Procurement Card | KCTCS

Administrative Procedures

Administrative Procedures

Procurement Card

Procedure Number: 5.4.2-P

Current Effective Date: 08/01/2023

Original Effective Date: 07/01/2019

Revision Dates: 07/23/2021, 06/23/2022, 07/01/2023, 08/01/2023

Revision Number: 4

Revision Summary: Major revisions, addition of Section 11, update to BA850 process

Responsible Official: Vice President, Administrative Services

References:

1. Purpose

To address the use and regulation of the KCTCS procurement card.

2. Scope

This procedure applies to all KCTCS employees.

3. General

3.1 Issue of Procurement Cards:

  1. Procurement cards are issued based on need versus matter of convenience to the user. The Procurement Card Application and KCTCS Procurement Card Agreement shall be completed, signed, and submitted to the College Site Coordinator/KCTCS Procurement Card Program Administrator for processing.  Even though the procurement cards are embossed with an individual's name, the account will have no impact on a cardholder's or user’s personal credit. All procurement cards are issued to KCTCS from PNC Bank.

  2. Procurement cardholders should be KCTCS employees responsible for making purchases for their department(s) or college(s).
    1. The cardholder cannot be a temporary employee.
    2. A card can only be issued to an individual (not a department).

  3. The department head shall authorize the issue of a procurement card.

3.2 Use of Procurement Cards

  1. Procurement cards can only be used for official KCTCS business.

  2. Purchases from foreign merchants are blocked for all procurement card levels and must be preapproved by the Procurement Card Program Administrator.

  3. Procurement card purchases for refreshments, meals, or accommodations must be recorded as an electronic procard record with, but not limited to, a list of attendees, agenda, and receipts attached for documentation. The bona fide business purpose must include why a working meal was necessary.

  4. At the time of purchase, the procurement card user is to advise merchants of the KCTCS Sales Tax Exemption number located on the front of the procurement card.
    1. KCTCS cannot recover tax charged by merchants after a purchase is final.
    2. For issuance of a tax-exempt certificate requested by a merchant, please download the fillable tax exemption form on the Intranet Forms Page.

  5. Declines: Should the card be declined at the point of sale for any reason, notify the respective Site Coordinator (S/C).  The S/C is to submit an email to pcard@kctcs.edu including the cardholder name, last 4-digits of the card and the current issue.  The Procurement Card Program Administrator will make every effort to determine why the transaction was declined.  Some common reasons for the rejection may be that the incorrect expire date and/or CVC code entered, the transaction exceeds card limit thresholds, foreign merchant, and/or flagged by PNC for suspicious activity.

3.3 Cardholder Eligibility Requirements

  1. The employee shall be in an established KCTCS position, preferably full-time (no temporary positions).

  2. The employee shall be in good standing and have an “M” (meets) evaluation rating or better on his/her personnel Planning, Performance, and Evaluation Form.

  3. The responsibilities of the employee shall include small dollar purchase authority.

3.4 Purchases Under Federal Grant Awards

For Uniform Guidance regulations for Federal Grant Awards see also Business Procedure 5.3.6-P Sponsored Projects Accounting for Grants & Contracts and 5.4.3-P Requisitioning.

4. Custodial Procurement Cards

4.1 Custodial Card

A Custodial Card is a shared procurement card issued to an individual within a department and used by other KCTCS employees.

  1. The card owner (person to whom the card is issued) will be the primary contact for the use of the procurement card.

  2. The card owner will not be personally liable for misuse of the procurement card by another employee unless he/she is personally involved in the misuse.

4.2 Card Custodian

A Custodian is the responsible KCTCS employee a custodial card is issued to.

  1. The Custodian shall ensure procurement card use is in compliance with KCTCS procurement procedures.

  2. The Custodian will have discretion to determine if an employee may use the card.

4.3 Custodial Card User

  1. The employee using a card shall sign a Procurement Card Agreement.

  2. The employee will receive a copy of this procedure, or review online, along with other written material given to cardholders (if applicable) before using the custodial card.

5. Procurement Card Controls

5.1 General

The procurement card program has the capacity to place controls on each card enabling purchases to be tailored specifically for individual department requirements.

  • Spend Limit Per Transaction
  • Spend Limit Per Cycle
  • Merchant Category Code
  • Default Budget String

Requests for limit, budget string and any other procard account profile changes are to be directed to the KCTCS Procurement Card Administrator email pcard@kctcs.edu.  Under no circumstances should a transaction be split into two separate transactions to circumvent the single purchase limit. Splitting a transaction is a violation and is subject to the Compliance Guidelines (Section 9) set forth herein.

5.2 Default Spend Limit

  1. Each card will have a maximum default spend per purchase limit of $7,500.00 per transaction.  This amount can be increased by the Procurement Card Program Administrator on an as needed basis upon review and approval of the request justification for a single non-requisition purchase. Please see Administrative Procedure 5.4.3-P for clarification on purchases that should be made through the requisition process.

  2. Monthly and transaction spend limits will be assigned based on necessity and review of actual usage.

5.3 Card Level

There are two procurement cardholder levels for which one may apply.

  1. Level I – general store purchases for necessary supplies, including grocery store, and airline ticket purchases.

  2. Level II – special purpose activities (accreditation teams, student affairs activities, grants/contracts, system-administered professional development activities, cultural events, and official guests requiring accommodations), including restaurant and lodging, in addition to Level I functionality. Additional purposes may be considered on a case-by-base basis.

5.4 Record Retention

  1. Every purchase shall include a completed electronic procard record (eBA850), also known as an Expenditure Transaction Detail Sheet, which is an electronic form in PeopleSoft Financials with supporting documentation attached to the electronic form that includes, but is not limited to the following:
    1. A valid sales receipt/invoice (website/email copy is acceptable).
    2. Packing slip
    3. Cash register receipt
    4. Order form or application
    5. Meeting agenda (for conference fees)
    6. PDF copy of exception request approvals (email is acceptable)

  2. Should a receipt/invoice be lost, and a copy cannot be obtained, a completed BA3C form Affidavit for Lost Receipt Form shall be attached for documentation.

  3. The PeopleSoft electronic procard record includes a standardized workflow for which the form will route for approval and review. The workflow established is as follows:
    1. The supervisor of the requestor;
    2. The budget authority based on the chartfield string entered into the electronic form and the staff member assigned as the authority in the budget header maintenance table in PeopleSoft;
      1. If there are multiple chartfield strings, then the form has an ad hoc function that allows the user to include the additional budget authority for approval.
    3. The cardholder.

  4. Colleges have the ability to incorporate a supplemental procedure to add additional approvers beyond the standard workflow as they see fit by utilizing the adhoc function.
    1. This can include the cardholder supervisor, site administrator, or coordinator for each electronic procard record that is completed.

  5. The electronic procard record must be created and in approved status by the edit deadline of the reporting procard cycle for auditing and reporting purposes.

6. Purchase Authority and Restrictions

6.1 Generally Restricted Purchases

Procurement cards are not to be used for the following:

  1. Lodging, unless the KCTCS Assistant Vice President of Business Services/COO for direct-bill lodging has granted prior approval.

  2. Personal purchases.

  3. Capital equipment purchases.

  4. Purchases charged to capital project accounts.

  5. Items costing more than $500 identified as high risk.

  6. Items costing more than $1000 to be tagged for inventory.

  7. Internal use within KCTCS.

  8. Printing, as defined in Administrative Procedure 5.4.13-P.

  9. Split purchases to avoid the maximum procard single limit transaction amount.
    1. Without prior approval a requisition is required for transaction totals over $7500.00 (including any credit card fees).

  10. Payment to third party suppliers.
    1. Procurement card payments are to be made only to the supplier providing the goods and/or services.

  11. No personal account of any sort should be used to make KCTCS purchases.  This would include, but is not limited to accounts such as Amazon, eBay, PayPal, Costco, Sam’s Club, etc.

  12. Upgrades to flights, lodging and/or convenience purchases such as, but not limited to:
    1. Early check-in
    2. Wi-Fi during flight or other entertainment packages
    3. Refreshments
    4. Additional baggage

6.2 Procurement Card Level Restrictions

Procurement card purchases from certain types of businesses or commodities are restricted. The table below illustrates restricted transactions and purchases. Note that items listed in Level II are also restricted in Level I.

Caption Text Goes Here
Level I Level II
Wire Transfers, Money Orders Wire Transfers, Money Orders
Furriers and Fur Shops Furriers and Fur Shops
Drinking Places, Bars, Taverns Drinking Places, Bars, Taverns
Nightclubs, Cocktail Lounges... Nightclubs, Cocktail Lounges...
Package Stores - Beer, Wine, Liquor Package Stores - Beer, Wine, Liquor
Financial Institutions - Manual Cash Financial Institutions - Automatic
Financial Institutions - Automatic Cash Cash Security Brokers/Dealers
Security Brokers/Dealers Insurance Sales Timeshares
Insurance Sales Dating and Escort Services
Lodging/Hotels and Motels Preparation Services Counseling
Timeshares Service-Personal Massage Parlors
Dating and Escort Services Motion Picture Theaters
Counseling Services/Personal Billiard and Pool Establishments
Massage Parlors Betting
Motion Picture Theaters Amusement Parks
Billiard and Pool Establishments Legal Services, Attorneys
Betting Membership Establishments (Costco, Sam's, etc.)
Amusement Parks  
Legal Services, Attorneys  
Caterers  
Eating Places, Restaurants  
Fast Food Restaurants  
Membership Establishments (Costco, Sam's, etc.)  

7. Conditional Procurement Card Use

7.1 Facilities-Related Use

Building maintenance or repairs that comply with Administrative Procedure 5.2.6-P Facilities Maintenance can be paid via procurement card.

The merchant's certificate of liability insurance must be on file prior to beginning any work/services.

7.2 Small Technology Purchases

Procurement card holders or custodial procurement card users shall ensure devices purchased such as telephones, personal digital devices, or other equipment that cost less than $500 per item are in compliance with KCTCS Technology Solutions security standards and properly configured with appropriate safeguards.

7.3 Computer-Related Equipment

For computer related equipment such as desktop computers, laptops, and iPads costing more than $200 but less than $500, the items are to be tracked in PeopleSoft Asset Manager.

  1. Such equipment will be assigned either to a permanent fixed location or to an individual employee.

  2. Software purchases should be coordinated with Technology Solutions.

7.4 Bulk Fuel Purchase

Bulk Fuel can be purchased on a procurement card for delivery to storage tanks owned by KCTCS.

  1. Bulk fuel purchases shall be recorded via electronic procard record with invoice and/or paid receipt attached.

  2. Fuel purchased for a KCTCS vehicle is on an exception or emergency basis only.
    1. Request for exception to this restriction shall be submitted (in advance where possible) to the KCTCS System Director of Procurement to Payment Services or designee.

  3. The procurement card should not be used to purchase fuel for a rental vehicle where an employee is in travel status except in extenuating circumstances.
    1. The employee should pay for the fuel and seek reimbursement.
    2. If a procurement card is used to rent a vehicle for group transport, the same procurement card may be used to purchase fuel.
    3. The license number of the vehicle should be written on the fuel receipt and document the purchase of the fuel within the bona fide business purpose section. Refer to Administrative Procedure 5.1.17-P Vehicle Rental for details.

  4. Fuel used for instructional demonstrations; non-highway licensed service equipment, such as generators, mowers, weed eaters, etc.; or other maintenance or service equipment is allowed and must include in the business purpose, the specific equipment, period of time, and event/purpose for which fuel is to be used.

7.5 Credit Card Fees

  1. A credit card processing fee is allowed within the following guidelines:
    1. Calculated percentage amount does not exceed a total flat fee of $50.00, and
    2. Budget owner must agree to cover the credit card fee.

  2. If the fee exceeds $50.00 or the budget owner refuses to cover the fee in the budget line, payment must be made using a non-PO voucher rather than a procurement card.

8. Security of the Procurement Card

8.1 Internet Purchase Security

  1. For Internet purchases, card users should only use secure websites that are indicated by an “https” preceding the web address.

  2. Card users should click on a padlock next to the web address bar to ensure the site is encrypted.

  3. Card users should only conduct business with reputable merchants.

  4. Card users should only use merchants located within the U.S. unless otherwise preapproved by the Procurement Card Program Administrator.

8.2 Ensuring Secure Communications

Card users should never share a procurement card number and/or information via email or fax. The card user should contact the merchant at the time of payment unless payment is made online through a secure website.

8.3 Physical Card Security

  1. Cardholders should secure the physical procurement card in a secure locked area when not in use.

  2. The card owner should keep accurate record (check out/in log) of who is using the card so that the card can always be located.

9. Compliance Violations

9.1 Compliance Responsibility

The colleges’ Procurement Card Site Coordinator/Administrator and the KCTCS Procurement Card Program Administrator are charged with ensuring compliance for purposes of internal control and sound management practice.  Responsibility for a procurement card should not be taken lightly. KCTCS funds are committed each time a procurement card is utilized; therefore, cardholders and card users are held accountable for all transactions made to a KCTCS procurement card. Supervisors of cardholders are responsible to carefully review each transaction to ensure compliance and validity. Intentional misuse or fraudulent abuse may result in disciplinary action up to and including dismissal from employment and prosecution. Negligence by the supervisor in reviewing cardholder statements may also result in disciplinary action up to and including dismissal from employment.

9.2 Discipline for Violations

  1. First Incident – Verbal/Written Notification (email or letter) of non-compliance.
    1. Cardholder or custodial card user shall provide written (email acceptable) acknowledgment that they understand how the actions violated business procedures and include assurance of compliance to business procedures in the future.

  2. Second Incident – Written notification (email or letter) of non-compliance with card use suspended for 30 days, depending on the seriousness of the violation and whether the violation is a repeat of the first incident.
    1. Cardholder or custodial card user will receive additional training within 30 days of the issuance of violation.

    2. Cardholder or custodial card user shall provide written acknowledgment that they understand how the actions violated business procedures and include assurance of compliance to business procedures in the future.

  3. Third Incident – Card suspended for 30 days with possibility of cancellation of cardholder privileges, depending on the seriousness of the violations and whether violations are a repeat of the prior incidents.
    1. Cardholders or custodial card user may be subject to disciplinary action in accordance with KCTCS personnel policies.

    2. Documentation of such disciplinary action pertaining to the use of a procurement card may become part of the employee’s performance record and/or be considered in the determination of his/her performance rating or eligibility for award of merit bonuses.

    3. Depending on the seriousness of the violation(s), disciplinary actions may also include immediate account termination, documentation of unsatisfactory job performance in the employee’s personnel file, and/or formal suspension or termination of employment with KCTCS.

9.3 Violation Period

  1. Procurement Card Site Coordinator will maintain a record of non-compliance per cardholder within a fiscal year.

  2. Cardholder will begin each fiscal year with no carryover of violations. EXCEPTION: If the incident occurred in the last quarter of the previous fiscal year and the violation was deemed serious, the violation may carry over to the next fiscal year.

9.4 Violation Examples

  • Personal purchases.
  • Split purchases to avoid the single purchase limit of $7500.00.
  • Purchasing capital assets.
  • Receipts having sales tax charged without attempt to obtain credit.
  • Charging incidentals with hotel accommodation(s).
  • Charging a car rental without prior approval and documented written justification.
  • Failure to submit Statement of Account to the Procurement Card Administrator by the established due date.
  • Failure to include necessary supporting documentation as required.
  • Failure to have authorized approval signatures on the procurement card statement.
  • Upgrades to flights, lodging and/or convenience purchases such as, but not limited to:
    • Early check-in
    • Wi-Fi during flight or other entertainment packages
    • Refreshments
    • Additional baggage

9.5 Violation Appeal

  1. A cardholder or custodial cardholder who has had privileges canceled may appeal and reapply for a procurement card in writing at the start of a new fiscal year.

  2. Appeals are subject to the approval and discretion of the KCTCS System Director of Procurement to Payment Services or his/her designee.

9.6 Termination of Card

  1. KCTCS may terminate cardholder’s, custodians, or custodial card user’s right to use the procurement card at any time for any reason.

  2. Cardholder, custodian, or custodial card user shall cease use of and return the procurement card to the appropriate KCTCS personnel immediately upon request or upon transfer to a new department or leaves KCTCS.  It is the responsibility of the cardholder and supervisor to notify the respective Site Coordinator and the Procurement Card Program Administrator and surrender the procurement card.

9.7 Supervisor Responsibility

  1. Supervisors of cardholders are responsible to review the cardholder statement at each cycle to ensure each transaction is in compliance and propriety of the business expense. Failure to do may result in disciplinary action in accordance with KCTCS personnel policies.

  2. Supervisors noted for failing to provide appropriate review and/or compliance will receive additional training and be requested to provide written (email is acceptable) acknowledgment of the situation and provide assurance to future compliance to KCTCS business procedures.

  3. Instances of repeated failure of appropriate review and/or compliance will be subject to disciplinary action including notation of unsatisfactory job performance as part of the employee’s performance record with consideration in the determination of the employee’s performance ratings.

10. Suspected Fraudulent Activity

Steps to address suspected fraudulent activity:

  1. Cardholder (or College Site Coordinator) is to contact the Procard Administrator immediately upon discovery of suspected fraudulent activity.

  2. Cardholder is to contact the police and file a report if the card is suspected stolen/missing.

  3. The KCTCS Procard Administrator will contact PNC Bank to alert them of the suspected fraudulent activity:
    1. The procard suspected of fraudulent activity will be deactivated immediately.
    2. A new procard will be ordered for replacement.

  4. PNC advises to first make a good faith effort to resolve directly with the merchant for any posted unauthorized charges. If that effort does not end with satisfactory results, then the Cardholder can file a PNC dispute form to billinginquiries@pnc.com.

  5. The KCTCS Procard Administrator shall record Cardholder compromised card information on an internal tracking log.

11. Card Integrity - Procurement Card Audit Activity

Card activity is subject to monthly and/or random audits by the appropriate personnel, including, but not limited to the KCTCS Procurement Card Program Administrator, College Site Coordinator, KCTCS Internal/External Auditors, and Card Integrity.  The audits are to protect the interests of KCTCS, and to help ensure adherence to the program’s policies and procedures.  Cardholders/Custodians may be asked to produce the physical procurement card to validate existence and provide statements and/or supporting documentation to verify appropriate use.

  1. Card Integrity – 3rd party audit procard data-monitoring mechanism to identify possible procard misuse and noncompliance.

  2. Monthly Expense Monitoring: Reporting data is a combination of data exported from PNC ActivePay and PeopleSoft Electronic expenditure form criteria.

  3. Identify misuse & abuse tailored to KCTCS procedures.

  4. Report data includes, but is not limited to:
    1. Transaction Date
    2. Merchant
    3. Cardholder/College
    4. Transaction Posted Dollar Amount
    5. Bona fide business purpose as specified on the electronic procard record and/or ActivePay comments

  5. Auditing compliance.

  6. Quick review to allow communication of findings to College Site Coordinators/ Cardholders.
    1. Findings could be positive or negative.
    2. Communication within relevant time frame allows time for prevention of fraudulent activity, card misuse, and potential violations.
    3. Quick communication alerts cardholders/employees that transactions are being closely monitored.

11.1 Data File

The Card Integrity data file that contains previous cycle procard data is uploaded monthly (after the mapper G/L upload by Finance) using a secure PeopleSoft process.  Card Integrity uses automated monitoring methods to “flag” potential transaction compliance issues based upon KCTCS tailored criteria.

11.2 File Review

Card Integrity sends email share file notification when the reports are available to view on the secure Card Integrity site to the to College Lead Management/Site Coordinators, Fire Commission and Procard Administrator for their review/records. Reviewed records are to be uploaded to a secure network folder for retention and potential audit purposes.

11.3 Audits

The KCTCS Procard Administrator to perform quarterly audits, selecting a minimum of three college business units per quarter.  Violations will be recorded per section 9 of this procedure.