Babson College Procurement Card Manual

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Procurement Card Manual

TABLE OF CONTENTS

1. Overview………………………………………..…………………………………...3

2. Administration……………………………………………………………………...32.1 PCard Acquisition2.2 PCard Renewal2.3 PCard Suspension and Cancellation2.4 Lost/Stolen PCard

3. PCard Use……………...…………………………………………...………………43.1 Purchases3.2 PCard Limits3.3 PCard Monitoring3.4 Tax Exemption3.5 Fraudulent Transactions3.6 Disputed Charges

4. PCard Restrictions……….……………………………………………..................74.1 Prohibited Items4.2 Gift Cards4.3 Transactions > $10,0004.4 Personal Items4.5 Accidental/Inadvertent Charges

5. PCard Accounting………………………………………………………………….95.1 PCard Charges5.2 Journal Entries

6. PCard Reporting…………………………………………………………………...96.1 Cost Allocation Reports6.2 Missing Receipts6.3 PCard Works™

7. Exceptions…………………………………………………………………………...10

Attachments……………………………………………………………..…….……...…111. Babson College Procurement Card Agreement2. Staff Gift Card Report3. Student Gift Card Report4. Journal Entry Form5. Missing Receipt Form

EFFECTIVE DATE: March 1, 2011

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Procurement Card Manual

1. Overview

Through an agreement with Bank of America, Babson College provides qualified employees with a MASTERCARD Procurement Card (PCard) to purchase goods that do not require a Babson College purchase order (see Section 4.3 for information about purchase orders). Babson College strongly encourages PCard use for certain small dollar purchases and for Travel, Meals and Entertainment expenses because the PCard provides convenience and improves efficiency by:

Simplifying the ordering process Decentralizing purchasing responsibility for small dollar orders Facilitating prompt payment to vendors Reducing overall processing costs

Cardholders may use the PCard for Babson College business only. Use of the card for personal purchases is strictly prohibited. Violations may result in revocation of cardholder privileges and possible disciplinary action.

Babson College pays Bank of America directly for all PCard purchases. Applying for and using a PCard in no way affects the cardholder’s personal credit history. Babson College assumes full corporate liability for PCard use. Personal information is used only for tracking and administration purposes.

2. Administration

2.1 PCard AcquisitionFull-time and part-time employees of Babson College are eligible to apply for and receive PCards. The Purchasing Office will order a PCard from Bank of America after the applicant and his/her department head have completed the application form. Upon receipt of the PCard the applicant signs a Babson College Procurement Card Agreement (Attachment 1). The application form can be found online on the Purchasing Office website or at: K:\Perm\Business Forms\Procurement Card Application.doc.

For the cardholder’s protection, he/she must sign the PCard immediately upon receipt. After each use, the PCard should be returned to the cardholder and the cardholder should retain or destroy transaction carbon sheets. The cardholder is responsible for keeping the account number confidential and preventing unauthorized use of the PCard.

The PCard remains the property of Bank of America. Only the assigned cardholder whose name appears on the card may use a PCard.

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2.2 PCard RenewalPrior to a PCard’s expiration date, Bank of America will send a new card to the Purchasing Office. Purchasing Office staff will send an email notification to the cardholder and forward the new card. Upon receipt the cardholder should immediately sign and activate the new card.

2.3 PCard Suspension and CancellationBank of America and Babson College have the right to suspend or cancel cardholder privileges at any time. In the case of suspension the cardholder must surrender the PCard at the request of Babson College or any authorized agent of Bank of America. Upon cancellation, the PCard must be cut in half and forwarded to the Purchasing Office. Use of a PCard or account after notice of its cancellation may be considered fraudulent and could result in Bank of America taking legal action against the cardholder.

2.4 Lost/Stolen PCardShould a PCard be lost or stolen, the cardholder must immediately notify the Purchasing Office. If the cardholder cannot reach a Purchasing Office staff member, he/she should call Bank of America at 1-877-451-4602. In the event the cardholder calls Bank of America directly, he/she is still responsible for confirming notification to the Purchasing Office on the next business day. Babson College is liable for all active PCard transactions until the card is formally reported as lost or stolen to Bank of America.

3. PCard Use

3.1 PurchasesCardholders may use the PCard to purchase goods by telephone, mail, internet, or in person. It is the cardholder’s responsibility to ensure proper receipt of these goods. When using the PCard for internet purchases, the cardholder should print the appropriate screens to document proof of purchase and receipt of goods. Cardholders should make purchases ONLY from secure sites.

When placing an order, cardholders must provide the vendor with the following information:

* Goods or services to be purchased.* Cardholder name, PCard number, and PCard expiration date.* Babson College tax-exempt ID number (04-2103544).* Instructions to mark the outside of the package(s) being shipped with the cardholder’s

name, Babson College building address, and the words “Purchasing Card.” This will expedite internal delivery.

* If the vendor requests a PO number, use “PCARD” as the PO number.PCard transactions are subject to all Babson College and departmental purchasing guidelines and restrictions.

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3.2 PCard LimitsBabson College assigns a user profile to each cardholder. Each profile has spending limits that reflect cardholder’s needs and his/her departmental purchasing requirements. If the spending limits are exceeded the vendor will decline use of the PCard.

Each profile includes three spending limits and one transaction limit:

Single -- Maximum dollar amount for a single transaction

Daily -Maximum dollar amount that can be spent in one day

Monthly -- Maximum dollar amount that can be spent in one month

Daily Transactions # -- Maximum number of transactions that can be completed in one day

There are four user profiles: Extra Light, Light, Medium, and High. The table below shows the four PCard limits by profile. To change a PCard profile or spending limit a cardholder must obtain approval from the appropriate department head and submit a request to the Purchasing Office. A cardholder’s profile can be changed temporarily during a monthly cycle (from the 28th

of one month to the 27th of the next month) upon approval of the cardholder’s supervisor and/or division director.

Profile Monthly Daily Single Daily Transactions

Extra Light $1,500 $1,500 $1,500 10

Light $5,000 $2,500 $2,500 10

Medium $15,000 $10,000 $10,000 15

High $25,000 $15,000 $15,000 30

Before traveling, cardholders should contact the Purchasing Office to confirm their spending limits and determine whether their profile needs to be changed temporarily. Purchasing Office staff will notify Bank of America of temporary changes to prevent difficulty with out-of-area card use.

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Cardholders should always be aware of their profiles and limits, as well as the provisions of the Babson College Procurement Card Agreement.

3.3 PCard MonitoringThe PCard Office monitors PCard use on an ongoing basis. Monitoring activities include:

Spot checks of vendors Review of reports on PCard purchases Review of monthly PCard Cost Allocation Reports

3.4 Tax ExemptionAs a 501(c) (3) non-profit organization, Babson College does not pay Massachusetts sales tax. Each PCard is embossed with Babson College’s state tax-ID number: 04-2103544. Vendors should not include sales tax in any charges. In the event that sales tax is included, it is the responsibility of the cardholder to ensure that the vendor credits the tax payment back to their PCard account.

3.5 Fraudulent TransactionsIf Bank of America identifies a possible fraudulent transaction, it will place a temporary hold on the PCard in question and notify the cardholder. If Bank of America is not able to contact the cardholder, it will contact the Purchasing Office. The Purchasing Office will then check the transaction with the cardholder. If the charge is deemed to be fraudulent, the card will be cancelled, and Bank of America will issue a new card in 3-5 business days.

If a cardholder does not recognize a PCard transaction on a statement, it is her/his responsibility to contact the vendor. If the cardholder cannot resolve the issue with the vendor, she/he should immediately contact the Purchasing Office.

3.6 Disputed ChargesIt is the cardholder’s responsibility to follow up on any erroneous charges, returns, or adjustments and to ensure that the vendor applies the proper credit on subsequent statements. The cardholder must contact the vendor to identify the problem and attempt to resolve the issue. If an agreement cannot be reached between the cardholder and the vendor, the cardholder must notify the Purchasing Office.

The Purchasing Office may require the cardholder to complete a Disputed Transaction Form. Purchasing Office staff will submit the completed form to Bank of America, which must be notified of a disputed item within 60 days of the original transaction. A disputed item can result from a number of causes including failure to receive the goods or services billed, receipt of defective merchandise, incorrect shipment quantity, fraudulent PCard use, incorrect billing, duplicate billing, non-posting of credit, etc.

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Upon notification of a disputed transaction, Bank of America will immediately credit the account for the amount of the disputed charge. The bank will then investigate the transaction, and within 90 days determine a resolution. If Bank of America rules in favor of the cardholder, the credit remains permanent. If not, the bank re-instates the charge.

4. PCard Restrictions

4.1 Prohibited ItemsAs noted, cardholders may use PCards for Babson College business only. Cardholders may not use PCards to purchase the items listed below. Purchases of prohibited items may result in PCard deactivation.

Alcoholic beverages, except when purchased as part of a restaurant meal or with the approval of the appropriate division director and the Purchasing Office

Items redeemable for cash, including gift cards that are redeemable for cash (e.g., American Express, Visa, MasterCard)

Gasoline for personal automotive use Printers, scanners, copiers, and fax machines Insurance Hazardous materials Animals Precious metals Travelers’ checks Cash advances Firearms and ammunition Prescription drugs Personal items

4.2 Gift CardsBabson College strongly discourages the use of PCards to purchase gift cards for faculty, staff, or students, and encourages faculty and staff to reward employees and students with tangible items such as books, flowers, etc. However, subject to the requirements noted below in Sections 4.2.1 and 4.2.2, PCards may be used to purchase gift cards to be used as gifts, prizes, or rewards for farewell parties, academic or co-curricular achievements, thank you gifts to guest speakers, and contests/competitions, as well as to provide incentives for participation in activities and events.

However, please note that the Internal Revenue Service has issued an opinion that gift cards given to employees, including student employees, are considered cash equivalents and therefore

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are subject to employment taxes based on the dollar amount of the card. Accordingly, the dollar value of a gift card purchased for a Babson employee or student employee will be included in the employee’s gross income and the appropriate federal, state, social security and Medicare taxes will be withheld from the employee’s wages.

Please also note that use of a PCard to purchase Visa, MasterCard or American Express Gift Cards is strictly prohibited by Babson College policy.

4.2.1 Gift Cards for Faculty and Staff (including Student Employees) The maximum gift card amount is $100. The gift card cannot be redeemed for cash (e.g., American Express, Visa, MasterCard). The name of the gift card recipient is included on the PCard Cost Allocation Report The department/division maintains a list of gift card recipients and amounts and submits

a Staff Gift Card Report to the Purchasing Office (Attachment 2 and available online from the Purchasing Office website).

As noted above, the dollar amount of the gift card will be reported to Payroll and included in the employee’s gross income, and the appropriate federal, state, social security and Medicare taxes will be withheld from the employee’s wages.

4.2.2 Gift Cards for Students The maximum gift card amount is $250. The gift card cannot be redeemed for cash (e.g., American Express, Visa, MasterCard). The cardholder purchasing gift cards is on the Student Gift Card authorization list

maintained by the PCard Office. The cardholder has a signed authorization from the Graduate or Undergraduate program

office. This form, including the name of the student recipient and the relevant function or event, should be submitted with the cardholder’s monthly PCard Cost Allocation Report.

The department/division maintains a list of gift card recipients and amounts and submits a Student Gift Card Report to the Purchasing Office (Attachment 3 and available online from the Purchasing Office website).

If a student receives more than $600 in gift cards in a calendar year Babson College will report the income to the IRS on Form 1099-MISC.

4.3 Transactions > $10,000PCard transactions costing more than $10,000 require a Babson College purchase order, and must comply with Purchasing Office requirements for bidding or sole source authorization. Please contact the Purchasing Office for information on purchase order requirements.

4.4 Personal Items

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Cardholders may not use a PCard to purchase personal items. Use of a PCard for personal purposes will result in card deactivation.

4.5 Accidental/Inadvertent ChargesIf a cardholder accidentally or inadvertently charges a personal item or another prohibited item to a PCard, he/she should complete a Cash Receipts Form, attach a check made out to Babson College, and submit the form and the check to the Business Office with a copy of each to the Purchasing Office. The form is available online on the Purchasing Office website and at K:\Perm\Business Forms\Cash Receipts Form.pdf.

5. PCard Accounting

5.1 PCard ChargesAll PCard transactions are charged to the budget account number for the cardholder’s department. All transactions appear in Breago and on a monthly detailed bank statement sent to each cardholder by Bank of America.

Travel, Meals and Entertainment transactions default to object code 6501. If any of these transactions should be charged to Student Travel, Meals and Entertainment (object code 6510), please contact the Purchasing Office.

5.2 Journal EntriesReallocation of PCard transaction expenses should be done electronically using PCard Works™ (see Section 6.3). If a reallocation cannot be completed online, a Journal Entry Form (Attachment 4) should be used. This form is available online on the Purchasing Office website or at K:\Perm\Business Forms\Journal Entry Form.pdf. Completed forms should be sent to the Business Office.

6. PCard Reporting

6.1 Cost Allocation Reports At the end of each month cardholders receive a PCard Cost Allocation Report from the Purchasing Office. Completed reports must be returned to the Purchasing Office within 30 days. Submissions should include receipts and Bank of America statements. It is the cardholder’s responsibility to obtain transaction receipts from the vendor each time he/she uses the PCard. Print-outs and copies are acceptable forms of receipts. The cardholder should compare the sales receipts to the entries on the monthly Cost Allocation Report. Failure to submit Cost Allocation Reports and receipts within 30 days may result in PCard deactivation.

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For auditing purposes, the Cost Allocation Report should include a brief (1-2 sentences) explanation of the business purpose for the transaction types listed below. The business purpose statement can be included on the report, or entered using the electronic PCard Works™ system (see Section 6.3).

Travel, Meals and Entertainment (including a list of attendees for restaurant meals) Babson College Bookstore, Reynolds kiosks, Olin kiosks Supermarket and pharmacy purchases Subscriptions Recurring expenses

The Cost Allocation Report includes information on each transaction as well as the account to which the transaction is charged. The top row of the report shows the different categories.

6.2 Missing ReceiptsAs noted above, cardholders are responsible for providing originals or copies of all receipts. In the event a receipt is lost or missing, the vendor will often be able to provide a new receipt or a copy of the original (with possible exceptions such as parking garages, restaurants, or taxis). If the cardholder has contacted a vendor, and still cannot produce a receipt, she/he should submit a Missing Receipt Form to the Purchasing Office (Attachment 5). The form is available online on the Purchasing Office website and at: K:\Perm\Business Forms\Missing Information Form.docx.

6.3 PCard Works™The PCard Works™ program is a web-based application that facilitates online, real-time PCard administration, accounting, and reporting. For example, Works™ includes online processes for approval and reconciliation that enable cardholders and department finance staff to review transactions as they are processed rather than waiting for the close of a billing cycle. Works™ also includes a function that allows cardholders and department finance staff to run PCard Cost Allocation Reports at any time during the monthly cycle.

Works™ transactions are posted to Breago at the end of each month. Once transactions are swept and posted, charges cannot be reallocated on the Works™ system.

For more information about Works™, to get access to training tools, or to be set up on the system, please contact the Purchasing Office or the PCard Coordinator.

7. ExceptionsExceptions to the policies and requirements in this manual must be approved by the appropriate division director or department head and the Purchasing Office.

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Attachment 1

Babson College Procurement Card Agreement

Babson College is pleased to present you with a Procurement Card.

I, ______________________________, hereby acknowledge receipt of a Babson College Procurement Card, number______________________.I acknowledge receipt of the Procurement Card User Manual and confirm that I have read and understand its terms and conditions.

As a cardholder, I agree to comply with the policies and procedures of the Procurement Card User Manual. I understand that Babson College is liable to Bank of America for all charges made by me.

As the holder of this Procurement Card, I agree to and accept responsibility for the protection and proper use of this credit card as outlined in the Procurement Card User Manual. I understand that I am the only authorized user of the Procurement Card indicated above. I understand that the College will audit the use of the card. I understand that I cannot use the Procurement Card for personal expenses.

I further understand that improper use of the card may result in disciplinary action, up to and including termination of employment. Should I fail to use the card properly, I authorize Babson College to deduct from my salary or from any other amounts payable to me, an amount equal to the total of the improper purchases. I also agree to allow Babson College to collect any amounts owed to me if I am no longer employed by the College.

I understand that Babson College may terminate my right to use this Procurement Card at any time for any reason. I agree to return the Procurement Card to Babson College immediately upon request or termination of employment.

CARDHOLDER:

Signature_______________________________________Date____________________

Print Name______________________________________Last 4 SSN#_____________

Department______________________________________Campus Phone__________

Campus Location________________________________________________________

Email completed form to the Purchasing Office or fax to 781-239-5841.

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Attachment 2

Staff Gift Card Report

Purpose of gift card(s):_____________________________________ Pcard Purchaser_____________________________________________ Budget number__________________________________________ Pcard Administrator Signature_______________________________ Date Submitted______________________________________________ This form must be submitted to Purchasing, with all Cardholder Allocations Reports which have transactions for all Gift Cards purchased with the Babson College Pcard’s.

Gift Card Gift Card Staff Staff Date Card Name Amount Name Function

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Student Gift Card Report

Purpose of gift card(s):_____________________________________ Pcard Purchaser_____________________________________________ Budget number__________________________________________ Pcard Administrator Signature_______________________________ Date Submitted______________________________________________ This form must be submitted to Purchasing, with all Cardholder Allocations Reports which have transactions for all Gift Cards purchased with the Babson College Pcard’s.

Gift Card Gift Card Student Student Date Card Name Amount Name Function

Attachment 3

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Attachment 4

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Attachment 5

Missing Receipt Form Cardholder Information: Cardholder: Last four Digits of Card Month: Thank you for sending your Cost Allocation Report. Please complete section: A. MISSING RECEIPTS Please provide us with the following missing receipts:

If you are not able to obtain the receipt, please provide a description and purpose of your purchase and any attempts you have made at retrieving or finding the receipt(s).

B. MISSING TRAVEL AND ENTERTAINMENT PURPOSE The Internal Revenue Service requires companies to obtain documentation for all transactions relating to travel and entertainment. Please provide us with a brief explanation of your travel/entertainment as it relates to business.

DATE: VENDOR: AMOUNT:

C. AUTHORIZATION: CARDHOLDER SIGNATURE:

AUTHORIZATION SIGNATURE:

As always, your help in these matters are appreciated and necessary to ensure a successful and efficient audit. If you have any questions or concerns, please feel free to contact the Purchasing Department. Thank you in advance for your efforts. -The Purchasing Departmen

DATE: VENDOR: AMOUNT: