, the use of the facility must comply with the following:
- Drawing cash within New Zealand is not permitted unless the cardholder is away from their “home campus” at the time the cash is required
- Prior to withdrawing cash, the cardholder should exhaust all other options of payment including using the standard Purchase Card functionality
- Cash withdrawn must be accounted for as with all other expenditure, including appropriate supporting documentation
- Unspent cash should be converted back to NZ currency, banked into the University bank account, and coded to the general or project ledger account used for the original advance. Evidence of this deposit should be included with the Purchase Card monthly statement
- In the event that unspent funds cannot be converted back to NZ currency, such as with coins or an uneconomic amount, then the money should be held in the cost centre for future travel use. This fact should be noted on the appropriate Purchase Card Monthly Statement
7. Expenditure Documentation
Consistent with any purchase on behalf of the University, expenditure must be supported by
appropriate documentation. Invoices and/or receipts must be originals. Tax invoices or receipts must be supplied for expenditure in excess of $50.00.
The requirements of a valid tax invoice issued by a New Zealand organisation can be found under the heading "University Expenditure - Claiming GST From Invoices Received" within the Taxation Procedure.
Coding of Purchase Card Transactions
Purchase Card transactions will be loaded into the Finance One PCard Module on a regular basis using an import file provided by the bank. If a cardholder has new transactions requiring coding action they will receive an email from the PCard Administrator advising them.
Coding of transactions for posting to the University’s general or project ledgers will occur in the Finance One OU My PCard Module. The process will include identifying any applicable New Zealand GST, the inclusion of suitable comments supporting each transaction and a summarised narration for transfer to the general/project ledgers.
Note that both the comments and ledger narrations will appear on the monthly purchase card statement. Therefore it is important that they include sufficient detail to corroborate each transaction.
Further information relating to this process can be found in the Finance One Purchase Card User Manual.
8. Monthly Purchase Card Statements
At the start of each month, cardholders will be emailed a statement of the previous month’s Purchase Card transactions. This statement should be reviewed and signed by the cardholder, declaring that “the information contained on this form is correct and the expenses incurred were for business purposes in accordance with the University of Otago Purchase Card Policy”. Under no circumstances should a Purchase Card statement be signed on behalf of the cardholder – only the cardholder should make the above declaration.
The Purchase Card Statement must be authorised by the cardholder’s supervisor. The supervisor should record their name and position on the statement. In all cases this review and authorisation should be performed by a person senior to the cardholder. This is known as the ‘One-up” principle and should always be applied.
If a Purchase Card Statement contains expenditure relating to the supervisor, then it should be referred to a higher authority for approval.
The statement along with all original supporting documentation should be forwarded to the Financial Services Division by the date specified on the statement.
9. Lost or Stolen Cards
Purchase Cards are valuable and should be treated in the same way as a passport or cash.
If a Purchase Card is lost or stolen during working hours, the cardholder must contact the PCard Administrator on firstname.lastname@example.org immediately. They will arrange for the Purchase Card to be cancelled and a new one issued. In the event where the card is lost or stolen outside normal working hours, the cardholder should contact the issuing bank immediately to arrange for the card to be cancelled and then contact the PCard Administrator on email@example.com to advise of the loss and initiate arrangements for a replacement card.
Contact details are:
In New Zealand call 0800 724 200
From overseas call collect +44 1733 294 440
The bank is liable for all charges incurred on the account once they have been advised of the lost card.
In the event the lost Purchase Card is subsequently found by the cardholder, it should be destroyed as it will no longer be valid and a new one will have been issued.
Audit of cardholder purchases will be performed on a regular basis by Financial Services personnel, and internal and external auditors.
If a cardholder is suspected of misusing their Purchase Card, then this will be reported to the cardholder’s Divisional Head, the Director of Financial Services and the Chief Operating Officer for comment and/or resolution.
11. Misuse of Purchase Card
Misuse of a Purchase Card could include, but is not limited to:
- Inappropriate expenditure
- Personal expenditure
- Inappropriate or inadequate supporting documentation
- Inappropriate use of a cash advance facility
- Use of a Purchase Card by someone other than the cardholder
- Failure to provide a correctly authorised monthly statement
- Failure to comply with any other University policy or procedure related to the use of Purchase Cards
Misuse of the Purchase Card by the cardholder will lead to:
- Cancellation of the Purchase Card
- A request for immediate reimbursement of the inappropriate expenditure if repayment has not been made per Clause 5 of the Purchase Card Policy
- Possible internal disciplinary action
Intentional misuse of a Purchase Card for personal gain is fraudulent behaviour under the University’s Fraud Policy and will be referred to the relevant authorities for the purposes of investigation and possible prosecution.
12. Termination of Employment
If a cardholder leaves the employment of the University (or its subsidiaries), it is their responsibility to:
- Reconcile all Purchase Card expenditure since the last statement and provide the necessary supporting documentation for this expenditure
- Advise the Purchase Card Administrator Financial Services so the card can be cancelled
- Surrender the Purchase Card to their immediate supervisor or Financial Services
13. Review of Continued Use
A monthly review of the Purchase Cards on issue will be performed by Financial Services personnel. The results of the review together with recommendations will be presented to the Director of Financial Services for consideration.
If a cardholder no longer has a need for their Purchase Card, they should return the Purchase Card to the Purchase Card Administrator in Financial Services who will arrange for it to be cancelled.
In all cases the cardholder must account for all outstanding expenditure incurred prior to the Purchase Card being cancelled.