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Procard User Guide Edition 1 - Chapter 3 |
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Following is Chapter 3, The Default Speed Chart, 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. |
The University of Massachusetts Procurement Credit Card Program (UMass Procard) has been designed by your administration to accommodate low dollar value purchases of consumable supplies. Credit cards are a straightforward method of purchasing supplies that takes advantage of today's technology. Card use eliminates most of the paperwork that is required to buy and pay for something, and it is as easy to use as a personal credit card. The successful implementation of the program will prove to be beneficial to the entire University System. See Chapter 1, Benefits of Card Use, page 1.
A major objective of the University's Procard Program is to move the University from a highly centralized, highly controlled environment to one that is more decentralized, with control and authority vested at the unit level. One way to accomplish this is to assign as much purchasing authority and responsibility as possible to the individual who makes the purchases, while maintaining the existing lines of authority.
To this end, the responsibility for the proper use of the card rests first with the Cardholder; second with the Account Administrator of the speed chart assigned to the card (if other than the Cardholder); and third with the next higher level of authority to the Account Administrator (usually the individual to whom the Account Administrator reports), hereinafter referred to as the "Reporting Authority." This chain of responsibility runs concurrently with the existing lines of authority.
Accordingly, each Procard will have two speed chart.account numbers assigned to it by the issuing department at the time the Card Application form is prepared and approved by the Account Administrator and the Reporting Authority, a Card Speed Chart (an speed chart for which the Account Administrator has fiscal responsibility) and a Default Speed Chart/Account (an speed chart for which the Reporting Authority has fiscal responsibility). (See page 28 for instructions on how to identify the default speed chart/account.):
The first speed chart/account will be assigned directly to the card, and when supplies are purchased using the card, that speed chart/account code will be charged automatically. Authorized individuals ("reallocators") in each cardholding department will have 30 days from the date that the transaction is fed to the University's PeopleSoft System to go into the system to move those charges to other departmental speed chart/account codes. See Chapter 5, the Procard Reallocation Program, page 41.
If charges remain on the card speed chart/account, there must be sufficient funds in the speed chart/account to cover them, the charges must be appropriate for the speed chart/account, and the speed chart/account must be active. Should one or more charges on the card speed chart/account not meet these criteria, the Reporting Authority will be notified that (s)he has 15 calendar days to identify another speed chart/account that can appropriately accept the charge(s).
In the event that an acceptable response is not received within the 15 day period, the second speed chart/account (the Reporting Authority's Default Speed Chart) will be charged.
When an Account Administrator authorizes an employee to have a Procard to make charges against the Account Administrator's speed chart, (s)he in effect is giving that individual what equates to spending authority for that speed chart for Procard purchases. It is the responsibility of the Account Administrator to periodically go to the Records Manager to review the Cardholder's records, to insure that expenditures are appropriate.
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ACADEMIC DEPARTMENTS
In academic departments, in those cases where the speed chart assigned to the card bears the name of the dean/business manager in the University's PeopleSoft System, the default speed chart also may bear the name of the dean/business manager (must be two different speed chart numbers). The only time that the dean/business manager would have to go outside the department to his/her vice chancellor for a default speed chart and signature on the Procard Application form would be if the dean/business manager were the Cardholder.
ADMINISTRATIVE :
If Card Account = Subordinate to Department Head, Default Speed Chart/Account = Department Head's
If Card Account = Department Head/Business Manager's, Default Speed Chart/Account = Department Head/Business Manager's, unless Cardholder is Department Head/Business Manager
ADMINISTRATIVE DEPARTMENTS
In administrative departments, in those cases where the speed chart/account assigned to the card bears the name of the department head/business manager in the University's PeopleSoft System, the default speed chart/account also may bear the name of the department head/business manager (must be two different speed chart/account numbers). The only time that the department head/business manager would have to go outside the department to his/her vice chancellor or budget officer for a default speed chart/account and signature on the Procard Application form would be if the department head/business manager were the Cardholder.
The same principle would also apply to the offices of the vice chancellors and the chancellor.
The following examples depict how this procedure works:
EXAMPLE 1:
A Principal Investigator (PI) would like to have a Procard to make purchases of appropriate research supplies against his grant speed chart/account. The grant speed chart/account would serve as the card account. The PI goes to his department head and requests authorization to apply for a Procard. The department head agrees to allow one of the departmental speed chart/accounts to serve as the default account. In this scenario, the PI would be the Account Administrator, and the Department Head would be the Reporting Authority.
See Chapter 1, page 5, Speed Chart/Account Codes, Grant Accounts
The PI obtains a Procard and makes charges against it. A post audit review of the PI's procurement activity against the card indicates that a purchase was charged to the grant speed chart/account assigned to the card that was inappropriate for the grant speed chart/account. The Department Head is notified of the problem by the Associate Controller, or his/her designee (copy to PI, grant accountant, Procard Manager, Accounts Payable), and the Department Head is given 15 calendar days to identify another speed chart/account that is appropriate for the charge.
The Department Head immediately contacts the PI and instructs him to identify an appropriate speed chart/account to which to move the charge. The PI fails to do so within the specified time frame, the charge is taken off the grant speed chart/account, and the Default Speed Chart/Account that was listed on the PI's Card Application form is charged. The Department Head and PI are so informed. Note that because this was a grant speed chart/account, further action may be necessary, depending on the nature of the grant and the Cardholder's history of card use.
EXAMPLE 2:
A department head wants to have a Procard assigned to her for miscellaneous supply purchases against a departmental speed chart/account. In this scenario, the next level of authority would be her Dean. The Dean agrees to allow the Department Head to use one of the Dean's speed chart/accounts as the Default Speed Chart/Account.
The Department Head obtains a Procard and makes charges against it. During the course of the year, the accountant in the Controller's Office who oversees the card speed chart/account notes that the card account keeps going further and further into the red. An investigation shows that the Procard charges are not being reallocated to other speed chart/accounts.
In this instance, notification of the problem is brought to the attention of the Dean by the Associate Controller, or his/her designee (copy to Department Head, the accountant in the Controller's Office, Procard Manager, Accounts Payable), and the Dean has 15 days to identify one or more speed chart/accounts to which to move the charges. The Dean's Business Manager contacts the Department Head and insists that the issue be addressed immediately, the Department Head moves the charges to other appropriate speed chart/accounts, and the card account goes into the black. No further action is necessary.
In each example, even though the PI or department head would in all likelihood have identified an alternative speed chart/account, the Cardholder's Reporting Authority was notified, and (s)he ultimately was held responsible for resolving the inappropriate expenditure. This is where the cultural change comes into play, where responsibility and authority are merged.
Repeated problems could have a negative effect on cards
Note that the Controller's Office reserves the right to take action against cards that are assigned to individuals in departments that have numerous account issues. The Account Administrator and the Reporting Authority also have the right to reduce a Cardholder's transaction limits, or to cancel a Procard. See Chapter 4, Post Audit/Oversight, page 31.
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