Purchasing Services has arranged with PNC Bank to provide individual, pre-approved, employees of the University with a Purchasing Card to be used to acquire goods & services and/or travel-related expenditures, including group meeting and meal expenses, necessary for the ongoing operation of the University.
The Purchasing Card will have two separate spending limits. One will be for Goods & Services and the other for Travel & Group Meals/Meetings. Cardholders may be authorized for either or both of the limits, depending on the needs of the department.
The card, issued to approved employees, will be presented (with presented defined as: physically handing the vendor the card, or the providing of the card number for phone, fax, mail, on-line or other purchases) to the vendor providing the material or service. A daily electronic notice will be sent by the card-issuing bank to Penn State.
Goods & Services transactions are transmitted and loaded into IBIS for viewing by the Cardholder’s administrative area. After verification that the purchase was not for personal use, complies with Penn State policy, and is supported by a receipt the Financial Officer or those delegated authority by the Financial Officer to be a “Reconciler” will process the transaction via IBIS for posting to the appropriate departmental account(s) and the clearing account 0513.
Travel & Group Meal/Meeting transactions are transmitted and loaded into the Employee Reimbursement System (ERS) for settlement by the Cardholder or authorized delegate. The travel settlement in ERS will follow an appropriate approval path, including the budget administrator and Financial Officer to assure compliance with policy and procedure. If amounts are due to the cardholder, a direct deposit will be made to the cardholder’s bank account. If a net amount is due for all travel settled in ERS, the net amount will be deducted from the cardholder’s paycheck at the end of the month.
Payments to the card issuing bank will be made monthly by Accounting Operations based upon the charges and credits transmitted during the payment period.
The Cardholder must personally verify that all charges presented on a monthly paper statement from the issuing bank are accurate and are legitimate University expenses. The statement must be signed, dated, and retained by the Cardholder for one year (current statement plus 12 months prior). The Cardholder must notify the Financial Officer (FO) if there are any problems arising from this monthly statement review. A Directory of Financial Officers is available on the Corporate Controller's website. Any charge made by the Cardholder (or someone authorized by the Cardholder) not supported by a receipt becomes the personal liability of the Cardholder.
Sanctions may be imposed for misuse of the card.
This procedure outlines the steps required to issue a Purchasing Card, make purchases, process returns and credits, handle disputes, maintain control of the cards, assure the validity of the purchases, maintain receipts/records to meet audit requirements, and sanctions for misuse.
Account - This term means the budget/fund combination in the IBIS Financial Accounting system.
Card Coordinator - The Purchasing Card Coordinator is a Purchasing Services employee who functions as the University liaison for all communication (requesting new cards, handling discrepancies, assuring reports are received, etc.) between the University and the issuing bank (except lost cards where the Cardholder contacts the bank personally). A coordinator has been identified for purchases for the College of Medicine under the Penn State purchasing cards program (see Purchasing Card Coordinator Responsibilities (Exhibit "A")).
Cardholder - A University employee who has been approved by his/her budget executive or budget administrator and the Financial Officer, and has successfully completed the Purchasing Card On-Line Tutorial and Cardholder Certification Quiz, to acquire goods & services and/or travel & group meal/meeting transactions for a specified University administrative area, by using the Purchasing Card (see Cardholder Responsibilities (Exhibit "B").
Financial Officer (FO) - The Corporate Controller’s representative in each administrative area sharing responsibility with the budget executive, budget administrator, and the Card Coordinator for the proper use and control of the Purchasing Card at the University, and is responsible for all reconciliation activities.
Issuing Bank - PNC Bank provides the Purchasing Card to the University. They have contracted with Penn State to comply with the terms and conditions as stated within the contract.
Purchasing Card (Exhibit "C") - A credit card, clearly marked with University identification, for a University employee approved to use the card to obtain goods & services and/or travel & group meal/meeting transactions.
Receipt - documentation to confirm that the goods & services were ordered and received and/or travel & group meal/meeting transactions occurred and that indicates the price paid (See Acceptable Receipts for more detail).
Reconciler - The Financial Officer or that individual delegated by the area’s FO to perform the daily reconciliation between Purchasing Card receipts and daily electronic notification from the issuing bank for goods & services transactions (see Reconciler Responsibilities (Exhibit "D")).
The Purchasing Card may be used to acquire goods & services and to pay for travel & group meals/meeting, based on limits approved by the department. Items specifically EXCLUDED from being obtained with the Purchasing Card are explained in detail in University Policy BS14.
Before acquiring items with the Purchasing Card, it is recommended to check the availability of such items within the eBuy system. If the item is available through eBuy, the transaction would be completed within the eBuy system.
Note: All University Policies apply to purchases obtained with the Purchasing Card.
The following maximum limits have been set for the Purchasing Card. Departments should authorize specific limits based on the anticipated purchasing patterns of the Cardholder, the budgetary amount available for purchases, and the potential for losses due to misuse or unauthorized use by third parties. Cardholders who are not authorized to purchase goods & services should have those limits set to zero; those not authorized for travel & group meals/meetings should have those limits set to zero.
- Maximum value of one transaction: $2,000 including shipping, handling, and special charges.
- Maximum total of purchases per cycle (sixteenth of the month to the fifteenth of the following month): $18,000
- Maximum value of one transaction: $3,000 including taxes, gratuities, and service fees.
- Maximum total purchases per cycle (sixteenth of the month to the fifteenth of the following month): $20,000
There is a maximum daily limit that is set at the same maximum as the cycle limit; however, some departments do set daily limits at amounts lower than cycle limits. Please note that it is misuse of the purchasing card to split transactions to circumvent the limits.
Academic and administrative units may set lower transaction, daily, and cycle limits. The budget administrator and Financial Officer will approve the limits for an individual's card. The Financial Officer or Reconciler can be contacted regarding the limits set on your purchasing card.
The transactions are categorized based on the vendor used. If the vendor has a Merchant Category Code (MCC) which has been categorized as goods & services, it will fall under that limit. If the vendor has an MCC code which is categorized as travel & group meals/meetings, it will fall under that limit. Following are the MCC codes which are categorized as travel & group meal/meetings:
- 3000-3299 Airlines
- 3351-3441 Car Rental
- 3501-3790 Hotels/Motels/Inns/Resorts
- 4011 Railroads
- 4111 Commuter Transport/Ferries
- 4112 Passenger Railways
- 4121 Taxicabs/Limousines
- 4131 Bus Lines
- 4214 Motor Freight and Trucking
- 4457 Boat Rentals and Leases
- 4511 Airlines, Air Carriers
- 4582 Airports, Flying Fields
- 4722 Travel Agencies, Tour Operators
- 4723 TUI Travel - Germany
- 4784 Tolls/Bridge Fees
- 4789 Transportation Services (not elsewhere)
- 5499 Misc. Food Stores - Convenience Stores and Specialty Mkts
- 5541 Service Stations (w/without services)
- 5542 Fuel Dispenser, Automated
- 5811 Caterers
- 5812 Eating Places
- 5813 Drinking Places
- 5814 Fast Food Restaurants
- 5921 Package Stores - Beer, Wine, Liquor
- 7011 Hotels, Motels, Resorts
- 7012 Timeshares
- 7032 Sporting/Recreation Camps
- 7033 Trailer Parks, Campgrounds
- 7512 Car Rental Agencies
- 7513 Truck/Utility Trailer Rentals
- 7519 Recreational Vehicle Rentals
- 7523 Parking Lots, Garages
- 7549 Towing Services
Acceptable receipts include a detailed cash register receipt, a printed acknowledgment from a website (including email confirmation), a priced packing slip or other documentation which provides information about the item or service purchased the vendor, date of transaction, and amount of the purchase. Detailed receipts must be obtained when possible. If detailed receipts cannot be obtained, the Cardholder must document the reason why they could not be obtained. Original receipts should be obtained whenever possible, but it is acceptable for a Cardholder to request that a vendor fax a copy of a receipt or mail a photocopy. The fax or copy should include some documentation or notation as to why an original receipt was not available. If the charge is for more than $500, a budget administrator must sign the support form or receipt to indicate concurrence with the submission of a non-original receipt. Completely hand-written receipts are not acceptable.
If the price is not indicated on the documentation, but is noted by the Cardholder, the documentation must be reviewed and approved by the Financial Officer prior to reconciliation and posting by the reconciler. The Financial Officer will indicate approval by signing the supporting documentation. Acceptance of supporting receipts and/or documentation is at the discretion of the Financial Officer.
Receipts for credits should be obtained; however, if the vendor did not or will not provide a credit receipt, the credit transaction (without receipt) should be referenced to the original charge and documentation (including photocopying the original documentation as support for credit) and any differences in amount must be clearly explained.
If a receipt or other documentation is lost or unavailable, the Cardholder must document the charge on the Substantiation Form for Lost or Unobtainable Receipts indicating the details of the purchase, the business purpose and the amount of purchase. This support form must be approved as follows:
- Transactions under $100: Budget Administrator and Financial Officer or Assistant
- Transactions $100 or more: Budget Executive and Financial Officer (no delegates)
In cases of missing or lost receipts where the transaction will be charged to a federal grant or contract, the Principal Investigator (if other than the Cardholder) is also required to approve the support form.
The Cardholder must settle all travel expenditures (including those on the purchasing card) in ERS no later than 60 days after the end of the trip (30 days if the travel is charged to a restricted fund and is completed in the last month of the sponsored agreement). Receipts are required for all purchasing card transactions, with the exception of individual meals charged to the purchasing card. Receipts will be scanned, along with any non-purchasing card receipts, as part of the ERS settlement process. It is not necessary for cardholders to sign receipts related to purchasing card transactions processed through ERS.
Group meals must be supported by itemized receipts. All group meals, whether conducted during travel or while on campus, must be entered into ERS. The information required to support the group meal (location, attendees, business purpose) must be entered into ERS for review and approved by the budget administrator and Financial Officer. The same holds true for group meeting expenditures.
The amount paid including occupancy taxes, fees, and gratuities must be included on the receipt, invoice, or other documentation.
For purchases made on-line, such as airline reservations, a printed confirmation, itinerary, or e-mail confirming the purchase, including pricing (cost) is acceptable.
Receipts are required to be reimbursed for actual costs for miscellaneous expenses, such as cab fare, parking fees, or subway tokens. If receipts are not obtained, these expenses will be considered to be part of the miscellaneous per diem available to the traveler. Note: the purchasing card can be used for these expenses, but in some cases, depending on the vendor used, the transactions may be categorized as goods & services.
Cardholders with Travel & Group Meal/Meeting spending limits should be familiar with the University Travel Policy.
If you lose a receipt or, for some reason, do not receive a receipt or invoice, contact the vendor to get a duplicate. In the rare situation that you cannot get a receipt from the vendor, you should complete a Substantiation Form for Lost or Unobtainable Receipts, which is available from your Financial Officer. This form does require approval by the budget administrator or budget executive and the Financial Officer before the transaction can be settled in ERS. Not providing substantiation (documentation such as a receipt or the "Substantiation Form for Lost or Unobtainable Receipts") of a purchasing card transaction is a misuse of the purchasing card.
Misuse of the purchasing card by the Cardholder or others who they have authorized to use their card can result in disciplinary action. Misuse is broadly defined as using the card in violation of University policy and procedure. The following are considered to be misuse of the purchasing card:
- Using the purchasing card for personal purchases or for purchases that would not be authorized by the University.
- Using the purchasing card to purchase any goods & services or to conduct any travel & group meal/meeting which violate policies or procedures of the University, including those items listed as specific exclusions for the purchasing card, or which violate any law or regulation to which the University must adhere.
- Splitting a transaction to circumvent the transaction limit authorized for the cardholder's card.
- Using multiple cards to circumvent the transaction limit authorized for the cardholder's card.
- Failing to provide required purchasing documentation in a timely manner (within 30 days of purchase for goods & services or within 60 days for travel & group meals/meetings - 30 days if charges are on restricted funds and is completed in the last month of the sponsored agreement) - unless there are extenuating circumstances that are disclosed to the Financial Officer.
- Failing to provide, when requested, information about any specific purchase.
- Failure to review monthly purchasing card statements.
Misuse of the purchasing card by the Cardholder or those authorized by the Cardholder to make purchases on his or her card can result in sanctions being placed on a Cardholder. These can range from suspension or cancellation of the card to more severe disciplinary action such as termination of employment.
By signing the online Purchasing Card Cardholder Agreement), the Cardholder gives the University permission to withhold from University pay an appropriate amount to cover any unsubstantiated charges or other misuse of the purchasing card. The decision to assess a cardholder's paycheck for a goods & services transaction would only be acted upon after a complete review of the situation by the Financial Officer, consultation with the budget administrator/department head and budget executive, and additional review by the Controller's Office, Purchasing, and senior administrators. For travel & group meal/meeting transactions, any unassigned charges or charges assigned to an unsubmitted report in ERS which has not been settled within 60 days (30 days if charges are on restricted funds and is completed in the last month of the sponsored agreement) of the last day of travel will be considered non-reimbursable transactions, and a report will be done by the Financial Officer which will result in a deduction from the Cardholder’s paycheck for the amount of the transaction(s).
In addition, the cardholder agrees that any net amount due the University after settling travel & group meals/meetings in ERS for a particular trip can be deducted from the next paycheck.
Depending on the type and frequency of misuse, sanctions may include:
- A verbal warning (only one)
- Loss of the purchasing card for a designated period or permanently
- Inclusion of a written report in the employee's personnel file (with copies to the Office of Human Resources, your department human resources officer, budget officers, and the purchasing card coordinator)
- Dismissal from employment at the University.
Sanctions will be determined on a case-by-case basis. Certain sanctions can be instituted by the Financial Officer (verbal or written warnings, suspension, or cancellation of the card), while those involving the cardholder's personnel file or employment status will involve appropriate parties, including the Office of Human Resources, the human resources representative, and the budget administrator or budget executive. Criminal charges may also be brought if the University determines such charges are appropriate.
The material involved in card misuse may:
- Become the property of the cardholder who will have to pay the University the cost (this can be withheld from the University paycheck if not reimbursed by the cardholder)
- Be returned to the vendor
- Be retained by the University
Receipts should be provided within 30 days of the purchase for goods & services or within 60 days after the end of the trip (30 days if the travel is charged to a restricted fund and is completed in the last month of the sponsored agreement) for travel & group meals/meetings, which is a reasonable time frame; however, if a Cardholder has problems with a particular vendor, the Reconciler and/or Financial Officer should be notified, and an option would be to complete the Substantiation Form for Lost or Unobtainable Receipts as noted under “Acceptable Receipts.” This then becomes the substantiation for the charge.
Some Cardholders may be concerned that in some situations, the time limits above do not provide adequate time to provide a receipt, such as if a Cardholder is on extended travel or not available due to illness. In extenuating circumstances, the Cardholder would not be penalized if there were a legitimate reason for the delay in providing a receipt, such as those situations described above.
Unauthorized or questionable charges which occur through fraudulent use by a third party, are handled through the dispute process with the issuing bank and do not result in any liability to the Cardholder. The issuing bank sends statements directly to the Cardholders to provide a means for the Cardholder to assure that the card has not been used without the Cardholder's knowledge. If there are unauthorized charges listed on a statement, the Cardholder should follow the steps on the Lost/Stolen or Compromised Checklist (Exhibit "E").
The option to assess a Cardholder’s paycheck for an unsubstantiated charge would ONLY be taken after every effort had been made to obtain documentation for a charge from the Cardholder and the Cardholder had taken no action to provide substantiation for the charge, not necessarily 30 days. The decision to assess a Cardholder’s paycheck would only be acted upon after complete review of the situation by the Financial Officer, consultation with the budget executive and department head and review by the Controller's Office and Purchasing and senior administrators. The Cardholder would be contacted numerous times prior to this action to inform them that substantiation was needed and that taking funds from the paycheck was being considered.
Any unassigned charges or charges assigned to an unsubmitted report which have not been settled after an appropriate period of time (greater than 60 days after the trip has occurred) will be considered non-reimbursable transactions. The Financial Officer will have the authority to submit an expense report on behalf of the cardholder to settle these non-reimbursable transactions, which would result in a deduction from the Cardholder’s paycheck for the amount of the transaction. The Financial Officer may also proceed to take action based on misuse of the purchasing card.
An employee must first successfully complete the Purchasing Card On-Line Tutorial and Cardholder Certification Quiz, which is accessible through the PSU Purchasing Card website. The Cardholder will have the option to review the tutorial and take the certification quiz for Goods & Services only, Travel & Group Meals/Meetings, or both Goods & Services and Travel & Group Meals/Meetings. Upon successfully passing the Cardholder Certification Quiz, notification will be sent to the appropriate individuals that a prospective Cardholder has completed the required training for the specified limits.
The employee will also be required to electronically agree to the Purchasing Card Cardholder Agreement during the certification process, identifying that they agree to the terms and responsibilities of using the card, and the related sanctions that accompany misuse.
An electronic application, Add Purchasing Card Authorization (APCA), is available on-line in IBIS for completion, approval, and submission to the budget administrator or budget executive and Financial Officer for approval. The APCA application will authorize an employee for approval to carry a Penn State Purchasing Card for making purchases for a departmental account up to a specified limit per transaction. Other limitations on usage, such as types of purchases a Cardholder is authorized to make, may be imposed or revised as deemed necessary by the department. The APCA form may not be submitted until the prospective Cardholder has completed the on-line training and has electronically signed the Purchasing Card Cardholder Agreement.
Once a budget executive or budget administrator and Financial Officer approve the electronic application, it is forwarded in IBIS to the Purchasing Card Coordinator in Purchasing Services, who approves the form. The issuing bank receives the required information electronically for the bank to issue a card to the employee.
The issuing bank receives the required information electronically and issues a card to the employee. The issuing bank will mail the card to the Purchasing Card Coordinator who will then mail the card directly to the Cardholder. The Cardholder then must activate the card per the instructions provided.
The Cardholder is responsible for the physical security of the card to prevent its misuse and the abuse of its privileges. The Cardholder, acknowledging the rights and responsibilities that accompany the Purchasing Card, has agreed to provide receipts (see Acceptable Receipts) for all acquisitions made with the card, as required. All purchases must be for official University uses and must comply with University Policy BS14 and this procedure. All travel purchases must also comply with the University Travel Policy.
A Cardholder may allow another University employee to use their purchasing card, although this is discouraged. If the Cardholder does allow another person to use their purchasing card, the Cardholder is responsible for all the charges made by others whom the Cardholder has authorized to use the card. In cases where someone authorized by the Cardholder transacted the purchase for goods & services, those persons other than the cardholder who are using the card should sign the receipt as follows: “Jane Smith for John Doe” where John Doe is the cardholder’s name. That is, substitute card users do not sign only the cardholder’s name; they must sign their own names. Please note that the receipt and support form must be signed and dated by the cardholder as well, not just by the substitute cardholder. This protects the person using the card by documenting that the cardholder did approve the purchase. Travel & Group Meal/Meeting transactions made by others will be posted to ERS as belonging to the Cardholder, who will be required to settle the charges, even though for another employee. Any misuse of the card may result in sanctions being placed against the Cardholder and/or the user (see Sanctions for Misuse).
Reconcilers are not permitted to make purchases with a Cardholder’s card and then to reconcile the purchase, even with the Cardholder’s review and authorization. These transactions must be reconciled by another authorized reconciler in the department or the Financial Officer.
All purchases for the University are exempt from the Pennsylvania State Sales Tax. The Purchasing Card has notification of this fact printed on the card and the vendor should not charge PA sales taxes on purchases made with the card. The Cardholder must assure that PA sales tax is not charged to the University. Note: the University is NOT exempt from local and hotel occupancy taxes which are generally charged for lodging.
If the vendor is telephoned, the employee must indicate to the vendor at the beginning of the conversation that the purchase will be tax exempt. Likewise, if there is a mailed, faxed, or web order using the card number, the exempt status of the card/purchase must be included in the data conveyed to the vendor, if possible. The University’s tax exempt number is printed on the face of the Purchasing Card. Tax exempt certificates, if needed, are available.
The Cardholder may use the card for legitimate University purchases from any vendor [except as restricted in the “Specific Restrictions,” (see University Policy BS14) and Card Spending Limits]. The Cardholder should inform the vendor that the purchase is for the University in case there are special discounts offered or arranged for University purchases. The Cardholder will present the card to the vendor for recording the appropriate and necessary information for the purchase. If an order is faxed or telephoned to a vendor, the catalog or order form must be retained by the Cardholder until the material is received to assure that ordered material is received at the department.
The vendor should provide a receipt for the material (or a priced acknowledgment or priced packing list), along with the supplies or material.
If using the Purchasing Card for on-line purchases, assure that the on-line site is secure and encrypted. Do not opt to store credit card data with the on-line site; doing so can result in card compromise. The order confirmation or other online “receipt” should be printed to be used as a receipt in the event that a priced packing slip is not received.
- See the Cardholder Responsibilities (Exhibit "B").
- A list of vendors with which the University has contracted special prices is available.
With the exception of frequent flyer mileage and hotel reward programs, rebates or purchase incentives that are obtained as a result of a purchase made with the Purchasing Card belong to the University. This also includes any tangible, non-cash items offered and received. Non-cash items with a value of $25 or more must be reported to the Financial Officer so proper recording of the item can be made. Rebates should be credited to the account to which the original transaction that generated the rebate was charged. Purchase incentives, coupons, or certificates for discounts on future purchases must be turned in to the department for future use by the University.
All receipts for goods & services transactions must be submitted to the Cardholder’s reconciler as soon as the material or service is received from the vendor. The Cardholder is responsible for seeing that all receipts are submitted within 30 days. If the receipt (see Definitions) is not submitted within 30 days, it may be considered to be a misuse of the card. Sanctions may be administered, after review of the transaction. Sanctions may be avoided if there are extenuating circumstances that have been communicated to the Financial Officer and/or reconciler.
Use of the standardized purchasing card support form, available in GURU, is required to assure adequate documentation for each purchase. The receipts and supporting documentation submitted by the Cardholders are the University’s only records of these transactions, and must provide consistent information and be clearly understandable. If a department desires to use a custom purchasing card support form, the Assistant Controller must review and approve the form prior to use.
For group meals/group meetings which are reconciled in IBIS (not ERS), the Group Meal/Group Meeting Support Form may be used in place of the Purchasing Card support form. This form is also available in GURU and is required to have the cardholder (purchaser’s) signature on the form and on the detailed receipt. Given confidentiality and privacy issues, the full purchasing card credit card number and the Cardholders SSN should never be documented on the form. In addition, if the full credit card number is printed on the receipt or other supporting documentation, either the Cardholder or Reconciler should mark out all but the last four digits of the card number to prevent potential compromise of the purchasing card.
The Cardholder must indicate two items on the required support form;
- If an account different than the default account is to be charged, the proper (approved) account information must be noted on the receipt, and
- The description of the item(s) purchased (if the receipt is not detailed to that level), and its purpose (why it was purchased) must be noted. The description and purpose should be specific and as detailed as necessary for the Reconciler, Financial Officer, and others reviewing the transaction to clearly understand what was purchased and for what reason.
Note: Since the Cardholder must also verify the Monthly Memo Statement (covered later), he or she may use a Purchasing Card Log (not exhibited) to track purchases because the receipts will have been handed in to the Reconciler for each purchase. If it is determined that such a log would be helpful, Cardholders may use a paper log book or electronic spreadsheet. Each Purchasing Card log should record at the minimum, the following information; date of purchase, vendor, description of item purchased, amount of item purchased, and the statement date when it is received from the bank. High-volume users and those who allow others to make purchases on their behalf are encouraged to keep a log to help with review of their monthly statements.
The Cardholder’s signature must be on both the receipt and the support form for all purchases, whether made by the Cardholder or someone authorized by the Cardholder. The Cardholder must sign both the receipt and the support form to document their review and authorization of the transaction.
After completing the form and signing as required, the receipts and the completed support form must be submitted to the reconciler as soon the goods & services are received.
The receipts are retained by the Reconciler and filed in P-number order (the P-number is discussed later). It is permissible to file purchasing card receipts by account number, and then by p-number if this is more efficient for the Reconciler. Financial Officers will review receipts periodically and may require that receipts be forwarded to their office for review and filing.
All receipts for purchases for Travel & Group Meals/Meetings, with the exception of individual meals which will be covered by per diem, must be maintained. Settlement of expenditures must be done in ERS within 60 days after the end of the trip (30 days if the travel is charged to a restricted fund and is completed in the last month of the sponsored agreement).
The Cardholder, or a delegate, will be able to see purchasing card transactions in ERS and will assign those transactions to the appropriate trip, or prepare a report for a group meal or meeting, if not related to travel. Receipts will be scanned into ERS with the appropriate travel or group meal report.
If purchasing card transactions are not settled in an appropriate time-frame, the Financial Officer will follow-up with the Cardholder to determine why charges are not settled. If appropriate, the Financial Officer may settle the charge as a non-reimbursable transaction, which would result in a deduction from the Cardholder’s paycheck for the amount of the transaction. The Financial Officer may also proceed to take action based on misuse of the purchasing card.
The Financial Officers are responsible for the reconciliation function for goods & services transactions and may delegate Purchasing Card reconciling functions, duties, and responsibilities to a responsible individual in the department. Financial Officers should avoid delegating an individual as a Reconciler for a Cardholder who is in a supervisory role over the delegated Reconciler.
A Reconciler Delegation Form (see Exhibit "F") will validate and record this delegation from the Financial Officer for audit purposes. The Reconciler Delegation Form must be completed and signed by the Reconciler before security access to reconciler functions is requested.
The Delegated Reconciler, if also a Cardholder, may not reconcile charges on his or her own card. The IBIS system has controls to prevent this. In addition, the Reconciler should not process any purchases that were made by the Reconciler for the Cardholder. Another authorized Reconciler or the Financial Officer must reconcile these transactions.
The support form must be properly marked with item description and purpose (specific and detailed), and with a revised account number to charge if different from the default account. The receipt and support form must both be signed by the Cardholder. The Reconciler also assures that the purchase was appropriate according to University Policy. The Reconciler will use the receipt to match against the daily electronic IBIS Review/Reconcile Purchasing Card Charges “RPCC” transaction (received from the issuing bank via IBIS, not exhibited).
The RPCC assigns an individual “P-number” to each electronic transaction. The P-number is the tracking number for support documentation. If the account is changed on the receipt by the Cardholder, this, as well as the proper object codes, would be entered in the budget distribution section of the RPCC. Purpose and description of the purchases must also be entered by the Reconciler. The description and purpose should be specific and as detailed as necessary for the FO and others reviewing the transaction to clearly understand what was purchased and for what reason (why the purchase was made and how it relates to University business). The Reconciler will also perform any resolution required for IBIS Financial.
To finalize reconciliation, the Reconciler notes the P-number on the receipt (or support form), initials and dates the receipt (or support form), and ‘approves’ the purchase on the RPCC transaction. Note: See Reconciler Responsibilities (Exhibit "D").
If receipt and support form are not in the reconciler’s hand by the time the electronic notice (RPCC) is received, the Cardholder must be contacted in order to obtain the receipt and support form. If necessary, a reminder may be issued to the Cardholder stating that the signed Purchasing Card Cardholder Agreement indicated that all receipts would be submitted on a timely basis. Also, the reconciler may request that the Financial Officer become involved if necessary to obtain the receipts.
The IBIS system generates automatic email reminders to Cardholders for purchasing card transactions that have not yet been reconciled 15 days after receipt of the transaction at Penn State. Another reminder is sent to the Cardholder before the transaction moves into the auto-post status. This email reminder system is in place to ease the burden on Reconcilers on follow-up with Cardholders, but Reconcilers should continue to personally contact Cardholders as necessary to obtain appropriate receipts and documentation.
If there is a discrepancy between the receipts and the electronic notice (RPCC), the Reconciler must notify the Cardholder of the difference and together work out the solution. If the Cardholder and receipt and vendor agree with their figures, and the bank is different, the Reconciler must contact the Card Coordinator.
If the vendor and receipt are not in agreement, the Cardholder must contact the vendor to determine where the problem arose. If appropriate, the vendor should issue a credit receipt to correct it.
If a Reconciler is aware that the purchasing card was used for a personal purchase and the vendor is unable to issue a credit for the purchase, the Reconciler must verify that repayment has been made and receive confirmation that a fully processed deposit has been completed and approved prior to reconciling that purchasing card transaction. The corresponding ROCR number should be noted in the description. The original purchasing card support form and receipts cannot be given back to the cardholder for any reason once they have been turned over to the Reconciler and the transaction has been reconciled.
Purchasing Card purchases and the related receipts, which are not reconciled within 30 days after being transmitted to the University, will be automatically charged to the default account and Object Code 365. These items must then be reconciled and redistributed through “RPNR,” Review Posted but Not Reconciled Purchasing Card purchases. Reconciliation between the receipt(s) and the RPNR must still be done and the charges transferred from the default account (if necessary) and Object Code to the proper account and Object Code. This reconciliation and transfer is to be done as soon as possible, and must be cleared by the fiscal year end. The Financial Officer is responsible for RPNR reconciliations.
The issuing bank will provide to each Cardholder a paper Monthly Memo Statement showing all purchases for that billing cycle charged against that card. Each Cardholder will personally confirm that all purchases against the Purchasing Card he/she is holding were made by the Cardholder and no extraneous or unauthorized purchases were made. The Purchasing Card Log suggested in the section titled “Receipts” may be used for this verification. To confirm this review, the Cardholder must sign and date the monthly statement. If all is in agreement, the Cardholder retains the statement – Cardholders should retain statements for one year (current statement + 12 months prior). Cardholders should properly dispose of statements after the required retention period.
NOTES: *Reconcilers are not to review monthly statements for the Cardholder. Cardholders may also review their goods & services purchases online by accessing the IBIS function “BYPC” (Browse Your Purchasing Card). If any extraneous or unauthorized purchases are discovered, the Cardholder should follow the checklist for unauthorized transactions listed on the Lost/Stolen or Compromised Checklist (Exhibit "E"). A Billing Inquiry form may be submitted by the Cardholder directly to the issuing bank.
Cardholders may also access transaction information for their purchasing card through an on-line system provided by the issuing bank. A cardholder is still required to open and sign their paper statement to evidence their review even if reviewed on-line.
If the Cardholder has returned merchandise (or requested credit for an authorized service) and has not received credit within 30 days, if there are charges on the monthly statement that the Cardholder knows nothing about but the vendor determines are valid, or there are other disputes between the Cardholder and the vendor, the Cardholder must prepare a Billing Inquiry form, completing the requested information. The Cardholder must sign it, provide a copy to the Reconciler or Financial Officer, and forward it to the issuing bank via mail or fax for processing and resolution.
Disputes must be filed as soon as possible, but no later than 60 days after the statement date on which the transaction appears. Cardholders will be responsible for any losses that are not disputed within the 60-day period.
Reconcilers should note on the RPCC for the original transaction that a dispute has been filed; including the date the form was mailed or faxed.
The charge can be reconciled before the dispute is resolved and should be to avoid being auto-posted. Reconcilers should also work with the Cardholder to follow-up on any filed disputes for which credit has not been received or which have not already been resolved as valid charges.
At times, charges may appear on a Cardholder’s account that were not authorized by the Cardholder and were placed by unknown third parties. In these situations, the Cardholder should immediately cancel the card with the issuing bank, notify the Reconciler and/or Financial Officer, and the Purchasing Card Coordinator. The card must be canceled through UPCA using the reason code “compromised” and a new card requested through APCA. A dispute form must be filed if the issuing bank requests such action. A checklist for handling unauthorized transactions is included on the Lost/Stolen or Compromised Card Checklist (Exhibit "E").
Reconcilers should contact the Cardholders immediately if transactions appear on RPCC which are not within the Cardholder’s normal spending patterns as a control to identify the unauthorized transactions by third parties as soon as they occur. Reconcilers must reconcile the charges that appear, noting the following in the RPCC Purpose and Description:
”Card compromised. Transaction made by an unauthorized third party. Card canceled on xx/xx/20yy.”
Reconcilers should assist the Cardholder in assuring that unauthorized charges, which were posted to Penn State accounts, are properly credited. Transactions which are credits for unauthorized charges should note the following in the RPCC purpose and description:
“Credit received for transaction made by unauthorized third party on PXXXXX.
The Cardholder, or authorized ERS delegate, should review purchasing card transactions in ERS on a regular basis and contact the Financial Officer immediately if charges are posted which were not authorized by the Cardholder. The Financial Officer will then determine how to settle the charges in ERS in Consultation with the ERS Helpdesk.
The Purchasing Card Coordinator will monitor unauthorized card transactions and will notify the Assistant Controller and Internal Auditing if any patterns of unauthorized use become apparent.
If a Cardholder discovers his/her purchasing card is missing or stolen, he/she must notify the issuing bank immediately by calling 1-877-PSU-4PNC. Notification must also be made to the Financial Officer and the area Reconciler. In addition, an Update Purchasing Card Authorization (“UPCA” form in IBIS) must be processed by the department to complete the cancellation (check with the Financial Officer).
Note: Cardholders at the College of Medicine must also notify their Card Coordinator.
Once the card has been reported missing or stolen, the liability to the University ceases unless there is evidence and proof of fraud. If a card is not reported missing or stolen to the issuing bank, fraudulent charges will accrue up until the time of cancellation by the Cardholder. These could become the responsibility of the Cardholder or department to pay.
If a card is returned to the department or Financial Officer for any reason (misuse, retirement, termination, etc.), the department or Financial Officer must use the “UPCA” to cancel the card (form is approved by the budget administrator/budget executive and Financial Officer). If a card must be canceled immediately, the Financial Officer should contact the Card Coordinator and request that the card be canceled immediately with the issuing bank. A UPCA must be processed to complete the cancellation. Information from the UPCA is automatically transmitted to the issuing bank for their appropriate action. Once the card has been canceled, it must be shredded or destroyed so the card number is no longer readable and disposed of or returned to the Card Coordinator for return to the issuing bank for recycling. The University liability ceases only upon notification of cancellation to the issuing bank unless fraud is detected and proven.
Note: Cards may not be transferred between administrative areas. If a Cardholder is transferring from one administrative area to another, the old area should cancel the current card and the new area should issue a new card.
There will be times that a card must be deactivated (suspended) or dollar limits revised for a brief period of time (during a leave of absence, nearing year-end, etc.). Other data concerning the card may also need revision, including name changes, change of address, or a change to the default account. The Update Purchasing Card Authorization form (the IBIS “UPCA”) will be completed and approved by the budget executive or budget administrator AND the Financial Officer, and submitted to the Card Coordinator. If required, the issuing bank will be notified of the requested changes.
The UPCA would also be used to provide Goods & Services or Travel & Group Meal/Meeting spending limits to cardholders who have a card, but were not previously authorized for one of these limits. The Cardholder must pass the appropriate cardholder certification quiz before limits can be updated in UPCA.
In situations when a new card will be issued, the old card must be shredded or destroyed so the card number is no longer readable and disposed of securely. The card, after shredding or destruction, may also be returned to the Card Coordinator for return to the issuing bank for recycling.
The issuing bank will prepare the following:
- An electronic daily notice to Penn State for all purchases by each issued Purchasing Card made during the billing cycle. This will show the card number and Cardholder assigned that card. Goods & Services transactions will be posted to the IBIS system to create the RPCC and associate it with the predetermined default account assigned to that card, and provide information for the reconciler to process the RPCC. This will also process individual charges to the University accounts for purchases of goods & services made by using the Purchasing Card. Travel & Group Meal/Meeting transactions will be posted to the ERS system.
- A paper Monthly Memo Statement of all charges to a specific card is sent by the issuing bank directly to the Cardholder for review and audit.
- A monthly summary billing/invoice will be sent to Accounting Operations which will cover the total of all of the daily electronic postings the bank submitted to the University.
- Software, electronic data, and reports on a periodic basis which can be used by the Card Coordinator in Purchasing Services and the Controller’s Office to determine the vendor frequency of activity, respective dollar amounts, each Cardholder’s activity, excessive or fraudulent use, etc. A number of exception reports may be activated for review and analysis. (Similar software and data is available at the College of Medicine for comparable analysis of purchases.)
The issuing bank will submit to the University a weekly summary 'Invoice' which is the accumulation of the daily electronic notices that are distributed to the University for IBIS and ERS. The systems will provide a check figure of the amounts received each day during the billing cycle to compare to the electronic invoice. The contracted cut-off date/time must be taken into account for this comparison to be valid.
The summary invoice is paid within the contracted time frame by Accounting Operations. The payment may be delayed if there is a major difference between the daily electronic transmissions and the weekly electronic invoice. Generally, however, payments will be made regardless of any differences, in order to meet the contract terms. Adjustments will be made later by the issuing bank or vendor to settle differences.
Payments will be made from the ledger clearing account 0513. Differences and disputes will be reconciled and confirmed by Accounting Operations, in consultation with Purchasing, for the next cycle of activity.
Any differences occurring between IBIS, Accounting Operations, and the reconciled items will be reviewed and resolved by the Card Coordinator, Reconciler, Financial Officer and Corporate Controller’s Office.
Receipts (with appropriate notations), supporting documentation, and purchasing card support forms (if used) must be retained as follows:
- *Transactions posted to Federal or Federal Flow-Through accounts must be retained for 7 years after the agreement end date of the award
- *All other transactions, for current year + 3 years (gift funds, state funds, industry contracts, general funds, and auxiliary - especially related to UBIT audits.)
An area may wish to image purchasing card receipts, supporting documentation and support forms. Imaging is permitted, and departments are encouraged to use Optical Image Technology (OIT, DocFinity). Any other system must be reviewed and approved by Administrative Information Services (AIS) and should be in compliance with University policy and any regulatory requirements.
Receipts are scanned and entered into the ERS system. Cardholders should retain original receipts until the related ERS report has been approved and paid. Originals do not need to be retained after that point and should be shredded for privacy and confidentiality reasons.
Monthly memo statements from the issuing bank to Cardholders, once the Cardholder (no proxy or substitute) verifies the accuracy of the statement and signs the statement, should be retained by the Cardholder for one year (current statement, plus twelve prior monthly statements). Statements which are no longer required must be shredded for privacy and confidentiality reasons. Cardholders should dispose of records on a timely basis.
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.
Exceptions to this procedure must be approved by the Corporate Controller and Purchasing Services, as stated in University Policy BS14.
Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management, and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.
- Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released in writing by the Office of General Counsel.
Documents under audit or review, either internally or externally. The retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Officer will be responsible for contacting the department.
Additional questions may be directed to the University Archivist or the Records Management Officer.
For questions, additional detail, or to request changes to this procedure, please contact the e-Procurement, Purchasing Card & Travel Manager
Date Approved: 04/13/15
Most recent changes:
- Revision 8 - dated 4/13/15
Revision History (and effective dates):
- Revision 7 - Dated 5/16/08
- Revision 6 - Dated 12/17/04
- Revision 5 - Dated 9/25/02
- Revision 4 - Dated 7/25/01
- Revision 3 - Dated 1/11/99
- Revision 2 - Dated 6/12/98
- Revision 1 - Dated 8/9/97
- Original - Dated 10/18/96