Feb 2007 Purchasing Card Guide

Division of Procurement

Pur chasi ng Car d Users Guide February 2007

Montgomery County Public Schools Department of Materials Management Division of Procurement 850 Hungerford Drive, Suite 162 Rockville, Maryland 20850 301-279-3555

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1.0 Purpose, Exclusions, and Definitions Purpose The Montgomery County Public School (MCPS) Purchasing Card Program has been established to streamline the process for making low dollar purchases that are necessary to MCPS operations. Exclusions The following materials and services shall be excluded from the Purchasing Card Program unless otherwise noted: a) b) c) d) e) f)

Transactions greater than pre-established dollar limits. Travel and entertainment expenses, including, restaurants and accommodations. Gas and oil, including car rental. Personal expenses. Transactions resulting in "insufficient funds". Cash access.

Any questions regarding the above should be directed to your supervisor for clarification. Definitions Program Administrator: The Program Administrator serves as the liaison for Cardmembers and as point of contact for American Express for initial account set-up and ongoing account management. Assistant Program Administrator: The Assistant Program Administrator serves as back up to the Program Administrator. Approving Official: The Approving Official is a person in authority who will be responsible for the card activities of a certain number of subordinate Cardmembers. Cardmember: The Cardmember is the employee to whom the card is issued. The card bears the employee's name and may only be used by the named employee to make authorized purchases for MCPS. Card-Provider: American Express issues the purchasing cards. 1.1

Roles and Responsibilities 1.1.1

The Cardmember a) Acknowledges that the Purchasing Card is the property of MCPS and should only be used for official, business purposes. b) Accepts responsibilities under the MCPS Purchasing Card Program and agrees to comply with the requirements set forth in this User Guide by signing the “MCPS PURCHASING CARD AGREEMENT”.

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c) Does not give the card number to any other individual to place orders with a supplier. The Purchasing Card is a charge card and must be used in such a manner that insures the security and safekeeping of the Purchasing Card. The Purchasing Card is nontransferable. Allowing anyone else to use the card will result in termination of card privileges. The Cardmember must be the person placing the order with the supplier. d) Notifies American Express immediately of any lost or stolen purchasing cards and advises his/her Approving Official and the Program Administrator of the situation. Notification is required to release MCPS from liability for charges incurred by someone other than the Cardmember. e) Advises the supplier at the time of transaction of the following: 1. The shipping address, including the name, and phone number of the person to whom the material is to be delivered. 2. The MCPS school, division, or department that should be entered at the time of purchase or ordering. 3. The tax-exempt status of MCPS (i.e., no sales tax). f) Accounts for the goods received by obtaining a receipt and/or a packing list at the point of receiving goods and verifies that the materials and/or services received are what was ordered. g) Treats returns and credits of goods as separate transactions, that they are not to be handled as exchanges or combined with other purchases, and DOES NOT ACCEPT CASH REFUNDS. h) Reviews statements each month for accuracy and gives statements with logs and invoices/receipts to the Approving Official to be retained by the Approving Official for future reference and audit. (Click here to review, MCPS Form 234-21, Purchasing Card: Cardmember Transaction Log) i) Notifies an American Express Customer Service representative of any billing discrepancies posted on the Monthly Reconciliation Statement that cannot be resolved with the supplier. American Express will place these charges in dispute until they are resolved. j) Contacts the Program Administrator (or Assistant Program Administrator) for assistance in informing suppliers who are not currently Purchasing Card suppliers of the advantage of accepting the purchasing card from MCPS. 1.1.2

Approving Official a) In collaboration with the Program Administrator, establishes appropriate guidelines and procedures for use of the Purchasing Card, consistent with the requirements set forth in this guide, and the policies and procedures of the MCPS school, department, division, or office, including setting transaction and monthly limits for each subordinate Cardmember. b) Reviews and signs the monthly summary report within fourteen (14) calendar days of receipt, which lists all the individual Cardmember monthly transactions for policy compliance, to ensure purchases are made in accordance with MCPS purchasing policy. c) Approves and retains all documentation for a period of five (5) fiscal years, for future reference and audit, the Cardmember monthly statements and transaction logs.

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1.1.3 Program Administrator and Assistant Program Administrator a) Develop and coordinate Cardmember and Approving Official training and communications. b) Work with Cardmembers to identify new AMEX suppliers/merchants. c) In collaboration with Approving Officials, establish and maintain Cardmember records and controls regarding: transaction limits, monthly limits, reporting hierarchy and card expiration date. d) Coordinate Cardmember enrollment, termination and changes. (Click here to review, MCPS Form 234-20, Purchasing Card File Maintenance Worksheet) e) Identify potential needs for new purchase agreements. This may include negotiation of discounts on future purchasing card purchases. f) Point of contact for American Express for account set-up and ongoing account management. 1.1.4

Division of Controller Invoice Processing and Remittance a) Receives and processes monthly purchasing card billing statement for payment and input to the MCPS accounting system. b) Performs post-audits of purchasing card transaction activity to ensure proper functioning of the Program. c) Centrally executes payment of the Card-provider's monthly billing statement. The purchasing card billing system is a single bill/central pay arrangement. Although each individual Cardmember receives a monthly account statement, payment is centrally executed by MCPS Accounts Payable. The grand total of all charges to MCPS, with supporting detail by Cardmember account is paid to American Express within fourteen (14) days following the close of the billing cycle. d) Retains monthly billing statements.

1.1.5

Suppliers a) Mark boxes and other shipping containers with the proper shipping address, the Cardmember’s name, and telephone number, to facilitate identification. b) Show detailed information on quantity, description, and price on receipts or packing lists. c) Issue paid invoices (as requested by MCPS Department of Transportation and Division of Maintenance). d) Segregate individual credit/return transaction. Do not issue cash refunds. e) Maintain the confidentiality of MCPS Purchasing Card Account numbers and transaction history to prevent this information from unauthorized use. f) Should not bill or invoice backorders until shipped.

1.1.6

American Express a) Processes requests for new purchasing card accounts, and changes to or cancellations of existing accounts in a timely manner. b) Sends monthly purchasing card account statements directly to the school, division, department, or office of individual Cardmembers. c) Resolves billing errors with Cardmembers and/or Suppliers in a timely manner.

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d) Provides a single monthly billing statement to the MCPS Division of Controller, including all information necessary to apply transaction costs to the MCPS General Ledger code assigned to each purchasing card account. e) Provides ongoing customer service through MCPS representatives and American Express Purchasing Card Account Administrator. 1.2

Procedures 1.2.1

Ordering materials or services a) The Cardmember (or his/her Approving Official) must ensure that funds are available to pay for items being purchased. This includes items purchased with a card from the Independent Activity Fund (IAF). b) All items purchased over the counter must be immediately available. No back ordering is allowed. c) All items purchased by telephone order should be delivered in a single delivery by the merchant (supplier) within the 30-day billing cycle. The order should not be placed without this assurance. d) Whether by phone or over the counter, the Cardmember shall inform the supplier that the purchase is for MCPS and is tax exempt. If prompted the Cardmember will give the supplier the number that is listed on the card. (List all the numbers). e) The Cardmember must verify that the following is prominently marked on the outside of all boxes or other shipping containers: the shipping address, including the name and phone number of the person to whom the material is to be delivered, and the school/division/office/department for which the order had been placed. f) If someone other than the Cardmember is picking up the order, then the Cardmember notifies the Supplier who this will be, requests that the Supplier ask for identification, and that person sign for the order picked up. g) The Cardmember Transaction Log and the monthly statement shall be used to document Purchasing Card orders. These logs, with receipts attached, shall be retained by the Cardmember or his/her Approving Official for at least five (5) fiscal years. These logs are subject to review by both the internal and external auditors. (Click here to review, MCPS Form 234-21, Purchasing Card: Cardmember Transaction Log)

1.2.2

Returns/Credits a) The Cardmember is responsible for ensuring that returns of material to suppliers are handled as credits and treated as separate transactions. Returns are not to be handled as exchanges or combined with other purchases. A separate transaction must be placed to reorder the correct material. b) Cash refunds are not allowed under any circumstances!

1.2.3

Picking Up/Receiving Materials a) Employees, who have been authorized by their supervisors to pick up supplies ordered by a Cardmember, must show identification of employment by MCPS when picking up orders. The official MCPS employment badge is the only identification to use in such cases.

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b) The Cardmember verifies that the material received is what was ordered and verifies the accuracy of all receipts and packing lists. c) The Cardmember updates his/her transaction log indicating delivery/receipts of materials ordered by the Cardmember. 1.2.4

Monthly Cardmember Statements and Reconciliation a) American Express will send monthly account statements directly to the school/division/office/department of individual Cardmembers. b) Each Cardmember is responsible for checking his/her monthly statement of purchases or other transactions (e.g., credits). The transaction log (with attached sales receipts), maintained during the month, should be compared with the monthly statement from American Express. c) The Cardmember should attempt to resolve any disputed transactions first through the supplier. If a discrepancy cannot be resolved with the supplier, then American Express should be notified. As the Card-provider, American Express will place these charges in dispute until resolved. d) After review, the Cardmember signs and dates the monthly Cardmember statement, with transaction log and receipts, and gives to his/her Approving Official within seven (7) calendar days for retention and audit. The use of a signature stamp is not acceptable. The Approving Official reviews the monthly report within fourteen (14) calendar days, including disputed transactions and files them with the fiscal year end financial information. These timelines must be followed should a dispute or change prove necessary.

1.2.5

Lost and/or stolen card a) The Cardmember reports the loss/theft of their card (or account number) immediately to American Express Customer Service at 1-800-492-4920. b) After American Express has been contacted, the Cardmember must advise his/her Approving Official and the Program Administrator. Upon notification to American Express of a lost or stolen card, further use of the card will be blocked. Prompt notification of lost or stolen cards (or account confidentiality) reduces the MCPS liability for fraudulent charges.

1.2.6 Changes to a Cardmember account 1.2.6.1

Cancellations a) The Cardmember’s Approving Official must initiate cancellation within forty-eight (48) hours of the Cardmember account, in the event that the Cardmember is transferred to another location or his/her employment is terminated. The Purchasing Card accounts cannot be reassigned from one employee to another. b) In the event that the Cardmember’s employment is terminated, the Approving Official should expedite cancellation of the Cardmember account by contacting the Program Administrator immediately. c) The Approving Official will collect the card and cut it in half and retain with the financial records when the Cardmember is leaving. If the plastic card cannot be collected, the Approving Official should advise the Program Administrator accordingly.

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d) The Approving Official provides the Program Administrator with the relevant details of the Cardmember's cancellation. e) The Program Administrator coordinates cancellation of the Cardmember account with American Express. f) The Approving Official initiates permanent or temporary changes in transaction or monthly limits to a Cardmember's account. Upon notification by the Approving Official to the Program Administrator, the Program Administrator will complete the necessary form and submit to American Express. g) The changes to a Cardmember's account are effective within fortyeight (48) hours. h) In emergencies only, American Express can facilitate change approval immediately upon notification by the Program Administrator. In such cases, the change must immediately be followed by appropriate approval by the Cardmember's Approving Official. 1.2.6.2

Issuing a New Cardmember Account a) The Approving Official completes the Cardmember Application and forwards it to the Program Administrator (Click here to review, MCPS Form 234-22, Purchase Card: Approving Official Acknowledgement) to be submitted to American Express. b) The Program Administrator contacts the potential Cardmember to schedule the mandatory training session. c) The Program Administrator completes applicable sections of the "MCPS PURCHASING CARD AGREEMENT" and obtains the signature of the Approving Official for the Cardmember's participation in the Card program. d) The Cardmember attends the mandatory training, reads the User Guide, and obtains understanding as to his/her responsibilities with regard to the Purchasing Card, including the transaction and monthly limits set by his/her Approving Official. e) The "MCPS PURCHASING CARD AGREEMENT" must be signed by the Cardmember and the original signed form must be given to the Program Administrator (or her/his representative at training) in order to receive the MCPS Purchasing Card.

1.2.7

Year End Procedures a) All Cardmembers shall follow year-end instructions provided by their Approving Officials regarding the spending limitations as the fiscal year comes to a close. Such information provided by the Division of Controller to Approving Officials shall include the deadline by which fiscal year-end spending must be completed. b) All Cardmembers, who are ten (10) month employees, will turn in their Purchasing Cards no later than the same time that they relinquish keys and other school property, as the school year closes. However, cards may be requested from Cardmembers at the discretion of the Approving Officials as spending limits on cards are reduced, to coincide with the end of the fiscal year.

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1.2.8 Monitoring and Auditing Purchasing Card Activities a) The Procurement Office and the Division of Controller, as well as the Department of Reporting and Regulatory Accountability, will conduct random audits of Purchasing Card use. The primary purpose of these audits is to ensure that the Purchasing Card program procedures are being followed and that: 1. 2. 3. 4.

Purchase volume appears reasonable. The Card is being used for appropriate transactions. Purchases are authorized. Documentation is complete.

b) Approving Officials are responsible for retaining all receipts and vouchers for audit by internal and external auditors. c) In addition to random audits, monitoring of Purchasing Card use will be made by the Program Administrator and Assistant Program Administrator through the use of American Express @Work. @Work allows for online reporting and program management. The Purchasing Card activity through American Express @Work shall also be monitored by location by the Approving Officials or their designees. Areas to be monitored include, but are not limited to: 1. 2. 3. 4.

Individual location procurement and purchasing policies. Compliance with Purchasing Card procedures. Sales and use tax charges. Non-use of card by Cardmembers.

d) In general, Purchasing Card transactions are subject to review by any or all of the following: 1. 2. 3. 4. 1.3

The Approving Official for the activity of the Cardmember. Division of Controller. Procurement Office. Department of Reporting and Regulatory Accountability, Internal Audit Unit.

Telephone and Contact List 1.3.1

Call American Express 24 hours/day, 7 days/week: 1-800-492-4920 Lost or Stolen Cards Questions or Information Billing Disputes1 Supplier should be contacted first to resolve billing disputes. If dispute cannot be satisfied with the supplier, then American Express should be contacted and the Program Administrator informed of the dispute.

1.3.2

Call the MCPS Program Administrator: 301-279-3115 Changing Work Locations Purchasing Card Denied at Supplier Supplier Does Not Accept American Express Other Questions

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PURCHASING CARD AGREEMENT The Montgomery County Public Schools (MCPS) Purchasing Card (the Card) is issued to you subject to the following terms and conditions. You must comply with these terms and conditions as part of the terms and conditions of your employment. Please certify as follows: 1. I realize that I am entrusted with a valuable tool, a Purchasing Card, and will be making financial commitments on behalf of Montgomery County Public Schools (MCPS). I understand that MCPS is liable to American Express for all charges made on the Card. 2. I will strive to obtain the best value for MCPS. I agree to purchase supplies and materials in accordance with my organizational responsibilities and purchase limits established by the Approving Official designated to review my purchases. 3. I must use this Card for approved purchases only and must not charge personal items. I am aware of and understand MCPS Regulations and the MCPS Policy on ethics. MCPS will audit the use of this Card and report and take appropriate action on any discrepancies. Failure to use the Card for MCPS purposes only may result in deducting of the total of such unauthorized charges from my payroll check. 4. I must follow the policies and procedures established by MCPS for the use of the Card. Failure to do so may result in either revocation of my Card use privileges or other disciplinary action. 5. I acknowledge that all purchases must be made in accordance with applicable laws and regulations, including, but not limited to MCPS Purchasing Card policies and procedures. Persons intentionally making unauthorized purchases may have their Purchasing Card privileges suspended, or be subject to disciplinary and/or legal action. This does not apply to lost or stolen card purchases made by others. 6. I have been given a copy of the User Guide for the Card. I am required to read the User Guide and understand the requirements of the Card's use. 7. If the Card is lost or stolen, I must notify American Express and the MCPS Program Administrator immediately. Having done so, if my Card or account number is lost or stolen, I am not personally responsible for any unauthorized charges. 8. I must comply with any changes that MCPS may make to the terms and conditions, and policies and procedures concerning the use of the Card. 9. I will return the Card immediately upon request or upon termination of my employment (including retirement). Should there be any organizational change that causes my work location (school, office, department, or division) to change, I will notify the MCPS Program Administrator and American Express (see User Guide) immediately. 10. I have attended the MCPS Purchasing Card training and agree to additional training as needed. As the employee being issued the Card, I have read and agree to the terms and conditions stated above. I certify that, to the best of my knowledge and belief, all of my statements and assertions are true, correct, complete, and made in good faith, and subject to MCPS policies, procedures, and all other applicable laws and regulations. This agreement supersedes any previously signed agreements (as of the date of the signing of this agreement). Employee Name (printed): Employee ID # : School/Location Name: Employee signature:

Date:

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