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Procard User Guide Edition 1 - Chapter 1 |
UNIVERSITY OF MASSACHUSETTS
AMHERST
Procard
Policies and Procedures
ã1998 by
University of Massachusetts
Procurement Department
Amherst, MA 01003
Phone (413) 545-0361 Fax (413) 545-1643
3rd Printing, 02/99
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Following is Chapter 1, OVERVIEW, of the Procard
User Guide. There are five chapters in all. The link to the online User Guide is provided to all prospective cardholders at training. If you are interested
in finding out more about this exciting and innovative
purchase card program, please contact the Procard Manager in
the Procurement Department at 5-1748. |
OVERVIEW
Welcome to the University of Massachusetts Amherst - Procurement Credit Card Program (UMass Procard). The Procard is a procurement tool, which offers an alternative to the existing University procurement/payment processes and provides an efficient and effective method to purchase and pay for consumable commodities of low dollar value. The card is a MasterCard credit card, backed by JPMorgan Chase, and hereinafter referred to as "JPMC."
This User Guide outlines the benefits of the Procard program to you (the Cardholder) as well as to your department and the University. It also provides you with the information that you will need to use the card. The Procard concept is designed to delegate authority and responsibility, to enable you to quickly and conveniently make small purchases of approved commodities directly from those vendors that accept the MasterCard credit card. This program was created with the help of many staff and faculty members, who participated in the original Procard Pilot Program, and is designed to meet your needs and those of the University.
The Benefits of the UMass Procard to you and the University are significant:
Benefits to the Cardholder:
Benefits To The University:
The Procard is designed to be used for purchases of consumable
supplies related to University business only. Use of the card for
personal purchases is strictly prohibited. The Procurement Department
and Accounts Payable are responsible for monitoring the effectiveness
of the Procard Program. If you have any questions regarding the
program or the appropriate use of the Procard, please contact the
University Procard Manager in Procurement at 5-1748.
HOW IT WORKS:
The Procard simplifies the process for the purchase and payment of
goods. Purchasing authority is delegated to the authorized
Cardholder, thus enabling the Cardholder to order materials directly
from the supplier. When the goods are received, the Cardholder saves
the packing list (or whatever documentation is available from the
vendor to show the proof of purchase (itemized). Once a month, the
Cardholder will receive a statement from the bank that lists all the
Cardholder's purchase transactions. The Cardholder will reconcile the
documentation to the monthly statement and place it on file for audit
purposes. It's that easy!
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There are five authorization criteria built into the Procard that are checked by the MasterCard system when the vendor scans the card, or enters the Cardholder's card number, at the point of sale. Following are the authorization criteria and the preset limits (Standards) that have been established by the University for Procard use. All transactions are approved or declined (instantaneously) at the point of sale based on the Procard authorization criteria:
The Account Administrator may increase or decrease on the Cardholder's card those standards that are noted above as being flexible. The Account Administrator may only decrease the single purchase limit (currently set at $1,000 ) for an individual Cardholder. Each time a card is used, that counts as a transaction. If the transaction limits established for the card are exceeded, the card will reject. The Cardholder may make as many purchases as (s)he wishes from the same vendor in a single day, as long as the total of the combined purchases from that vendor does not exceed $1,000. When the combined purchases from a single vendor in the same day exceed the per transaction limit (currently $1,000), that is called "dovetailing," which is a post audit issue. See Chapter 4, Post Audit/Oversight, page 31.
See your Card Application/Card Change Form for the authorization limits assigned to your card. It is the Cardholder's responsibility to ensure that the limits assigned to his/her card are not exceeded and that there are sufficient funds in the card account to cover the purchase(s).
The authorization process occurs through an electronic system that
supports the Procard processing services under the University's
agreement with JPMC. In addition, Procurement and Accounts
Payable have the capability to view a large selection of daily
reports to effectively monitor the use of Procards.
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Use of the Procard is restricted to non-appropriated accounts. The Procard may not be used for purchases against state appropriated accounts. Only one speed chart number and account code may be applied to the Procard; however, Procard charges may be moved from the card speed chart/account code to other valid campus speed charts/account codes by one or more authorized individuals within the budgetary unit who have access to the Reallocation screens. See Chapter 5, The Procard Reallocation Program, page 41, for information and instructions regarding reallocation.
To better accommodate the varied needs of our Cardholders, account codes have been created specifically for Procard Use: 736699 against Subsidiary EE (Administrative Expenses), and 742992 against Subsidiary FF (Operating Expenses).
When you complete your Procard Application form, select one of these two object codes to go with the account and the default account numbers assigned to the card. It should be the same account code for both accounts. Select the account code that best fits the majority of the types of purchases of consumable supplies that you usually make that are appropriate for the speed chart assigned to your card, excluding those commodities that are on the restricted list (see pages 5-7, Restricted Commodities).
For example, if your supply purchases usually fall within Subsidiary EE , you would select account code 736699. Administrative departments would ordinarily select Sub. EE. If your supply purchases usually fall within Subsidiary FF, you would select account code 742992. Academic departments would ordinarily select Sub. FF.
Not all grant accounts are appropriate for Procard use. Check with the respective grant accountant in the Controller's Office for possible restrictions before you make a grant account a card account. If the card account is against a restricted grant account, only the account code can be reallocated, not the account. You are encouraged to use other than a grant speed chart as the card speed chart, if that option is available to you. You could then reallocate the charges from the non-grant card speed chart and account code to one or more grant or non-grant speed charts and account codes, as may be appropriate.
Card Applications against grant speed charts must be approved by the
appropriate grant accountant in the Controller's Office. Note that
the card expiration date may not exceed the expiration date of the
grant speed chart.
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The Procard may be used for the purchase of most consumable commodities, with the exception of those contained in the list below. Cardholders will be informed of any changes to policy, as they may occur.
Purchases of restricted commodities, all purchases that may be inappropriate for the account assigned to your card, and any purchase that totals more than $1,000 (including shipping), must continue to be processed in accordance with other established procurement and accounting methods that are appropriate for the particular type of purchase. Please keep in mind that absolutely no personal purchases are allowed.
The Procard shall not be used to purchase the following commodities:
*Some services are now allowed, please check to see if the vendor you are using is listed at the Services Allowed web page at http://www.umass.edu/procurement/Procard/services.htm.
If you have any questions regarding a restricted commodity, or if
you have an emergency that requires immediate attention, please
contact the University Procard Manager in Procurement at 5-1748.
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While the Procard is a new procurement tool, it does not signal a change in policy regarding compliance with the use of University contract suppliers. If the desired item is available on an established State, University, or MHEC contract, it must be purchased from the contract vendor.
The Procurement Department is authorized to bid for, and issue, contracts that will provide the University with "least total cost" arrangements for consumable supplies required from outside vendors. When bidding such contracts, Procurement considers not only the vendor's line item pricing for the products, but also the vendor's:
Supplier contract pricing and performance are normally based on the University's overall anticipated volume of purchases during the contract period. In order to assure the University community of paying the "least total cost" for goods, and to fulfill the University's obligation to consolidate all of its requirements with the authorized contract supplier(s), all University departments are obligated to order the required consumable supplies from those vendors who are authorized contract suppliers to the University (State, University and MHEC), if the desired items are available on contract.
Until such a time as the Procard Website is available, the lists of current contract vendors may be found as follows:
University Contract Vendors: Found at http://www.umass.edu/procurement/commcont.html
MHEC Contract Vendors: MHEC Website at http://mhec.umassp.edu.
State Contract Vendors: Commonwealth's Website at: http://www.magnet.state.ma.us/osd/statewid/service.pdf.
NOTE: State and MHEC Contract expiration dates are staggered throughout the calendar year, so please check the websites first, to insure that the vendor is currently on contract. Contact your departmental bookkeeper for hard copies of available MHEC Contracts.
Circumventing the use of contracts may realize some savings for you initially, but repeated circumvention of contracts dilutes their value, discourages vendors from bidding in the future, and eventually drives prices up, to where no discount is offered. This will eventually negate any savings that may be realized from the use of the Procard system. Keep in mind that many of the vendors who might offer you a lower price may have bid on, and lost, a State, MHEC or University contract, and then intentionally try to circumvent contract pricing to gain your business. Please do not fall prey to this ploy. And, when you request pricing, make sure that you identify the appropriate contract against which the pricing should be applied. Failure to do so could result in your being given higher, non-contract pricing.
If the item is not covered by a contract, or, if the contract vendor is not yet ready to accept MasterCard, you may, of course, use any vendor that will accept MasterCard.
Departments may furnish to the Procurement Department the names
and addresses of suggested vendors, together with the product types
that they sell, for inclusion in future contract bids.
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How to Activate Your Procard/Authorized User:
You must telephone MasterCard at the number indicated on your
Procard to activate your credit card, before you use it. MasterCard
will verify your identity, to ensure that you are indeed the
legitimate Cardholder. Remember that only the Cardholder is
authorized to use the Procard. You are responsible for all activity
against the card and may not share your Procard with
anyone.
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The Procard may be used to purchase consumable supplies in person at the supplier site, over the phone, or by mail. Prior to placing the order, check the Contract Supplier Listings for contract suppliers for the product or service you are about to order. Again, remember that all Cardholders are obligated to order their required goods from those suppliers who are authorized contract suppliers to the University if the desired item(s) are available on contract.
When placing your order, please be sure to provide the vendor with the following information:
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Tell the vendor that the address label/packing list that accompanies the package(s) must contain the following information:
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For Information concerning the standard mail address format, link to the Mailing Services Page.
Address labels/packing lists that do not contain this information will delay the delivery of your goods indefinitely. Under no circumstances should the vendor indicate the Cardholder's Procard number on any labels that are external to the package, which would threaten the security of the card. See Chapter 2, Procard Records Management, page 21, for details on how to record and reconcile Cardholder transactions.
Please note that, by law, vendors are not permitted to bill your
credit card for purchases until the items have been shipped and the
transaction will not go against your card until that time. In most
instances, your card account will be debited within 48 hours after
the vendor ships your merchandise.
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Responsibility for Receipt of Goods:
The Cardholder is responsible for ensuring receipt of goods and follow-up with the vendor to resolve any delivery problems, discrepancies or damaged goods.
Upon receipt of your goods, keep the documentation received from
the vendor (typically a sales receipt or packing slip) for later
reconciliation (see Chapter 2, Procard Records Management, page
22.)
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Responsibility for Returning Item(s):
Item(s) should be returned directly to the vendor by whichever
means the vendor requires. The Cardholder is responsible for ensuring
that proper credit is applied to the card account for any returned
item(s) and that evidence of the return is maintained. (See How to
Dispute a Transaction, page 14.)
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The Procard may be used for departmental purchases of consumable supplies up to $1,000 from the University Store. Purchases can be made over the phone or in person. All orders must be picked up. The Cardholder must be present when picking up a phone order or when making a purchase in person and must present his/her Procard to the sales clerk and sign for the purchase. Remember that the Procard is not to be used for personal purchases.
When calling in an order or making a purchase in person, please provide the sales clerk with the following information:
Failure to emphasize that you are making a departmental purchase
may result in you not receiving the 30% University Contract discount
on qualified contract items.
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The following is a synopsis of the Procard policy for records management and is not intended to be all inclusive. For complete details, see Chapter 2, Procard Records Management, pages 21-25.
The Procard will eliminate the time and effort spent on processing and invoicing small purchase requests/purchase orders. With the authority to purchase specific commodities comes the responsibility to maintain adequate documentation at the source of the transaction.
The Cardholder shall familiarize him/herself with Chapter 2, Procard Records Management, pages 21-25, which details the procedures that the Cardholder must follow in order to maintain adequate documentation of all transactions against the Procard. Keep in mind that the documentation must support the legitimate business purpose of all transactions made with the Procard. Following are examples of supporting documentation:
Each month you (the Cardholder) will receive from the bank a Cardholder statement listing all your purchases. Check this statement against your sales receipts and packing slips to ensure that all the goods for which you are charged have been received.
Upon completion of reconciliation of the Cardholder statement to the supporting documentation, the Cardholder shall forward the statement and all supporting documentation to the individual within his/her department who has been assigned the responsibility for records retention. Such documentation shall be maintained on file in a manner that allows for its timely retrieval as detailed in Chapter 2, Procard Records Management, and as required by internal and external auditors, and by the Controller's Office. All documents must be retained by the department and kept readily available for audit purposes for the current and the previous fiscal year. All other records will be picked up by the Post Audit staff and put in storage in the Controller's Office for an additional five-year period.
The Cardholder statement that the Cardholder will receive each month is for reconciliation and audit purposes only. The University will pay JPMC directly and charge the speed chart assigned to your Procard. Use of the Procard will in no way affect or change your personal credit history.
It is the Cardholder's responsibility to ensure that all the
required documentation is accounted for and maintained in the manner
outlined in Chapter 2, that the Cardholder statement is reconciled
against the supporting documentation, that the Cardholder limits
assigned to his/her card are not exceeded, and that (s)he does not
exceed funds available in the account assigned to the card. Failure
to do so will result in action being taken against the Cardholder's
Procard, which may include a reduction in the Cardholder's
authorization limits or the cancellation of the card.
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The Cardholder is responsible for following up with the vendor for any erroneous charges, disputed items or returns, within 15 days of receipt of the JPMC Cardholder statement. A Cardholder may dispute a charge that appears on his/her monthly credit card statement. Disputed charges can result from failure to receive goods, use of the card by an individual other than the Cardholder to commit fraud, altered charges, defective merchandise, incorrect billing, duplicate charges, credits not processed, etc. The Cardholder should contact the vendor first to resolve any outstanding issues. Most issues can be resolved this way.
If the Cardholder is unable to reach agreement with the vendor, the next step is to complete the Statement of Questioned Item Form (See Appendix 3, Cardholder Forms, page 58(c), and send it, together with any supporting documentation, to the following address (Exception: Sales tax, which must be resolved by the Cardholder. Neither the bank nor the University will get involved with such disputes):
Procard Manager
Procurement Department
407 Goodell Building
All disputed transactions must be submitted to the Procard Manager
within 50 days of the monthly cycle date. Your request will be sent
directly to JPMC for review. When JPMC has
completed its investigation, the Cardholder will be informed of the
resolution and any corrections that were made.
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Only employees of the University (including student employees), as designated by the Account Administrator (the individual who has fiscal responsibility for the card speed chart) and the Reporting Authority (the individual to whom the Account Administrator reports), may receive a Procard. (See Chapter 3, The Procard Default Speed Chart and Lines of Authority, page 26). An individual may only receive his or her card after signing the Procard Card Application/Card Change form, which must be completed and signed by the applicant, the Account Administrator, and the Reporting Authority; by attending a formal Procurement Card Training Session; and by signing the Cardholder Agreement Form (See Appendix 3, Cardholder Forms, page 58(b)). Training Schedule
The Cardholder is required to read the Procard User Guide
and adhere to all Procard policies and procedures. Prospective
Cardholders must be present at Cardholder training and may not send a
proxy.
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Each Card Application/Card Change form will bear two speed chart
numbers and account codes. The first speed chart number/account code will
be that of the Account Administrator, against which all the Procard
charges will be made. The second speed chart number/account code will be a
default speed chart/account number of the Reporting Authority (the individual to
whom the Account Administrator reports, usually a department head or
a dean). For a complete explanation of how the Default Speed Chart/Account Number
works, see Chapter 3, The Procard Default Speed Chart/Account and Lines of
Authority, page 26.
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To cancel a Procard, the Cardholder must email the Procard
Manager in the Procurement Department, who will give the Cardholder
instructions as to what needs to be done, depending on the
circumstances. Exception: Cancellation if the card is lost or
stolen. See How to Report a Lost or Stolen Procard,
below.
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Renewal of an Existing Procard:
A renewal Procard will be sent automatically to the Cardholder
by JPMC at the Cardholder's address listed on the most
recent Card Application/Card Change Form, 30 days prior to the
expiration date of the card.
How to Report A Lost or Stolen Procard:
It is the responsibility of the Cardholder to immediately
report a lost or stolen Procard. The Cardholder must report a
lost or stolen Procard by phone directly to JPMC at (800)
270-7760. The 800
number is staffed 24 hours a day, 7 days a week. A
replacement card will be available for the Cardholder to pick up within 7 calendar
days.
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Only authorized Cardholders may use the Procard. Cards and card numbers must be safeguarded by the Cardholder against use by unauthorized individuals within or outside the University.
Use of the Procard will not affect the Cardholder's personal
credit in any way. The contract agreement that enables the University
to authorize individuals to use the Procard is between the University
and JPMC/MasterCard. Unlike personal credit cards that limit
liability to $50 for a lost or stolen card, the Cardholder's speed chart,
not the Cardholder personally, is liable for all charges made to the
Procard, up to the monthly transaction limit that is set on the
card.
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Consequences of Improper Use of the Procard:
The Procard represents the University's trust in you and your empowerment as a responsible employee of the University to safeguard and protect the University's assets. As a Cardholder, you assume the responsibility for the protection and proper use of the Procard.
See Chapter 4, Post Audit/Oversight, page 31, for an explanation
of the post audit/oversight policies and procedures and how post
audit and oversight of the card are administered.
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To ensure the continued success of the Procard Program and to meet
audit requirements of the University and various government agencies,
periodic post audits will be made of the Cardholder's Procard account
to determine that items purchased have been received, that proper
records are being maintained, and that policies and procedures are
being followed. The Controller's Office staff, as well as University
internal and external, and state and federal auditors will perform
these reviews. See Chapter 4, Post Audit/Oversight, page 31.
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Tax Exemption (See Appendix 2, Massachusetts Sales Tax Policy, page 57):
The University of Massachusetts Amherst is exempt from paying Massachusetts State Sales Tax, and, in most instances, from paying the state sales tax of any other state. The tax-exempt number appears on the front of each Procard. This number must be given to all vendors by the Cardholder at the time of the transaction, to exempt payment of state sales tax.
If sales tax is billed incorrectly to the Cardholder's account, it is the responsibility of the Cardholder to dispute the charge with the vendor directly. Neither JPMC/MasterCard nor the University will become involved with such disputes.
If a vendor requires a tax exemption certificate, it is the
responsibility of the Cardholder to provide it. Cardholders may
obtain a supply of tax exemption certificates from the Procurement
Department.
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Cardholder Responsibilities - Synopsis
Purpose:
To establish the policies related to the proper use of the UMA Procard.
Policy:
*Some services are now allowed, please check to see if the vendor you are using is listed at the Services Allowed web page at http://www.umass.edu/procurement/Procard/services.htm.
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For questions or comments regarding this site please
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© 2004 University of Massachusetts Amherst. Site Policies. This site is maintained by the Procurement Department . |
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