Procurement Card | KCTCS

Administrative Procedures

Procurement Card

Policy Number: 5.4.2-P

Current Effective Date: 08/01/2017

Original Effective Date: 10/01/2013

Revision Dates: 10/01/2013, 01/01/2015, 07/18/2017

Revision Number: 3

Revision Summary:

Responsible Official: Director of Procurement to Payment 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 must be completed, signed, and submitted to the College Site Coordinator/KCTCS Procurement Card Program Administrator for processing. 
  2. Procurement cardholders should beKCTCS 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 must 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 procard levels.
  3. Procurement card purchases for refreshments, meals, or accommodations must have a completed BA50 Form (Meals, Refreshments and Accommodations Report) attached for documentation. 
  4. At the time of purchase, theprocard user is to advise merchants of theKCTCS Sales Tax Exemption number located on the front of theprocard.
    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, contact the KCTCS System Office of Procurement to Payment Services Department.

3.3

Eligibility Requirements:

  1. The employee must be in an established KCTCS position, preferably full-time (no temporary positions).
  2. The employee must 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 must include small dollar purchase authority.

3.4

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

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

4.2

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

  1. The Custodian must ensure procard 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

A custodial card user is the employee using a custodial card.

  1. He/she must sign a Procurement Card Agreement.
  2. He/she will receive a copy of this procedure and other written material given to cardholders before using the custodial card.

5. Procurement Card Controls

5.1

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

  1. Spend Limit Per Transaction 
  2. Spend Limit Per Cycle 
  3. Merchant Category Code 
  4. Default Budget String

5.2

Default spend limit:

  1. Each card will have a maximum default spend limit of $4,999 per transaction. 
  2. Monthly and transaction spend limits will be assigned based on necessity and review of actual usage. 

5.3

Card Level:

  1. There are two procurement cardholder levels for which one may apply.
    1. Level I – general cardholders, including airline ticket purchases.
    2. LevelII – 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.
      1. Additional purposes may be considered on a case-by-case basis.

5.4 Record Retention:

Record Retention:

  1. Every purchase must include a BA8 Form (and a BA50 Form when required) with supporting documentation that includes but not limited to:
    1. A valid sales receipt/invoice (website/email copy is acceptable).
    2. Packing slip.
    3. Cash register receipt.
    4. Order form or application. 
  2. Should a receipt/invoice be lost and a copy cannot be obtained, a completed Affidavit for Lost Receipt Form must be attached for documentation – BA3C Form.

6. Purchase Authority and Restrictions

6.1

Procurement cards are not to be used for:

  1. Lodging, unless the KCTCS System Director of Business Services 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. Advanced payment of goods or services.
  8. Internal use within KCTCS.
  9. Printing, as defined in Business Procedure 5.4.13-P.
  10. Split purchases to avoid the maximum transaction amount
    1. Without prior approval a requisition is required for transaction totals over $5000. 
  11. Payment to third party suppliers.
    1. Procard payments are to be made only to the supplier providing the goods and/or services.

6.2 Procurement card level restrictions:

Procurement card level restrictions:

  1. 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.

    Level I Level II

    Wire Transfers, Money Orders

    Furriers and Fur Shops

    Drinking Places, Bars, Taverns

    Nightclubs, Cocktail Lounges…

    Package Stores-Beer, Wine, Liquor

    Financial Inst. Manual Cash

    Financial Inst. Automatic Cash

    Security Brokers/Dealers

    Insurance Sales

    Lodging/ Hotel and Motels

    Timeshares

    Dating and Escort Services

    Tax Preparation Services

    Counseling Service - Personal

    Massage Parlors

    Motion Picture Theaters

    Billiard and Pool Establishments

    Betting

    Amusement Parks

    Legal Services, Attorneys

    Misc. Food Stores

    Bakeries

    Freezer, Locker Meat Provisions

    Candy, Nut and Confection Stores

    Dairy Products Stores

    Caterers

    Eating Places, Restaurants

    Fast Food Restaurants

    Wire Transfers, Money Orders

    Furriers & Fur Shops

    Drinking Places, Bars, Taverns

    Nightclubs, Cocktail Lounges…

    Package Stores-Beer, Wine, Liquor

    Financial Institutions - Automatic Cash

    Security Brokers/Dealers

    Insurance Sales

    Timeshares

    Dating and Escort Services

    Tax Preparation Services

    Counseling Service - Personal

    Massage Parlors

    Motion Picture Theaters

    Billiard and Pool Establishments

    Betting

    Amusement Parks

    Legal Services, Attorneys

7. Conditional Procurement Card Use

7.1

Building maintenance or repairs that comply with Business Procedure 5.2.6-P (Facilities Maintenance) can be paid via procard.

  1. A certificate of liability insurance must be on file prior to beginning any work/services.

7.2

Procard holders or custodial procard users must 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

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

  1. Bulk fuel purchases must be recorded on a BA8 Form
  2. Fuel purchased for aKCTCS vehicle is on an exception or emergency basis only. 
    1. Request for exception to this restriction must be submitted (in advance where possible) to the KCTCS System Director of Procurement to Payment Services or his/her 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 a BA8 form should document the purchase of the fuel with the bona fide business purpose. Refer to Business 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 on a case-by-case basis.
    1. Requests for authorization to purchase fuel for the above should be submitted to the KCTCS System Director of Procurement to Payment Services or his/her designee prior to purchase.
    2. The completed BA8 is to include the specific equipment, period of time, and event/purpose for which fuel is to be used.

8. Security of the Procurement Card

8.1

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

  1. Card users should click on a padlock next to the web address bar to ensure the site is encrypted.
  2. Card users should only conduct business with reputable merchants.

8.2

Card users should never share a procard number and/or information via email and/or fax.

  1. The card user should contact the merchant at the time of payment unless payment is made online through a secure website.

8.3

Cardholders should secure the physical procard in a secure locked area when not in use.

9. Compliance/Violations

9.1

The supervisor of the college Site Coordinator/Program Administrator is responsible to audit, review, and ensure transaction bona fide business purposes are within KCTCS business procedure guidelines.

9.2

Violation Discipline:

  1. First Incident – Verbal/Written Notification (email or letter) of non-compliance.
    1. Cardholder or custodial card user must provide written (email acceptable) acknowledgement 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 must provide written acknowledgement 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.
    1. 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:

  1. Personal purchases.
  2. Split purchases to avoid the single purchase limit of $4,999.
  3. Purchasing capital assets.
  4. Receipts having sales tax charged without attempt to obtain credit.
  5. Charging incidentals with hotel accommodation(s).
  6. Charging a car rental without prior approval and documented written justification.
  7. Failure to submit Statement of Account to the Procurement Card Administrator by the established due date.
  8. Failure to include necessary supporting documentation as required. 
  9. Failure to have authorized approval signatures on the procard statement.

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, custodian’s, or custodial card user’s right to use the procurement card at any time for any reason.
  2. Cardholder, custodian, or custodial card user must cease use of and return the procurement card to the appropriate KCTCS personnel immediately upon request or upon termination of employment.

9.7

Supervisor Responsibility:

  1. Supervisors of cardholders are responsible to review each transaction to ensure compliance and propriety of the business expense.
    1. Negligence to do so 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) acknowledgement 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 or eligibility for award of merit bonuses.