Commonwealth of Kentucky Finance and Administration

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Commonwealth of KentuckyFinance and
Administration

• Procurement Card Policy Overview
• June 22, 2004

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Finance and Administration PolicyProcurement
Card Program

• FAP 111-58-00

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Organizational CardPolicy Reference Sections 3

• A new card is established, assigned to an
  organization, instead of an individual
• No signature line
• No dispute rights
• More strict guidelines for types of purchases
  that can be made
• Can be shared between employees
• Requires approval from Controller to establish

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Roles Responsibility

• Finance Administration
• Agency Head
• Agency Fiscal Officer
• Procurement Card Program Administrator/Authorized
  Signer
• Procard Administrator
• Agency Supervisors
• Cardholder/Custodian

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Finance and AdministrationPolicy Reference
Sections 15 21 a - d

• Train agencys procurement card program
  administrators
• Provide a report for agencies to monitor/
  reconcile cycle activity
• Establish procurement guidelines
• Conduct reviews to ensure agencys compliance
  with FAP 111-58-00
• Monitor program for general operational
  improvements

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Questions on Finance Role
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Agency HeadPolicy Reference Sections 1 15 18

• Sign Commonwealth of Kentucky Procurement Card
  Site Agreement (formerly Agency Agreement)
• Identify individual(s) to serve as Program
  Administrator and Authorized Signer
• Empower administrators to execute
  responsibilities
• Ensure agency personnel comply with FAP 111-58-00
  and other related statutes and policy

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Questions on Agency Head Role
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Agency Fiscal OfficerPolicy Reference Sections
12 17 a - i

• Develop a written plan to establish internal
  controls and monitor compliance
• Establish proper separation of duties
• Ensure cardholders/custodians are submitting
  valid receipts and documentation along with
  activity reports on timely basis
• Ensure receipts and other documentation are
  properly retained
• Establish a plan that takes an appropriate
  disciplinary action when cardholders fail to
  comply
• Report noncompliance to cabinet secretary and the
  Office of the Controller

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Questions on Fiscal Officer Role
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Program Administrator/ Authorized SignerPolicy
Reference Sections 7 15 a, b, c, e, g, h

• Work with agency management to determine who
  shall receive a card
• Maintain proper card controls including
  appropriate limits and proper Merchant Category
  Code
• Develop and provide mandatory training for all
  cardholders, custodians and card users
• Execute and maintain an accurate Cardholder
  Agreement for all cardholders/custodians
• Coordinate the process for disputed charges
• Coordinate payment process
• Establish a procedure to ensure cardholders/card
  users receive no monetary benefit from purchases

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Questions on Program Administrator Role
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Procurement Card Administrator Policy Reference
Sections 13 15 d, f, g, h, I 20

• Distribute activity reports to cardholders
• Assign default accounting structure for each card
  and ensure proper accounting structure is charged
  for each transaction, including 1099 reportable
  charges
• Ensure cardholders do not receive monetary
  benefit from purchase
• Report any non-compliance to Agency Head and
  Office of the Controller
• Ensure timely payment to issuing bank to avoid
  finance charges
• Report purchases of fixed assets to property
  officer
• Submit activity reports to Finance CRC

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Questions on Procard Administrator Role
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Agency Supervisor Policy Reference Sections 17
a, b, d

• Inform each cardholder/custodian, in writing, of
  the goods services that may be purchased
  without explicit prior approval
• Ensure cardholder/custodian requests prior
  approval for purchases not specified
• Sign activity report to attest that all purchases
  were approved and for the benefit of the
  Commonwealth

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Questions on Cardholder Supervisor Role
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Cardholder Policy Reference Sections 2 5 6
9 10 11 14 16 17 b, c, d

• Sign Cardholder Agreement
• Obtain prior approval for all purchases
• Obtain valid, detailed receipt for every purchase
  and credit
• Ensure sales tax is not charged on purchases
• Reconcile receipts to activity report to attest
  that all purchases were for the benefit of the
  Commonwealth
• Submit signed activity report with all receipts
  to procard administrator within 4 business days
  after close of the payment cycle
• Reconcile Activity Report to bank statement to
  ensure accuracy
• Follow agencys procedure for any disputed item
• Report a lost or stolen card to the issuing bank
  immediately

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Questions on Cardholder Role
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Organizational Card Agency Head Policy
Reference Section 3 a, b, c, f, i

• Obtain prior approval from the Office of the
  Controller
• Sign Cardholder Agreement for organizational card
• Ensure only one organizational card per physical
  location
• Ensure organizational card is not shared by other
  organizational units within the Cabinet or Agency
• Appoint one employee to serve as custodian
• Ensure each employee using the card has received
  a copy of the policy and other written material
  provided to individual cardholders

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Organizational Card Custodian Policy Reference
Section 3 d, e, f, g, h, I, j, k

• Determine which employees may use the card
• Maintain a detailed log of employees who use the
  card
• Ensure purchases are pre-approved before card is
  logged out
• Ensure all cardholder duties are followed for
  each purchase
• Ensure card numbers are not written down,
  retained, or used by employees
• Ensure card is not used for purchases from the
  internet
• Store card in a secure location
• Ensure card users report a lost or stolen card to
  the issuing bank, agency management, custodian
  and agency program administrator immediately

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Questions on Organizational Card
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Important Note
It is no longer acceptable for cardholders to
provide statements signed by supervisors in lieu
of missing receipts. All purchases must be
documented by a valid vendor receipt identifying
goods or services purchased. Cardholders can be
held monetarily responsible for purchases not
substantiated by a valid receipt.
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Activity Report

• Located in Agency root folder of Seagate
• Shall be submitted on at least a monthly basis
• Shall identify the purpose need for every
  purchase
• Must be signed by cardholder and his/her
  management
• Must be submitted to program administrator within
  4 business days after close of cycle
• Shall be submitted Finance CRC each month

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Activity Report

• Shall be submitted Finance CRC each month via
  mail to
• Room 460, New Capitol Annex
• 702 Capital Avenue
• Frankfort KY 40601
• Or, fax to [phone]

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Procard Report Parameters
Note The screenshot above is intended as an
example.
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Procard Report Parameters
Note The screenshot above is intended as an
example.
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Procard Report Parameters
Note The screenshot above is intended as an
example.
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(No Transcript)
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Procard History

• 1996 Program began with 7-10 cardholders
• 2001 80 to 100 cardholders
• Informal cardholder training
• No formalized supervisor involvement

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Procard History-continued-

• Nov 2001 New report distributed to cardholders
• Every cardholder was trained
• New procedure implemented
• Supervisors required to sign cardholder
  activity report
• Every transaction requires an invoice/ receipt
• Deadlines implemented for report submission to
  Procard Administrator

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Report Benefits

• Supervisors more involved and aware of
  expenditures in their agencies
• Creates cardholder accountability
• Helps ensure all receipts are collected
• Establishes a schedule for receipt submission
• Provides justification for approval of the
  Procurement Desktop (PD) Procard documents
• Simplifies the payment process

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Procard Report Process

• Self Helps
• Cardholder Spreadsheet
• Name
• Agency
• Phone Number
• Fax Number
• Vendor spreadsheet
• Name
• Address
• Vendor Number

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Procard Report Process-continued-

• Print Reports
• Check Reports
• Send E-Mail/Fax to Cardholders
• Report Processing
• Stamp in/mark off cardholder list
• Record document number funding strip on
  Invoices
• Sort invoices by document number
• Mark off document
• Enter into Procurement Desktop (PD)
• Validate send to Program Administrator for
  release

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Questions on Activity Report
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Resources

• FAP 111-58-00
• Finance Administration Procurement Card Users
  Guide
• http//mars.ky.gov

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Contacts

• Finance Administration
• Customer Resource Center
• Email Finance.CRCGroup_at_ky.gov
• Phone [phone]
• Toll-Free 1-877-973-4957

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Other Questions