P-Card Manual-US Bank by cityofindepmo

CITY OF INDEPENDENCE

PROCUREMENT CARD MANUAL

July 2017

TABLE OF CONTENTS Cover Page Table of Contents Introduction Purpose Overview Responsibilities Cardholder Reconciler Approver Department Director Procurement Manager Finance The Bank Requesting a P-Card Limitations Prohibited Use Lost Receipt Affidavit Exclusions by Merchant Category Code (MCC) Placing an Order and EMV Chip Sales Tax Receiving Materials Returns, Credits, Rejected Merchandise Internet Procurement Travel Reporting a Lost or Stolen Card or Fraud Canceling a P-Card Cardholder Transfer to Different Department Errors and Disputes Cardless Accounts Approval of Procurement Card Policy

1 2 3 3 3 4 4 4 5 5 5 5 6 6 6 7 7 7 8 9 9 9 9 10 10 10 10 10 11

PROCUREMENT CARD SERVICES MANUAL INTRODUCTION The Independence, Missouri, procurement card or P-card is designed to improve efficiency in processing purchases from any vendor who accepts a P-card. Cardholders are responsible for all purchases made with the card. PURPOSE The purpose of the P-card and this manual is to:  Provide employees with instructions on the proper use of the P-card as an efficient means to pay for items and services purchased in accordance with the City’s Procurement Policy  Reduce the cost of transactions with an aim to reduce or eliminate less efficient methods of procurement, e.g. petty cash checks, department checks, RPs, small dollar purchase orders, etc.  Reduce field crew travel time involving purchases  Reduce paperwork  Develop reasonable and enforceable policies, procedures, and audit controls. The program is NOT intended to avoid or bypass appropriate procurement or payment procedures but to complement existing processes  Increase the number of vendors immediately accessible to the P-card  Improve management reporting  Provide for disciplinary action if the P-cards are misused NOTE: The policies and procedures established herein are minimal standards for departments. Department Directors may establish additional controls. OVERVIEW The P-card as the mandatory method of payment for any purchase for the City, provided no processing fees are assessed and added to the transaction. Always use your P-card if at all possible, before considering any other procurement method. If a vendor does not take a P-card, use a requisition. The City of Independence, Missouri, has contracted with U.S. Bank to provide P-card services. All cards are issued at the request of the department. Card usage will be monitored, and cards may be suspended or rescinded at any time. The Program Administrator (Procurement Manager) will issue a P-card upon receiving a P-card Account Action Request & Cardholder Agreement. Submission of the agreement indicates that you understand your responsibilities and agree to adhere to the established guidelines. You may begin using your card immediately after completion of training provided by the Procurement Division or approved designee. Recordkeeping is essential to ensure the success of the program. As with any purchase, you must retain sales receipts, cash register receipts, invoices, order forms, receiving documents, written quotes for purchases that exceed bid thresholds, documentation for food purchases, and any other documentation to support the purchase. All documentation shall be submitted to your department reconciler immediately. The standard per transaction limit is $5,000/transaction. Department directors may request changes in limits as they deem necessary. Purchases must be for the use and benefit of the City of Independence. NO PERSONAL PURCHASES ARE ALLOWED. Purchases made from price agreement vendors should be made with a P-card, thereby eliminating the need for a blanket requisition in the accounting system. A link to the list of price agreements is available on the CityNet Home Page in the Vendor Library.

By using a P-card, vendors are usually paid within three (3) business days of the transaction. Please indicate to vendors they MUST NOT invoice the City, to ensure a duplicate payment does not occur. Please ask merchants to give a detailed description of goods and services on the receipt, not just the word “miscellaneous”, or only a part number; purchases must be adequately identified. You are responsible for the security of this card and the transactions made against it. Use of the card not in accordance with these established guidelines may result in personal liability and disciplinary action. DO NOT LEND YOUR CARD to another person for use. The need for an employee to make a purchase for City use is justification to request issuance of a P-card in their name. RESPONSIBILITIES Cardholder Hold and secure P-card. Order/receive materials and services. Make certain sales tax is NOT charged when not appropriate. Require refund immediately from merchant if charged in error by crediting your card. DO NOT accept cash or check for refund. Collect receipts and supporting transaction documentation. Turn in all receipts and supporting transaction documentation to your department reconciler immediately. Transactions are normally reconciled on a weekly basis. Check with your reconciler for department workflow. Delay in submitting receipts/documentation is grounds for revocation of P-card and possible disciplinary action. Ensure that quotes are attached for all purchases that require multiple quotes. Ensure that food purchases include a detailed receipt, purpose of the purchase, and a listing of people for whom the purchase was made; this is an IRS requirement. The P-card cycle ends on the 21st day of each month and the cycle begins the 22 nd day of the month. Be sure all receipts and documentation are turned in by the 22 nd day of the month, or first working day following the 22nd. Lost or stolen cards – notify the Procurement Manager immediately. If incident occurs outside normal business hours, contact US Bank at 800-344-5696 immediately and report to Procurement Manager on the next business day. Request approval from Department Director (or designee) and Procurement Manager via email for over-limit charges. Comply with all Procurement and P-card policies and procedures. Handle disputed items. Reconciler Collect transaction receipts and supporting documentation from cardholders. Reconcile each transaction in the US Bank Access Online System (USB), https://access.usbank.com. Attach all receipts and supporting documentation into USB system to each transaction at least weekly. Assign JDE account number(s) to each transaction in the USB system from the dropdown. If an account number is missing, email to Linn Sanders lsander@indepmo.org in Finance to add the number to the system. DO NOT SEND paper receipts to Finance. (Keep the paper at your office if you choose). Check to make sure sales tax is charged only when appropriate. Check to make sure processing fees are not charged. Ensure that competitive quotes are attached for purchases that exceed $5,000. Exception: if a purchase cannot be competitively bid; supporting documentation must be submitted. Ensure that food purchases include a detailed receipt, purpose of the purchase, and a listing of people for whom the purchase was made; this is an IRS requirement. Complete the final reconciliation for the cycle month by the 28th day of each month. Handle disputed items that Cardholder is unable to resolve. Notify the Procurement Manager immediately if a card is lost or stolen. Email Procurement Manager when a cardholder’s employment is terminated for account deactivation; shred P-card.

Comply with all Procurement and P-card policies and procedures. Approver Review all transactions received from reconcilers in online queue in the USB system https://access.usbank.com. Reject transaction and return to reconciler if correction is required or make correction yourself. Make sure a receipt is attached and an account number is assigned. Approve transactions at last weekly to ensure consistent workflow from department to Finance. Final approvers for the department (you’re the last stop before going to Finance), always assign transaction to Quality Control to move it to Finance. Department Director A designee may be appointed by the department director by sending an email to the Procurement Manager with the appointment. Authorize issuance of P-cards for employees in your department. Set departmental spending limits within established guidelines (standard limit is $5,000 per transaction. Certain cardholders may be granted higher limits if they frequently use a P-card to pay amounts in excess of the standard limits. Contact Procurement Manager to determine appropriate limits and confirm with email to Procurement Manager. Request approval from the Procurement Manager for over-limit charges via email. Comply with all Procurement and P-card policies and procedures. Procurement Manager Is the Program Administrator for the US Bank P-card program. Coordinate program policy issues. Create and maintain cardholder hierarchy for control and reporting purposes. Approve transaction limits for cardholders and oversee any necessary modifications. Process properly authorized card requests and card limit changes. Block merchant/commodity codes when appropriate. Administer training program for cardholders. Coordinate issuance and cancellation of cards. Maintain policy and cardholder guidelines and manuals. Evaluate P-card feedback from suppliers and from departments. Coordinate and maintain internal controls. Assist in resolving billing disputes. Monitor use of cards and audit for compliance with policies and procedures. Participate in ongoing program reviews. Provide information regarding card use, policy, and procedures to system users. Finance Issue payment to U.S. Bank for all City P-card activity immediately upon receipt of the Corporate Account Statement (all cardholder accounts) to ensure no late fees are assessed; normally by the last day of the month. Review transactions received from department reconcilers and balance with City’s corporate statement. Upload reconciled transactions from all departments into JDE. Review transactions for compliance with City regulations. Notify Procurement Manager when transactions are not reconciled in a timely manner by departments. Assist in monitoring missing documentation and notify the Procurement Manager if necessary to correct a situation. Notify the Procurement Manager of violations or discrepancies if assistance is required to resolve. THE BANK U.S. Bank is the issuer of the City of Independence procurement cards. The bank’s responsibilities

include all activities related to the underwriting, promotion, issuance, and servicing the cards. The current Customer Service Center can be reached at 800-344-5696. The bank will process reported lost, stolen, or canceled cards, as reported to them by the City of Independence Procurement Manager. They will assist in processing errors and disputes with suppliers, as necessary. The bank will produce and transmit reports and/or transaction files to the City of Independence as needed. Training materials are available on the USB website. Login to your account and click on ‘Training’ at the bottom of the menu on the left side of the page. REQUESTING A P-CARD Prerequisite: To obtain a P-card, the individual must be an employee of the City of Independence and be authorized to purchase goods, materials, and services on behalf of the City. The Department Director must authorize issuance of a P-card for anyone in their department. Temporary and contract employees are not eligible to receive a P-card. Complete the Cardholder Agreement and Action Request Form (available on CityNet – click Departments, Finance, Forms/Policies). The form must be sent to the Procurement Manager, who will request the card from the bank. Upon receipt of the card, the employee will be scheduled for training. Once training is completed, the cardholder will receive, sign, and activate their card. The cardholder shall keep the card in a secure place. Although the card is in his/her name, it is the property of the City of Independence and is only to be used for City purchases. Card usage will be monitored and cards may be suspended or rescinded at any time. Remember, as a Cardholder, the employee is committing City funds each time the P- Card is used. LIMITATIONS A. Cardholder Use Only – Only the employee whose name is embossed on the card may use it. No other individual is authorized to use the card. Violation is grounds for suspension or revocation of your P-card. When a special-use card is issued, a City employee within the using department is assigned responsibility for the use of the card. B. City Purchases Only – The P-card shall be used for City authorized purchases only. It cannot be used for any personal purchases. Any such use shall require immediate reimbursement and shall result in disciplinary action, up to and including termination. Instances of personal use will be judged on a case-by-case basis. A City P-card is not a short-term personal loan for the cardholder. C. Transaction Limitations 1) The standard transaction limit is $5,000. 2) The Department Director may request the Procurement Manager to authorize key department personnel to have limits higher than the standard limits if they pay bills for the department that regularly exceed the stand limitations. 3) Multiple items may be purchased, but the P-card transaction cannot be split to deliberately circumvent the policy. Such action may result in suspension or revocation of your P-card. PROHIBITED USE The following types of items MAY NOT be purchased with a City P-card, regardless of the dollar amount: Alcoholic beverages

Cash advances Fees – fees for processing the transaction must never be charged. Personal items – defined as anything that is not purchased for use and ownership by the City. “Split” Purchases – “Split” purchases occur when single purchases costing more than $5,000 are split into multiple P-card transactions to circumvent the $5,000 bid threshold. It is a violation of City policy to split purchases as described. Violation of this policy may result in the revocation of your card. Any product or service normally considered to be an inappropriate use of City funds Purchases are strictly prohibited from vendors that create conflicts of interest, such as companies owned by the City employee or relatives, or where the employee will gain or benefit directly or indirectly from the purchase. LOST RECEIPT AFFIDAVIT Affidavits are available in case of a lost receipt (available on CityNet. – click Departments, Finance, Forms/Policies). Excessive use of affidavits in lieu of actual receipts is cause for revocation of your PCard and subject to disciplinary action. EXCLUSIONS BY MERCHANT CATEGORY CODE (MCC) MCC is a numeric four-digit code that the bank card provider assigns to each vendor to identify the vendor’s primary product or service. Specific MCC codes are excluded from use on all City of Independence P-cards. These exclusions will cause a transaction to be declined at vendors registered with codes such as: 1. Access to cash, i.e., ATMs, casinos, and lotteries. 2. Personal service providers, such as barber and beauty studios, and health spas. 3. Amusement and entertainment vendors, such as theaters, bowling alleys, and arcades. 4. Purchase of alcohol or establishments, which may have a primary MCC for alcohol (bar instead of restaurant). NOTE: If a vendor accepts P-cards but your transaction is rejected and you believe the purchase should be allowed, call the Procurement Manager. Some vendors have codes that do not necessarily make sense, i.e., a plumbing parts and supply wholesale/retail vendor may register as a “contractor”. If you are attending an event at any location that has legal gambling (Atlantic City/Las Vegas, etc.) you may be staying at a hotel that has a casino. The MCC code may indicate it is a casino. If you will check with the Procurement Manager prior to leaving for your destination, arrangements will be made to assure that the charge for your hotel will be approved. PLACING AN ORDER & EMV CHIP Using the P-card is always the preferred choice when making a purchase and paying for anything for the City, with the exception of those items listed in the “Prohibited Use of P-cards” section above. Your P-card contains an EMV (Europay, Mastercard, VISA) microchip. You will receive a PIN under separate cover from you P-card. Some merchant card terminals may prompt for the PIN. Check with the vendor with regard to using your card properly. When making a P-card purchase, be prepared to provide the following: Your name (name on card) Your card number Card expiration date CVV number (3-digit code on the back of card)

P-card address: PO Box 1019, Independence, MO 64051 (any other will be rejected) Ask the vendor to provide a detailed receipt/packing list that includes product description, price, sales tax (if applicable), and freight/delivery charges. Written documentation is required for all transactions. If goods and materials are ordered by phone, ask the vendor to include a detailed sales receipt in the package. Save the P-card receipt and shipping documents and include as supporting documentation when reconciling your transactions. SALES TAX Cardholders must inform the vendor that the City is tax-exempt before the order is processed. The City’s tax exemption number is printed on the front of your P-card. You must provide a copy of the City’s Sales Tax Exemption Form (see http://citynet.indepmo.org/finance/Forms.aspx and click on Missouri Sales and Use Tax Exemption) to the vendor if requested. Check your receipt before leaving the vendor’s place of business to ensure that sales tax has not been added to your purchase. If procurement online, be sure you are not charged sales tax. If sales tax is charged, request a refund immediately. Repeated transactions that include payment of sales tax is violation of this policy and cause for revocation of your P-card and other disciplinary action. Out of State Transactions Purchases made in Kansas or a state other than Missouri must be delivered to a Missouri address to be tax exempt. Orders picked up or services received in Kansas or any other state will be subject to sales tax. The City of Independence is not exempt from hotel excise taxes or fuel taxes. When making purchases online, check the policy of the vendor and the whether they are required to charge sales tax to Missouri purchasers. Exceptions In some rare instances, the cost benefit of obtaining a tax exemption may not be advisable. All of the following conditions must exist before a cardholder forgoes an exemption: 1. Considerable effort and time would need to be expended to obtain the exemption (i.e., it would cost more in labor than the exemption is worth). 2. If taxes are included and the cardholder has made all attempts to get the tax removed by the merchant, the cardholder will be able to waive the sales tax exemption and add the cost to his/her overall expense of the item if the sales tax amount is less than five dollars. Efforts to try and retain the tax should be noted for auditing purposes and that merchant should not be used again. RECEIVING MATERIALS Every purchase must be documented with a receipt, which will typically be a standard store receipt. If you are having a purchase shipped to you, request an invoice (marked paid) in addition to the packing slip to ensure you have an adequate receipt that includes total costs. Under certain circumstances, such as magazine subscriptions, membership applications, and conference registrations, copies of the order forms will be acceptable as receipts. If ordering on the Internet, print a copy of the final screen before you leave the website. This can serve as your receipt. Keep the charge slip attached to the receipt for each transaction. Keep all receipts for use in reconciliation of your account. All receipts must contain the following information:  

Date the purchase was made Vendor identification (name)



Itemized description of each item purchased, including quantity (not just a credit card machine receipt with a total)  Per item cost  Total cost  Cardholder identification (card account number or your name) (IF NOT PROVIDED BY THE VENDOR, THE CARDHOLDER MUST WRITE THE MISSING INFORMATION ON THE RECEIPT.)

RETURNS, CREDITS, REJECTED MERCHANDISE The cardholder is responsible for making all arrangements associated with P-card returns. Cardholders are expected to follow up until the appropriate credit is issued against their P-card. To arrange a return:     

Notify supplier you are returning items that were purchased with the P-card. (Many suppliers will not accept returns without prior return authorization.) Ask the supplier to credit the P-card for the return. Never accept cash or check for a P-card return. Follow supplier’s packaging and labeling instructions. Complete appropriate documentation of shipment.

INTERNET PROCUREMENT When procurement a service or product online with a P-card:  Make sure that you are fully informed of all charges associated with making this particular purchase. Shipping and handling plus other special or hidden fees can greatly increase the cost of your purchase.  Note the expected delivery time and determine whether or not the vendor’s delivery schedule fits your needs.  Read the online vendor’s refund/return and customer privacy policies. Learn the terms of business practiced by a particular online vendor. Beware of online merchants who do not prominently display refund/return or privacy policies.  Look for addresses that start with “https:” Never enter your credit card number on a web page that does not have “https:” at the beginning of the web page address. The “https:” in the URL (web address) means that information you fill out in an ordering form will be transmitted over an encrypted, secure connection to the vendor.  Look for the security alert and the lock icon when making online purchases.  Guard your personal information. Don’t provide any nonessential information online.  Give the merchant/supplier the following: o Name as it appears on the p-card. o The card number and expiration date. o The billing address – PO Box 1019, Independence, MO 64051-0519 o Security code (three-digit code) on the back of your card. o Reminder – the purchase is not subject to sales tax; refer to the sales tax section of this document.  Before you click the “Order Now” or “Place Order” button, do a “Print Screen” of the items you are procurement. Make sure quantities, unit prices, and totals are shown. This can serve as a receipt should the order confirmation not be itemized.

TRAVEL P-cards are not restricted for travel expenses, e.g. fuel, airfare, parking, shuttle service, car rental, etc. Submit a City leave request per City Travel Policy.

LOST OR STOLEN CARD OR SUSPICION OF FRAUD IMMEDIATELY REPORT A LOST OR STOLEN CARD OR IF THERE IS SUSPICION OF FRAUD: The City of Independence is liable for all charges incurred before the card is reported lost or stolen to the bank. As soon as possible contact the Procurement Manager. If it is after hours, immediately call U.S. Bank at 800-344-5696, 24 hours/day, 7 days/week. Record the name of the person at the bank you spoke to, and the time and date the loss/theft is reported. The card will be canceled and a new card will be issued. Call and report incident to Procurement Manager on the next business day. FRAUD It is the cardholder’s responsibility as a City employee to report all suspected instances of fraud, waste, and abuse to the Procurement Manager immediately at rpankey@indepmo.org or call 816-325-7091.

CANCELING A P-CARD To cancel a card, the Department Reconciler shall e-mail the request to the Procurement Manager and shred the card. The Procurement Manager will cancel the account with the bank.

CARDHOLDER TRANSFER TO A DIFFERENT DEPARTMENT Email the Procurement Manager regarding the transfer. The Procurement Manager will deactivate the card until such time as a request for a P-card is submitted by the cardholder’s new department director.

ERRORS & DISPUTES When transaction charges appear to be incorrect, reconcile the transaction and note on the receipt or other documentation what the error is and what is expected to correct the error. If a credit has been requested, the credit should appear on the account transaction list within an acceptable number of days. Contact the Procurement Manager if correction does not appear in a timely manner. If a transaction requires dispute:  A dispute is a transaction that the cardholder has made but the amount or some other error has occurred that will require correction by either the merchant or the bank.  Cardholder shall immediately try to resolve the dispute with the vendor.  If you are unable to reach an acceptable solution, select the transaction in the US Bank system and mark it dispute and contact Procurement Manager for assistance to resolve.  Keep a record of disputed items to ensure they are resolved.

CARDLESS ACCOUNTS Cardless accounts are identical to standard P-card accounts except no card is issued.

Approval and Authorization of Procurement Card Manual

This edition of the City of Independence Procurement Card Manual contains the procurement card policy used by the City of Independence. This manual has been approved for use by the Procurement Manager.

________________________________ Russell M. Pankey, CPPO, CPPB Procurement Manager